Australians have adopted smartphones and tablets into everyday culture faster than consumers in many other developed economies
There are several explanations as to why.
Geography is one factor. Like the United States, Australia is a continent-sized country, and mobile communication offers businesses and consumers solutions as they try to bridge the geographic distances.
But perhaps the main reason is the push given to mobile hardware and wireless data services by the Australian carriers.
The carriers have expanded coverage areas and updated network infrastructure in densely populated, metropolitan hubs like Sydney and Melbourne. This has created a virtuous cycle: Greater demand for data services increases consumer demand for smart mobile hardware.
Competition for 4G expansion among the carriers has helped speed this process along. Telstra, Australia's largest wireless carrier, offers 4G coverage to 40% of the Australian population, and plans to cover two-thirds of the population by the middle of next year. About 1.5 million devices are served over its 4G network.
Telstra's biggest competitor, Optus, currently serves about 785,000 devices with 4G. However, it is investing heavily, with plans to offer 4G to 70% of the population.
Still, much of the heavy lifting on mobile devices, such as video streaming and app downloading, is done over Wi-Fi networks. Australia's plan to provide ultra-fast and affordable Internet to all Australians under the National Broadband Network (NBN), will also strengthen the mobile ecosystem.
The NBN will reach 3.5 million residences by the middle of 2015.
In more general terms, Australia's strong commodities-driven economic performance over the last decade or so has created one of the world's wealthiest societies. The World Bank currently ranks Australia eighth on the global list with a GDP per-capita of $61,789.
The wealthy population also helps to explain Apple's success in the Australian market, where its tablets and smartphones have been bestsellers.
In this report we'll key in on several aspects that help distinguish Australia's mobile industry from its counterparts in the rest of the world.
By some measures, Australia is the top major smartphone and tablet market globally. With 22 million inhabitants Australia has a smaller population than other major mobile markets such as the United States, South Korea, and the United Kingdom, but it has higher rates of smart device ownership.
As in many mobile markets, Google's Android operating system has become the dominant platform. However, Australia is somewhat atypical in that Apple devices running iOS have managed to hold onto significant market share. We'll look at how likely it is for Apple's relative strength to endure, or if Android's rapid recent gains will continue.
Australian consumers have been quick to shift their social media habits to mobile, which encourages them to spend a great deal of time glued to their mobile screens, since social media is one of the biggest time buckets on mobile. That has helped boost the local mobile marketing scene.
Mobile marketing efforts have seized on the social-savvy and mobile-readiness of the population to create some notable multi-platform successes, such as the Cannes award-winning "Dumb Ways To Die" campaign created by McCann Melbourne for the Melbourne Metro, which began as a viral YouTube video and now includes a mobile app game that became a top-10 downloaded free app in many markets, including the U.S.
Mobile ad prices in Australia are higher than in many other major mobile markets.
Note: This report is part of a BI Intelligence series on mobile markets outside of the U.S. and Europe. Click here to see our December 2012 report on Mobile In The BRICs, and here to read our May 2013 report on Mobile In East Asia.
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Early Adopters
Australia ranks fourth globally for the number of active iOS and Android devices per-capita, with .79 in circulation for every adult aged 15 to 64, according to Flurry.
In other words, there were 79 iOS or Android tablets and smartphones in circulation for every 100 adults.
The only three countries that ranked ahead of Australia in Flurry's device data — Singapore, Hong Kong and Sweden — all have significantly smaller populations.
More specifically, smartphone penetration of the Australian mobile subscriber base has exploded to an estimated 84% in 2013 from just 19% penetration in 2007, according to the Australian Mobile Phone Lifestyle Index, published by Australia's digital industry association, the AIMIA. (See chart, right.)
A more general definition of penetration — such as the percentage of all Australian adults with smartphones — turns up lower numbers. A May 2012 survey by the Australian government determined that 49% of the adult population had smartphones.
In any case, in terms of penetration, Australia's smartphone economy more closely resembles that of its developed neighbors in East Asia, such as Singapore and South Korea, than major Western economies like the U.S. and the U.K.
