More Mobile than PC Web Users in 3 Years: Forecast

IDC is modeling mobile Internet adoption and growth and its model says that in essentially three years there will be more mobile Web users than those accessing the Internet on PCs. Here's what the firm forecast earlier this morning: 

By 2015, more U.S. Internet users will access the Internet through mobile devices than through PCs or other wireline devices. As smartphones begin to outsell simpler feature phones, and as media tablet sales explode, the number of mobile Internet users will grow by a compound annual growth rate (CAGR) of 16.6% between 2010 and 2015 . . . 

In addition IDC made the following predictions: 

• Worldwide, the total number of Internet user will grow from 2 billion in 2010 to 2.7 billion in 2015, when 40% of the world's population will have access to its vast resources.

• Global B2C ecommerce spending will grow from $708 billion in 2010 to $1,285 billion in 2015 at a CAGR of 12.7%.

• Worldwide online advertising will increase from $70 billion in 2010 to $138 billion in 2015, with its share of total advertising across all media growing from 11.9% to 17.8%.

This mobile Internet access forecast may turn out to be aggressive in terms of timing but it will certainly turn out to be true. And it should wake up some complacent companies that still believe they can afford to delay building apps and/or optimizing their websites for mobile. 

There are so many publishers and marketers that don't understand (or seemingly don't through their inaction) the poor user experience they present in the absence of a mobile website or smartphone app. Simply relying on mobile browsers to render their existing PC sites is insufficient. And everyone should dump Flash in the process of upgrading for mobile. (Tablets are a bit different because they operate more like PCs.)

Google previously indicated that 79% of its major advertiser-clients still don’t have an optimized mobile presence.

Everyone needs to get used to the idea that in less than a decade smartphones, tablets and other mobile devices will be the primary way the majority of people access Internet content. And, as IDC says, when that happens the Internet will become a very different place. 

Safari Bigger than Android Browser Share?

Several outlets are reporting, based on Net Applications data, that Safari has the largest mobile browser share by a considerable margin. But there's something that doesn't seem exactly right about the numbers. 

According to Net Applications Safari has 53% of the mobile browser market compared to Android's 16%. Opera Mini is 21%.

Source: Net Applications

Given Android's recent surge and greater market share in North America (and increasingly outside the US) how could Android be so far behind? There's a comparable discrepancy between Apple's OS share (28%) and browser share (53%).

According to Nielsen Android has a 40% OS share, but Net Applications finds only a 16% browser share. Behaviors and engagement of iPhone and Android users are similar. If 40% of US smartphone owners have Android phones it seems strange that they're only generating 16% of the visits to websites. (The 16% may instead be a global browser share number, which would be even stranger.)

However Net Applications is also capturing tablet activity. Tablets are generally not included in the comScore and Nielsen mobile market share data. That could account for some additional browser share enjoyed by Apple.

For comparison purposes I looked at StatCounter and found this about mobile browser share in North America:

Source: StatCounter

This chart shows that Android has a larger browser share than the iPhone: 29.5% to 25%. However if you combine the iPhone and iPod Touch, Apple's overall share increases to 36% vs. 29% for Android. The iPad isn't reflected in the StatCounter data, which would presumably boost iOS further.

Let's say, hypothetically, that the iPad adds in five more share points, lifting iOS to 44% (vs. 29% for Android). This still doesn't get us close to the 53% in the Net Applications figures above. And if we look at the international data, Apple's position weakens. 

Source: StatCounter

In the chart above Apple's devices together command 22% of the mobile browser market to Android's 17%. Again this is without the iPad; but the Apple tablet probably doesn't enjoy a larger share of the browser market than the iPod Touch. Even factoring in five more points for the iPad we can't get anywhere near the Net Applications 53% figure for iOS. 

Some of these data are obviously incorrect. My sense is that the StatCounter data are probably closer to the truth. 

