[2014 q2q3umeng insight] china’s mobile internet：further segmentation and verticalization

Main Conclusions

In the third quarter of 2014, the number of active smart devices in China exceeded 900 million, with a growth rate of 8.4%. Within one month after iPhone6 and iPhone6 plus were launched, the total active market in China increased by 14 times.

The number of 4G sessions has grown by 30 times since the beginning of 2014. 4G users expanded from northern and eastern China (where cities were better developed) to other regions.

Less frequent users(launching app for less than 5 days per month) accounts for 55% of all users, and they represent a huge market potential. System tools, video apps and games are their largest demand. Frequent users(launching app for more than 15 days per month) launch nearly 10 apps every day. Entertainment and SNS apps are their largest demand.

SNS, news and other apps supporting life and work have the highest retention rate. Apps in areas with more auxiliary functions in life, like SNS, E-commerce, News & finance, grew faster in vertical fields.

The ratio of jailbroken iOS devices, after reaching an all time low, climbed up to 13.6% in September. The most frequently used apps on those jailbroken devices are video and games.

Active Devices in China reached 900 million

In Q3 of 2014, active devices in China tracked by Umeng were over 900 million, an increase by 8.4% compared to Q2. The increase mainly comes from Android devices, including the updating of 4G Android devices. Yet with the launch of two new iPhones and two iPads, the number of iOS devices is expected to rise in Q4.

Samsung’s brand influence in domestic Android market remains unshakable. In terms of the brand influence, Samsung still dominates the domestic Android market.

Data Source: Umeng Analytics Platform www.umeng.com


Unit : Hundred Million

3.85

5.97

7.9 8.3 9

0

3

6

9

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

The upward trend of active

devices

23%

11%

8%

7%6%

5%5%

3%

2%1%

29%

Brand distribution of active

Android devices(2014 Q3)

Samsung

Mi

Huawei

Lenovo

Coolpad

1x

1.31x

4月 9月

Monthly session by all users

Increase by 30%

Mobile internet users are more reliant on APPs


From Q2 to Q3 of 2014, Apps launched by mobile internet users grew continuously. In September, total session of all users increased by 30% compared to April. Apps on mobile devices have become an indispensable part of life.


14% of Apps target at foreign customers, featured by mobile games

Foreign

14%

Domestic

86%

Distribution of major APP

markets(2014 Q3)

In Q3 of 2014, 14% of Apps developed domestically are targeted at foreign market*.

Of all Apps targeting at foreign customers, nearly half of them are mobile games. System tools rank second. In these fields, domestic developers are expanding their territory all over the world.


*In Q3 of 2014，if more than 80% of an App’s launch is from abroad, the app is considered as for foreign market.

47%

13%

13%

4%

3%

20%

APP category targeting at

foreign customers

Games

System tools

Entertainment

Photography

Wallpaper

Other

4G session has increased by 30 times since the beginning of 2014


30.5 times of that in January

4G network has been spreading rapidly in China. In September 2014, number of 4G sessions was 30.5 times of that in January. 4G network has become the standard configuration for new mobile phones, pushing the updating of mobile devices.

0

5

10

15

20

25

30

35

2014.1 2014.2 2014.3 2014.4 2014.5 2014.6 2014.7 2014.8 2014.9

Upward trend of 4G sessions

“4G Lifestyle” expands from northern and eastern China to other regions

In January 2014, 85% of all 4G traffic were concentrated in northern and eastern China. But until September 2014, with 4G traffic increasing in other regions , “4G lifestyle” spreadnationwide. Eastern China surpassed Northern China to become the region with the highest percentage of 4G traffic, accounting for 29.2% of the total. Northeastern China, which had low level of 4G traffic in January, accounted for 4.4% of the total traffic in September.


0%

20%

40%

60%

80%

100%

1月 9月

Distribution of 4G traffic

(2014 Q1 to Q3)

Southwestern China

Northwestern china

Central China

South China

East China

North China

Northeastern China

Less frequent users: a huge potential market to develop

According to Umeng statistics, users whose monthly active days are under 5 days account for 55% of the total. These less frequent users will be the hotspot customers contended by future mobile device developers. In order to better understand the interests and actions of users, Umeng divides all customers into three categories, namely frequent users(launching app for more than 15 days per month in Q3), ordinary users(launching app for 6-15 days per month) and less frequent users(launching app for less than 5 days per month). In each group, users are picked randomly for the research.

