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Google Confidential and Proprietary
Prepared by J'son & Partners Consulting for Google
Mobile Internet
in Russia
Android and Mobile Marketing, Google Russia Android and Mobile Marketing, Google Russia
Table of Contents
1. Mobile Internet users 1.1. Number of active mobile Internet users
1.2. Number of active mobile Internet users by regions of Russia
1.3. User profile
2. Mobile Internet access devices 2.1. Overview of mobile Internet access devices
2.2. Tablet PCs
2.3. Smartphones
3. Mobile Internet usage on smartphones 3.1. Frequency of mobile Internet usage
3.2. Average duration of daily session
3.3. Mobile Internet usage experience
3.4. Places where smartphones are used
3.5. Incentivising smartphone usage
3.6. Mobile Internet advertising
3.7. Using a smartphone to make purchases
3.8. Purchases with a smartphone
3.9. Reasons for using mobile Internet: top 10 actions
3.9.1 Reasons for using mobile Internet: search applications
3.9.2 Reasons for using mobile Internet: video applications
3.9.3 Reasons for using mobile Internet: social networking sites
4. Technical parameters for mobile Internet usage 4.1. 3G network coverage map
4.2. Mobile Internet traffic
4.3. Average traffic for one subscriber
4.4. Cost of mobile Internet
5. Forecasts, trends and barriers for mobile Internet development in Russia 5.1. The dynamic of smartphone prices and forecast
5.2. Dynamic for 3G network coverage
5.3. Growth of sales market for smartphones and other mobile Internet access devices
2
1. Mobile Internet users
Number of subscribers,
million
Average traffic per 1
subscriber, MB
Total traffic per
month, TB
3G tablets 0.3 250 75
USB modems 10.3 1,430 14,729
Smartphones 12.0 121 1,452
Mobile phones 27.2 14 381
1.1. Number of active Internet users from mobile devices as of the first six months of 2011
Data traffic from smartphones accounts for about 75% of all
data traffic from mobile devices*
*In this study, the term „mobile device‟ is understood as smartphones, mobile telephones and tablet PCs.
3G tablets Mobile phones Smartphones
0,3 27,2
12
250
14
121
75
381
1 452
Traffic per month, TB
Number of subscribers,
million
МBOU
3
2009A 2010A 2011E 2012F 2013F
34 39 43 48 53
1. Mobile Internet users 1.2. Number and share of the population of active Internet users from mobile devices by region of Russia
The development of the mobile Internet is rapidly eradicating the “digital divide” in the outlying
regions of Russia. The share of active* data subscribers in Moscow and St Petersburg accounts for
around 40% of the total population
5-20%
20-25%
25-30%
30-35%
more than 35%
Share of data subscribers in the total population by region of Russia,
as of the end of Q2 2011:
28% of the population of Russia
who are active data
users**
**as of Q2 2011
Subscribers for data
from mobile devices, million people
* An active data subscriber is a subscriber who has used a data service at least once in the last month
4
Gender
18 - 24
25 - 34
35 - 44
45 - 54
55 +
Average age: 30.8
Men
Women
Age
Education
Employment status
Primary
Secondary
Higher
Full time
Part-time employment
Student
Unemployed/
Working from home
Monthly household income
High (more than RUB 50,000)
Average (RUB 25,001 – 50,000)
Low (RUB 25,000 and lower)
2%
11%
20%
31%
37%
39%
61%
60%
36%
4%
8%
11%
12%
67%
24%
42%
27%
1. Mobile Internet users 1.3. Smartphone user profile General demographic characteristics
5
Age
1. Mobile Internet users 1.3. Smartphone user profile. Demographic characteristics by operating system
Gender
Men are the principal users of smartphones.
