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The Sum of Its Parts: The Smartphone Multiplier Market

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COTW Smartphone Multiplier Market

The Sum of Its Parts: The Smartphone Multiplier Market

There’s a 60% chance you’re reading this article on a smartphone right now—a testament to how ubiquitous these devices have truly become in our lives.

We rely on smartphones every waking minute to stay connected. However, the various products and services—also known as the smartphone multiplier market—that allow us to use these devices in the first place can often be an afterthought.

Today’s chart uses data from Deloitte Insights to show just how sizable this ecosystem is becoming, and why it’s heating up as a battleground for big technology companies such as Apple, Alphabet, and Amazon.

The Smartphone Plateau

There are over 3.3 billion smartphone users in the world today.

The smartphone economy—estimated to pull in $944 billion in total revenue in 2020—is so massive that it rivals the GDP of countries like Indonesia and the Netherlands.

At the moment, the smartphones themselves contribute over half the market value. Despite the continued hype surrounding the release of new models, global unit shipments of smartphone devices appears to have reached a saturation point:

Smartphone Sales

There are two theories as to why shipments are leveling off. First, product innovation is more iterative today than in the past, which means there are fewer groundbreaking features to entice consumers into purchasing new devices. A second factor is that people are simply holding onto their devices for longer than in the past.

As device sales plateau, tech giants are diversifying efforts to find new ways to lure customers back in—and another related market is growing more lucrative as a result.

What is a “Smartphone Multiplier”?

When people think of the smartphone market, hardware likely springs to mind first, but an equally important part of the equation is the plethora of apps, services, accessories, and complementary devices that help us connect with the digital world.

The ecosystem of these products and services are known as smartphone multipliers. According to Deloitte, this ecosystem will drive $459 billion of revenues in 2020, an impressive 15% increase from the prior year.

The market can be broken down into three main categories:

CategoryMarket Value (2020e)Sub-categories
Content$312B
(68% of total)
$176B: Mobile ads
$118B: Apps
$10B: Music
$8B: Video
Hardware$111B
(24% of total)
$77B: Accessories
$25B: Wearables
$9B: Smart speakers
Services$37B
(8% of total)
$18B: Insurance
$12B: Repairs
$4B: Others
$3B: Storage

Largely driven by mobile advertising and app sales, content is by far the largest subcategory, accounting for 68% of revenues:

  • Mobile advertising surpassed TV as the largest advertising channel in 2019, partially thanks to the relentless growth of online video and social media, making ads virtually unavoidable on a smartphone.
  • Gaming apps are benefiting from the immense processing power of today’s smartphones—and will bring in over two-thirds of total app revenue in 2020. Apple’s app store brought in approximately $1.8 billion in sales between Christmas Eve and New Year’s Day alone.
    • If you’ve ever owned a pair of headphones or a powerbank, it’s easy to understand why accessories are the third-largest subcategory in the smartphone multiplier market. With more people ditching the cable for wireless headphones, this subcategory is also set to grow even more.

      The Next $1T Economy?

      In the U.S., 73% of adults go online several times a day or almost constantly, which makes it clear that they aren’t going to give up their smartphones anytime soon.

      As a result, smartphone multipliers will continue to evolve and flourish, presenting a unique opportunity for investors and businesses.

      Altogether, it’s expected that the smartphone multiplier market will grow between 5 and 10% annually through 2023, likely propelling the entire smartphone economy past the $1 trillion benchmark in the coming years.

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Chart of the Week

Global Shutdown: Visualizing Commuter Activity in the World’s Cities

Amid the COVID-19 crisis, cities are dramatically slowing down. Today’s chart demonstrates the impact of lockdowns on commuter activity worldwide.

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Staying Put: The COVID-19 Commuter Decline

Every day, millions of people worldwide rely on public transport networks to get around. But in times of crisis, bustling cities with high volumes of commuter traffic can come to a dramatic halt.

Today’s chart breaks down daily data from Citymapper’s Mobility Index, according to trips planned on the transport app across 41 select cities.

The results paint a unique picture of how social distancing and lockdown measures are impacting commuter and economic activity in major urban hubs.

Cities With the Biggest Drops in Activity

As the government response to the COVID-19 pandemic intensifies and people are urged to stay home, transit activity is dropping everywhere.

However, some areas are seeing more of a reduction in activity than others. Where has activity declined the most over the month?

