Strategy Analytics is predicting that HTC Android-based phones will constitute roughly 4% of total smartphone sales in the US market this year. The firm forecasts that Google will sell ".4 million units" (400K) in Q4. The iPhone is expected to sell approximately 11 million 3G units by the end of the year and at least double that next year.
The smartphone segment is the fastest growing part of the US handset market. But the market is becoming more competitive with RIM, Apple, Windows Mobile, Symbian, Palm and soon Android battling for visibility and sales. Venerable smartphone maker Palm reported earnings yesterday:
Smartphone sell-through for the quarter was 1,029,000 units, up 49 percent year over year. Smartphone revenue was $333.8 million, up 10 percent from the year-ago period.
However the company's net loss widened amid this growing competition.
Microsoft is seeking to build a premium ad network in mobile in parallel with its similar efforts on the desktop. To that end, it just added CNBC and became the exclusive provider of mobile ads to that site. It had a pre-existing display ads deal for the desktop.
Microsoft argues that Platform A, AdMob and others are like "remnant" ad networks on the Internet.
I moderated a panel on Location Based Services this morning at the GigaOM conference Mobilize in San Francisco. On the panel were Yahoo, XOHM, Google, Skyhook Wireless, JumpTap. We discussed the full range of subjects here but far from exhaustively. The takeaways were the following:
The audience is mostly tech companies and funders. Most of the panels at the show have been about product development, user experience and technology. There were some discussions here and there about advertising and revenue models but that has mostly been at the margins of the show.
Google's Rich Miner keynoted the afternoon session. Miner provided some good historical perspective about the mobile and carrier ecosystem. In particular he was critical of his early experiences with Windows Mobile at France Telecom. He lamented the absence of open standards and the challenges of doing software development for mobile in the past. Fast forward, Miner celebrated some of the recent developments toward greater openness at Verizon, AT&T and elsewhere in the indutry.
He made a range of fairly "generic" comments about Android. The first handset is expected next week. However, Miner didn't discuss that or preview the announcement in any way. He also didn't take any audience questions, perhaps becaue he knew they'd all be about the launch next week. Accordingly the speech felt somewhat truncated.
A mobile "guru" panel featuring Yahoo, Sprint, Zumobi and Motorola was an interesting exercise in future speculation. Generally the panelists were quite thoughtful. My favorite part was a sci-fi-like discussion of "augmented reality" (projection of images, labels, etc. onto the real world via mobile accessories).
There was also an interesting panel about mobile social networking featuring Loopt, Hi5, Facebook and MySpace. There were few new insights here but some interesting discussion about user behavior, mobile video and its potential. The panelists said they're seeing growing adoption but they still haven't figured out what the right revenue model is.
Most of the panels I attended featured the obligatory hommages to the iPhone. Indeed, perhaps the most interesting coversation of the day for me was with an Apple executive at lunch who'd slipped into the event but wasn't speaking at the conference. He was eager to see what the Android experience would be like -- as we all are.
The US Center for Disease Control has been tracking the decline of landlines in US homes for several years. Earlier this year the agency said "During the last 6 months of 2007, more than one out of every seven adults lived in wireless-only households" and mobile only homes had become nearly 15% of the total population. (There are breakdowns by race, gender, age and education here.)
Nielsen just put out findings that argue "one in five U.S. households could by wireless only by the end of 2008":
[M]ore than 20 million U.S. telephone households (17 percent) are wireless substitutors—homes without landlines that rely solely on a mobile phone for their home telecommunications. The new research ... suggests that one in five U.S. households could be wireless-only by the end of 2008.As the U.S. economy tightens and consumers look for ways to cut household spending, many are eyeing that landline phone bill, which averages $40 per month per landline household.