The majority of smartphone users are aged between 18 and 34.
iOS
Android
Windows Mobile/Phone
Symbian
41%
40%
32%
28%
59%
60%
68%
72%
Женщины Мужчины
iOS
Android
Windows Mobile/Phone
Symbian
49%
42%
42%
27%
30%
28%
28%
31%
14%
20%
17%
29%
8%
8%
12%
8%
2%
1%
5%
18-24 25-34 35-44 45-54 55 и старше
6
Women
55 and older
Men
1. Mobile Internet users 1.3. Smartphone user profile. Experience of smartphone usage by operating system
Of smartphone owners on the Android platform, the greatest share is occupied by new users
(with less than one year‟s experience of smartphone use). For many smartphone users on the Android
platform, this is their first “smart telephone”
How long have you been using smartphones?
Android
iOS
Windows Mobile/Phon
e
Symbian
61%
44%
34%
24%
39%
56%
66%
76%
До года Более года Less than a year More than a year
Symbian
Windowa
Mobile/Phone
iOS
Android
7
2. Mobile Internet access devices 2.1. Overview of mobile Internet access devices: tablet PCs
In 2010, the sales volume for tablet PCs in Russia came to around 400,000 devices – approximately 10 times
less than smartphone sales. In 2011, we expect the size of the tablet PC market to double
8
Sales volume for PC tablets in Russia, million items
2. Mobile Internet access devices
Sales volume for smartphones in Russia, million items
2009A 2010A 2011E 2012F 2013F
1,9 3,9
8,6
11,8
15
The volume of smartphone sales* in Russia will double in 2011 compared with that of 2010
* The smartphone is defined as a multi-functional mobile communication device.
The following main criteria identify a device as a smartphone:
• the operating system that manages the device and enables the installation of additional applications, including those from external developers
(Java2Me applications are not included): Symbian (version 6 and higher), Windows OS for mobile devices, Palm OS, Linux, Android, Maemo; Bada
• advanced communication features – email, HTML page viewing, data synchronisation with PC, etc.;
• support for standard business applications.
Share of smartphones in total sales of mobile
terminals in Russia, %
6%
11%
22%
29%
36%
2009A 2010A 2011E 2012F 2013F
2.2. Overview of mobile Internet access devices: smartphones
9
2. Mobile Internet access devices
2008A 2009A 2010A 2011E
81,2% 66,7% 71,6%
45,1%
0,8% 11,4%
33,9%
3,8% 13,5% 2,8%
6,0%
4,5% 5,0% 15,4%
26,3%
8,3% 2,4%
Other WM Apple Bada Android Symbian
1Q2011A 2Q2011A 3Q2011E 4Q2011F
67% 58% 42%
30%
17% 25% 37%
45%
10% 11% 15% 16%
4% 4% 5% 6%
3% 2% 2% 3%
Other WM Apple Bada Android Symbian
In Q4 2011 in Russia, sales of Android smartphones will for the first time exceed
sales of Symbian smartphones
Smartphone sales
by operating systems: 2008-2011
Smartphone sales by operating
system: 2011
2.2.1 Smartphones by operating system
10
2008A 2009A 2010A 2011E 2012F 2013F
518 452
377 331 305 285
Over the last 3 years, the average price for a smartphone has fallen by 33%.
There has been a significant increase in the share of sales of smartphones costing less than 200 USD
Market structure for smartphone sales
by price segment
The average price of a smartphone
at the end of the first six months of
2011 was 350 USD
2. Mobile Internet access devices 2.2.2 Average price of smartphones
Average price of a smartphone, USD
11
more than 500 USD
less than 200 USD
350-500 USD
200-350 USD
Dynamic of the average smartphone price by operating system, USD
The average price of an Apple smartphone during the last 2 years has increased by 70%,
prices for smartphones on Android, Symbian and WM platforms have fallen
744 637
497 483 462 415 415 393
Android
399 437 488 402 391 352 306 237 300 293
Symbian
414 492 472 472 475 435 434 404 462 351
Windows Mobile
2. Mobile Internet access devices 2.2.3 Average price of smartphones by operating system
12
The average retail price for a smartphone by region of Russia
as at the end of the first six months of 2011:
The highest prices for smartphones – are in the outlying regions of Russia and the Moscow Region.