Retailers Without Optimized Mobile Experience Will Lose Sales

A recent AP story on "mobile shopping" carried the headline "Mobile shopping: More buzz than buy so far." It lamented the fact more consumers weren't buying through their smartphones and identified various challenges facing "m-commerce." But the notion that there's some sort of inevitable progression from where we are to billions in mobile buying is simply mistaken.

Consumers are already aggressively using mobile phones at home and in stores. (Tablets are a separate conversation.) And new data from InsightExpress about anticipated holiday shopping patterns reinforces the idea that mobile is already a critical part of the shopping experience.

The following chart shows one of the more interesting findings of the InsightExpress survey: majorities of people will go to their smartphones before store sales staff. This ought to shock retailers and convey to them that they better have optimized mobile sites and all kinds of product information and content on their sites or they'll potentially lose the sale.

The InsightExpress data also reflect barriers to mobile commerce. Overall a poor user experience, combined with security fears, blocks people from buying on their phones. These problems are unlikely to be resolved in the near term -- unless you've got a gigantic smartphone (e.g., the new Samsung Note) or a connected 7-inch tablet in the store. Regardless, overcoming the security fears will take time.

Notwithstanding these problems a high percentage of people are willing to consider making purchases over their smartphones (men more than women). 

Meanwhile new data from the e-Tailing Group (sponsored by PowerReviews) also shows how people use mobile devices to shop (at home) and while in stores. The first graph below is general use (any location) of smartphones. The second one specifically reflects answers to a question about in-store smartpthone usage.

What's interesting is that the two charts above are similar but not identical, which means people are doing very specific things in stores vs. at home or work on their smartphones. Here's the top-actions list from the in-stores usage question:

1. Coupons
2. Pricing comparisons (on Amazon and beyond)
3. Reviews
4. Barcode scanning
5. Additional inventory information  

Retailers must be conscious that consumers are using smartphones everywhere to get information about stores, prices and products. They need to have well-designed, mobile-optimized sites and be conscious that their best customers are going to be mobile customers as well. Failure to immediately take action to develop an optimized mobile experience for customers will, again, result in lost sales.

Nielsen: Smartphones 40% of Handsets, Android in High Demand

According to new data from Nielsen, smartphones now represent 40% of handsets in the US (comScore says it's 35%). Among those smartphones the market share ranking by operating system is as follows: 

• Android -- 40%
• iPhone -- 28%
• RIM -- 19% 
• Windows Mobile --7% (Windows Phone -- 1%)
• Other (WebOS, Symbian, etc.) -- 5%

Here are the most recent comparable numbers from comScore:

What's perhaps more interesting is how demand for Android devices is now roughly equivalent to Apple's iPhone, according to Nielsen: 

Here are the blended averages from the data above regarding smartphone-buyer demand for the various operating systems:

• Android -- 35.6%
• iPhone -- 31.4%
• RIM -- 7.8% 
• Windows -- 5.4%
• Other (WebOS, Symbian, etc.) -- 2.2%
• Not sure -- 17%

As you can see from the chart above there are lots of undecideds among the late majority and late adopters. RIM's current share is about 20%. But to what degree are these figures predictive of future market share? If they are, they don't bode well for RIM.

As always in these iPhone vs. Android surveys I wonder if people are truly interested in "Android" devices per se or whether they're responding to particular handset models (e.g., Samsung Galaxy, Motorola Droid). 

At one point last year Nielsen predicted that we'd cross the 50% smartphone threshold by Q4 of this year. It looks more like that will happen in Q2 next year. At 50% we'd have more than 100 million smartphone users in the US. 

How Many Smartphone 'Independents' Are out There?

Comscore has just released some data that examines search users by demographic characteristics. It profiles those searching for Facebook vs. Google+ and other query comparison categories. One of the comparisons is between those searching for iPhone related queries vs. those searching for Android handsets:

iPhone searchers and Android searchers mirror each other very closely [and] also conduct almost the exact same number of searches for these phones (about 4 per searcher) . . . They have not made up their minds yet and there will be multiple times to speak with them before they convert and make a purchase.

