Why India is the Next Frontier for Mobile

Girl Talking by Ramesh LalwaniUnmodified picture by Ramesh Lalwani under Creative Commons 2.0

All over the world, opportunities are flourishing for mobile development (and investment). In some countries, like the U.S.,64% of adults owned a smartphone in 2015. In China, 68% of adults have a smartphone. Yes, these countries still offer room for growth. But not like India.

Indian use of smartphones is rapidly growing. Google-sized companies will be created over the next decade to satisfy user demand, which is significantly more than in the U.S. and China over the same time period. Here’s why India is primed for massive mobile growth. This is why we are getting more aggressive in India.

Mobile Growth All Over the World

It’s hard to believe that just 20 years ago, the world had about only 80 million mobile phone users, representing 1% of the world’s total population.

By 2014, the world’s mobile phone user base had grown to 5.2 billion, or 73% of the population. 40% of that user base had a smartphone.

Based on these stats, it’s hard to argue against mobile development as a lucrative business endeavor all over the world. Even so, growth in countries like China and the U.S. is slowing. Based on what I’m seeing as I invest and work with Indian companies, India offers the greatest opportunity for mobile investment. According to a report by IAMAI and KPMG, the number of mobile Internet users is set to double by 2017 to 300 million!

India already has over 900 million mobile phones, representing 79.39% of the population, and it’s on the path to having more smartphones than the entire U.S. population. It has the second highest number of mobile phones in use, after China and before the U.S.

In 2014, the number of smartphones in India grew 54%, and is expected to reach 651 million by 2019.  In 2013,  only 6.2% of Indian people owned a smartphone. India’s smartphone usage is growing faster than any other country. It’s currently the third largest smartphone market in the world.  

Indian internet penetration is also rapidly increasing. India currently has an internet userbase of at least 232 MM users. This is only 19% of the population, which leaves quite a bit of room for growth.

Scalability

Having a population that is four times bigger than that of the U.S at 1.27 billion people, offers a massive opportunity to scale a business. Though, margins in India are typically pretty low, the numbers are massive. There are hundreds of millions of people across India  who will access new technology for the first time via their mobile phones. They will want entertainment, content, services, and communication. Startups that can figure out how to meet the demands of mobile-first urban and rural Indians will create multibillion dollar companies. Even now, most people use a mobile phone to access the Internet vs a computer or desktop – “According to Meeker’s report 65% of people accessing the internet in India do so from a mobile device and 41% of e-commerce in India takes place on mobile.”

Growth in India

According to the App Annie Index, “Emerging markets grew as low-cost smartphones continue to penetrate India and Southeast Asia. First-time smartphone owner numbers are on the rise.”

I also think that people are inspirational at their core. If you provide the best hardware, QoS, content, and services, they will pay for it as long as their payment options become easier and ubiquitous.”

Takeaways

Indian use of smartphones is growing rapidly. The cost of smartphones continue to decline. “In 2015, the number of mobile internet users from rural area doubled from 2014, and in 2016 the growth percentage is estimated to surpass all the previous figures.

  • India is a market that can’t be ignored by corporations, investors, and startups
  • Growth in mobile usage and GDP is surpassing the US and China
  • Internet penetration is second to China and there’s still a tremendous amount of growth left with less than 25% of the population online
  • India is one of the youngest countries on the planet with a massive workforce

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India to Leapfrog Web 2.0 to Mobile 3.0

Much like India missed the industrial revolution, it is clear that India is going to miss the Web 2.0 revolution as well. There are many “Web 2.0” startups in India and some have been doing well, e.g. Zoho and SlideShare but that’s mainly due to an international user base and not indigenous Indian users.

I’ve been hard pressed to find an Indian Web 2.0 company, doing well and making money by serving the Indian subcontinent. The simple reason for this is that there are just not enough Indian computer and Internet users. Most casual Internet users will check stock prices, buy an airline ticket, look for a job, check their email, hit a social networking site and chat with others. There is a younger Indian demographic that is heavily using social networking sites like Facebook and Orkut but the amount of time they spend on these social networking sites is questionable.

Beyond the tech-savvy in India, very few people have heard of Wikipedia, Digg or the power of social media. The social “web” is taking form in India but not as most of us from the West have experienced. I predict that India will mostly leapfrog Web 2.0 and go directly to Mobile 3.0. Mobile 3.0 being highly personal, highly location specific products and services that allow 3G+ phones and even lower-end phones capable only of SMS to become part of the social fabric of the Web. There shouldn’t be any distinction between the Internet and Mobile platforms. One is just an extension of the other. As innovative user interface designs are produced, India’s 250 million mobile users can be brought into the social web much more quickly and provide them with true value which, unfortunately, they aren’t aware exists on the Internet today.

The largest impediment to bringing these 250 million people into the social web is going to be cost and the carriers holding the golden keys. Expecting the carriers to work with these small startup companies will be difficult at best. Not to mention, Indian carriers have a very bad reputation of bleeding their partners dry. They also have brought the “walled garden” to mobile phones. Companies like Airtel try to push their “Airtel Live” services instead of unfettered GPRS/EDGE. Maybe it’s not such a bad thing right now to allow non-tech-savvy people access to a limited online mobile experience, the way AOL gave subscribers an online version of a walled garden in the late 80’s and 90’s. Users will eventually outgrow the walled garden and seek more.

Estimates put the Indian mobile VAS space at about USD 1 Billion in March of 2008 and predict that it could hit USD 2 Billion by the end of 2008. These aren’t numbers to sneeze at. It’s just the beginning of the mobile application usage. Today, over 40% of VAS revenue comes from SMS. As smartphones like the Nokia N96, Blackberry Bond, Nokia E71, and Apple iPhone penetrate deeper into the Indian market, the desire for richer mobile applications connecting people together will only grow.

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So far the Indian government looks like it will stay in power. What does that mean for the Indo-US nuclear pact? It looks good. What does it mean for the Indian economy? More of the same once the initial euphoria of the government not falling wears off.

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It took some time to get the correct MMS settings for the iPhone but below is a screenshot of the exact settings to be used with Vodafone in Delhi when using SwirlyMMS for the iPhone. The same settings should work with Vodafone users in the rest of India and I would love to hear from those of you who have gotten it working. Unfortunately, SwirlyMMS doesn’t yet allow receiving MMS messages but the developers are working on adding that feature in soon.

SwirlyMMS Settings

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Social Mobile Mapping (Mapiki)

With Google’s release of Google Maps for Australia, I am hoping Google Maps India isn’t going to be that far away. Being a complete outsider to Indian roads and traffic, it would be a very welcome addition to our list of expat related sites and tools that we’ll be relying on after we move to India.

I know the challenges of putting together Google Maps in a place like India. I’ve been to the tiny little alleys that are at least 400 or 500 years old. I’ve also been to what was farmland 6 months ago and today is a luxury residential development outside Bangalore. In a country where the streets are thousands of years old and where farmland and undeveloped land is changing so rapidly, it will be an immense task to keep the data updated. However, could this be the perfect place for an experiment in Social Mobile Mapping or Mapiki? This is the term that I’m going to use for what I think could be a tremendous addition to the social web.

Imagine an application that will redraw maps based on GPS transmitters and SMS text messages, submitted by none other than the users of the mapping application. In a place like India, a rikshaw driver can pull out his mobile and type in a message and sms it to a service that will instantly display on the map the changes reflected by the rikshaw driver. Of course, this can be gamed but so can Wikis. The question is, can the wisdom of crowds provide cleaner more accurate mapping information just like it has helped to create Wikipedia?

For now, however, at least I can get driving directions in New Delhi.

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