The high cost for a smartphone in Moscow of around 390 USD is explained by Russia‟s highest share
of sales in this region for Apple and Android smartphones
2. Mobile Internet access devices 2.2.4 Average retail price for smartphones by region
More than 350 USD
330-350 USD
324-330 USD
On average for Russia 350
Moscow 390
St Petersburg 361
Average cost of a smartphone in the
first six months of 2011, USD
13
Over 5%
3 – 5%
2 – 3%
1 – 2%
0 – 1%
Around 50% of all
smartphones are sold in
the Top 10 Russian
regions
Region Share
Moscow region, Moscow 22.4%
Leningrad Region 6.5%
Krasnodar Krai 4.2%
Sverdlovsk Region 3.5%
Rostov Region 2.7%
Tatarstan Republic 2.7%
Chelyabinsk Region 2.5%
Nizhniy Novgorod Region 2.5%
Samara Region 2.5%
Republic of Bashkortostan 2.4%
2. Mobile Internet access devices 2.2.5 Regional structure of smartphone sales
Smartphone sales structure, Top 10 regions,
first six months of 2011
Regional sales structure for smartphones, first six months of 2011:
The Top 10 regions of Russia currently account for around a half of all
smartphone sales
14
2. Mobile Internet access devices 2.2.6 Specific sales of smartphones by region
The highest specific sales of smartphones - at more than 5 devices
per 1000 people per month - are recorded in Moscow and the Moscow Region.
5 – 5.5
4 - 5
3 - 4
0 - 3
Region Share
Moscow region, Moscow 5.50
Khabarovsk Krai 4.61
Kaluga region 4.35
Krasnodar Krai 4.18
Tyumen Region 4.15
Sverdlovsk Region 4.09
Leningrad Region 4.00
Samara Region 3.97
Nizhniy Novgorod Region 3.79
Sakhalin Oblast 3.72
Specific sales of smartphones, Top 10 regions,
first six months of 2011
Specific sales of smartphones: number of devices per 1000 people per month
15
16
303
452 488
547
2008 2009 2010 1H2011
69
122
142
187
2008 2009 2010 1H2011
Processor speed (MHz) RAM (MB)
*Average weighted indicators for 2008 smartphone performance – first six months of 2011
Processor speed and RAM*
In the last 3 years, the smartphone has become twice as fast and three times “smarter”
2. Mobile Internet access devices 2.2.7 Smartphone profile: performance
16
3G module GPS module
In 3 years, there has been a significant increase in the share of touchscreen and GPS smartphones as
well as the average screen size of smartphones
2. Mobile Internet access devices 2.2.8 Smartphone profile: functional
Touch Screen Screen size (inches)*
2008 2009 2010 1H 2011
89% 82% 71% 73%
11% 18% 29% 27%
Нет
Есть
2008 2009 2010 1H 2011
33%71% 72% 80%
67%29% 28% 20%
Нет
Есть
2008 2009 2010 1H 2011
22%62% 79% 85%
78%38% 21% 15%
Нет
Есть2.4
2.9 3.0 3.1
2008 2009 2010 1H 2011
Дюймы
*average weighted indicator for 2008 screen size – first six months of 2011
17
No
Yes
No
Yes
No
Yes In
ches
Number of installed applications
Number of applications used over the last 30 days
Number of charged applications
15 applications
on average
An average of
6 applications
An average of
3 applications
2. Mobile Internet access devices 2.2.9 Smartphone profile: average number of applications installed and used
On average, 15 applications are installed on a smartphone, and over the last 30 days
6 applications were used. Charged applications account for 20% of the total number of installed applications
How many applications are currently installed on your smartphone?
How many applications have you used in the last 30 days?
How many charged applications have you purchased through an app store?
73%
10%
3%
19%
45%
20%
6%
34%
37%
1%
8%
22%
1%
3%
14% 4%
not one 1 - 4 applications
5 - 10 applications
11 - 20 applications
21 - 50 applications
51+ applications
18
One of the fastest growing market segments for mobile content is the sale of applications in app stores.
In 2010, the share of this segment increased by a factor of 2.5.