Not surprisingly, mobile data is big business for the wireless industry. Data revenues — as opposed to voice and text revenues — already accounted for 42.7% of overall wireless revenue for the top Australian carriers in 2011. That puts Australia in the data big leagues, a bit above the United States in terms of data's share of revenues.
Tablet Penetration
The tablet has become the fastest-ramping computing device in history on a global scale, and Australia has not been an exception.
The AIMIA estimates that by mid-2013, about 71% of Australian mobile phone owners will also own a tablet, from only 12% in 2010.
With more Australians purchasing tablets, a greater number of players are entering the market, hoping to undercut the dominance Apple once enjoyed.
Since late 2012, Apple's market share has been dwindling.
According to research firm IDC, iOS tablet market share dropped to 56% in the first quarter of 2013.
Windows tablets, and particularly Android, have attracted consumers with new lower-priced tablet options.
Globally, the iPad line had also been steadily giving way to a flurry of new Android-based tablets, including the popular Kindle Fire from Amazon, which uses a version of Android's tablet operating system. (Note: Amazon's "forked" version of Android does not integrate with Google's Play app store.)
Mobile Platforms
While Android has succeeded in emerging markets like the BRIC economies (Brazil, Russia, India, and China) and continental Europe, Apple has won significant shares of the mobile market in the U.S., U.K., and developed economies of the Asia-Pacific region, especially in Japan and Singapore.
This Apple enthusiasm is also in effect in Australia.
Sales of Apple iPhones have been steadily increasing since its initial debut in Australia in July of 2008.
In its annual survey of mobile phone users, the AIMIA found that 40% reported owning an Apple phone. That put Apple far ahead of the second-place manufacturer, Samsung. The Korean brand was on the handsets of 18% of survey respondents.
Apple's increasing reach in Australia has come at the expense of Nokia, which enjoyed a 47% market share in 2009, according to the same survey. By 2012, Nokia's share had dipped all the way down to 16%.
In terms of mobile operating systems, a different story is taking shape. The Android operating system continues to accumulate momentum as the most-sold smartphone platform in Australia, according to the Kantar WorldPanel ComTech global consumer panel.
Android was running on 63.6% of handsets sold in Australia through the three months ending April 30, 2013. That's an impressive 6.1 percentage point gain in share over a year earlier.
Meanwhile, Apple's iOS operating system has consistently accounted for about 30% of the handsets sold in Australia, according to Kantar. In the 12 weeks through the end of April 2013, iOS was on 28.1% of smartphones sold. That's a 2.5 percentage point drop from the same period a year earlier, when iOS had a 30.6% share of sales.
Among the 10 major global mobile markets tracked by Kantar, Australia ranked fourth in terms of the iOS share of smartphone sales over the period. Only Japan, the U.S., and the U.K. (which was virtually tied with Australia at 28.7%) saw iOS taking a greater share of smartphone sales.
The recent turbulence in the global economy caused by an interest rate rise, and the pressure on the Australian economy and currency will likely bring tougher times.
If that's the case, Australia may observe a phenomenon already in effect in continental Europe, whereby Android gains market share as economic conditions deteriorate and consumers begin to pare back on spending.
Social Media
Social media websites have become more ingrained in everyday culture across the globe. Australians are also connecting over the web to the most popular websites.
According to a May 2013 report from Yellow Pages, the most popular social media websites in the country are Facebook, LinkedIn, Twitter, and mobile photo-sharing app Instagram.
Facebook garners the most attention from Australian consumers.
About 95% of all active social media users in the country have an account on the social networking giant. The site with the second-largest percentage of social media users is LinkedIn, at just 20%.
It's clear that Facebook Australia is spearheading the overall movement toward greater social media use in the country.
Not only is Facebook leading overall social media use, it is also the top social media website being accessed by Australians on mobile devices with 59% of social media users doing so, according to the same Yellow Pages report.
Additionally, a 69% majority of social media users on mobile devices are accessing their social networks through a native app, instead of over the mobile web.
