The term "phablet," used to describe devices that operate like a phone but approach the size of small tablets, is horrible. But what may be more horrible is that Apple is reportedly considering creating one, potentially mimicking Samsung's strategy of a range of devices of differing screen sizes.
Samsung is throwing a lot of mobile device spaghetti at the refrigerator, metaphorically speaking, to see what sticks with consumers. One might even describe its strategy as "incoherent." Nonetheless Apple may be moving toward introducing more devices with various screen sizes. That's according to an article in the Wall Street Journal:
The tests with suppliers seem to suggest that Apple is exploring ways to capture diversifying customer needs when many mobile device makers offer smartphones and tablets in various sizes.
In addition to potentially developing a device in-between the iPhone and current iPad mini, Apple is also apparently experimenting with larger screens for iPads. Most of these prototype experiments probably won't come to market.
The huge-screened Samsung Galaxy Note has proven popular; however it's unclear how many units have sold. Indeed, Samsung has been the primary creator of market demand for larger-screen smartphones. And now Apple is feeling pressure to respond with a larger-screen iPhone. However that's not likely to be the 5S, due out later this year.
It might make sense for Apple to offer two iPhones: one with the current screen (small) and one with a 5-inch screen (large). However beyond that it makes little sense for Apple to go.
When Steve Jobs rejoined Apple as CEO 1997 one of the first things he did was to simplify Apple's product lineup, which had become cluttered and confusing to consumers. This is the danger if Apple tries to follow Samsung and create multiple device screen sizes.
Consumers do want a larger-screen iPhone but they haven't been asking for multiple devices of incrementally larger screens. It's also not clear that anyone wants or cares about a larger iPad. Maybe one with a slightly larger screen would be interesting but that would need to entirely replace the current iPad.
It makes sense for Apple to have four devices at most: iPhone (two screen sizes perhaps), iPad Mini and iPad. Beyond this the product lineup becomes muddled and confusing. And to the extent that Apple seeks to imitate Samsung's approach it may indicate the company has lost confidence in its vision.
Nokia's results this morning are something of a Rorschach test. You either see them as evidence that Nokia has stalled and Windows isn't going to save the company or you can see some momentum and success -- as a promise of more future success.
Nokia's Q2 revenue was €5.7 billion ($7.5 billion), which was down vs. last quarter (3%) and last year (24%). Lumia sales were up 32% vs. last quarter to 7.4 million units. Overall the company sold 61 million phones, almost 90% of which are not smartphones however.
Nokia said the 7.4 million Lumia unit sales reflected strong demand for the Windows Phone based handsets. However in North America the company sold roughly 500,000 devices vs. 600,000 last quarter. Accordingly demand in North America is flat, while Windows remains under 5% in terms of market share. Nokia has had more success in Europe and other markets where its brand is stronger.
Yet Nokia has now pulled into the number three smartphone slot after Android and iOS. BlackBerry reported selling 6.8 million phones last quarter. Becoming number three was an expressed goal when Nokia selected Windows as its exclusive OS. However the question now becomes can it do better?
My view is that Nokia will be compelled -- notwithstanding contractual exclusivity with Microsoft -- to adopt Android at some point in the not-too-distant future or remain stuck in what amounts to neutral.
Update: The Verge reports that Nokia CEO Stephen Elop was concerned that if the company chose Android that it would lose to Samsung. Thus it chose Windows Phone as its exclusive OS. That has been a very mixed experience for Nokia, obviously. I believe that Nokia with its brand and marketing resources would have been in a position to challenge Samsung for Android dominance.
But the early window of opportunity, so to speak, has now closed for Nokia.
In honor of the blazing US summer and road trips, xAd and Telmetrics have released more data from their "Mobile Path-to-Purchase Study," this time on consumer behavior in the "Gas & Convenience" category. The study, which combined a mobile user survey (n=2,000) and consumer behavior data (n=6,000), was conducted by Nielsen earlier this year.
As might be expected the study reflects the very mobile-centric nature of the category, which includes convenience store visits, gas purchases and minor automotive service (i.e., oil changes).
Below are the study's key findings:
Interestingly, the study reported that "Gas & Convenience searchers spend an average of 6 minutes per mobile search session," which is 50% more than "the average Retail mobile search session."
The study also found that Gas & Convenience users were very open to influence and receptive to mobile advertising, especially if the ad pertains to a nearby location and/or offers a deal or coupon.
As the global market for smartphones matures, it is clear that the default keyboard platform is going to be key for product differentiation. That's why it is so interesting that up-and-coming Chinese OEM, TCL Communications Technology Holdings Ltd, has expanded its licensing agreement with Nuance, making Swype the default keyboard for its line of Android-based smartphones sold in the U.S. In its latest report of device shipments, TCL claims sales volume of smartphones grew 126% in June, when compared to the same month last year, exceeding 1.3 million units. Of the nearly 21 million phones sold globally in the first six months of 2013, over 18 million were sold outside the Chinese domestic market. 4.3 million were smartphones, selling under the he Alcatel OneTouch brand as well as TCL's own Idol X branding.