2. Mobile Internet access devices 2.3. Mobile content market
applications (including games) - content for smartphones with OS
RBT (Ringback Tone) - melody instead of ringtone
graphic content - pictures and screensavers for mobiles
video (incl. TV content) - pay-per-view and/or downloading video to a mobile phone
games - Java games for phones with no OS
information content – subscription (news, events guide, weather, currency exchange rates)
19
1133
1431
1798
2582
mobile phone content market
2009 2010 2011 2012
40 43 44 45
584 701 766 89879
8688
88
55143
255
497
360286
292
296
70172
355
760
Information content audio and RBT graphic content video and TV games applications
Mobile content market
by content type, USD million
Android
Palm
Apple
BlackBerry
Windows
Nokia
64%
32%
28%
24%
22%
15%
36%
68%
72%
76%
78%
85%
Ratio of paid to free applications, available to download
from app stores* Average cost* of apps by type, USD:
Average app
cost in store:
3.62 USD
Среднее 31% 69%
Бесплатные Платные
Average
Free Charged
2. Mobile Internet access devices 2.3.1 Mobile content market: app stores
A large proportion of the applications currently available in stores
are paid apps. Average cost of an application is USD 3.62
*data as at the end of second quarter of 2011
Games
News
Photography
Social
Music
Entertainment
Weather
Productivity
Sport
Finances
Health/Fitness
Lifestyle
Travel
Education
Books
Navigation
Business
1.97
2.05
2.11
2.28
2.45
2.5
2.53
2.74
2.85
2.93
2.97
3
3.66
3.71
4.44
4.99
5.7
20
Игры Развлечения Инструменты Социальные сети
Продуктивити Стиль жизни Фотография Музыка Путешествия Здоровье и фитнес
24%
20%
12%
7% 7% 7% 5% 4%
2% 2%
23%
11%
6%
2% 2%
6%
1% 3%
3% 2%
Games Games Entertainment Tools Social networking sites
Productivity Lifestyle Photography Music Travel Health and fitness
Dynamic of the total number of user app downloads in app stores,
million units, 2009-2011.
2009 2010 2011
26
76
256
1 Q 2011 2 Q 2011
Growth dynamic of the total number of apps available in app stores
for the first six months of 2011, thousand units.
Share of apps by type: in the structure of applications, available in app stores
and in the structure of user downloads, first half of 2011
2. Mobile Internet access devices 2.3.2 Mobile content market: app stores
For the period from 2009 to the present, the number of app downloads from app stores has
increased almost 10-fold. The most popular apps are games and entertainment applications
Share of apps downloaded Share of available apps
21
3.1. Frequency of mobile Internet use (days a week)
Smartphone
PC
3. Mobile Internet usage on smartphones
32% of smartphone owners use mobile Internet daily; around a half of users use it 4 to 7 days a week.
A PC is used far more often for daily Internet access
How often in the last week have you been on the Internet (using a PC or smartphone)?
22
7 of 7 6 of 7 5 of 7 4 of 7 3 of 7 2 of 7 1 of 7 0
5%
5%
29%
1%
17%
70%
30%
5%
15%
17%
4%
2%
One long One short Several longSeveral short Short and long n/a
Smartphone
PC
3.2. Average duration of daily session
3. Mobile Internet usage on smartphones
A PC is used more often than smartphones for several long online sessions a day. Smartphones are
used more often for one short online session.
How much time did you spend on the Internet yesterday (using a PC or a smartphone)?
23
Experience of smartphone usage
53% 47%
Да Нет
For 53% of users, this is their first smartphone. 39% of smartphone users have less than one year‟s
experience
3.3. Mobile Internet usage experience
3. Mobile Internet usage on smartphones
10%
9%
9%
15%
18%
17%
13%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Is this your first smartphone?
How long have you used your smartphone?
24
Yes No
Smartphones are used most often at home, “on the go” and at work
Any time
In the last 7 days
At home
On the go
At work
On public transport
In a cafe
In shops
In public places
In a restaurant
At school
At the airport
At the doctor‟s
Somewhere else
3.4. Places where smartphones are used
3. Mobile Internet usage on smartphones
Where do you use your smartphone?
