Europe

G1 Sells Out, iPhone Hits 10 Million Units?

T-Mobile reported yesterday that the company, due to "overwhelming demand," had pre-sold all the G1s it had initially ordered from handset maker HTC. Perceived as the first worthy competitor to the iPhone, the suggestion is that it could sell half a million units by the end of the year. The phone officially goes on sale October 22. 

I was in Google's NY offices today and tried to get my hands on one to no avail.

Meanwhile, several sources are reporting the unverified estimate that Apple may have sold its 10 millionth iPhone. (However, it may be more accurately that 10 have been produced.) Separately, CNET cites NPD Group figures that claim 30% of US smartphone buyers switched to AT&T to get the iPhone.

Here's where NPD says the defectors came from (6/08-8/08):

  • Verizon 47%
  • T-Mobile 24%
  • Sprint 19%

Given this, the G1 emerges as a defensive strategy against the iPhone as much as it is a bid for new customers. Still it may attract some new customers to T-Mobile until other carriers begin to offer their own Android-based phones (probably at least six months away).  

What these data above reflect is the growing demand for better mobile user experiences. 

HP to Introduce Touchscreen Consumer Smartphone

HP is going to introduce a touch-screen consumer smartphone that will utilize Windows Mobile 6.1, according to the Wall Street Journal. The company sells PDAs, PNDs and smartphones (mostly to business users) predominantly in Europe. The new iPhone-inspired touch-screen device will be marketed initially in Europe and eventually make it to the US. 

As I've argued several times over the past week, both the consumer and enteprise smartphone markets are quite competitive in the US. The decision to use Windows Mobile 6.1 is smart from an enterprise standpoint but not likely to help the new device gain adoption in its target consumer market -- unless the price is extremely aggressive and attractive.

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Related: BusinessWeek profiles the very iPhone-like Nokia 5800 (this is apparently what was known as the Tube previously). And here's an interesting new concept all touch-screen device from Nokia. 

Local Matters Confirms No Merger with mobilePeople

A day after mobilePeople announced funding, implying that the merger with LocalMatters was off (and we confirmed with them), a release has gone out explaining that the economy is to blame:

Local Matters and mobilePeople announce that, in light of the current equity markets, their planned merger will not occur. The two companies will return to, and build upon, their previous business partnership where they will continue to collaborate on projects with a growing base of global local media publishers.

This has clearly got to be a big disappointment for Local Matters (and mobilePeople). 

Nokia Tries to Regain US Marketshare

Nokia is the dominant handset maker in the world. It owns roughly 40% of the market. Yet it's US share has been in steady decline, from 20% a couple of years ago to about 7% today. However Nokia believes that's all about to change as it readies a range of US-specific handsets and is preparing to set Symbian free (open source).

I'm skeptical.

The company is building a poor-man's iPhone (literally) -- the "Tube" -- for release at lower price points in third world countries. It also has some higher-end iPhone-like phones (i.e., N95). But the absence of a software marketplace is likely to put these phones at a disadvantage. Their unsubsidized cost ($500+) also makes them less desirable.

And then there's the enterprise market, which is owned by RIM in the US. 

The US has now emerged as the most advanced "mobile Internet" market in the world and it's a critical one for Nokia as the company transforms from a hardware maker into a more diversified company (content, advertising). Nokia's dominance outside the US has perhaps set the company up to believe that it can quickly regain share in America. 

That's unlikely to be the case as competition intensifies. 

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Related: The Nokia Media Network (built out of the fomer Enpocket) is expanding its reach internationally. In the US, it will also local targeting by DMA in 10 major metros on publisher sites. 

mobilePeople Gains Investment, Local Matters Acquisition Deal Apparently Off

Copenhagen-based local-mobile search provider mobilePeople announced this morning that it "had received a $8 million USD investment round from Nordic based venture capitalist firm Via Venture Partners." I was struck by this because earlier the company announced that it was being acquired or merging with US-based Local Matters (LMI).

It appears that the merger/acquisition is not going through in the present (negative) macro-economic climate and mobilePeople has moved on with expansion plans. I was told that LMI and mobilePeople will continue to work together.

European Commission: Mobile Phones Continue Gains vs. Humans

According to the European Commission, mobile phones became more numerous than Europeans in 2006. That margin has continued to grow. Now there are roughly 112 wireless phones for every person.

In the US about 16% of households are mobile-only, in Europe it's now 25%; almost 40% in the East vs. about 20% in the West. (Nielsen Mobile has predicted the number of mobile only households will be 20% in the US by the end of 2008.) Nokia's home country of Finland has about 61% mobile-only penetration.

Cost is reportedly a big driver, as it always is, of the adoption of mobile at the expense of landlines. What this means for carriers is an imperactive to push for more data revenues across the board, as well as develop new revenue streams (e.g., advertising). 

The Outlook for Blyk: How Far Can It Go?

Blyk is a fascinating experiment: will an ad-subsidized MVNO survive and prosper among bigger rivals and a host of ad networks with greater reach? So far the EU-based Blyk has exceeded expectations. The company targets the 16-24 age segment and is expanding throughout Europe.

