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Mobile Life: The Key Events of 2011

2011 was widely anticipated to be the year of the iPhone 5. In a classic anti-climax however, consumers had to settle for the iPhone 4S – although this was still to become the fastest selling iPhone in history. Nevertheless, 2011 has been a year of significant changes which have made a big impact in how we lead our mobile life.

1.      Smartphones shatter PC sales

Starting a trend that analysts think we will never see reverse, smartphone sales exceeded those of PCs for the first time in Q1 – more than a year earlier than experts predicted.In Q3, sales grew year-on-year 42.6 per cent to 118.1 million – almost 25 per cent more than PCs.^[1]Nearly half of the UK population now own a smartphone and the pace of sales is accelerating rapidly. In the 12 weeks to 2 October, they comprised just under 70 per cent of all mobile phone sales.^[2]

Crucially, smartphones are putting the power and convenience of a computer, a mobile phone and a personal digital assistant in our pocket. A treasure chest of data, their internet connectivity, processing capability and storage capacity give users everything they need to sustain a truly mobile and socially connected life.

Reflecting the enormous impact of smartphones on daily life, 60 per cent of teenagers and 37 per cent of adults now class themselves as “highly addicted” to their phone.^[3]Similarly, our latest research shows that almost a third of iPhone owners would prefer to give up their credit card than lose their phone.

2.      Android and Samsung become the number one sellers

Google’s free Android operating system became the new market leader in 2011, and is now outselling Apple’s premium iOS by two to one.^[4] Launched just two years ago, Androidpowers more than a third of all smartphones and the proportion is expected to keep rising due to the large number of manufacturers using it.^[5]

In an equally dramatic fashion, Samsung is now the largest player in the smartphone market. Its 223 per cent increase in sales between 2010 and 2011 displaced Apple from the top spot. In comparison, Apple’s growth during the same period was just 21 per cent.^[6]

These major market shifts demonstrate how new technology can dominate in a matter of months, and more significantly, how hard it is to predict and plan for what will happen in the future.

3.      Android malware spirals out of control

Unfortunately, it’s not just Android sales that are booming. Rising 110 per cent in September and 111 per cent in October, research by Juniper shows Android malware is growing at a frantic pace. Android systems are proving easier for hackers to penetrate and the booming sales are attracting mass numbers of malware developers.

As many as 90per cent of all Android phones are now vulnerable to malware. Fifty-five per cent of the malware is spyware, which collects data on your location, contacts and activities. The remaining 44 per cent are SMS Trojans, which connect to the internet and send messages to premium rate numbers.^[7]

It’s clear that while this relatively new technology is providing more choice for consumers and enriching their lives, it is opening doors to opportunists seeking to exploit the frailties of operating systems and hardware that is not protected by anti-virus software. Future developments should not be stifled, but must be coupled with awareness of risks and the implementation of appropriate security solutions.

And the situation is unlikely to subside with the volume and value of data stored on devices increasing, and consumers sharing more sensitive data through activities like mobile banking.

4.      Personal data and privacy increasingly exploited 

If the threat of Android malware isn’t worrying enough, then the risk to consumers’ privacy will be. In a series of small updates to some of its Android smartphones, HTC added a function called HtcLoggers.apk that gives most apps access to the list of user accounts on the phone, GPS locations, SMS phone numbers and possibly keys to crack its encryption and almost any system log on the phone.

HTC has also been including an app called androidvncserver.apk, which acts as the client for a virtual network connection that could provide an avenue for almost any HTC Android phone to be taken over and controlled remotely.

Moreover, the android.permission.INTERNET app can track you, read your secret encrypted passwords, bills, emails, store-loyalty card numbers, credit card numbers, certificates and cookies from banks or financial institutions.^[8]

It’s not just smartphones that are at risk either. After Sony’s PlayStation Network and Online Entertainment service was hacked in April, more than 100 million users were potentially exposed to fraud. Despite Sony initially estimating the damage to cost £104 million and its share price falling by 55 per cent over the following six months, many organisations have not learned from Sony’s lesson. Crucially, data that’s sensitive or vulnerable to misuse is often not given the extra protection it needs.^[9]

5.      Tablet devices accelerating m-commerce

Accounting for a 173 per cent increase in traffic between 2010 and 2011, tablet devices are the fastest-growing generator of m-commerce. In Q3 2010, mobile traffic accounted for 4 per cent, but in Q3 2011, this figure rose to 10.92 per cent.^[10]

Just 16 months after the launch of Apple’s first iPad, department store chain, John Lewis, also reported in August that for the first time tablets outsold desktop PCs._[11] Crucially, tablets are already changing the dynamics of the PC industry and are widely predicted to outstrip PCs within a matter of years.

Repeating the same trend as seen in the smartphone market, research by Kantar Worldpanel ComTech shows Apple’s 73 per cent market share is expected to be eroded over the next few years, with particularly strong competition from the Samsung Galaxy.^[12] It’s important to bear in mind however that although tablets are included within mobile statistics, they are more akin to a laptop than a smartphone, with the large majority of tablet owners using their device mainly at home.

These key events of 2011 are certain to continue to impact mobile life for 2012. To help you stay ahead of technology-driven market trends and keep your business and your consumers protected, Lifestyle Services Group has a wide range of products and solutions. For more information go to our products and services page.

You may also wish to read MobileLife: The Outlook for 2012

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