Where have you used your smartphone in the last 7 days?
25
The most common reasons for using smartphones: “to save time”, “Internet
access when other means are not available” and “when I need specific information urgently”
To save time
To access the Internet when other means are not available
To obtain information that I need urgently
A fear of missing something important (for example, messages, letters or news from friends and acquaintances)
Mobile Internet is an essential feature of modern life
The smartphone as a discrete device for Internet access at work, at school and so on
Mobile Internet as the cheapest way of accessing the Web
Using mobile Internet on a smartphone because there is no other means of accessing the Web at home
3.5. Incentivising smartphone usage
3. Mobile Internet usage on smartphones
To what extent do you agree with the following statements.
26
10%
20%
23%
21%
25%Constantly
Frequently
Occasionally
Rarely
Never
In search engines
On video sites
On retailers' websites
In apps
Video advertising
Other sources
No response
3.6. Mobile Internet advertising
3. Mobile Internet usage on smartphones
90% of users notice mobile advertising when using mobile Internet from smartphones
How often do you come across advertising on the Internet or in apps on your smartphone?
Where do you encounter advertising?
27
21%
20%
18%
One fifth of all smartphone users have used their smartphone to obtain information about products when
making purchases
Have you used your smartphone to compare
prices and search for product information
Have you changed your opinion about
a product or service in a shop based on
the information that you received
Have you changed your opinion about
a product or service online based on
the information that you received
3.7. Using a smartphone to make purchases
3. Mobile Internet usage on smartphones
Specifically:
Share of smartphone
users
Question: Do you agree with the following statements?
28
23% have already made purchases* using their smartphone. Around a half of them made a purchase
with their smartphone in the last month
Yes No
Yes No
3.8. Purchases with a smartphone
3. Mobile Internet usage on smartphones
*The definition of a purchase includes the purchase of paid content
• Have you ever bought anything online using a smartphone?
• Have you bought anything online with your smartphone in the last month?
• How often do you make purchases online using a smartphone?
29
Daily Weekly
Monthly Less than once a month
74%
73%
72%
70%
68%
64%
60%
60%
52%
50%
46%
45%
42%
42%
40%
39%
25%
30%
25%
25%
0% 20% 40% 60% 80% 100%
Top-10 reasons for using mobile Internet
Listening to music
Viewing websites
Using search engines
Photos and videos
Social networking sites
Maps and navigation
Games
Visiting blogs and forums
Reading news on press and media sites
Any time
In the last 7 days
The most popular reasons for using mobile Internet on smartphones: reading emails, listening to music
and viewing websites
3.9. Reasons for using mobile Internet
3. Mobile Internet usage on smartphones
Mark all the actions that you have ever performed on your smartphone.
Mark all the actions that you have performed on your smartphone during the last 7 days.
30
While using their smartphones, owners often listen to music, watch videos and TV programmes or
browse the Internet using other devices
62%
42%
41%
38%
24%
18%
10%
17%
2%
Listening to music
Watching videos (online and offline)
Watching TV programmes (online and offline)
Browsing the Internet on any other device (such as a PC)
Reading books
Video games
Reading newspapers and magazines
Only the above actions when using my smartphone online
None of the above
3.9.1 Simultaneous usage
3. Mobile Internet usage on smartphones
31
Which of the actions listed do you perform (using other devices)
while you are browsing the Internet on your smartphone?
Smartphone
PC
3.9.2 Reasons for using mobile Internet: search applications
3. Mobile Internet usage on smartphones
40% of users use their smartphones for searching the Internet on a daily basis.
A PC is used more often for daily access to search engines
How often do you use search engines (Google, Yahoo!, Bing etc.) on your PC/Smartphone?
32
Daily Weekly Monthly Less than once a month
Smartphone
PC
3.9.3 Reasons for using mobile Internet: video applications (watching videos)
3. Mobile Internet usage on smartphones
28% of users use video applications on smartphones at least once a week. For PC users the figure
is 85%
How often do you watch videos online on your smartphone (via a browser or app)?
