A bunch of smartphone-related data and numbers are out today: Nokia earnings, Nielsen US smartphone figures and Samsung's global smartphone share.
First, Nokia reported Q3 2013 revenue of €5.66 billion vs €7.24 billion a year ago. Sales were off 22% YoY but there was a small operating profit due to aggressive cost cutting.
The company said that it sold 8.8 million Lumia smartphones (vs. 7.4 million last quarter and 6.3 million a year ago). Microsoft is taking over the Nokia handset business. Overall Nokia sold many more non-smartphones; however that market is decline and unlikely to be aggressively supported when Microsoft takes over. Nokia said that it sold 55.8 million non-smartphones vs. 76.6 million last year.
According to Strategy Analytics, Samsung was the big winner of the smartphone derby in Q3. Based on shipments estimates the firm said that Samsung captured 35% of the global smartphone market. By comparison Apple had a 13.4% share, which was down from just under 16% a year ago but still put the handset maker in second place.
The third place smartphone vendor was something of a surprise in China's Huawei. LG was fourth and Lenovo was fifth on this firm's list.
Back to the US, Nielsen is out with new smartphone data for Q3 (collected prior to the iPhone 5s release). Nielsen says that smartphone penetration is now 64.7% (comScore's number is just under 61%) in the United States.
In Q3 Android handsets combined for 52% of the market followed by iPhone with a 41% share. No other company has a meaningful share of othe US smartphone market. And despite the overall sales improvement in Nokia's Q3 results, there's little evidence of momentum for Lumia or Windows Mobile devices in the US to date.
The following is Nielsen's US breakdown of smartphone market share by manufacturer:
Earlier today Apple announced quarterly earnings. Gross revenue was $37.5 billion vs. $35.9 billion last year. The company generally beat expectations on revenue, earnings per share and iPhone sales. Mac sales were in line with expectations. However, iPad unit sales came in slightly lower than anticipated.
Here are the top-line figures from the release:
Regionally Americas sales rose only 1% year over year. Europe was flat. China was up 6% and Japan was up 41%. Here are the revenue numbers by product:
According to Localytics the following is the global breakdown of iPhones in market:
The Future of Privacy Forum's Jules Polonetsky was one of the featured speakers at the inaugural Place Conference. He spoke about indoor location and privacy with Jennifer King from UC Berkeley. We alloted 30 minutes for the discussion but could have easily spent an hour on it.
Privacy is the 800 pound gorilla of indoor location and the issue that challenges and potentially threatens its roll out. Ever since the negative publicity and coverage suffered by Nordstrom retailers have been scared to death of talking about what they're doing with indoor location -- despite the fact that consumers stand to benefit greatly through these innovations.
Hoping to head off regulatory intervention and preempt more ill-informed coverage and negative publicity, Polonetsky's Future of Privacy Forum (and Senator Charles Schumer of New York) announced a code of conduct that will govern indoor analytics and seek to protect consumer privacy.
The companies involved include Euclid Analytics, iInside, Mexia Interactive, Nomi, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions. Euclide and iInside spoke at the Place Conference.
This list doesn't include all the companies involved in indoor analytics (e.g., Retail Next) but the rest will adopt and abide by the rules announced today. And retailers will follow them. Basically the new rules require clear disclosures, enable consumers to opt-out of indoor tracking, make any tracking anonymous and prevent the misuse of information gained by venue owners.
People always forget that much more intrusive closed-circuit video cameras have been in retail environments for more than a generation.
As our panel on indoor analytics pointed out most of the data aggregated and anonymously captured by retailers will translate into in-store improvements, from staffing to store layouts. However consumers need to be educated about all of this given how new and little understood it is. This is where retailers need to step up (rather than cower) and help consumers understand why and how indoor location will benefit them.
Hopefully this new code of conduct will enable them do that with confidence.
Below is the full text of the press release:
New York, NY – U.S. Senator Charles E. Schumer, The Future of Privacy Forum (FPF) and a group of leading location analytics companies – including Euclid, iInside (a WirelessWERX company), Mexia Interactive, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions – today announced that they have agreed to a Code of Conduct to promote consumer privacy and responsible data use for retail location analytics. The companies responded to privacy concerns raised by Senator Schumer and the FPF about the use of this new technology. The code of conduct includes in-store posted signs that alert shoppers that tracking technology is being used, and instructions for how to opt out.