RankCityCountry04-Mar11-Mar18-Mar25-MarTotal Change (%)
#1Vienna🇦🇹 Austria128%92%9%6%-122%
#2Lisbon🇵🇹 Portugal128%108%24%12%-116%
#3Istanbul🇹🇷 Turkey117%103%20%10%-107%
#4Barcelona🇪🇸 Spain105%86%6%4%-101%
#5Brussels🇧🇪 Belgium107%96%15%7%-100%
#6São Paolo🇧🇷 Brazil112%113%33%12%-100%
#7New York City🇺🇸 USA104%85%17%7%-97%
#8Madrid🇪🇸 Spain100%65%5%4%-96%
#9Los Angeles🇺🇸 USA108%81%23%13%-95%
#10Melbourne🇦🇺 Australia113%110%53%20%-93%

*Note: Data measures the % of city moving compared to 100% baseline.

Overall, Vienna and Lisbon are the cities with the biggest average drop in commuter activity over the past few weeks. This decline in mobility is correlated with a spike in the proportion of COVID-19 cases in the population:

  • Austria
    March 4: 2.6 per million
    March 25: 586 per million
  • Portugal
    March 4: 0.4 per million
    March 25: 232 per million

That said, not every city is seeing a precipitous decline in activity — let’s look at those next.

Standing Still, or On Guard

Cities that saw lower decreases in commuter activity over recent weeks can generally be slotted into three categories:

  1. Cities that were already on or near shutdown (Seoul, Milan)
  2. Cities that have so far avoided major impacts from the virus (St. Petersburg)
  3. Cities that successfully mitigated spread (Singapore)

Here are the 10 cities on the list that saw the lowest changes in activity:

RankCityCountry04-Mar11-Mar18-Mar25-MarTotal Change (%)
#1Seoul 🇰🇷 South Korea48%43%41%37%-11%
#2Hong Kong🇭🇰 China (SAR)50%52%48%37%-13%
#3Singapore🇸🇬 Singapore90%88%79%62%-28%
#4Milan🇮🇹 Italy43%10%5%3%-40%
#5Tokyo🇯🇵 Japan63%54%42%21%-42%
#6St Petersburg🇷🇺 Russia114%114%85%69%-45%
#7Moscow🇷🇺 Russia112%113%75%54%-58%
#8Rhine-Ruhr🇩🇪 Germany75%72%28%15%-60%
#9Stockholm🇸🇪 Sweden97%83%34%32%-65%
#10Lyon🇫🇷 France75%97%6%4%-71%

*Note: Data measures the % of city moving compared to 100% baseline.

St. Petersburg is still seeing commuter activity at 69% of normal levels as of March 25th, as the proportion of confirmed COVID-19 cases in Russia remains low, at roughly 3.4 per million.

Milan has the lowest activity of any city at 3%, and has been in shutdown for most of the month.

Although Singapore’s total COVID-19 cases grew from 18.8 to 95.4 per million, it still has 62% commuter activity. Interestingly, Singapore is one of the few countries that has been able to properly control and manage its COVID-19 outbreak.

Biggest Weekly Declines

As the month progressed, various cities showed stark one-week declines in commuter activity based on official healthcare recommendations and growing case numbers.

After a government lockdown announced on March 9, Rome experienced the sharpest decline of -75% commuter activity in the week from March 4 to March 11. Currently, there is only 5% activity compared to usual, similar to Milan.

In the second week of March, COVID-19 cases in France jumped fourfold, from 27.3 per million to 118.4 per million people. As a result, Lyon saw a whopping -91% drop in commuter activity—going from 97% on March 11 to 6% on March 18.

Over the past week, as cases in Australia reached 95 per million, Sydney and Melbourne exhibited the highest average declines at -36% and -33% in commuter activity respectively.

Full List of 41 Cities

Here’s the full list of cities, courtesy of Citymapper.