According to this report, response rates to mobile ads shown to Blyk users are about 25% and marketers pay £0.50 per response (US$.90). Blyk itself reports a wide range of response to campaigns on its network but 29% on average. Obviously these are huge response rates compared to online advertising. However they will likely come down over time as mobile advertising goes mainstream. 

The question is: how far can a service like this penetrate? Advertisers fundamentally want reach, although Blyk's demographic is highly desirable. Scaled across Europe, the company might be able to offer something quite powerful to advertisers. 

In the US, there's a segment of the population -- likely the same age range -- that would be drawn to ad-subsidized mobile services. However MVNOs in the US don't have a very successful track record. And VirginMobile's similar SugarMama program has had limited success and not really helped the carrier develop much momentum. 

Google has pushed the notion of ad-supported mobile phones in public remarks. With an Android phone and the right carrier there might be an untapped opportunity to capture the budget-conscious youth market in the US. However, it's quite unlikely that we'll ever see "free" phones that rely entirely on advertising to subsidize costs and drive profits. 

Nokia's Tube on the Way

According to Reuters Nokia's much-anticipated touch-screen "Tube" will be unveiled next week at a press event in London:

Nokia said in July it would introduce its first touch-screen phone this year, and would sell it more cheaply than rival touch-screen models in order to tap into a higher-volume market.

Here's an apparent (and somewhat strange) commercial for the device. And here's a demo from Nokia. 

This is Nokia's response to the iPhone and (by virtual of timing) Android. If the phone is "good enough" it may capture a segment of people who would otherwise be attracted to subsidized iPhones. However, it's unlikely to be as compelling an experience as the iPhone in many respects, most notably in the absence of an applications and software marketplace.

The quote above suggests that Nokia is very consciously and literally positioning this as the "poor man's iPhone." 

Mobiya Broadens Its Model to Become General SMS Ad Play

UK-based Mobile classifieds platform and provider Mobiya is shifting its model to become an SMS ad network. Classifieds still form the content basis for the network. But ads will be sold around that "inventory."

I sent an email to founder Sacha Vekeman about the change. He told me they have "Decided to move away from a premium rate SMS model and move the business model of our company to sell the outgoing SMS inventory to brand and response advertisers."

Vekeman added:

"After two full years of testing various user experiences with consumers, we got it right. After two full years of testing pricing models with consumers, we know what they want to pay, for what, when. After two full years of business development and Publisher’s deals, we have a foundation of traction for inventory sales."

Vekeman said Mobiya can offer location, context and behavioral data on its users as part of the proposition to brand and direct response advertisers. In the US at least the SMS ads segment is largely underserved. 4Info, CallGenie, MoVoxx and a few others occupy the space. But SMS is to mobile Internet advertising what search is to display: not sexy but where the volume is. 

Earlier I wrote about Mobiya as a potential eBay acquisition

I’m also guessing that mobile classifieds platforms are on the list, especially the EU-based Mobiya. eBay owns a range of classifieds properties in the US and Europe, most notably Kijiji.

CallGenie Powering 118 Self-Service Ads Platform

CallGenie announced that in mid-November it will provide a self-serve advertising platform for KGB's (formerly InfoNXX) 118 directory assistance (DA) subsidiaries in Europe.

When someone calls one of the 118 DA numbers in Europe she receives the details of the requested listing or other information back in a text message. Advertisers will be able to embed ads in these SMS messages, with links to mobile websites if they desire. Targeting will be allowed by business category and location.

118 numbers in Europe receive billions of calls annually so there's considerable "inventory" here for advertisers to take advantage of. The audience that would do so is likely the same one that would do self-service search advertising online. 

Embedding ads in text messages rather than playing audio advertising before a caller receives her listing is, in my view, a conceptually superior user experience -- because it's less obtrusive. It's also more forgiving because if the displayed ads aren't entirely relevant it's not as much of a problem for the user. For example, if I'm looking for a sushi restaurant and get an audio ad for McDonald's that potentially represents a bad experience. If that same scenario is played out and the McDonald's ad appears in the text it's not as annoying to me. 

As of December, 2007 KGB declared in a public filing:

We currently have the number one market position in directory assistance in each of these markets, with an average 53% share of call volume in the U.K. and a 49% share of call volume in France. We estimate that we hold the number two market positions in Ireland and Switzerland with a 32% and 40% share of call volume, respectively.

The company also said, "To date, we have entered into annual contracts with over 7,000 small, medium and large businesses for our 118//Media service."

Update: KGB emailed me the most recent share numbers for 118 for the UK and France: "In the UK we have a 57% market share of call volume and in France 51%."

Opera Mobile User Data for August

Browser-maker Opera publishes a monthly "state of the mobile Web" report. The data are drawn from tracking Opera Mini usage across markets. Here are some highlights from August's report:

Opera: US sites August

Opera: UK sites August

Here's how these data compare with desktop Internet usage:

US properties

Source: comScore (August, 2008)

UK properties

Source: comScore (July, 2008)

Yell Mobile Maps Gains LBS Award

UK directory publisher Yell's mobile maps application has won an award in London for ‘Best Location-Based Service’ at the Mobile Search Awards on Sept 16, 2008.