As the quote suggests, the numbers and graphics reveal that these search audiences are almost identical. Comscore concludes that these individuals are the smartphone equivalent of independent voters who haven't made up their minds about which candidate to choose. 

The question is how large is this "undecided" audience? What fraction of the smartphone electorate does it represent? Is this 5%, 10% or 50% of would-be smartphone buyers? We don't know that and it matters. 

Millennial: Windows Phones a Rowboat on the Android Sea

The iPhone vs. Android meme is getting very tired yet it persists. That's the thrust of the coverage surrounding Millennial Media's "Mobile Mix" report for July 2011. Among other data, it ranks handsets and market share on the Millennial network by device type and operating system. Here are the "quick facts":

• iOS and RIM impressions were relatively flat month-over-month
• Android impressions grew 31% month-over-month
• Symbian impressions grew 11% month-over-month
• Windows Phone 7 impressions grew 71% month-over-month

The Windows Phone growth is noteworthy for the fact that that there is growth/life. By contrast comScore shows Windows/Microsoft losing share month over month. However high percentage growth from a very small base is, in actual handset numbers, not particularly meaningful. Several months of such growth would be significant however. We'll need to wait for the first Nokisoft phones to appear to see whether Windows will "make it" as an OS.

Unfortunately Millennial doesn't put much historical context into its individual reports. So I always like to take a look at the data from several months or a year ago to compare the figures. Accordingly here are several charts from this month's report and July 2010:

Top handsets on the network (7/10 then 7/11):

The iPhone has maintained its top position and RIM is holding on with three handsets in the top 20 vs. four a year ago. But otherwise it's all Android.

Operating system share (7/10 then 7/11):

As you can see smartphones have grown from 49% to 68% on the network. In the US market smartphones are about 40% of all handsets now according to Nielsen. As you can also see, the relationship between iOS and Android has flipped in a year with Android handsets now representing 61% of all impressions. 

In terms of monetization and revenue, however, Android continues to underperform its share while Apple devices outperform their relative share. 

Finally, as PaidContent has pointed out, one of the more interesting pieces of data surrounds "carrier" usage. Over the past year WiFi access has grown from 26% to 33%. This is probably a direct result of the use of "connected devices" (e.g., the iPad) more than any other variable. 

However as carriers eliminate unlimited data and throttle speeds on their networks, on the go users will increasingly seek alternatives that offer cheaper and/or faster access to their applications and the mobile Internet.

QR Codes Replacing SMS Marketing in Some Contexts

As I wrote in a post at Search Engine Land, we don't know yet whether QR codes are here to stay or whether they’re an interesting experiment on the way to something else, such as NFC-based marketing. But in the near term at least they appear to be gaining and increasingly used by publishers and marketers.

Comscore has come out with some interesting new data on usage patterns. Demographically the heaviest users of QR code scanning are 18-34 year old males who make more than 100,000 per year. Most scanning is done in the home (newspapers, magazines) or in retail or grocery stores. 

Several years ago I wrote a white paper about the virtues of SMS based marketing that argued SMS was a highly versatile tool that could be utilized in many ways: on traditional ads, in digital ads, on product packaging and so on. I also argued at the time that consumer response to SMS calls to action also provided compelling analytics for traditional media. 

That's exactly the way that QR codes are now positioned. Accordingly they'll probably replace SMS in some contexts as a mobile marketing tool -- if QR codes survive. But QR codes don't really do CRM loyalty marketing as well as SMS.

Millennial's 50th SMART Report Charts Growing Sophistication of Mobile Campaigns

Millennial Media is out with its monthly SMART report. Yesterday the company hosted an in-depth webinar to review the data in advance of the report's release and in honor of this being the 50th such report. Familiar data points about campaign tactics and devices were discussed. For example, in June, Android retains its platform leadership (53% of impressions), while the iPhone remains the top individual device (27% of impressions).

