The Subscribers vs. The Subscriptions (it really should not be this difficult)

Once again I’m making a short post fixing insane numbers of Tomi Ahonen (supposedly an expert on mobile). He made a blog post a while ago where he explained that making apps is silly as the reach is so low and only 1% or so of the apps make decent profit [1]. I’ll skip the logic of that conclusion and instead suggest you read the comment section of that article. People have been very verbal about that.

Meanwhile we have another gem I cannot skip as it was brought up in the comments too. You see in the same post Tomi Ahonen also explains that “6 Billion people on the planet use SMS text messaging today [1] and then goes to explain where people should focus instead of the apps:

So yeah. I don’t mean to stop developing your app strategy but please consider where the real money and profits are in mobile, except for games, they are not in apps. MMS works on over 85% of all phones in use on the planet, well past 3 times more than all smartphones in use. Here is the table putting the various platforms into context:

MOBILE DATA PLATFORMS SUMMER 2014

Rank . . Platform . . . . Units . . . Market share
1 . . . . . Premium SMS . . . 6,000 M (active users, total potential 7.1B but then illiteracy etc)
2 . . . . . WAP . . . . . . . . . . 5,400 M
3 . . . . . MMS . . . . . . . . . . 4,900 M

Whoa! Can I really reach 6 billion people via SMS? That’s quite an achievement considering Ericsson estimated (February 2014) that there are 4.5 billion unique mobile subscribers globally when inactive subscriptions, multiple subscriptions for same subscriber and machine-to-machine (M2M) subscriptions are removed [2]. There is no way to actually reach the amount of subscribers (human or organization) for any of the services “where the real money and profits are in mobile” according to Tomi.

As for the hilarious 7.1 billion SMS reach: total number of living humans on Earth as of 1st of July 2014 is estimated at 7.257 billion by the United Nations. Total annual births are now expected to remain essentially constant at their 2011 level of 134 million. As ten million infants and children die each year before their fifth birthday globally, we can do rough estimate of the amount of infants alive. Therefore SMS (by Tomi’s books) has total potential to reach every adult, child and elderly people of age 3 or more (and well over half of the 2 year old toddlers too) – had it not been illiteracy etc. ;)

Tomi’s numbers apply for amount of mobile subscriptions – sure – but what good is that for those planning to make money instead of apps? If I come up with a hit SMS-based service, will people with three subscriptions use it three-fold? Will dead subscriptions magically start using it? Will M2M subscriptions?
Tomi has serious problems understanding the difference of subscription and subscriber, as I wrote in my post about Tomi’s “Mobile Moment”.
cluemeter

REFERENCES:

[1] http://communities-dominate.blogs.com/brands/2014/08/the-comprehensive-app-economics-blog-2014-yes-peak-app-is-apt-name-sheer-disaster-industry-with-only.html

[2] http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/a#uniquesubscribers

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