Mobile data will skyrocket 700% by 2021
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The proliferation of smartphone ownership, expansion of cell infrastructure, and vast adoption of mobile video will drive up mobile data consumption seven-fold by 2021, according to the 2016 Cisco Mobile Visual Networking Index Forecast.
By the end of the forecast period, mobile data is projected to account for 20% of total internet traffic, up from just 8% in 2016.
Here are the key highlights from the report:
- Smartphones will account for more than 50% of connected devices globally. The number of global smartphones is projected to reach 6.2 billion by 2021, almost doubling the 3.6 billion devices that were in circulation in 2016. The growth will likely be driven by enhanced performance, an expansion of networks, and the lowering cost of high-performing devices, particularly in emerging markets, where the middle class is on the verge of mass growth.
- Mobile video data will be the fastest-growing segment of mobile traffic. Mobile video is set to increase 870% from 2016 to 2021, reaching 38 exabytes per month, representing the highest growth rate of any mobile data category, and making up 78% of total mobile data traffic. The accelerated growth will be encouraged by wide adoption of live video, AR, and VR.
- Data networks offloading to Wi-Fi will increase. Mobile carriers are already strained under the massive demand for mobile data. The rapid growth of mobile data usage will mean that networks’ reliance on offloading data to Wi-Fi will increase three percentage points by 2021 to reach 63% of total mobile data. In 2016, monthly offload traffic exceeded monthly mobile data traffic.
The forecast growth of mobile data is indicative of a virtuous cycle, whereby demand is fueling network evolution, which, in turn, is fueling demand. Currently, the explosive growth of mobile apps and overall mobile connectivity by end users is fueling the growth of 4G. This will soon be followed by 5G growth, which will drive even greater volumes of mobile data consumption. That’s because stronger network coverage will support more contextual, immersive mobile experiences, such as live video, AR and VR, and connected devices, which require faster connections and more bandwidth. These experiences will help drive greater engagement rates for marketing and advertising.
Lastly, building up infrastructure in emerging markets, like Latin America and India, will help incite richer app usage by consumers in these regions. For now, a lack of strong network infrastructure for standards like 4G continues to stump the potential mass handset and app adoption as well as usage in these high-growth markets.
Despite this explosive data growth, the global smartphone market is expected to slow considerably over the next few years. Despite a record-setting holiday quarter, 2015 was likely the last year of double-digit growth for smartphone shipments.
Mature markets were at the heart of this year’s deceleration. Adoption has reached new highs in key markets in the United States, Europe, and China. The pool of first-time buyers in these countries is shrinking rapidly, and sales are now primarily coming from phone upgrades.
Meanwhile, emerging markets will continue to see robust shipment growth. India and Indonesia, in particular, will help fuel a large share of the shipments growth within the global smartphone market over the next few years.
BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smartphones by country that forecasts the market through 2021 to reflect slower, stabilizing growth in the long term.
Here are some key points from the report:
- The global smartphone market is still growing at a steady pace due to more widespread adoption in emerging markets. We estimate the global market will hit about 2.1 billion units shipped in 2021.
- Shipments growth over the past few years has been driven by the falling price of smartphones, which has made handsets more accessible in emerging markets. The average selling price of a smartphone in India nearly halved between 2010 and 2015.
- With relatively low smartphone penetration, we forecast Indian smartphone shipments to grow rapidly over the next five years. Nevertheless, India has a long way to go before it surpasses China as the world’s leading market for smart handsets. India is estimated to account for roughly 10% of the global smartphone market in 2016, considerably less than China’s 30% share.
- The global platform wars are over, even as smartphone adoption continues to rise across various markets worldwide. Android and iOS are estimated to account for 97.3% of global platform market share in 2015, compared to 96.3% last year.
- Apple closed the year with another strong quarter on the back of its iPhone 6s and iPhone 6s Plus launches. Still, the vendor saw a slight decline in YoY growth of its share of the market in the face of stiff competition from Samsung and Chinese vendors such as Huawei.
In full, the report:
- Forecasts global smartphone shipments through 2021.
- Explores why India is the next high-growth smartphone market.
- Breaks down the global smartphone platform wars.
- Discusses smartphone vendor performance market share.
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