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Part 1 Major Phone Releases Overview & Strategies for 2018 Key Headlines

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TELCO INDUSTRY Part 1 Major Phone Releases Overview & Strategies for 2018 Key Headlines 1. The S8 was the most searched for mobile device in 2017 – a first for Samsung. At its peak, the S8 was 32% and 66% higher than the peaks of the iPhone 8 and X. 2. Apple attracts a similar online audience regardless of model, whereas, Samsung attracts a different segment from S8 to J5. 3. EE and O2 attracted the highest share of traffic across iPhone models. Samsung had a higher proportion of traffic going to Carphone Warehouse and 3. 4. Comparison is key for consumers. The term “vs” was the most searched-for specification (ahead of “camera” and “screen”), across all phone models. 5. See how networks and retailers can use search and audience data to increase converting traffic. Agenda Overview in 2017 How did major phone releases perform online? Audience Profile How do Apple and Samsung audiences differ by model? Search Traffic Winners How did Retailers and Networks perform by model? Tactics for Networks How can search, audience and conversion data be used? Overview How did major phone releases perform online? Key Phone Releases in 2017 Weekly Search Volume 20-Apr: Pre-order for the S8 opens, searches increase by 282% over 4 weeks Gradual increase of the Search Demand 7-Oct: Searches for iPhone 8 Moto G5 and (released 2 weeks prior) & iPhone X Google Pixel 5, Major Phone (before the 3-Nov launch) spikes toward the end of 2017 Releases 10-Mar: Pre-order for Nokia 3310 on The Samsung S8 was the most Carphone & Vodafone opens, searched for mobile device in searches rise by 2017 – a first for Samsung 206% over 2 weeks compared to previous releases. At its peak, “Samsung S8” searches were 32% and 66% higher than the peaks of “iPhone 8” and “iPhone X”. By the time the iPhone X was released, other models like the 07-Jan 07-Feb 07-Mar 07-Apr 07-May 07-Jun 07-Jul 07-Aug 07-Sep 07-Oct 07-Nov 07-Dec 07-Jan Google Pixel 2 had taken share toward the end of 2017. Samsung S8 iPhone 8 iPhone X Moto G5 Google Pixel 2 Nokia 3310 Source: Hitwise, 4 rolling weeks. Each model includes total search variations of each term. iPhone Models Weekly Search Volume iPhone Searches Older Models Still Searches for the iPhone 7 and 6 rose by 25% and 14% over 4 weeks, at the Popular time of the iPhone 8 release. Apple’s strategy to release two mobile devices in two months has been one of contention. The delayed iPhone X release in November had given a major boost to Samsung. The popularity of the older iPhone 6 and iPhone 7 also endured throughout the year. At the time of iPhone 8’s release, searches for the 07-Jan 07-Feb 07-Mar 07-Apr 07-May 07-Jun 07-Jul 07-Aug 07-Sep 07-Oct 07-Nov 07-Dec 07-Jan iPhone 7 and 6 also rose by 25% and 14%, respectively. iPhone 8 iPhone X iPhone 7 iPhone 6 Source: Hitwise, 4 rolling weeks. Each model includes total search variations of each term. Samsung Searches Samsung Models Other Models Weekly Search Volume Unaffected The lower cost A5 was Contrasting to the iPhone, Samsung’s released on 2-Jan, and Compared to the iPhone, mobile devices didn’t see the same halo was a constant search searches for other Samsung effect. share throughout 2017. models were unaffected by the S8 release. At the peak for the S8 (week ending 22 April), searches for other Samsung models remained unaffected. These included: the older S7, the low-cost A5 (released in January 2017), and the older low-cost model, the J5. So what? 07-Jan 07-Feb 07-Mar 07-Apr 07-May 07-Jun 07-Jul 07-Aug 07-Sep 07-Oct 07-Nov 07-Dec 07-Jan In the next chapter, we Samsung S8 Samsung S7 Samsung A5 Samsung J5 show how differences in Apple & Samsung’s search trend is linked to audiences. Sourc e : Hitwise, 4 rolling weeks. Each model includes total search variations of each term. Audience Profile How do Apple and Samsung audiences differ by model? Audience demographics and phone usage are similar iPhone Model Comparison across iPhone models Audience Breakdown iPhone iPhone 8 iPhone X iPhone 7 Similar Audience Age 18-24 yo (+48%) 18-24 yo (+41%) 18-24 yo (+25%) Group Across Models Apple’s “halo effect” (when one model is Consumer Spontaneous Spontaneous Spontaneous released, searches for other models rise) is Archetype * Spenders (+20%) Spenders (+22%) Spenders (+18%) linked to the fact that each iPhone attracts a similar audience. The iPhone 8, X and 7 attracts a younger Phone More than £70 More than £70 More than £70 audience, who are risk takers and highly (+37%) (+55%) (+33%) Expenditure / mth / month / month influenced by advertising and promotions. This audience also has a mobile high usage Every 12 Upgrade Every 12 Every 12 and high rotation of phone models. months (+6%) months (+23%) months (+48%) Frequency Every 1-2 years (+7%) Sourc e : Hitwise & Kantar Media TGI, 4 weeks to 13-Jan-2018. Audiences are based on top 1,000 searches of each phone model. Indexes are compared to the standard online population. * See slide 11 for explanation on Consumer Archetype. Samsung Different Audiences By Model In contrast, Samsung Samsung Model Comparison audiences by model differ Audience Breakdown in age, archetype and phone usage In contrast, Samsung attracts a different audience per model. Price is a driver (ranging from approx. £800 for S8 A5 J5 the S8, to £200 for the J5), but other variables show the differing needs of each segment. Age 18-24 yo (+17%) 18-24 yo (+26%) 18-24 yo (+33%) The S8 attracts a younger audience, driven by Group 55+ yo (+7%) innovation. In contrast, the J5 attracts an older, brand conscious audience and low phone usage. Spontaneous Consumer Spenders (+12%) Image Idolisers (+27%) Image Idolisers (+17%) Archetype Trendspotters (+5%) So what? Phone £20-49 £30-49 / Less than £20 / / month (+4%) month (+10%) month (+7%) - By profiling audiences by model, a Expenditure network can develop content and promos that resonate with each segment Upgrade Every 12 Every 13 -18 Over 2 years (+5%) - Networks can also track the frequency of Frequency months (+18%) months (+10%) upgrades to inform their bundling packages (e.g. handset only offers for S8, iPhone 8 or iPhone X) Sourc e : Hitwise & Kantar Media TGI, 4 weeks to 13-Jan-2018. Audiences are based on top 1,000 searches of each phone model. Indexes are compared to the standard online population. Kantar Media TGI Electronic Consumer Archetypes What is a Spontaneous for Apple and Samsung Spender vs. an Image Idoliser? Hitwise’s partnership with Kantar Media TGI allows marketers to marry online behaviour with consumer Spontaneous Spenders Image Idolisers choices, at scale. Easily influenced Driven by the brand, In the previous pages, we overlaid Hitwise’s online design and image behavioural data with Kantar Media TGI’s market Risk takers research variables, to provide a more in-depth view Driven by promotions Driven by premium of customer segments. and advertising quality products We saw that iPhone users, regardless of model, fitted into the “Spontaneous Spenders” archetype. Samsung users were a mix of archetypes, including Spontaneous Spenders, Trendspotters and Image Idolisers, depending on model. Technology Trendspotters Driven by innovation, style and technical specs Attracted by special features Always equipped with the latest technology Sourc e : Hitwise & Kantar Media TGI. Search Traffic Winners How did Retailers and Networks perform by model? Model Comparison Downstream Categories from Search Who gets each Samsung, depending on iPhone attracts a model, attracts a higher phone model’s higher share of traffic share of traffic to Retailers to Apple’s site and MNOs traffic? Downstream results differ for Apple and 2% 2% Samsung, at time of phone release. 3% 11% 2% 2% Searches for iPhones have a higher share of 15% 14% 21% 5% traffic going to Apple’s site, which was similar across models. 14% 13% Searches for Samsung devices attracts a higher 13% 14% share for retailers and MNOs, depending on 10% 11% 26% model. 16% 19% 16% 16% 17% 11% 8% iPhone 8 iPhone X iPhone 7 S8 S7 A5 MNOs = Mobile Network Operators (EE, O2, Vodafone & 3) Manufacturer Retailer MNO MVNO MVNOs = Virtual Networks or Leased Networks (Tesco Mobile, Virgin Mobile, Talktalk, Giffgaff…) Source: Hitwise,12 weeks at time of model release (6 weeks before + 6 weeks after release). Phone models based on top 1,000 search terms. MNO = Mobile Network Operator, MVNO = Mobile Virtual Network Operator. Categorisation based on top 20 domains per model. iPhone Model Comparison Downstream Sites from Search iPhone Traffic Dominance Type Domain iPhone 8 iPhone X iPhone 7 Retailer Carphone Warehouse 2.6% 3.8% 5.2% of MNOs Amazon UK 1.8% 2.1% 1.4% At time of release, each iPhone Argos 0.6% 0.9% 0.4% model sent a high share of traffic to the large mobile networks (MNOs). Curry’s 0.4% 0.6% 0.1% In particular, EE and O2 attracted MNO EE 5.4% 7.2% 3.7% the highest share for the iPhone 8 O2 3.3% 3.7% 2.8% and iPhone X (in 2017) and 3 for the iPhone 7 (in 2016). 3 3.3% 2.4% 4.6% Vodafone 1.5% 1.8% 2.3% MVNO Tesco Mobile 0.3% 0.7% 0.2% Virgin Mobile 0.6% 0.6% 0.3% MNOs, particularly, EE and O2, won search share for the newer iPhone Giffgaff 0.3% 0.2% 0.6% models.
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