Explaining 'digital life': A new measurement for mobile success

Market share isn't the only metric to measure success in the highly competitive mobile market.

"Digital life" will decide who will win the mobile race, Richard Windsor, founder of Radio Free Mobile, concluded in an exclusive talk he gave at the Open Mobile Media Summit in San Francisco. Digital life is a measure of the amount of time mobile users spend engaged with a mobile internet ecosystem using services like Google, Apple, Yahoo and China’s Baidu. Windsor goes beyond most explanations of the mobile market’s commoditization by presenting a framework for understanding how mobile device manufacturers will respond.

Monetizing digital life will become an increasingly important source of revenue and differentiation for mobile device manufacturers. Windsor used Apple’s fourth-place ranking of 35% on the scale of digital life as a case in point of the vital importance of digital life and to explain the mobile device manufacturers’ dilemma. “[Apple] is missing a large number of services... Apple is brilliant at delivering other people’s services, other peoples’ applications … in fun and easy-to-use ways…What happens five years down the road when the ecosystem world is much further developed and all the apps are available in equal quality in all the other ecosystems, and hardware is much more commoditized. How does Apple make a difference?”

Windsor’s definition of an ecosystem includes at least 100 million active users, preferably 300 million to be profitable. Using its own services “the ecosystem must capture traffic on its own servers, because if you want to monetize internet traffic in the ecosystem you need to know what the user is doing,” Windsor said.

Yahoo and Microsoft surprisingly lead digital life estimates, retaining 73% and 74%, respectively, of their subscribers’ time on the mobile internet using services in their ecosystems. But both are in a lower tier than Google, Apple and Baidu because of the smaller size of their ecosystems, with approximately 100 million active users. If these companies could grow the number of active users in the range of 300 million active users, they would be considered competitive with Google and Apple. Windsor questions Microsoft’s ability to grow fast enough but he deems Yahoo a dark horse that could eventually become a top-tier ecosystem.

Android ranks high in measures of digital life, but counter-intuitively, not proportionally as strong as Android shipments. “Android does not equal Google,” according to Windsor. Android’s digital life estimate was adjusted to 49% from 69%. One reason for the adjustment is Android’s large market share in China, where the Google/Android ecosystem of Gmail, Youtube, Google Search etc. are replaced by indigenous ecosystems such as Baidu. The lower functionality of Google apps on older versions of Android, such as Gingerbread, is another reason for the adjustment. Android’s digital life ranking will improve as older Android smartphones are retired and economically priced Android KitKat 4.4 devices, such as the Moto G, ship in volume.

Yet despite the adjustments for China and older Android versions, Android digital life is still estimated to produce $5 billion in advertising revenues this year for Google, according to Windsor.

Windsor contradicts the view that choice is limited to iOS or Android and that there is only enough space out there for two ecosystems. It may become only a choice between these two hardware and OS platforms, but the analysis of the ecosystems tells a different story. In 2015, it’s estimated that 2 billion smartphones will be in use throughout the world. Windsor expects Apple’s ecosystem to reach 350 million active users and the Android ecosystem to reach almost 400 million. The remaining 1.25 billion smartphones could support as many as 12 sustainable ecosystems of 100 million users.

In the near future, when every smartphone is a commodity and all are as amazing as the Nexus 5, LG G2, Moto X and iPhone 5s, Windsor’s framework gives good insight into how mobile device manufacturers will employ digital life to monetize, retain users and differentiate products.

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