Jorge Basurto is the General Manager for MEF Mexico, working as part of the MEF LatAm Chapter. Ahead of the first-ever MEF Connects Mexico on 14th August, Jorge talks about the mobile market in Mexico, and explores how the country has embraced the smartphone and what makes it such a unique and exciting place to do business.
According to the market intelligence agency, The Competitive Intelligence Unit – Mexican mobile phone preferences are migrating to Smartphones, whose penetration in the first quarter of 2013 is 25.94% (with 26.36 million devices), this same consulting firm indicates that by the end of the year the adoption rate will be 34.7% and by the end of 2015 will reach 68% of total users in the Mexican market.
This current smartphone penetration in market share implies a natural displacement of the so called feature phones, leading to a drop in their penetration to 14% in this market . This was noted by Mirega Gonzalez´s article for PC World back in 2011, where she suggested that Nokia still led the feature phone market with a 24.2% of penetration despite the fact of a 10% drop in sales, in contrast with Samsung´s success of its Android based smartphone that allowed the Korean company to obtain 19,5% of market share.
Thinking in terms of modernization of the installed base, these figures can be considered excellent news for the Mexican mobile market. This is especially true for users who have upgraded their phone and for those who recently acquired their first phone, which is, surely, a smartphone, as this will create a virtuous circle where the more smartphones on the consumer side mean greater demand for applications from a wider variety of genres and use and thus new forms of provision, access and commercialization of content and services.
By the end of the year smartphone adoption will be 34.7% and by the end of 2015 will reach 68%… these figures can be considered excellent news for the Mexican mobile market
This trend is also backed up by MEF´s Global Consumer Survey 2012 for the Mexican Market – where for 2012, 59% of users prefer gaming as the most popular form of app download or purchase, however, games are closely followed by music and social networking related apps with a 49% and 48% of user preference, respectively.
One of the key elements that will increase the acquisition of content and apps is the rise of companies offering new methods of electronic payment. In this context “Overall, 78% of Mexican mobile media users engaged with some form of mobile commerce in 2012″ (Global Consumer Survey 2012) – and it is the entertainment category that holds 24% of the Mexican mobile user’s purchase preferences (23% via smartphones and 25% via feature phones).
Banks are also starting jump on the bandwagon as they are introducing ePayment products for mobile platforms such as Mastercard who in early 2013, launched Wanda, its own electronic payment platform for mobile devices, in this same fashion Banorte has been operating a similar platform for their current customers and the mobile operator America Movil along with banks Inbursa and Banamex in a joint effort launched Transfer.
It is important to keep in mind that as the smartphone adoption grows; there is a need to add new elements that modify the current mobile ecosystem. This may have consequences either very favorable or unfavorable as it may impact existing business models, changes in market share or remove any or all the value proposition of a competitor.
Considering the above, in this new competition scheme and market dynamics we cannot think of a single service provider for specific functions, say, electronic means of payment or distribution channels. The inclusion of such elements will improve the user experience, facilitate market segmentation, and above all, involve a reduction in the costs associated with the provision or marketing of services facilitating its acquisition. In this context electronic payments will rise as a strategic element that will drive growth in the mobile entertainment industry in the next three to five years.
Given the clear trend of adoption and penetration rate of smartphones, the Mexican mobile entertainment ecosystem has the opportunity to link all these elements to ensure business´ growth for companies dedicated to the production, integration, distribution and payment of content over mobile networks
One of MEF Mexico’s key objectives will be to support market transition and integrate the value chain as companies make the transition from traditional VAS services to new opportunities of storage, distribution and purchasing of any kind of content as a result of the increasing adoption of smartphones by Mexican users. On 14th August MEF is holding its first ever MEF Connects event in Mexico City, bringing together key industry players – both local and international. I look forward to meeting many such companies there to exchange knowledge and ideas on how we can best serve this exciting market.
Jorge Basurto is the General Manager for MEF Mexico, working as part of the MEF LatAm Chapter. On August 14th the first ever MEF Connects México is to be held in Mexico City, sponsored by Nextel, Turner Broadcasting Sytem & Televisa Movil, where attendees will be treated to an evening of knowledge sharing and networking in the luxurious Club Piso 51 on top of the city’s tallest skyscraper, the Torre Mayor – Head over to the event page for more information or to register to attend.
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