Here are some of the things I "tweeted" yesterday during the webinar: 

• More than 70% of Millennial ad impressions are coming from in-app activity
• 40% of mobile consumers' usage time spent inside the home (based on InsightExpress data)
• Local market targeting continues to gain traction to drive consumers to brick and mortar locations
• Feature phones are no longer in top 20 handsets on the Millennial network

But the most interesting thing about the report to me is the comparison of June 2011 findings with those in the first report more than two years ago. Here are several graphics that reflect the market's growth and evolution:

The broad themes reflected in the graphics above are: the rise of touchscreen smartphones (Android and the iPhone in particular) and the growing sophistication of mobile advertisers and their campaigns. I don't have the vertical categories chart among those above. However Millennial has seen explosive, quadruple-digit growth in verticals like Finance, Retail/Restaurants, Automotive, Entertainment, Travel and Pharma. 

In response to a question during the webinar about the sophistication of advertisers Millennial SVP  Mack McKelvey responded, "The vast majority of our advertisers are very savvy and challenge us all the time."

Mobile Users Prefer Coupons and Opt-In SMS to Other Types of Ads

A press release based on research from Upstream (conducted by Luth Research) carries the following headline: "Personalized Messages Four Times More Effective than Time-, Lifestyle- or Location-Based Offers . . ." This came to me in an email last night.

The headline and the presentation of the data in the release are somewhat misleading, however. And with so many companies releasing data for PR reasons (and the market awash in numbers) no one should rely on a single piece of data or single study. There are some interesting findings however. 

The Upstream study involved a consumer survey of just over 2,000 US adults (both smartphone and feature phone users); there's no behavioral data here. Below is the hierarchy of ad preferences based on the categories in the survey:

Users ranked personalized offers at 59 percent over those focused on timing (18 percent), lifestyle (16 percent) or location (8 percent). Smartphone users responded in similar fashion, with 60 percent preferring personalized offers over promotions based on timing (17 percent), lifestyle (10 percent) or location (14 percent).

This stands for the idea that personalization trumps dayparting, lifestyle and location. Lifestyle is a vague concept that seems less relevant than "my tastes and interests." Indeed, this phrase implies greater relevance than these other aided-response categories. The verbatim question is: "In your mind what constitutes the best basis for an offer to be relevant to you?"

Location by itself doesn't mean an offer or ad is relevant, neither does timing. Timing and location are "hollow" in the above list. An ad directed ad people in San Francisco may or may not have any application to my situation. However an ad or offer that has to do with "my tastes and interests" may require location to be relevant and actionable. I can't attend a movie premiere or retail sale happening in another city.

Timing is also an important variable. A discount offer for a restaurant or bar may be more or less relevant depending on time of day and/or day of week.  

The larger point is: multiple variables help make ads more actionable and relevant. And most transactions are conducted or fulfilled offline, so location becomes a way to lead people to a transaction unless it's a pure ecommerce event.

An ad for a new product -- a sound system for example -- needs to show me where I can hear, see and possibly buy the product (location) to make it more than simply a less-than-optimal awareness ad. An ad for a holiday retail sale on my phone is going to be a lot more effective if it comes with a store locator vs. taking me to a crappy mobile shopping experience on my handset. 

Some of the other data among the findings reveal that consumers often assume offline action or local fulfillment. For example, smartphone owners valued the following categories as those they were most interested in (re ads/offers): 

1. "Content" for my mobile device (it's unclear but this might be apps, music)
2. Movies/entertainment, including tickets (all fulfilled locally)
3. Offering from my mobile service provider (perhaps hoping for a discount)
4. Retail store (95%+ offline purchase probability)
5. Computers and technology
6. Travel or vacation (likely e-commerce transaction that pertains to location)

So when we "peel back the onion" on the data, what we see is that people want relevant ads and offers but that location is very much in the background or an assumed feature of the offer.