City, CountryMarch 4March 11March 18March 25Total Change (%)
Vienna, Austria128%92%9%6%-122%
Lisbon, Portugal128%108%24%12%-116%
Istanbul, Turkey117%103%20%10%-107%
Barcelona, Spain105%86%6%4%-101%
Brussels, Belgium107%96%15%7%-100%
São Paulo, Brazil112%113%33%12%-100%
New York City, U.S.104%85%17%7%-97%
Madrid, Spain100%65%5%4%-96%
Los Angeles, U.S.108%81%23%13%-95%
Melbourne, Australia113%110%53%20%-93%
Amsterdam, Netherlands98%86%13%6%-92%
Washington DC, U.S.97%82%15%6%-91%
San Francisco, U.S.96%65%9%6%-90%
Boston, U.S.97%77%16%7%-90%
Chicago, U.S.97%92%16%7%-90%
Montréal, Canada103%104%31%14%-89%
Paris, France95%89%8%6%-89%
London, UK100%91%36%12%-88%
Manchester, UK100%91%42%13%-87%
Sydney, Australia106%99%56%20%-86%
Mexico City, Mexico109%110%53%23%-86%
Rome, Italy91%16%6%5%-86%
Copenhagen, Denmark97%80%11%11%-86%
Berlin, Germany93%86%26%12%-81%
Birmingham, UK99%91%45%18%-81%
Toronto, Canada97%91%32%19%-78%
Vancouver, Canada94%89%38%16%-78%
Philadelphia, U.S.89%85%22%13%-76%
Monaco, Monaco81%50%12%7%-74%
Hamburg, Germany85%72%20%12%-73%
Seattle, U.S.80%51%19%8%-72%
Lyon, France75%97%6%4%-71%
Stockholm, Sweden97%83%34%32%-65%
Rhine-Ruhr, Germany75%72%28%15%-60%
Moscow, Russia112%113%75%54%-58%
St Petersburg, Russia114%114%85%69%-45%
Tokyo, Japan63%54%42%21%-42%
Milan, Italy43%10%5%3%-40%
Singapore, Singapore90%88%79%62%-28%
Hong Kong, Hong Kong50%52%48%37%-13%
Seoul, South Korea48%43%41%37%-11%

*Note: Data measures the % of city moving compared to 100% baseline.

The COVID-19 pandemic is affecting everything from the stock market to the environment. With cities actively working to keep populations in isolation and healthy during this time, it may take a while before commuter activity returns to normal.

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Chart of the Week

Ranked: Global Pandemic Preparedness by Country

This interesting pre-COVID19 report ranked countries by their level of preparedness for the outbreak of infectious diseases and pandemics

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Global Health Security Index

Ranked: Global Pandemic Preparedness by Country

The world has experienced many pandemics throughout its history, but not every era has had the benefit of modern medicine and hindsight.

However, even with the readily available medical expertise and equipment that exists today, it is still unevenly distributed throughout the globe. Combine this with a highly interconnected global economy, and large populations are still at risk from infection.

Today’s chart pulls data from the 2019 Global Health Security Index, which ranks 195 countries on health security. It reveals that while there were top performers, healthcare systems around the world on average are fundamentally weak—and not prepared for new disease outbreaks.

Pathways for Commerce and Disease

Modern transportation and trade have linked the farthest stretches of the world to fuel a global economy. Physical distance plays less a limiting role and more an enabling one to form a flat world as Thomas Friedman put it, creating opportunities for commerce anywhere in the world.

A person can sell dishware from his home in Cusco, Peru, online to a customer in Muncie, Indiana, with products manufactured in China, from materials sourced in Africa.

While these connections sound sterile, there are people interacting with one another to procure, manufacture, package, and distribute the goods. The connections are not just through products, but also people and animals across many borders.

Now, add up the interactions within the global food supply chain with plants and livestock and tourism industries and place them under the pressures of climate change, urbanization, international mass displacement, and migration—and the volume and variety of opportunities for disease transmission and mutation becomes infinite.

The same pathways of global commerce become the transmission vectors for disease. A cough in Dubai can become a fever in London with one flight and one day.

You Cannot Manage What You Do Not Measure

Despite this, we still live with national healthcare systems that look inward towards national populations, with less of a focus on integrating what is happening with the outside world.

The Global Health Security (GHS) Index is the first comprehensive effort to assess and benchmark health security and related capabilities by nation, and it tracks six key factors to come up with an overall score for each of the 195 countries in the ranking:

  1. Prevention
    Prevention of the emergence or release of pathogens
  2. Detection and Reporting
    Early detection and reporting for epidemics of potential international concern
  3. Rapid Response
    Capability of rapidly responding to and mitigating the spread of an epidemic
  4. Health System
    Sufficient and robust and health system to treat the sick and protect health workers
  5. Compliance with Global Norms
    Compliance with international norms by improving national capacity, financing plans to address gaps
  6. Risk Environment
    Risk environment and country vulnerability to biological threats

Note: The GHS Index is a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), and was developed with The Economist Intelligence Unit (EIU).