Like Samsung, TCL is a well-diversified consumer electronics manufacturer with a major presence in the flat-screen TV market. Its management expects the geographic expansion of its smartphone sales to fuel growth and profits in the coming years. If it does so, it will be at the expense of Samsung, HTC and Google's own Motorola brand. Matt Revis, Vice President of Dragon Devices at Nuance, points out that the company had its choice of a number of less expensive alternatives to Swype to support touch-based input, including the "free" default keyboard that ships with the Android operating system.
"This is representative of a situation where you have a company that is positioned to grow globally and looking for an innovation partner to make it a category leader," Revis explained. "They are working with Nuance."
Indeed, it is a signal event for Nuance and Swype, which is already available for free download from Google Play. While Nuance would not provide revenue estimates for the licensing agreement, the impact can be expected to be significant, given TCL's ambitious growth expectations in the coming year. A virtuous circle has been established whereby an aggressive manufacturer recognizes that innovation will be key to growth and has recognized the need to cement a relationship with a firm that has been steadily investing in improving the technologies that support touch-based and multimodal input - both through internal development and acquisition.
Against the backdrop of a sweeping reorganization at Microsoft, intended to promote greater collaboration and faster time-to-market, hardware tracker IHS reported that PCs "delivered the worst second-quarter performance in 11 years."
The firm said that global PC shipments were down 7% vs. a year ago. IDC reported in Q1 that PC shipments were down 14% year over year. I suspect that when the IDC and Gartner hardware figures are released we'll see greater declines for Q2 than what IHS is reporting.
IHS said that during the first half PC sales, globally, suffered "a harsh 11.2% contraction compared to the same six-month period a year ago."
Tablets and smartphones have clearly eaten into the PC market and put downward price pressure on PCs. PC replacement cycles are getting longer. A more intangible thing has also happened: PCs have ceased to be shiny new objects coveted by consumers.
They've become instead pure utilitarian items without the ability to evoke the device-desire they once had.
While countless retailer apps and mobile websites are designed specifically to deliver an "omnichannel" experience -- tracking a customer through the lifecycle of a purchase -- retailers are missing out on opportunities to engage customers through in-store technologies, says a new report by EKN Research.
A survey of more than 60 large retailers found just 13% of retailers are offering in-store features for mobile apps indicating a significant gap in leveraging the use of smartphones or mobile devices for customer engagement.
In terms of providing the infrastructure for ubiquitous connectivity, only 1 in 5 retailers currently offer free in-store wi-fi, with 42% of retailers having no intention of ever offering free wi-fi in stores.
Mobile technologies may offer new opportunities for customers but many retailers are not willing to make the investment. The report finds that IT spending on store technologies will remain relatively flat in the next three years, representing 31% of the total IT budget in 2013. Though the share is expected to increase to 35% by 2016.
"In 2013, increasing store operations efficiency remains retailers’ top goal from investments in store technologies. Running an efficient store should be table stakes for mature retailers, and their top goal should focus more directly on improving customer engagement. EKN views this as evidence that the focus hasn’t yet shifted for a majority of the retailers."
This news comes on the heels of a recent comScore report that found consumers are open to communications from retailers on their mobile devices with 47% of shoppers willing to have a retailer to send a coupon to their smartphone when they are in-store or nearby.
And previous data suggest a majority of mobile users are accessing retailers' websites for in-store sales or customer service functions.
We'll be exploring the current pulse of retailers and in-store marketing technologies at our upcoming Place Conference this October in San Francisco.
The IAB released a global mobile advertising report for 2012 this morning. It reflects ad share by region and ad format. The IAB sizes the global mobile advertising market at $8.9 billion (€6.9 billion) in 2012.
The North American mobile advertising market was worth $3.5 billion in 2012. It lagged just behind APAC and should overtake that region this year.
The following are the values of the other global-regional markets:
Mobile paid search (read: Google) is the dominant form of mobile advertising on a global basis and in most individual regional markets according to the IAB:
With the possible exception of Latin America, with its more limited smartphone penetration, SMS-based advertising is shrinking around the globe.
Despite mobile paid-search's global dominance, search and mobile display are seeing comparable growth rates:
Google is clearly one of the beneficiaries of these trends but so will be Facebook, Twitter and a few ad networks. Fewer than 10 companies are in a position to control three-fourths of the global-mobile ad marketing in 2013.
Yesterday Kantar Worldpanel ComTech reported that the iPhone has gained on Android in the US market. The firm said the relative market shares of Android, iPhone and Windows Phones are now as follows:
The iPhone is the bestselling individual smartphone in the US, though not across the globe.
Kantar asserts that its survey data are more accurate than other sources because it operates "the largest continuous consumer research mobile phone panel of its kind in the world, conducting more than 240,000 interviews per year in the U.S. alone."