As we've seen in many mobile markets worldwide, social media adds fuel to the fire in mobile. Once mobile consumers adopt the habit of using social media on their phones, they tend to spend more time glued to their handsets and native apps, since the latter often offer a better-quality experience than sites accessed via mobile Web browsers.
As seen on the chart to the right, social media usage on mobile has been skyrocketing in Australia.
Smartphones are now the device which Australians use most to access social media, even edging out the laptop.
Social media activity on tablets has also grown significantly over the last three years. Only 5% of social media visitors used a tablet to access social networks in 2011, compared to 35% in 2013.
Australians are also developing a penchant for accessing social networks while watching TV.
According to Yellow, 42% of all Australian social media users have used social networks while simultaneously watching TV.
That habit has particularly taken root among users between the ages of 14 and 29.
As is known from other research, the lion's share of social media usage simultaneous with TV-watching happens on tablets and smartphones.
Mobile Marketing And Advertising
Only a market with a robust mobile advertising and marketing scene will produce marketing-linked app successes like the "Dumb Ways To Die" app game.
While paid search is only one part of the mobile ad market, it serves as an indicator of how well a particular market monetizes.
Judging by the data available on the paid search market on mobile in Australia, the local mobile ad market is a top performer.
In terms of paid search ad spend and ad clicks attributable to mobile, Australia ranks close to its developed Asia-Pacific peers, Singapore and Japan.
Australian ad buyers spent 16.8% of their paid search budgets on mobile, with tablets accounting for 8.8%, according to Marin Software's data for full-year 2012. Only Singapore, among 10 major global markets outside the U.S. and Europe, had a higher total share of spend on mobile (20%).
In the share of clicks from mobile devices (21.1%), Australia ranked only behind Singapore.
Australia also ranks high in some of the other paid search metrics.
CTRs: Already, click-through rates, or CTRs, on paid search ads in Australia are higher on smartphones and tablets than they are on PCs, according to Marin Software's 2012 data.
CPCs: Perhaps more importantly, cost-per-click (CPC) is much higher in Australia than it is in the U.S., where smartphones and tablets have CPCs of $0.48 and $0.62, respectively. Australian click costs are $0.68 for smartphones and $0.78 for tablets.
These high CPC numbers are indicators of high amounts of consumer commerce activity on mobile devices, and a healthy sign for the overall mobile market.
In sum, Australia's mobile culture has afforded the opportunity for advertisers to direct greater attention to mobile.
It's a truism in digital advertising that clicks on ads must be connected to conversions and commerce if the ad is to attract a high price.
That's the secret to Google's massive advertising business. Since clicks on mobile paid search results can be traced to sales and customer acquisition, the accumulated record of those conversions will boost the value of mobile ads, and cost-per-click. That causes the share of ad budgets going to mobile to also notch upwards.
That's why it's important to note that e-commerce has exploded in Australia.
A strong e-commerce base means more potential sales from digital clicks. That translates to higher ad rates.
Australian e-commerce has jumped from $57 billion to $216.4 billion in the five years between 2007 and 2012.
Australians are filling up those virtual shopping carts. According to a recent report from eMarketer, the average Australian consumer will spend $3,802 on e-commerce over the course of 2013. Australia came in second only to the U.K. on this measure.
Some of that impressive Australian e-commerce volume is migrating to mobile devices, and becoming mobile commerce.
THE BOTTOM LINE
Australia has iOS and Android device penetration rates that exceed any other major smartphone market in the world.
Android has gained market share recently and economic headwinds could help it make further inroads against Apple's iOS operating system in the tablet and smartphone markets.
High levels of consumer engagement on mobile has helped along mobile advertising in Australia.
Paid search CPCs surpass those in other major economies such as the U.S. The percentage of paid search ad spend going to mobile devices in Australia is an impressive 16.8%.
Brandon Workman contributed to this report.
Click here to download the charts and data for this report in Excel.→
Click here to download a PDF version of this report.→
More coverage:
Looking Beyond the U.S. And Europe — Mobile Explodes In The BRICs
Mobile In East Asia: Why Japan, Korea And Singapore Lead The World In Mobile Monetization
Android Owns The Chinese Smartphone Market
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