In terms of average numbers, less frequent and ordinary users use 1.3 and 4.8 apps per day respectively. Frequency users use up to 9 apps per day. For less frequent users, the number could still be increased dramatically.


1.3

4.8

9.1

0

2

4

6

8

10

Less Frequent Users Ordinary Users Frequent Users

Apps launched per day by different users


Entertainment and social app: Top 1 demand for frequent users

The top 5 categories of apps most frequently used by frequent users are entertainment, social networking, video, news and business. These users use more apps than less frequent users, and their demands are more diversified. Their life scenes can be revived in apps.

Among these apps, entertainment and social networking apps are the greatest demand, which account for 28% of the total use. These two categories are also the key to grasping “the most active group on mobile internet”.

14%

14%

13%

10%9%

Top 10 apps by frequent users(2014 Q3)

EntertainmentSNSVideoNewsBusinessEducationLifeE-commerceFinanceGame

System tools: Top 1 demand for less frequent users


In terms of app launch, the top 5 apps most frequently used by less frequent users are system tools, mobile games, video, photography and wallpaper. It shows that these users are not much reliant on using apps to facilitate life. Their demands are basic, such as entertainment and device management. The developers could still do a lot of work to strengthen their reliance on mobile internet,

System tools account for 33% of all sessions of less frequent users. Since they concern more about the device itself, system tools are their biggest demand.

33%

17%

10%

7%

6%

Top 10 apps by less frequent users(2014 Q3)

System toolsGamesVideoPhotographyWallpaperNewsMusicEntertainmentLifebooks

Less frequent users are usually light users of games

Light games like puzzle, card and leisure games are popular both in less frequent and frequent users. But in terms of game sessions, less frequent users have a higher rate in light games out of all game sessions, with a total percentage of 85% in puzzle, card and leisure games. Frequent users, on the other hand, are more varied in game categories. They also prefer action games to puzzle, card and leisure games.


32%

28%

25%

5%

4%

5%

16%

31%

21%

16%

3%

13%

Puzzel

Card

Leisure

Action

Sports

Other

Distribution of games by frequent users and less

frequent users(2014 Q3)

Less Frequent User Frequent User

Fastest growing categories in first three quarters in Q1-Q3 2014:

Social networking, E-commerce, News, Finance


Umeng statistics shows that in 2014, vertical fields with stronger supporting function for life, such as social networking, e-commerce, news and finance, grew faster than others.

The finance apps have played an important role in reducing customer acquisition cost and increasing liquidity. They gradually make up for the information symmetry problem in traditional financial products. E-commerce apps are reinforcing their O2O model by using features like geographical location and codes scanning to connect online and offline customers. In this way, user experience is expanded, thus attracting a larger customer group.

0%

50%

100%

150%

200%

250%

300%

Top 10 Growth rate of vertical users

(2014 Q1-Q3)

Highest rotation rate: social networking, news, business, e-commerce and finance


In terms of app category, apps in social networking, system tool, news and

entertainment have higher rotation rate.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Average retation rate by major app category

(2014 Q3)

Next Day Retention Rate

7-Day Retention Rate


SARFT tightening restraints on operating system: Not a bad

news for TV boxes

On July 2014, The State Administration of Radio Film and Television ordered cable TV network companies not to install operating systems other than TVOS. There was concern that it may influence the TV box industry. But according to statistics, since December 2013, the number of active TV box devices has maintained a steady growth. In September 2014, the number increased to 3 times of that in December last year. The SARFT restriction had little influence on internet TV boxes. Some users even replaced their cable TV boxes with internet boxes.