Perhaps the most interesting and significant data form the survey concerns the most desired marketing "channel" or ad delivery mechanism. The survey question asks, "Which of the following channels for delivering ads to your mobile phone about a product/service would make you more likely to learn more about or purchase the product/service?"

Among smartphone owners the top responses were the following:

1. Mobile coupon
2. Text message (after opt-in)
3. Mobile email
4. Ad on mobile site 

Amazingly smartphone users were more interested in SMS marketing messages than feature phone users.

The big conclusion I draw from the data above is that mobile users are interested in saving money (coupons) and essentially want control over the marketing messages they receive (opt-in SMS, or email). Thus these types of ads are likely to be most effective. However, again, the survey is measuring attitudes and not behavior. 

Report: SonyEricsson Android Owners Click Ads Most, HTC Least

Ad network Jumptap released its latest "MobileSTAT" data dive for July. This month's newsletter focuses on Android but also contains general metrics from the Jumptap network. There's a link to a write up of the June data at the bottom of this post.

In the latest issue of its newsletter Jumptap has created a map that shows where Android, iOS and RIM handsets "overindex" by state. This aspect of the report is getting lots of coverage. However the data are little more than a curiosity with few practical or actionable implications. These data may also not actually reflect the sales distribution of the various OS handsets because the Jumptap network is not necessarily representative of the mobile Internet as a whole or used equally by a representative group of mobile subscribers.

More interesting are the other metrics in the report. For example, Jumptap showcases Android handset CTRs by device type and by carrier. CTRs for Android devices are generally consistent across carriers (averaging about 20%). But there appears to be wide variability in display ad CTRs according to handset type. There's no satisfactory explanation offered for the variation in CTR performance by handset.

Jumptap says the following about why Android SonyEricsson handset owners generate the highest CTRs:

We speculate Sony’s relatively high CTR is due to their positioning as a premium brand, but don’t rule out the role that usability, hardware and interface may have.

By contrast I would speculate that LG and SonyEricsson handset owners are late Android adopters, while HTC and Motorola handset owners are earlier adopters and so less inclined to click on ads than Android neophytes.

The following is Jumptap's CTR chart by age, showing that those between 55 and 75 click the most. 

Compare the data from June: 

These data are likely impacted by a higher number of "unintended clicks" and/or lower mobile sophistication levels in these older age groups. 

Jumptap also said that 61% of the campaigns on its network are targeted in some way (vs. 49% in June). The chart below shows the breakdown of targeting methods. Note that "location" is only used by about 18% of advertisers using any form of targeting. 

Finally most advertisers on Jumptap's network appear to be sending people to mobile websites or landing pages. Jumptap speculates that this reflects growth in the number of mobile websites. It's a safe bet however that the entire "click to Web" group is not sending users to optimized mobile sites or landing pages.

A substantial number of these "click to Web" mobile marketers may be unsophisticated, however, and simply sending users to their PC sites -- incorrectly assuming that the smartphone browser does a good job rendering them.

See also: Selective Zip-Level Targeting Produced 85% Lift.

Will Survey Data Translate into iPhone Sales?

There are two competing mobile handset stories running simultaneously in the tech press right now. The first is how Android is increasing its dominance over other operating systems including iOS. The second, which largely contradicts the first, argues that Android will potentially lose meaningful market share when the next iPhone comes out. 

Below is the data that the "pro-Android" stories are built on; first Nielsen: 

Google’s Android operating system (OS) now claims the largest share of the U.S. consumer smartphone market with 39 percent. Apple’s iOS is in second place with 28 percent, while RIM Blackberry is down to 20 percent.

 Then Canalys:

Android, the number one platform by shipments since Q4 2010, was also the strongest growth driver this quarter, with Android-based smart phone shipments up 379% over a year ago to 51.9 million units . . .