For comparison purposes comScore reports the following (May, 2013) smartphone market share in the US:
Comscore shows Android and the iPhone gaining in the US and all other operating systems losing share vs. last quarter.
While the iPhone may have gained in the US that trend does not appear to be global. Kantar reports that Android's share is now nearly 70% in Europe and even higher in China.
A once-impossible objective for digital marketers was 1:1 matching between online ad exposures and offline store visits and purchases. Hence the historical focus on e-commerce, which was much easier to track.
But tracking and matching users is getting a lot more sophisticated notwithstanding the decline of the cookie. For example, Facebook is matching "hashed" users (Facebook ID, email, phone) with offline actions and purchases through data partnerships such as Acxiom, Epsilon and Datalogix.
These data partnerships also allow for more flavors of demographic or audience targeting to occur online on Facebook. This is part of Facebook's Custom Audiences program.
In mobile specifically one of the things that has held back mobile ad spending has been the inability to show ROI on a per-campaign basis. However that's starting to change with efforts from PlaceIQ, Placed, xAd and others. Placed and PlaceIQ are starting to measure store visits in response to mobile ad exposures to show lift (this is something we'll be exploring in detail at Placed in October).
Indeed, online-to-store tracking will be mandatory for mobile ad networks within 12 months. Networks will need to be able to offer agencies and marketers a sense of the "Place Visit Rate" (a PlaceIQ metric) resulting from the campaign. Already today, however, there are examples of programs that represent the future of mobile marketing -- and one that achieves the formerly impossible goal of near 1:1 matching.
Earlier this year Catalina introduced BuyerVision Mobile. It was created in partnership with 4Info and offers marketers the ability to target mobile shoppers based on purchase history (using store loyalty card data) and then "close the loop" through in-store purchase reporting.
Over the course of the past 24 months 4Info -- formerly an SMS marketing platform -- has created a database of "110 million devices in 97 million households." The company claims that it has achieved a "90% direct match to NCS, DLX and Acxiom data sets." That's also true of the Catalina purchase history data.
Catalina and 4Info know exactly who their consumers are but have "hashed" IDs, yet matched these individuals in their respective databases. Thus when Huggies wants to target buyers of Pampers (smartphone moms), it can be done with almost 100% certainty. And when those individuals appear in stores and make purchases, those data are captured by Catalina and matched with the 4Info data to show whether the mobile ad exposure provided an actual in-store sales lift -- for each campaign.
There are a number of privacy concerns that are immediately raised, though both 4Info and Catalina say there's no individual/PII targeting. Putting aside the privacy discussion for the moment, the Catalina-4Info model is pretty clearly the future of mobile targeting and ad measurement.
And it's a future that is a great deal more nuanced, sophisticated and "closed loop" than 90% of current digial ad paradigms.
The mobile payments space is a little like the local market: lots of promise, lots of money but very hard to crack. Yesterday a young entrepreneur and his payments startup Clinkle received a $25 million vote of confidence from a group of celebrity investors.
This was reported to be the "largest seed round ever." Whether it is or not $25 million is a lot of money for yet another mobile payments app. While it's true that nobody in mobile payments has "broken through," Clinkle will have a tough slog as it tries to build both merchant adoption and consumer usage.
Once again it's the "cold start" or "chicken and egg" problem.
However, according to the NY Times, there's no merchant hardware requirement for Clinkle and the go to market strategy involves a Facebook-like focus on college campuses and surrounding businesses. That may be a key decision and help the startup gain some quasi-critical mass in selected markets among students.
Beyond the hardware issues surrounding NFC adoption, the central issue with mobile payments has been a lack of perceived need among consumers. Mobile payments are being used in selected contexts and commerce situations (e.g., Starbucks) but the public at large hasn't seen the need to replace plastic payment with app-based payment that relies on stored credit cards or bank accounts.
That brings me to indoor location and marketing. When discussing these topics, and the absence of technology standards, I often use mobile payments as an analogy. Yet there is a critical distinction. The difference between the two segments is that while mobile payments still largely requires a shift in consumer behavior, indoor marketing does not.
Large majorities of consumers are already using their smartphones in stores to look for price information, product reviews and coupons. The idea of brands and retailers communicating with them in stores will be built on this existing behavioral foundation. Accordingly indoor marketing won't require consumers to adopt new technology or approaches to shopping -- unlike mobile payments.
The "heavy lifting" in indoor marketing is on the merchant side, where WiFi or other sensor infrastructure needs to be in place. Fortunately in most major retail environments the rudimentary infrastructure already exists.
But don't take my word for it. We'll be discussing the competing indoor location technologies and hardware requirements for indoor marketing (as well as their accuracy) at Place: The Indoor Marketing Summit this fall in San Francisco. It will be an event anyone in the mobile or location-based marketing space won't want to miss.