1.60 1.88

2.19 2.38

2.70 3.00

0

1

2

3

4

2014.4 2014.5 2014.6 2014.7 2014.8 2014.9

Growth of monthly active TV boxes

(2014 Q1-Q3) The number in September 2014 is 3 times of that in January 2013


Total number of iPhone 6 grew by 14.3 times in the month after

iPhone6 was launched

Since iPhone 6 and iPhone 6 plus were launched in September, the number of the two devices in China has been soaring. In October, the total active devices increased by 14 times compared to September. For now in China, iPhone 6 has a larger number than iPhone 6 plus. But iPhone 6 plus has already tackled problems such as the insufficient production, and is catching up with iPhone 6. The ratio of iPhone 6 plus

active devices to iPhone 6 active devices rose from 1：4 in September to 1：3 in October. Cellphones with bigger screen are more attractive now.

Sep Oct

Changes in active devices since the launch of

iPhone6 and 6plus

iPhone 6 iPhone 6 Plus

iPhone 6 to

iPhone6plus ratio: 4:1

increase by 14.3 times compared to September

3:1

Samsung and Xiaomi compete for Top 5 active devices in Q3



Mi Xiaomi M3’s rank rose from No.7 in Q2 to the fourth place. In Q3 Xiaomicompetes with Samsung for Top 5 seats in active Android devices.

0.58%

0.58%

0.64%

0.65%

0.65%

0.75%

0.76%

0.77%

0.82%

0.85%

0.86%

0.90%

1.23%

2.15%

2.32%

2.39%

2.71%

2.74%

3.09%

3.14%

Samsung Galaxy Mega 5.8

Mi M1(MIUI)

Meizu MX2

Samsung Galaxy Ace

Huawei Hornor 3C

SoftwinerEvb

Mi 1s

Mi 2A

Mi M2

Hongmi note

Samsung Galaxy Win

Samsung Galaxy Note

Samsung Galaxy S II

Samsung Galaxy Note III

Hongmi

Samsung Galaxy S IV

Mi M3

Samsung Galaxy S III

Mi 2S

Samsung Galaxy Note II

Active Android devices

TOP20 2014Q3

0.47%

0.52%

0.54%

0.54%

0.56%

0.62%

0.69%

0.74%

0.82%

0.83%

0.83%

0.98%

1.31%

1.61%

1.74%

1.99%

2.10%

2.47%

2.73%

2.73%

Samsung GT-S7562

Vivo X3T

Samsung Galaxy Mega 5.8

Samsung GT-S7568

Meizu MX2

Mi M1(MIUI)

Mi 2A

Samsung Galaxy Ace

Samsung Galaxy Win

Mi M2

Mi 1s

Samsung Galaxy Note

Samsung Galaxy S II

Mi M3

Samsung Galaxy Note III

Hongmi

Samsung Galaxy S IV

Samsung Galaxy S III

Mi 2S

Samsung Galaxy Note II

Active Android devices

TOP20 2014Q2

Large screen phone users have significant demand for video app

Large screen phones refer to mobile phones with screens larger than 5.5 inches. Many mobile phones of different brands, including Apple, launched in recent years have large screens. For now, large screen phones make up 36% of total mobile phones.

For large screen phone users, video apps’ sessions account for 38% of total app sessions, well above the average level of 9% in total users. This is a significant characteristic for this group.



38%

Frequency of video app

(Large screen phones users)

Video Other

9%

Frequency of video app

(all users)

Video Other


Large screen users especially prefer sport games

Umeng statistics show that, of all games, sport games are mostly favored by large screen users. These users spend 47% of their total mobile phone time playing sport games. That percentage in all users is only 5%.

48%

25%

14%

Game distribution by large screen users

Sports

RPG

Simulation

Card

Puzzle

Education

Strategy

Leisure

Adventure

Action

The percentage for domestic jailbroken iOS devices is 13.6%

The percentage for domestic jailbroken iOS devices dropped to a record low of 12.2% in Q2. It rose to 13.6% in September.


0%

10%

20%

30%

40%

2013.1

2013.2

2013.3

2013.4

2013.5

2013.6

2013.7

2013.8

2013.9

2013.1

0

2013.1

1

2013.1

2

2014.1

2014.2

2014.3

2014.4

2014.5

2014.6

2014.7

2014.8

2014.9

The percentage of China jailbroken iOS

devices



Video and game: The main demand for domestic jailbroken iOS

devices

The top 3 app categories for domestic jailbroken iOS devices are video, games, and books. However, top 3 for those normal devices are system tools, wallpaper and video. Non-jailbroken devices rely much more on system tools than jailbroken ones. Jailbrokendevices have high demand on video apps for the fact that once the device is jailbroken, third party video apps become available to play videos of various forms. Another important reason for jailbroken devices is playing games.

