Cuckoo clock 2013Q1

Today, every second internet user in the country can say they have a gadget of some kind. While the share of smartphone owners reached 45% in Q1 2013, an 11 percentage point increase in smartphone penetration in a year, the share of tablet owners quadrupled in the same period. So the revolution in small internet-enabled devices continues...

Who has what gadget? When and what are they used for? What are the most well-known and used brands? What is the dynamic growth in the penetration of different gadgets and the intensity of use? These and many other questions are answered by NRC Marketing Research and Consulting Ltd. The quarterly research series was launched in the third quarter of 2011. The current wave of data was collected in February 2013 from a sample of 1000 internet users aged 18-69.

What has changed in a year?

Overall, 51% of all internet users in Hungary are gadget owners, i.e. they own at least one smartphone, tablet, netbook or e-book reader. A year ago, this figure was 38%, compared to 31% a year and a half ago (when the survey was launched).

The most popular gadget is the smartphone, which is currently used by 45% of internet users. The share has increased by 5 percentage points in the last six months and by 11 percentage points compared to a year ago. So the rate of growth is slowing, but still significant: roughly every six months, one in ten traditional mobile users replaces their old mobile device with a new internet-enabled one. However, the slowdown in the rate of penetration growth does not mean that the rate of growth in the number of smartphones sold has slowed down, as a relatively large number of people - 15% of current smartphone owners - are no longer using their first smartphone, but have already replaced a smartphone with a newer, more modern one in their latest purchase. They are predominantly "first generation" smartphone users who bought their previous smartphone before 2010.

The most dynamic small, modern, high-tech device is the tablet: the share of tablet owners has risen from 2% to 9% in a year, so there are practically more than four times as many domestic internet users than this time last year. There has also been an increase in e-book readers, from 2% to 4% compared to Q1 2012. In terms of popularity, the netbook is the only gadget to be considered the outlier, with no growth in the last year and 6% currently owning a netbook.

Looking at the demographic characteristics of "gadget ownership", while a year ago and before it was a more "masculine trait", this difference is now disappearing and the proportion of women (50%) with gadgets is now close to that of men (52%). However, it remains the case that it is mostly among young, higher educated people living in the capital who can claim to own at least one of these devices.

Internet use is a natural part of gadget use, with nine out of ten gadget owners using the internet at least occasionally on their device, and nearly two thirds regularly connecting to the web via their small internet-enabled device. And while there is no suggestion that small screen internet use has fundamentally reduced the amount of time people spend on PCs and laptops, one in two smartphone owners have found that when they could have used a large screen to surf the web, they chose to do so on their gadgets.

However, smartphone use not only affects the way people use the internet, but also the frequency with which they use traditional functions on their phone (making calls, receiving calls, sending SMS), with just over a third of smartphone owners making at least occasional internet calls (e.g. via VIBER or Gtalk) to family and friends, which has a cannibalising effect on traditional calls. One in two users who make at least occasional calls over the internet say that they make fewer traditional calls from their device. Even more people prefer to send messages over the internet rather than text messages, with 85% of smartphone owners having exchanged messages with someone and a quarter of them regularly (also) keeping in touch with friends. Three out of four of these users say they send fewer SMS messages thanks to the internet messaging option than before.

HGI (Hungarian Gadget Index): 19.0

In order to monitor the change in the attitude towards gadgets among Hungarian internet users on a quarterly basis, NRC has created an aggregated indicator, the Hungarian Gadget Index, which shows the attitude of the Hungarian internet society towards gadgets in a single number. The index includes the penetration of smartphones and other gadgets, as well as the number of functions used on the gadgets and the frequency of use of these functions.

The Hungarian Gadget Index is an average of the gadget scores at the individual level, which can range from 0-100 (for example, a gadget score of 0 is given to someone who does not own any of the four gadgets tested, and a gadget score of 100, the maximum, is given to someone who owns 2 or more gadgets and uses the vast majority of the functions available on a daily basis).

Among domestic internet users, HGI stands at 19 points in Q1 2013, up 5 points from a year ago. Behind the increase in the index is a rise in gadget penetration (and within that, most notably the share of smartphone and tablet owners). Since there is no increase in the intensity of internet use on small internet-enabled devices compared to the same period last year among those who use a gadget, this component of the HGI index did not contribute to the increase in the index.

Looking to the future, smartphones are still expected to see the biggest increase in penetration. 27% of those currently using a traditional mobile device said they plan to replace their current device within the next year. As mobile phones are now virtually the only smartphones in the operators' mobile phone range, it is assumed that a large proportion of these people will have a new smartphone within a year. But how will the proportion of smartphone and other gadget owners actually evolve? Only the next wave of NRC's Gadget Survey will tell us with absolute certainty...