In addition to the universe of U.S. wireless substitutors, Nielsen’s study reports that:
- U.S. cord cutters tend to have lower income-levels; 59 percent have household incomes of $40,000 or less
- Smaller households, with just one or two residents, are more likely to cut the cord than larger households
- Moving or changing jobs are the biggest life events associated with cord cutting: 31 percent of cord cutters moved prior to cord cutting and 22 percent changed jobs
- Wireless substitutors tend to use their mobile phones more than their landline peers, 45 percent more per phone, but still save an average $33 per month in a household of one subscriber, less $6.69 for each additional wireless resident, when they cut the cord
Carrier landline revenues have been declining steadily for the past several quarters. The Nielsen data suggest that that the bad economy is accelerating the trend landline abandonment among certain user populations.
Yet more affluent consumers are also very mobile centric. According to the recent Ipsos Mendelsohn survey of US consumers with income of more than $100K, the higher the income the more likely to use cell phones to access the Internet:
The details are emerging about the precise date for release of the new HTC-made, T-Mobile Google Phone. According to the Wall Street Journal (and others) the phone will cost $199 with a two-year contract (identical pricing to the iPhone). It will actually go on sale in mid-October (although it be announced on Sept. 23).
It will have both a large touch screen and a full keyboard -- the absence of which is the iPhone's Achilles Heel. And it will have an Apps Store/marketplace. We've already seen some of the software applications, which appear impressive.
Unless the phone is flawed, it's poised to do fairly well because of the AT&T exclusive relationship with Apple in the US. The public is hungry for more capabile phones; the iPhone has primed the pump. Indeed, the iPhone is the device (rather than BlackBerry) that the Android phone will be most directly measured against of course.
But most interesting to me is the branding. According to the Wall Street Journal: "it will showcase the Google brand." Unlike Windows Mobile, which gets third billing on its phones, Google will get top billing.
When Google launched Android the company said this wasn't a "GPhone," it was an operating system and software stack. However, out of (marketing) necessity, T-Mobile is all but compelled to position it as a Google Phone. Google is the only one of the three involved players (T-Mobile, HTC and Google) with a truly strong consumer brand. The brand "Android" has no resonance with the public either.
When others start selling Android-based phones, which they will quickly want to do if this initial phone is successful, they will face a similar branding dilemma, which will be quite interesting to watch unfold.
So whether Google intended it or not, the "GPhone" (that won't be the official branding) is here.
Skyhook Wireless, which provides location awareness technology (GPS, WiFi, cell tower) to the iPhone and other devices, is keeping track of the growth of location-based applications on the iPhone. Here are some charts the company sent me, reflecting the current state of things with location aware apps:
Looking at the Skyhook data it appears there are roughly 275 location-aware applications for the iPhone, with a slight majority on the paid side. We did a review of the location-aware apps when the iPhone Apps Store first launched in July. At the time there were about 55 by our count.
Earlier in the week, Centrix (based in Canada) introduced software, NetworkLocation, for the Mac. It uses Shyhook's WiFi positioning capabilities to automatically adjust network settings based on location:
NetworkLocation allows users to customize their Mac OS X settings, such as launching an iTunes playlist, enabling Airport, or iChat message status based on location . . . "We developed NetworkLocation to address an annoyance we all come across to varying degrees – the tedious routine of getting our laptops into a comfortable and productive state,” said Richard Fillion, co-founder of Centrix.ca. "Everywhere we go, we want our computers to behave a certain way - from lowering the volume at the library, to changing the default printer or mail server. With NetworkLocation, it just happens.”
Centrix.ca has integrated WPS from Skyhook Wireless to determine user location. "With Skyhook, NetworkLocation can position a user automatically indoors, where people use their Macbooks most,” said Kate Imbach, director of developer relations at Skyhook Wireless. "Network Location shows how location-aware software can optimize user experience based on environment-specific requirements.”
Once any software determining location is on the desktop, both content and advertising can be automatically targeted to users in a more geographically specific way. Google, for example, is integrating location (its cell-tower database) into its Chrome browser, which will eventually enabled AdWords campaigns that offer much more geographic precision.