Now the survey data on which the "pro-iPhone" stories are based:

Roughly two weeks ago ChangeWave came out with survey data that argued those planning to buy a smartphone in the next 90 days expressed a preference for the iPhone over Android 46% to 32%.

Then, earlier this week, Piper Jaffray released some survey data (which got way too much play for its tiny and unscientific sample) suggesting that most mobile phone owners would be buying an iPhone next. Indeed, the data argue that Android will see less than 50% retention: 

No doubt many people are interested in the next iPhone but attitudes and survey responses don't always translate into concrete behavior. For the overheated claims to come true ("iPhone 5 could double iOS market share") Apple will need to unveil a true blockbuster.

If You Use Your Phone More For Texting and Browsing than Talking, You're in the Majority

According to a survey by CloudTalk the mobile phone public prefers texting and browsing to real time "voice" conversations using their mobile devices. While the composition of the sample (and its size for that matter) are unclear, the survey respondents were very clear in their preferences. Nearly 90% said they prefer texting or "messaging" over voice conversation. In practice the numbers were slightly different as those sampled cited their overall usage of smartphones:

 In order of priority, phone users reported:

1. Texting / messaging - more than seven in 10
2. Emailing - nearly six in 10
3. Social networking - nearly 50%
4. Talking on the phone - 43%
5. Surfing the Web - about four in 10

By this measure, talking on the phone is on a par with "surfing the web," with under half the sample citing it as a priority. According to David Hayden, the chairman and CEO of CloudTalk (which provides a "platform" for multmodal and asynchronous mobile communications), this provides evidence of the evolution of mobile phone from an "intrusive" interruptor of everyday life into a more nuanced "communications tool."

There's something missing in this analysis. As Greg has cited in many other posts here at Internet2Go, we see mobile phones as far more than communications devices. By focusing solely on the communications capabilities, this survey misses the uses of the smartphone that are more like a wallet, with contact lists, calendar items and ultimately payment vehicles. 

But their are insights to be gained by observing how readily the general public is adopting new modes of communications while at the same time recognizing that, in many cases, voice is the most appropriate way to communicate.

Map-App Use Rises, PC Maps Fall

The general assumption was that apps were transitional and would eventually give way to HTML5 and the mobile Web. So far that doesn't appear to be happening. And in some ways, the opposite is happening.

More time is now spent with apps than on the mobile Web and there's a movement toward apps, at the expense of the mobile browser to some degree. The latest evidence of this can be found in the mobile mapping category. Last week comScore released data on mobile map usage.

Interestingly -- and not surprisingly -- mobile map-app usage seems to be eating into PC-based map usage. ComScore found a 2% decrease in PC map usage vs. a year ago, though the PC maps audience is slightly less than double the size of the mobile maps audience.

Also not surprisingly, most mobile mapping usage happens in the car. This has also been true of 411/directory assistance.

Mapping apps that provide turn-by-turn navigation are most popular in the category. 

ComScore estimated the number of smartphone map users ("4 out of every 5 mobile map users") at 38.2 million in May. This almost certainly under-counts the number of mobile mapping users by roughly 10 million people (using a figure of 38% smartphone penetration on a base of 250 million mobile users). Mapping is consistently one of the most used categories of applications. 

Parsing the Tablet Market Share Numbers

When I quickly looked at the Strategy Analytics tablets market share data yesterday it struck me as strange. The iPad had 61% of the market and Android 30%. The number seemed way too high for Android.

But as John Gruber points out the data are about shipments, not sales. Even though the word "shipments" is there as plain as day, I didn't focus on it. I just "bleeped" over it.

Many companies, including Samsung and Microsoft, have used shipments to argue market share; for Windows Phones in the case of Microsoft and for the original 7" Galaxy Tab in the case of Samsung. Yet shipments don't equal sales.

