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SNS Forecast and Trends

Neha Dharia, Analyst, Consumer Practice

neha.dharia@ovum.com

October 2013

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Summary

Social Networking Services (SNS) has made not only

made a profound impact on how consumers communicate

but it has greatly impacted how consumers share

information, conduct commerce, indulge in entertainment

and even search. This presentation will map the growth

trajectory of the communication based SNS to its current

form as a utility and entertainment based mobile platform

on a global scale. It will look at the fundamental shift in

social and the role of mobile media platforms in defining

the future of SNS. Along with this, the presentation will

also highlight the way forward and South Korea’s role and

relative position in leading the SNS revolution.

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Agenda

The fundamental shift in SNS

Reaching the point of no return

Answering the two big questions

Rise of mobile media platforms

Consumer speak

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Stats at a glance

2 billion monthly active users on SNS sites

1 billion monthly active mobile SNS users

Over 20 billion messages transacted daily on WhatsApp

Line gathers over 45 million users in a year

5% penetration of WhatsApp in a market makes it go viral

Kakao Talk has more than 400 million game downloads in one

year

Line gathers $4.3million in sales of emoticons in 2 months

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Social was the foundation

And is now the glue that holds everything together

TV

Search

Career

Consumption of media

payments

games

music

Utilities

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What caused this fundamental shift?

The very nature of social

A smartphone in every hand

Growth in funding for social

Free! Free! Free!

External events creating pockets of opportunity

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SNS Growth Trends:

Watershed years - 2008 and 2010

0

200

400

600

800

1000

2006 2007 2008 2009 2010 2011 2012

Su

bscri

bers

(m

illio

ns)

Source: Company data, Ovum

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We have arrived at another inflection point

All of this had led us to a point of no return

Mobile media platforms acceleration in 2013

Viral growth spurs on user engagement

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Apps without borders

.

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Apps without limitations

.

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Can local apps go global?

The 2 big questions

How will social messaging re-define social?

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SNS Growth Trends:

2013 – 2015 battle for social messaging

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014 2015 2016

Su

bscri

bers

(m

illio

ns)

Source: Company data, Ovum

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SNS traffic, APAC will continue to rule

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 2014 2015 2016

APAC

MEA

SCA

Source: Company data, Ovum

EUR

N.AM

27 trillion 257 trillion

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Growth of mobile media platforms

Made for mobile

Evolution will be organic

Revolutionize how social and mobile interact

Determine the shape of SNS in the future

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Impact on telco revenues

Vendors launch social messaging solutions

Device vendors re-think their strategy

Developers focus more on social aspects of

gaming, payments

OTT players face more competition,

partnerships have been triggered

The consumer benefits

Game. Set. Match.

$10 billion

mobile voice

revenue

lost $54 billion

SMS revenue

lost

BBM goes cross

platform

Fb partners

with 18 telcos

globally

Nokia adds

WhatsApp

button

RCS launched

S.Korea &Spain

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Impact on communications

Source: Ovum

13%

4% 4% 4% 3%

4%

16%

10% 11%

8% 7%

7%

6%

19% 20%

13%

21%

15%

2%

7% 8%

4%

11% 11%

0%

5%

10%

15%

20%

25%

Voice calls via a fixedtelephone

Voice calls via a mobilephone

Mobile text (SMS) viathe texting service

provided by your mobileoperator

Voice over IP call (suchas Skype calls)

Social networks (e.g.Facebook)

A mobile messagingservice (such as

Whatsapp or Viber)

Significantly decreased Decreased Increased Significantly increased

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Consumer Speak: Social Messaging Usage

Source: Ovum

39%

22%

48%

58%

28% 28% 30%

40%

28%

31%

43%

48%

0%

10%

20%

30%

40%

50%

60%

70%

Games Mobile commerce(buying items online)

Emoticons (smileys) Voice calls Group calls Video calls

Use now Would use if available

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Its all about the money

Source: Ovum

30%

23%

20%

40%

30%

33%

13% 12%

6%

16%

13%

15%

6% 6%

3%

10%

6%

9%

4%

9%

2%

10%

4%

7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Games Mobile commerce(buying items online)

Emoticons (smileys) Voice calls Group calls Video calls

£0-£1 £1-£2 £2-£5 More than £5

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Welcome to the new era

Source: Ovum

Mobile platforms changing status quo of Social

Social will soon be synonymous to mobile

Social is about global meeting local

Social will make money on mobile

Mobile media platforms are the present and future of

social

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Q & A