The rise of mobile computing has been nothing short of meteoric – and it’s still just a baby. That rise is not defined by the fact that there are 250 million smartphone users in the U.S. – up from 114 million in 2012 – and it’s not because 78 percent of the adult population currently owns a smartphone.
In fact, those are by-products of the change. The truth is that smartphones have shifted from cool-to-have to must-have. What that means for businesses – especially tech businesses – is that having a great mobile app is no longer just a perk for brownie points. Quite frankly, if your Internet business doesn’t have a great mobile app, you are dinosaur. And you know what happened to those guys.
In response to the growing demand for mobile, tech companies are realigning their approach to products. So how far will the mobile revolution go? Well, we sure aren’t going back to surfing on a desktop all day. (Get some background info on the move to mobile in Should Your Business Go Mobile?)
The Shift to Smartphones
In 2012, Facebook’s stock was in trouble. Following a February IPO that garnered a tremendous amount of media coverage, the stock plunged. Much of that drop was due to a sense of doubt that Facebook could create more avenues for revenue. Investors were growing concerned that although Facebook had about 1 billion users, the company’s ability to monetize those users just wasn’t that great. The problem was mobile: Prior to 2012, the company had been unable to draw ad revenue from its mobile users.
Seeing an opportunity where others saw a large problem, Facebook took action. In just a year, the firm tapped into the mobile advertising market, turning it from a minuscule share of its total ad revenue to 41 percent of it in the second quarter of 2013.
Facebook CEO Mark Zuckerberg believes that this is just the beginning of the firm’s reliance on mobile users. "Soon we’ll have more revenue on mobile than desktop," Zuckerberg said in a July conference call with analysts.
This isn’t the only move that Facebook has made with mobile computing. You’ve probably heard of – or even used – the Facebook Home app that was released in April. The premise of the app was a complete integration of Facebook into every aspect of the mobile phone as an attempt to reduce the influence of the Android shell.
So far at least, Facebook has been rewarded handsomely for its concentration on mobile users. According to the company’s global active daily user count released in August 2013, 78 percent of its 128 million daily active users access the site via mobile. Investors have taken notice as well. At time of writing, Facebook is trading a little above $43 per share, a 102 percent increase from the same time a year ago.
Other Big Companies Get on Board
You don’t have to tell Twitter about the value of its mobile users – the company’s been going after them for quite some time. It’s a good fit: Twitter’s basically like texting on steroids. A recent study released by Twitter on what it calls its "primary mobile users", a term used to categorize those that mainly access the network via mobile phone, revealed that these users were three times more likely to use Twitter when commuting, 160 percent more likely to use the service at school or work and 159 percent more likely to use it when they wake up. In short, the most active users of Twitter tend to use smartphones. (Learn some Twitter etiquette: Check out Twitter Fail! 15 Things You Should Never Do On Twitter.)
As Twitter continues to look for new ways to monetize its user base, particularly with regards to mobile-advertising, it will look to this study and others like it to serve as a guide to the untapped potential that exists among mobile social media users.
Yahoo wants to tap into mobile users as well, which is a huge reason why the company acquired Tumblr in May 2013. Tumblr, a popular blog network that boats over 170 million users, consists of a large group of dedicated, young mobile users.
Marissa Mayer, CEO of Yahoo, referenced Tumblr’s mobile users when she announced the acquisition.
"Tumblr sees 900 posts per second and 24 billion minutes spent onsite each month. On mobile, more than half of Tumblr’s users are using the mobile app, and those users do an average of seven sessions per day. Tumblr’s tremendous popularity and engagement among creators, curators and audiences of all ages brings a significant new community of users to the Yahoo! network," Mayer said.
For years, Yahoo has been falling behind competitors like Google, Facebook. Analysts say it’s move to tap into mobile users is a sign that it’s serious about being on top in Silicon Valley.
A Mobile Strategy for Moving Ahead
Mobile computing has not only changed the ways that we communicate and access information, it has reshaped the business models of some of the leading tech companies. If the past three years are any indication, mobile computing will continue to provide opportunities for companies to improve and expand their business models. That means if you don’t have a mobile strategy, you’re probably already behind.