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Summary:

Smartphone buyers are still making buying decisions based on hardware. But it’s the apps that are changing their lives, connecting them to the Internet and in many cases, lessening their dependency on other gadgets, according to a report from Deloitte.

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Smartphone buyers are still making buying decisions based on hardware, but the apps are what’s changing their lives, connecting them to the Internet, and in many cases, lessening their dependency on other gadgets, according to a report from Deloitte.

Deloitte found that 58 percent of the almost 2,000 respondents reported that their main criteria for buying a smartphone were quality, camera, size, keyboard and price. Just 18 percent said apps and their functionality influenced their buying decision. This would seem to echo a recent Pew Internet study that found only 35 percent of people have apps on their phones, and only 25 percent actually use them. For all their growth in the last couple of years, apps aren’t quite mainstream yet.

But here’s the thing: Once people start using the apps, many are finding it’s changing their habits and relationships with other devices. Among app users, 42 percent have diminished or lessened their use of MP3 players, and 38 percent have done the same with AM/FM radios. Another 30 percent favor their phone over handheld gaming devices, and 28 percent are avoiding their GPS personal navigation devices.

A few other bits of data: 62 percent said having access to certain apps have caused them to use their phone in places they wouldn’t before, and 41 percent of users use their smartphone as a laptop replacement while away from home. Users are still learning about the benefits of apps, which despite Apple’s many ads, is still an education process. But once people get going using them, they see how useful the tiny programs are, specifically in getting them easy access to content or services on the Internet. According to the Pew study, the average adult app user has 18 apps.

This jibes with a report from Finnish mobile analytics company Zokem which reported that half of mobile data volume happens now through apps, not a browser. People are realizing that apps are like a quick on-ramp to the Internet and provide usefulness that rivals, and in some cases eclipses, a mobile browser.

Ed Moran, director of Insight and Innovation at Deloitte, said app makers, smartphone manufacturers and carriers need to do a better job explaining how smartphones have become computers in your pocket, capable of doing a lot of things you can’t do on a PC. He also said making apps easier to use will also increase their adoption. As that happens, app use will only go up, he said.

While hardware is still the lure for many buyers, it’s the apps and the Internet access they offer that should become a major selling point in the future.

Post and thumbnail photos courtesy of Flickr user dougbelshaw.

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  1. Great point, Ryan. I use my iPhone for calls and texting, but for the “mobile web” it’s conducted almost exclusively via apps.
    Maybe what we need next is a study that tries to put a dollar figure on the importance of apps, particularly those that are exclusive to one mobile platform. Would be interesting to determine the true cost to the user of switching from on platform (e.g. Blackberry) to another (e.g. Android).

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  2. @brian. Yeah, that’s the sad thing about apps is that while they’re great, they are often slow to expand across multiple platforms. Sucks for consumers switching platforms and more work for devs. I wonder how mobile web apps will change things when HTML5 matures. Or are apps just gonna grow in importance?

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  3. ‘Apps vs browser” is almost a red-herring.

    Many many apps are but iconized bookmarks (at least functionally). You could open a browser (wait for it to load), go to favorites (wait for it to drop down), go over your hierarchy of folders till you get to your link for (for example) twitter and double click it and wait for it to load.

    Or you could click on the twitter icon in your homescreen.

    What a browser needs (and chrome / chrome OS was all about that) is a colorful home screen with animated scrolling.

    My guess is such a browser would sell, no matter which OS.

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    1. Except, that’s not what ‘most’ apps are at all. Most apps are native code that runs completely independent of a browser, call web service APIs directly, and present the UI using native controls and widgets. The benefits for the user are faster loading, faster execution (only raw data is transferred via the API, no need for markup code, images, etc), and just better overall user experience – at least potentially. Apps will routinely retain a user’s login credentials, whereas web apps often wont, meaning you have to remember and re-enter your password frequently.

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  4. I think apps will cease to be a differentiating factor for handsets as time goes by. Not because they become less used but simply because they beceme universally available and transferrable accross multiple platforms. The hardware itself ceases to have any meaning beyond the normal criteria of usability, design and feature set after that.

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  5. PCs are bought on hardware, then why mobiles will be bought on Apps after approximately 1 year?

    PCs have Wintel monopoly, what differentiates one PC from another is hardware and operating system. Mobile market is diverse and hence Apps are also diverse and hence people will closely look at them for deciding about purchase.

    Apps are much closer emotionally, social networks or not. PCs either sit on a desk (desktops) or need a flat surface to work (laptops or netbooks). Mobiles go in a pocket or in a purse or in a man purse and are used in many varied environments again needing a closer look at Apps.

    There may be more reasons but I can not think of them now.

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  6. Ryan,

    Very interesting statistics. One reason apps are still secondary during the buying process is probably the fact that users are primarily buying a phone. There is always a lag in being productive with new gadgets due to the learning curve. I would expect that as apps become as important as the voice communication, and users start depending on them, they will drive the buying decision for the hardware.

    Ranjit

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  7. The article I’ve linked to below dovetails nicely with yours.

    And while you read it, please forget about the platforms mentioned which are irrelevant to the point of the article. Of course, everything is a moving target, and things are changing and getting better.

    But like “disruption” has been the new buzzword, I have a feeling that “discovery” will be the next, and it’s one of the most important challenges we face in the way tech impacts everyday people…

    http://fury.com/2010/09/the-first-step-to-fixing-the-android-marketplace-has-nothing-to-do-with-the-android-marketplace/

    Mark

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  8. It is still true that a mainstream mobile user, even a smartphone user, is not so much into apps. Basic use cases, according to our studies, are still voice and SMS, even with smartphones. However, web browser has been in somewhat stready growth phase, many thanks to better screens and browsers of today’s smartphones. Also apps are growing significantly, but invidial categories (like games, social media, music players etc.) are still having a hard time challenging browser. Cumulatively, however, apps are making good progress, as can be found from our report about Internet traffic from apps vs. browsers this week at http://www.zokem.com/category/mobile-insights/

    One thing is important to remember, and that is the fact that eventually vendors and operators are the ones really making an impact on app adoption. Market places and app stores are important, but those are still used heavily by hard-core users, and normal consumers do somewhat spontaneous downloads, like games, but still not actively continue using most of those downloaded apps.

    Instead, pre-embedded key apps like Facebook and YouTube, have shown sticky usage. When it is made very easy for people to adopt these native apps, they continue using them. And in those cases they skip web browser, they just learn to use the native apps. In our studies, app usage is increasing very quickly, and the growth is mainly coming from mainstream important apps like maps, Facebook, Twitter, YouTube etc. – which are preinstalled into the devices, and typically the user experience is quaranteed.

    App stores are important – but we believe it is more for the long-tail of the market.

    Best,

    -Hannu / Zokem

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  9. [...] will tell if any of this pays off. As we’ve written before, most consumers base their purchase first on the hardware. But the various OS makers know that apps are what keep many consumers tied to a platform and [...]

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