19%

11%

9%8%

8%

8%

7%

6%

6%4%

APP categories for jailbroken

iOS users

Video

Games

Books

Music

Books

SNS

Finance

Entertainment

News

System tools

30%

13%

10%

10%

6%

5%

5% 5%

4%3% 3%

APP catogeries for non-

jailbroken iOS users

System tools

Wallpaper

Video

Games

Books

Leisure

Music

Books

Finance

SNS

News

Glossary:

Active Device: Active device refers to device which has activated at least one app covered by Umengplatform in the stipulated time frame. All the “devices” in the report refers to “active devices”, not the actual shipment.

Session: Session refers to the number of app launch covered by Umeng platform in the stipulated time frame.

Release Date:

November, 2014

Data Source:

Analysis data in the report is based on over 420,000 Android and iOS apps from the Umeng platform. All data was collected from January to October 2014.

Statement:

All data belong to Umeng platform. Any people and organization are permitted to quote the report, please cite original source when using this data.

About

Analytics

Umeng Analytics is the leading mobile app analytical platform in China. We provide enterprise level analytics solutions to developers, allowing in depth analysis of user behavior and assist developers to efficiently distribute their apps and maximize monetization opportunities.

http://www.umeng.com/analytics#

Game Analytics

Umeng Game Analytics provide one-stop solution for mobile game developers. We provide comprehensive support targeted at game operation need in different stages. From user acquisition, user quality, user activity to user payment, Umengprovides standard operation target and model to conduct deep track and analysis.

http://www.umeng.com/analytics_games

Share

By covering main stream social network platform at home and abroad and mainstream mobile operation system, UmengShare helps developer to quickly socialize their app, and use social network chain for word-of-mouth marketing. In this way, they could obtain new clients and reinforce old clients. Umeng share also provides professional and detailed statistical analysis report in socialization, and obtains real time information about platform, users, and backflow. Meanwhile, under the ever-changing open platforms, The calculation engine of Umeng share regularly assess on apps. By analysing “Social Health Index”, Umeng share instructs the developers to update their share function regularly.

http://www.umeng.com/component_social

Push

Umeng Push estabilishs a channel to communicate directly with users. We push the updated content or activities in app to end users so that they are able to get relevant information at the first time. This could level up user activeness and loyalty.

http://www.umeng.com/launch#push

Product

Track

Umeng Track helps developers to monitor how apps in APP Store are promoted through different channels, so that developers are able to make the most suitable channel strategy.

http://www.umeng.com/umtrack

User feedback

Umeng User Feedback initiates a two-way feedback mechanism. It enables developers and users to interact in the“ WeChat way”, in which users, after giving suggestions, would receive timely reply from developers. http://www.umeng.com/component_feedback

Update

Umeng Update easily achieves the synchronous update in difference channels, so that users could get the newest product. http://www.umeng.com/component_update

Crash Report

Umeng Crash Report is developed specially for mobile app developers as a tool to collect and analyze app runtime error. It helps developers to monitor and analyze the operational stability of app on mobile devices. http://www.umeng.com/component_update

Index

By mining key data on mobile internet (currently including app category, app market performance, mobile device category, operation system version, resolution, network, and user geographical distribution), Umeng Index helps mobile developers and those in the industry to keep track of the trend of mobile internet. http://www.umindex.com

Product

Umeng is the largest mobile app analytics platform in China established in April, 2010.

Umeng is devoted to creating more value for developers. We start by statistical analysis products, and develop one-stop solution for mobile developers from develop to operation, including developing, analyzing, sharing, promotion and other services.

For now, more than 420,000 mobile apps use Umeng products.

www.umeng.com

weibo.com/umengcom

[email protected]

[2014 q2q3umeng insight] china’s mobile internet：further segmentation and verticalization

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