Here's the Strategy Analytics breakdown of "shipments market share": 

In terms of actual devices sold to consumers and in actual use, it's a very different picture. Almost without exception sales of Android tablets have so far been disappointing. The RIM Playbook has also underperformed. There are a few Windows tablets on the market but none are selling (maybe in Asia). 

In June comScore released some data that showed traffic generated by various mobile devices including tablets, for May 2011. According to the data, the iPad was responsible for "89% of tablet traffic across all markets." In the US, however, the figure was 97%.

Even though these figures don't claim to represent device market share, they're likely a more accurate reflection of devcies in the market than shipments. In my travels and interactions with people professionally I don't see any other tablets "in the wild" other than the iPad. I'm one of the few people I know that has an Android tablet. (I also have an iPad2.)

Apple has now sold approximately 34 million iPads globally. 

Finally, survey data released a few weeks ago by Bernstein Research found that consumers were far less interested in rival tablets than the iPad. 

The "totality of the evidence" thus suggests that actual sales of Android and other non-iPad tablets collectively represent less than 15% of the market and in the US less than 10%. 

Are Carrier 4G Claims Setting Up Users for Disappointment?

All the confusing, and even deceptive, carrier marketing around data network speeds and "4G" may be setting mobile users up for disappointment. Earlier this month Retrevo found that there was considerable consumer confusion about 4G.

More than one third of iPhone owners and almost 30% of Android owners thought they already owned a 4G handset (in the case of Android some of them may be right). Of course there is no 4G iPhone available yet. 

Expectations of increasing mobile data speeds may be responsible for growing user expectations about mobile Internet page-load times.

A company called Compuware commissioned research to study mobile user expectations in several countries: US, UK, Germany, France, China, India and Australia. There were 4,014 survey respondents who had used a mobile handset to go online in the past year.

According to the survey, most people expect websites on their handsets to load quickly and, in some cases, even faster than on their PCs at home. They'd like to wait no more than 3 seconds but are willing to wait not much longer than about 5 seconds.

If mobile websites fail to meet these expectations -- if pages take more than 5 seconds to load -- users are likely to abandon. Beyond this there could be other fallout. Users may visit competitors' mobile sites or they might not try using the mobile site in question again. In the extreme, there could be some negative associations with the brand.

Publishers don't control network speeds of course. But it's up to them to build the fastest-loading sites they can that will work on 3G and even 2G networks to avoid some of the inevitable backlash that comes with being a slow site on the mobile Internet. 

AT&T Reports Solid Q2, Nokia Not So Much

US Carrier AT&T and OEM Nokia reported Q2 earnings this morning. AT&T, the corporation, earned quarterly revenues of $31.5 billion, which were up slightly (2.2%) over a year ago. The company reported its "best-ever second-quarter smartphone sales." Meanwhile Nokia had a worse-than-expected quarter. Overall sales were off 11% and profit declined 44%. Smartphones declined 34%.

Below is a summary of each of the company's numbers.

AT&T Wireless:

• Total wireless subscribers up 1.1 million to 98.6 million (33K contract subs added)
• 70% of new contract sales were smartphones; total smartphones sold: 5.6 million
• iPhone activations: 3.6 million (24% are new to AT&T)
• Android (RIM and Windows Phones) now 40% of smartphone total
• 23.4% growth in data revs: up $1 billion vs a year ago
• ARPU: $63.87 

Nokia:

Nokia saw revenues of EUR 9.3 billion, which were off 11% from a year ago. The company reported a loss of nearly EUR 500 million. Nokia sold 16.7 million smartphones vs. 25.2 million during Q2 of 2010 for a 34% decline. By contrast Apple sold 20.3 million iPhones this past quarter.

Overall sales of all mobile devices were off 20% vs last year. And all regions saw sales declines, especially Europe, North America and China. 

Nokia reiterated that a Windows Phone would be out this year but declined to be more specific. 