“This is a significant step forward in the quest for consumer privacy,” said Schumer. “This agreement shows that technology companies, retailers, and consumer advocates can work together in the best interest of the consumer. There is still much more work to be done and I will continue to push for privacy rights to be respected and strengthened, but this represents real progress and I thank the Future Privacy Forum and these tech companies for their hard work hammering out this agreement.
“Today, location analytics companies have introduced a comprehensive code to ensure they have data protection standards in place to de-identify data, to provide consumers with effective choices to not be tracked and to explain to consumers the purposes for which data is being used,” said Jules Polonetsky, executive Director of the Future of Privacy Forum. “These standards ensure that consumers understand the benefit of the bargain and have choices about how their information is used while allowing technology to continue to improve the shopping experience. As we quickly approach the holiday shopping season, this is not only the right move – but a timely one as well, adding a layer of trust, choice and transparency onto a shopping experience that in 2013 is more mobile and hi-tech than ever before.”
In July, Schumer warned that major national retail chains were testing technology that would allow them to automatically track shoppers’ location through stores. Following this warning, FPF worked with the technology companies to develop a Code to ensure that appropriate privacy controls are in place as retailers seek to improve the consumer shopping experience. These technology companies use mobile device Wi-Fi or Bluetooth MAC addresses to develop aggregate reports for retailers.
The Code puts guidelines in place to create best data practices that will provide transparency and choice for consumers. The Code calls for the display of conspicuous signage by retailers and for a central opt-out site for consumers.
"We are just beginning to see the possibilities that in-store analytics can bring to shoppers and to retailers, and yet, as with any new technology, there is the chance for confusion about the intent and possible implications of such technology,” said Steve Jeffery, CEO, Brickstream. “We applaud the Future of Privacy Forum for taking the lead in bringing retailers and technology providers together to address these important issues.”
“We would like to thank Senator Schumer for his leadership on this issue,” said Will Smith, CEO, Euclid. "Privacy has always been a priority as we've designed and built our services, and we have been working diligently with FPF to release best practices for the retail analytics industry as a whole.”
"iInside and industry partners have made it a top priority to assure that consumers are well-informed and their personal privacy and identity are protected. The newly announced code is a major step forward in establishing and communicating clear and concise standards across our industry," said Jim Riesenbach, CEO, iInside Inc.
“The release of a Code of Conduct to guide industry practice ensures that businesses and retailers are able to enhance their customers’ experience without compromising their privacy,” said Glenn Tinley, President & Founder, Mexia Interactive. “Business and consumers also can be assured that a company listed on the SmartStorePrivacy.com website has committed to following the code.”
"Proximity and location technology is evolving rapidly, and we want to make sure it’s deployed in an open, responsible and trustworthy manner. The retail location analytics Code of Conduct is a solid step in the right direction," said Marc Wallace, Co-Founder & CEO, Radius Networks, Inc.
“SOLOMO sees privacy as an opportunity for retailers to build trust with customers,” said Liz Eversoll, CEO, SOLOMO. “We’ve collaborated to develop the Code of Conduct to ensure transparency and empowerment for retail customers. Indoor location technology will offer customers new in-store experiences, special deals, and localized services as retailers introduce it in their stores. Everyone wins.”“Turnstyle Solutions is pleased to partner with the Future Privacy Forum in the development of this Code of Conduct. We are confident the code lays the foundation necessary to protect sensitive consumer information, while offering retailers and consumers services that enhance their shopping experience," said Devon Wright, Co-Founder, Turnstyle Solutions.
Later this morning Apple will introduce at least two new or updated iPads. It's widely expected that Apple will offer a 5th generation full-sized iPad that incorporates design features of the Mini and will be thinner and lighter. In addition the company will likely introduce a "retina" display iPad Mini. There are likely to be other announcements tied to Macs and the Mavericks OS update.
However the iPad will be the center of attention.
This update is important as Apple faces intensifying competition from Google, Samsung and Amazon. There are also a host of "no-name" tablet makers pushing the price of smaller tablets down. Intel, for example, believes that there will be reasonable quality $99 tablets for sale this holiday season. Accordingly it will be interesting to see whether Apple adjusts the pricing of its iPads in any way.