Google has just added its StreetView imagery (and walking directions) to the Google Maps for Mobile application. They're available on all color BlackBerry devices and most Java phones. After downloading the new version of Maps for Mobile, StreetView appears as a menu option on the business data/profile window:
It can also be expanded to full screen and manipulated (pan, etc.) just as on the desktop:
Last week Google also made its My Location (trianglulation) capability more precise by updating its database of cell-tower locations.
StreetView is also going to be available via Android phones. The first one is scheduled to be announced next week from T-Mobile.
The M:Metrics unit of comScore reported yesterday that mobile search was growing in the US and Western Europe. The measurement firm found that mobile search penetration in the UK and US markets was greatest, at 9.5% and 9.2% of mobile users respectively. However, in terms of real numbers, the US has a much larger number of mobile search users as the UK -- simply because of the population of mobile subscribers (74 million vs. 250 million).
It's not clear whether SMS-based search is included in the figures below (don't believe so). Let's assume this is all measured through a browser search box. Here are the comScore figures:
There are other numbers in the market (we have some), which I've gone into a bit in a post at Search Engine Land discussing these comScore data. Not part of the release yesterday, here are comScore US data showing sought after content categories in SMS activity:
I'm always mystified that weather is such a big category in these data.
Google's first Android OS-based phone is expected to be formally announced next week -- an HTC phone (Dream) on T-Mobile's network. Google's Andy Rubin, one of Android's co-creators, is feeling opening-day jitters. Reuters interviews Rubin:
"We're in the final stages and having lots of sleepless nights," he said in an interview. "We're very happy with the results," said Rubin, who worked previously at Apple and a number of Silicon Valley start-ups . . .
After two years of speculation, Google is under pressure to deliver a product sufficiently different from Apple's iPhone and the myriad copycats that have appeared since it was introduced last year . . . Rubin said Google chose to "put our blinders on" and make sure the first phones impress consumers.
"If we come out with a dud, people will go, 'Well, that was a waste of time," said Rubin. . . Google has worked almost exclusively with Taiwan's High Tech Computer Corp (HTC) and T-Mobile for the first Android phone, he said.
I'm not sure that Google gets only one shot to make a first impression. Apple's iPhone 1.0 was great but had weaknesses. That device has been improved several times with hardware and software upgrades. However, the press and mobile analysts will certainly pronouce judgment on the first Android device, which is probably impressive but will likely leave room for improvement.
BlackBerry is the dominant smartphone in the US market and is rapidly improving, under pressure from Apple. But Apple's decision to go with an exclusive carrier relationship has probably limited its market potential. Those unwilling to switch to AT&T (and not on BlackBerry, which has limited consumer appeal) would probably welcome a new, consumer-friendly device with capabilities and software comparable to the iPhone.
Here's more from the Wall Street Journal, which says the phone will actually go on sale in October.
This past week both Dial Directions and Tellme announced speech for Dash mobile devices. Here's how it works: Users register their cellphones and then the system recognizes that they have a Dash device when they call. Dial Directions users call 1-DIRECTIONS (1-347-328-4667) and identify an address or intersection they're going to. The spoken destination is sent from the cellphone instantaneously to the Dash Express and consumers can use the device's routing. Here's a video demo.
In a similar scenario, Tellme also allows users to call its phone number (1-800-555-Tell) and ask for a specific business listing or conduct a category search (e.g., sushi, San Francisco). Once the desired result is obtained it similarly goes automatically to the Dash device for routing, etc. The search results in this case come Microsoft Live Search.
While the Tellme capabilities extend beyond directions to business search, both integrations illustrate a fascinating trend toward connected devices. The idea here is that the phone is tied to the PND, which may in turn be tied to the PC (as in Send2Dash). This is part of the broader movement toward "the cloud."
Users increasingly want access to "their content" wherever that may be -- on the desktop, on their phones and in the car. Rather than seeing these services as independent silos, they become just input and output locations or modalities depending on where the user is and the circumstances (driving, walking, etc.). This is a vision that Tellme has been nurturing for some time.