950 Million Users will be Accessing Social Networking Sites via Mobile Devices by 2012

By: Elizabeth Bramson-Boudreau, Consultant, and Leslie Arathoon, VP of Research, Pyramid Research
(Business News & Technology News, 12 Mar 2008)

Today's active social networking members represent more than one-third of the total worldwide Internet user base, for a figure of 530 million members worldwide. Looking ahead, Pyramid Research expects social networking sites (SNSs) to gain prominence as they add increased functionality and more people are introduced to them by friends and acquaintances. As social networking develops as an industry, mobility will play a vital role in shaping the future. There are strong forces bringing SNSs and mobility together, including the industrywide trend toward presence and personalization. The ability of members to access a social networking site from anywhere will enhance the utility of the SNS and thus boost the amount of advertising revenue that it can generate. For mobile operators, SNS could greatly increase mobile data usage, which has so far been lackluster in most markets, and open the door to new revenue streams from subscription fees or advertising. To that end, a broad range of handset suppliers, network equipment providers and software developers have been making progress in addressing technical obstacles to mobile social networking—such as the need for bandwidth, devices and browsers.

Pyramid Research believes that the opportunity for mobile social networking is rich; key technical issues are being addressed, and both of the main stakeholder groups are motivated toward a joint future—as are consumers. Pyramid Research expects 2008 to be another building year, with operators and SNSs continuing to confront technical, commercial and market challenges. By 2009 and 2010, however, mobile social networking should become increasingly popular—with uptake seen not just in the US market, but globally. Hence, we forecast 300 million mobile social networking users by 2010, representing 7 percent of worldwide mobile subscribers. By 2012, we expect roughly 18 percent of mobile users, the equivalent of 950 million users, worldwide to be accessing at least one social networking site via their mobile device.

Worldwide mobile social networking users, 2006-2012


With these subscriber adoption figures in mind, Pyramid Research has analyzed the revenue opportunity for mobile operators engaged in social networking services. Although most industry observers speak of the online advertising opportunity as the "holy grail," Pyramid Research's analysis found that in fact it is the increase of mobile data usage that will contribute the most to operator financials. Indeed, if the offerings available to subscribers are compelling enough to justify high data usage—flat-rate or pay-as-you-go—the rewards for operators could be significant.

Yet despite the clear financial rewards of mobile social networking, there is risk that operators will be disintermediated or cut off from their customers through flat-rate Internet access or, more broadly, the rise of asynchronous communications over synchronous channels. Pyramid Research believes this future can be avoided so long as mobile operators keep in mind a vital imperative as they move forward with their strategies: to continue to delight their customers by enhancing their everyday experiences.

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