According to data from Localytics, the most popular iPad is the iPad 2, which has 38% of the global iPad market. The 4th generation iPad has only 18% and the iPad Mini has 17% according to the firm. Among Android tablets it's a three way race between Samsung, Amazon and Google/Asus.
On a global basis Samsung is the Android leader with 55% market share. In the US however Amazon Kindle tablets have outsold Samsung. Overall, according to Chitika in June, the iPad drives 84% of tablet-based traffic in North America. The ad network is set to update these numbers today.
Gartner and IDC continue to forecast the decline of the PC, with tablet growth continuing. However, thus far, Microsoft has not produced a competitive tablet to stem its falling OS and device market share.
On Friday the Pew Research Center offered new data showing that 43% of Americans over 16 owned a tablet or an e-reader. That makes for a total of just over 100 million people in the US with one or both devices. Among them Pew said that 35% owned tablets, which I calculated was roughly 84 million people.
Yesterday comScore released data about in-store smartphone usage from the EU 5: UK, France, Germany, Spain and Italy. The top in-store shopping activities across the region were:
This compares with our survey of US in-store shopping activities:
Source: Opus Research n=1,050 US smartphone owners (9/13)
There are several US surveys regarding showrooming and what consumers do in stores with smartphones. They show slightly different things. Basically, however, the top three activities are: compare prices, get product reviews, find coupons.
We can't assume the comScore data are the final word on European in-store behavior but it's interesting to note that the top activities all involve asking for input or advice regarding what to buy. That behavior is evident among US smartphone owners but further down on the list. There may be a cultural explanation or it may be a function of the framing of survey questions.
There are roughly 150 million smartphones in the US and between 140 and 150 million in Europe. Penetration rates are comparable. In Europe the leading handsets are Android based, whereas the iPhone is the top smartphone in the US.
Recently xAd and Telmetrics released more data from their UK "Mobile Path to Purchase" study conducted by Nielsen. This time the focus was on consumer behavior in the automotive vertical (car purchases and servicing). The big takeaway, once again, is how mobile devices now play a critical role in the pre-purchase research process.
The UK study is something of a mirror of the earlier US version, with some differences.
Perhaps the most important finding, the UK study discovered that 30% of UK automotive researchers used mobile devices exclusively. Tablet owners were more likely to be at home when conducting research vs. smartphone users (82% vs. 41%). In addition to price comparisons (popular with with both smartphone and tablet owners), smartphone owners are more often seeking location and contact information for dealers and service locations whereas tablet owners were doing more review checking.
In order of popularity and volume here's what UK auto mobile users are looking for or researching:
The following are some additional data and details from this slice of the UK study:
Location was a critical factor for mobile users: 40% sought or expected business locations within 5 miles. Finally only 30% of these automotive researchers knew specifically what they were looking for. Thus there's a significant opportunity for marketers to influence these consumers' purchases though mobile marketing and advertising.
There are a number of analyst firms in the market that seem to exist to generate forecasts, many (or most) of which turn out to be inaccurate. In that context I'm quite skeptical about ABI's latest forecast regarding indoor location. The firm says the market is going to be worth $4 billion by 2018.
While it's almost certain that over time indoor location will be worth billions, it's too early to say with any precision or accuracy how much the indoor location market will be worth. Ironically ABI's numbers are probably too small (the firm is usually the source of inflated forecasts). As the market evolves there will be a number of revenue streams and indoor location will touch a wide array of of consumer purchases.
First, there's licensing revenue generated by retailers and venue owners to indoor location vendors. There's also IT-related spending for "infrastructure upgrades" to support indoor location. That includes WiFi, bluetooth low energy and a range other approaches. There's no technology standard and unlikely to be one for some time. These numbers are quite small right now, unless we consider historical spending on WiFi as part of all this.
Then there are a range of in-store marketing angles: in-store couponing, mobile advertising, apps, digital kiosks that interact with smartphones and so on. Though inevitable indoor marketing is generally speculative at the moment. Over time it will be worth several billion dollars. Currently brands spend billions to secure favorable positioning in stores and market to consumers at or near the point of sale. Some of that will inevitably shift to digital, indoor marketing. The question is how much?