Country Overall Rankings

Overall, the rankings uncover a distressing insight. Global preparedness for both epidemics and pandemics is weak, with the average score in the index sitting at 40.2 out of 100.

The countries with the highest scores have effective governance and politics systems in place, while those with the lowest scores fall down for their inadequate healthcare systems—even among high-income countries.

Here are the 50 highest-ranking countries in the index:

RankCountryGHS Index Score
#1🇺🇸 United States83.5
#2🇬🇧 United Kingdom77.9
#3🇳🇱 Netherlands75.6
#4🇦🇺 Australia75.5
#5🇨🇦 Canada75.3
#6🇹🇭 Thailand73.2
#7🇸🇪 Sweden72.1
#8🇩🇰 Denmark70.4
#9🇰🇷 South Korea70.2
#10🇫🇮 Finland68.7
#11France68.2
#12Slovenia67.2
#13Switzerland67
#14Germany66
#15Spain65.9
#16Norway64.6
#17Latvia62.9
#18Malaysia62.2
#19Belgium61
#20Portugal60.3
#21Japan59.8
#22Brazil59.7
#23Ireland59
#24Singapore58.7
#25Argentina58.6
#26Austria58.5
#27Chile58.3
#28Mexico57.6
#29Estonia57
#30Indonesia56.6
#31Italy56.2
#32Poland55.4
#33Lithuania55
#34South Africa54.8
#35Hungary54
#35New Zealand54
#37Greece53.8
#38Croatia53.3
#39Albania52.9
#40Turkey52.4
#41Serbia52.3
#42Czech Republic52
#42Georgia52
#44Armenia50.2
#45Ecuador50.1
#46Mongolia49.5
#47Kyrgyz Republic49.3
#47Saudi Arabia49.3
#49Peru49.2
#50Vietnam49.1

You can view the complete rankings of all 195 countries on the GHS Index website.

Interestingly, 81% of countries score in the bottom tier for indicators related to biosecurity—and worse, 85% of countries show no evidence of having completed a biological threat-focused simulation exercise in conjunction with the World Health Organization (WHO) in the past year.

Confirmed COVID-19 Cases vs. Global Health Security Score

Many healthcare systems have had their security tested with the outbreak of COVID-19.

global health secutiry score vs covid19 cases

Although it is still extremely early, there appears to be a relationship between a nation’s health security and its ability to cope with pandemics.

Takeaways: A World Unprepared

While there may be top performers relative to other countries, the overall picture paints a grim picture that foreshadowed the current crisis we are living through.

“It is likely that the world will continue to face outbreaks that most countries are ill positioned to combat. In addition to climate change and urbanization, international mass displacement and migration—now happening in nearly every corner of the world—create ideal conditions for the emergence and spread of pathogens.” – The Global Health Security Index, 2019

The report outlined eight critical insights about global health security in 2019 that reveal some of the problems countries are now facing.

  1. National health security is fundamentally weak globally. No country is fully prepared for epidemics or pandemics, and every country has important gaps to address.
  2. Countries are not prepared for a globally catastrophic biological event.
  3. There is little evidence that most countries have tested important health security capacities or shown that they would be functional in a crisis.
  4. Most countries have not allocated funding from national budgets to fill identified preparedness gaps.
  5. More than half of countries face major political and security risks that could undermine national capability to combat biological threats.
  6. Most countries lack basic health systems capacities critical for epidemic and pandemic response.
  7. Coordination and training are inadequate among veterinary, wildlife, and public health professionals and policymakers.
  8. Improving country compliance with international health and security norms is essential.

A Stark Reality

The intention of the Global Health Security Index is to encourage improvements in the planning and response to one of the world’s most omnipresent risks–infectious disease outbreaks. When this report was released in 2019, it revealed that even the highest ranking nations still had gaps to fill in preparing for a pandemic.

Of course, hindsight is 20/20. The COVID-19 outbreak has served as a wake-up call to health organizations and governments around the world. Once all of the curves have been flattened, the next version of this report will undoubtedly be viewed with renewed interest.

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