Likely Smartphone Buyers Prefer iPhone, RIM Takes Nosedive

A new US-centric ChangeWave consumer smartphone survey (n= 4,163) looks at mobile operating system preference and specifically iOS vs. Android. Accordingly those planning to buy a smartphone in the next 90 days expressed a preference the Apple product to Android 46% to 32%. 

The perhaps most striking finding -- and grim news for RIM -- is that only 4% of respondents say they intend to buy a new BlackBerry device.  

In terms of customer satisfaction the following graphic reflects the percentage of current smartphone owners who say they're "very satisifed" with their current handsets. Again Apple and Android lead. 

However ChangeWave noted the following about improvement for Windows Phone 7 vs. Windows Mobile:

We continue to see a big difference between the high Very Satisfied rating for Windows Phone 7 (57%) vs. the much lower rating for Windows Mobile OS (14%). Even so, the higher Windows Phone 7 rating has yet to produce a sustained momentum boost for Microsoft in term of buyer preferences.

ChangeWave also said that demand for Motorola Android devices was down (8%; down 4-pts) after the iPhone had come to Verizon:

After benefitting tremendously in the years Verizon subscribers were barred from the iPhone market, Motorola is now seeing a loss of market share at least partially attributable to the Verizon iPhone release that occurred earlier this year.

Mobile Numbers from the Google Q2 2011 Earnings Call

Below are the substantive comments made by Google CEO Larry Page and other Google executives about Android and mobile from yesterday's Q2 earnings call. I've cut out all the bloat, PR spin and puffery.

Google CEO Larry Page: 

I actually have a new metric to report in Android of 550,000 phones activated a day. And that's a huge number, even by Google standards. 

There's over 400 such devices, 39 OEMs, 231 carriers in 123 countries, and over 78 open handset alliance partners. 

[D]espite the efforts of some of our competitors, there hasn't been any slowdown in any of those things. And partners and developers are continuing to expand the Android ecosystem.  

Nikesh Arora, SVP and Chief Business Officer:

One format which was launched by Susan's team called Click-to-Call or Click-to-Share has been particularly successful. Unilever is a great use case of these formats. They integrated our AdMob product into a very large campaign of launching a new product to use the banner to drive traffic to a campaign Mobile site and achieve unprecedented results with almost 700,000 unique visitors accessing their content. 

Susan Wojcicki, SVP of Ads: 

Voice Search traffic for Mobile devices is up 6x in the past year.

There are now 135 million Android devices that have been activated in total, up from 100 million just 2 months ago. There are also now over 400 different Android devices available globally. Android market is also picking up momentum. It has over 250,000 different apps, and users have downloaded apps over 6 billion times, which is double the downloads from just a few months ago.

Mobile Display is starting to take-off too with traffic on the AdMob network up more than 3.5x in the past year. 

____

The comment by Larry Page above, "despite the efforts of some of our competitors," refers to patent attacks on Android. Right now Oracle is involved in Java-related litigation with Google over Android; and Microsoft is trying to force licensing deals on Android OEM partners.

Some financial analysts have suggested that Microsoft is getting about $5 per every Android device sold by HTC though such a licensing deal. Microsoft wants Samsung, now the largest Android OEM in the world, to pay up to $15 per Android device. There's speculation that the company is using that figure partly as leverage to get the Korean company to better commit to Windows Phones. Samsung has only tepidly embraced Windows Phones. 

While both Nokia and Microsoft await the formal release of one of their jointly produced handsets both companies continue to suffer at the hands of Android.

Nokia's share is falling like a rock and Microsoft's handsets are selling here and there but not in big numbers. Licensing revenue for mobile devices is clearly "Plan B" for the company. And while it could pay off in revenues over time that's much less desirable selling actual mobile devices.

In addition the more Android devices sell, the more Microsoft loses its grip on the overall OS market. Indeed, it's less and less "important" to have a Windows-based device in the more heterogeneous cross-platform market that exists today than it was when there were only Apple Macs and Windows-based PCs.