Then there's the value of digital influence over offline purchases. A majority of US smartphone owners (and increasingly European smartphone owners) use their devices in stores to help make purchase decisions. There's a direct impact on purchases (deciding to buy or not buy) from this indoor smartphone research or "showrooming."
I've estimated in the past that the Internet's influence over offline shopping is approaching $2 trillion. Using this type of lens, smartphone "showrooming" is impacting (positively and negatively) offline buying probably to the tune of billions already. Should this be part of an indoor location forecast? Not necessarily but it should be included in the discussion to show how much is at stake for retailers and others in the ecosystem.
ABI is directionally correct that the market is worth billions -- it's already there if you consider smartphone influence over offline transactions -- but precisely how much and where the money will come from is still to speculative to predict reliably.
Digital marketing platform Monetate recently tested whether a site offering the option to buy through PayPal saw any conversion lift vs. not offering PayPal. Using A/B testing and data from a single client the company said there was a modest roughly 1% sales lift by offering PayPal:
Adding this simple reassurance to product detail pages not only lifted average order value by 1.03%, but it also reduced cart abandonment by 1.21%. Not a huge lift, but not shabby either . . .
We recently asked 1,250 US adults which entities they trusted most to handle mobile payments. The following was the order of results:
Square and Facebook were not on the list of choices. However Facebook is testing its own mobile payments service with some consumers and retailers (stored credit card and details).
As the survey data above indicate PayPal is in a very strong position to become the dominant mobile payments company (especially after its Braintree acquisition) if it can establish and reinforce its brand and user experience as being the simplest and most secure.
Apple could quickly enter the mobile payments arena; however so far it has held back. And while Amazon has a presence in mobile payments it's not particularly strong or developed.
Google, for its part, has failed to establish Wallet among consumers. Square is in a decent position but it doesn't have the reach that PayPal currently has. Facebook has massive reach but is not going to be trusted with payments by most consumers without a Herculean education and marketing effort.
So currently it's PayPal's market to lose really, as mobile payments take hold.
One still gets the sense that there are marketers who treat the rise of mobile devices as something of a novelty. The idea that mobile devices have supplanted PCs in many use cases hasn't quite sunk in for many.
There are nearly 150 million smartphones in the US today, with many of them being used as primary internet devices. Now, according to Pew Research Center data released this morning, there are nearly 103 million people in the US (over 16) who who tablets or e-readers. Eventually tablets will replace e-readers for most.
A survey of more than 6,000 people in the US (over 16) conducted between July and September found that 35% of Americans own tablets and 24% own e-book readers. Combined, a total of 43% of Americans own one or the other or both. After Q4 the tablet number will be at or above 40%.
Here's the breakdown in terms of real population numbers by category -- if the Pew data are reliable:
Apple is scheduled to announce new iPad models next Tuesday at an event in San Francisco. While Android tablet shipments (and presumably sales) have been growing the great majority of tablet traffic in North American is still from the iPad.
Ad network Chitika reported in late June that the iPad was responsible for 84% of all tablet traffic in North America. The company is currently updating its numbers and will release new data next week.
However this is what the tablet landscape looks like (until further notice) in terms of actual tablet-based traffic to websites:
Yesterday afternoon Google reported third quarter earnings. The company beat financial analyst consensus estimates. Total "consolidated revenues" (including Motorola) were $14.89 billion, representing 12% growth vs. the third quarter in 2012.
US-based revenue was 45% of the total compared with 55% from outside the US.
Paid clicks grew 26% across Google sites and its extended network. However average prices paid for those clicks decreased 8% vs. last year. This is likely due to an ongoing shift to mobile usage (more clicks coming from mobile, with lower prices paid for them). Indeed, earlier this week comScore reported that US search volumes were down (again likely because of mobile):
Despite the release of its elegant and innovative Moto X phone, Motorola Mobility's loses increased. The unit saw Q3 revenues of $1.18 billion (vs. $1.78 billion last year). And there was a loss of $248 million (vs. $192 million in 2012).
On the earnings call, Google CEO Larry Page said that "Almost 40% of Youtube’s traffic now comes from mobile, up from 6% two years ago." It was also mentioned that there are "more than 40 million calls driven by Google ads every month." That's roughly 2X vs. 2012. Many of them are coming from smartphones.