33
Daily Weekly Monthly Less than once a month Never
Smartphone
PC
3.9.4 Reasons for using mobile Internet: Social networking sites
3. Mobile Internet usage on smartphones
52% of users use their smartphone to visit social networking sites at least once a week.
How often do you visit social networking sites on your smartphone (via a browser or app)?
34
Daily Weekly Monthly Less than once a month Never
4. Technical parameters for mobile Internet usage 4.1. 3G coverage map as of 2010-2011
The share of the population living in areas covered by 3G networks of mobile operators
70 – 97%
60 – 70%
50 – 60%
40 – 50%
0 – 40%
2010
1 half 2011
At the end of the first half of 2011, the share of the population living in regions covered by 3G
networks was more than 50% in the majority of Russian regions
35
According to the forecasts of J‟son & Partners Consulting, Internet access traffic from mobile devices
will „double‟ every year over the next few years against a continually falling cost
Drivers:
• An increase in the total number of smartphone users
• Development of coverage and quality of service of 3G network operators
4. Technical parameters for mobile Internet usage 4.2. Mobile Internet access traffic, PB
5 10
25
48
104 7,1
4,2
2,8
1,9
1,3
0
1
2
3
4
5
6
7
8
0
20
40
60
80
100
120
2009A 2010A 2011E 2012F 2013F
Трафик, ПБ
Средняя стоимость 1МБ, руб.
36
Traffic, PB
Average cost of 1MB, RUB
As of the end of the first half of 2011, average traffic per smartphone user
was 121 MB a month
4. Technical parameters for mobile Internet usage 4.3. Average traffic for one subscriber, MB
2010
1st half of 2011
2010 1st half
of 2011
On average for Russia 85 121
Moscow 89 166
St Petersburg 100 143
Average traffic per 1 subscriber per
month, MB
over 150
100-150
50-100
25-50
0-25
37
2010
1st half of 2011
4. Technical parameters for mobile Internet usage 4.4. Cost of mobile Internet
2010 1st half
of 2011
On average for Russia 4 3
Moscow 6 3
St Petersburg 2 2
Average cost per 1 MB of traffic from
a smartphone, roubles
As of the end of the first half of 2011, the average cost per 1 MB of traffic for mobile Internet
smartphone users was 3 roubles
More than 5
3 - 5
Less than 3
38
5. Forecasts, trends and barriers for mobile Internet development in Russia
5.1. Growth of sales market for smartphones and other mobile Internet access devices
2009A 2010A 2011E 2012F 2013F
1,9 3,9
8,6 11,8
15
Sales volume for PC tablets in Russia, million items Sales volume for smartphones in Russia, million items
Sales drivers:
• The current level of technology development facilitates
the production of inexpensive smartphones and PC tablets
• Development of coverage and quality of service of 3G network operators
• Mobile operators subsidise the purchase of smartphones and
PC tablets
• Development and rise in popularity of mobile applications that require
a “functional” telephone and Internet access
• Development of consumer credit programmes
According to forecasts made by J‟son & Partners Consulting, the volume of smartphone sales
in Russia will be 15 million devices per year by 2013.
39
0.4 0.74
1.02 1.23
.
40
5. Forecasts, trends and barriers for mobile Internet development in Russia
5.2. Growth in data traffic and the mobile content market
Mobile content market, USD billion Mobile data traffic, PB
Drivers of growth in data traffic and the mobile content market:
• reduction in the cost per 1 MB of traffic, including on account of a rise in sales
of unlimited data tariffs
• development of coverage and quality of 3G operator networks and
increase in mobile Internet speeds
• increase in the total number of users and a drop in the cost of smartphones
• increase in the sales of content in app stores of mobile eco-systems
• convergence of mobile and Internet spaces
According to forecasts made J‟son & Partners Consulting, mobile data traffic will amount to 104 PB by
2013, while the mobile content market will grow to USD 3.1 billion
2009A 2010A 2011E 2012F 2013F
5 10
25
48
104
2009A 2010A 2011E 2012F 2013F
1,1 1,4
1,8
2,6
3,1