The application, which is quite a bit richer than the company's basic WAP search tool, is built by Local Matters' Copenhagen-based unit mobilePeople

 

Mobile Search on the Rise

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:

Mobile search usage

 Mobile search market share

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:

comScore US SMS activity
I'm always mystified that weather is such a big category in these data.

Nokia Lowers Outlook, Symbian Phones Down

Finnish mobile hardware giant Nokia said that it was lowering its handset outlook for Q3 and would see a lower market share:

Nokia now expects its mobile device market share in the third quarter 2008 to be lower than in the second quarter 2008 . . . Nokia expects the overall mobile device market in 2008 to be impacted by the weaker consumer confidence in multiple markets. However, Nokia continues to expect industry mobile device volumes in 2008 to grow 10% or more from the approximately 1.14 billion units Nokia estimated for 2007. Nokia also continues to expect industry mobile device volumes in the third quarter 2008 to be up sequentially.

The full-year outlook for the company was generally upbeat (the stock is down on the warning). In addition, shipment growth in phones with the Symbian OS declined (to 5%), the company reported this week. In the first quarter, the annual growth rate for Symbian was 16.5%. Last year, growth was faster than that. Overall, at a time when smartphone growth is gaining, Symbian appears to be slowing -- in opposition to the trends in the broader market. Growth for smartphones is 16% annually according to Gartner. Symbian is mostly run on Nokia phones.

The following is data from our recent survey of North American mobile phone users, showing market share of various devices:

 mobile market share

Source: Opus/LMS/Multiplied Media, 8/08, n=789 (US and Canadian adult cellphone users)

Adoption of 3G Devices Growing in U.S.

Thanks in part no doubt to the release of the iPhone 3G, the U.S. has seen an explosive growth in mobile subscribers with 3G-enabled devices in the past year.

According to comScore:

The United States has caught up with Western Europe in the adoption of 3G with 28.4 percent of American mobile subscribers having 3G devices versus 28.3 percent in the largest countries in Europe. The number of U.S. subscribers with 3G enabled devices has grown 80 percent to 64.2 million during the past year.

A look at the top subscribers in U.S. versus Western Europe:

3G Growth

3G Growth

U.K.'s O2 Finding Consumer Appeal for Mobile Payments

Using mobile phones to purchase goods and services is a fast-growing concept that is gaining traction from carriers, consumers and payment networks alike. Mobile payments rely on near-field communication (NFC) technology to facilitate purchases and include associated technologies for mobile couponing and payment authentication.

U.K. carrier O2 released the results of six-month mobile payments trial in which 500 people were given Nokia 6131 handsets loaded with cash to make store purchases or travel throughout London. According to O2, nine out 10 participants enjoyed making cell phone payments.

Among the mobile payment activities in the O2 trial included:

  • Travel on subway, buses and trams in London, using the handset like an Oyster contactless payments card
  • "Smart posters" containing embedded tags which serve as shortcuts for services enabled through the handset by tapping the phone on the poster.
  • Barclaycard payment application allowing purchases of £10 or less at retailers including Books Etc, Chop’d, Coffee Republic, EAT, Krispy Kreme, Threshers and YO!
  • Ability to check available funds and locate nearby retailers that accept payments.

Elsewhere, Visa announced the launch of new mobile payment programs in Brazil, South Korea and the United States. Visa has been working for some time with financial institutions, telecommunications providers and handset manufacturers in delivering mobile payments with efforts to improve the consumer payment experience.

According to the release, the latest programs include:

  • Brazil: Visa announced yesterday the availability of remote mobile payments in Brazil by Banco do Brasil. It is the first program of its kind in Latin America, allowing Banco do Brasil's Visa cardholders to pay with their mobile device and confirm the transaction via text message. The service is accessible through any Brazilian mobile carrier serving the more than 140 million subscribers in the country. Companhia Brasileira de Meios de Pagamento (VisaNet Brasil), the acquiring institution for all Visa debit and credit payment transactions in the country, will be running the deployment of this technology in Brazil.
  • Korea: In a world first and in partnership with T-Money provider KSCC (Korea Smart Card Company), card issuer Shinhan Bank and Korea Telecom Freetel (KTF), Visa has made it possible for commuters to use their Visa account to top up their T-Money balances automatically on the phone's SIM card when it falls below a certain level. By conducting the entire transaction automatically over the mobile network, commuters are freed from the inconvenience of waiting in line at transit kiosks or other agents to top up their transit account.
  • U.S.: Visa recently announced a partnership with Chase Bank for a pilot program to deliver personalized mobile offers to select consumers in Phoenix, AZ. With more than 50 participating merchants, the program has capacity for 5,000 participants who will receive offers, including discounts or special deals, directly to their mobile devices via text message. They will be able to redeem these offers at the merchant’s location or online. The pilot will also cover special game day offers for baseball fans attending games at Chase Field, home of the Arizona Diamondbacks.
  • North America: Visa is working with multiple leading issuers, such as PNC Bank, SunTrust Bank, U.S. Bank, Wachovia, and Wells Fargo in the United States, and RBC, TD Bank Financial Group, and Vancity in Canada, to trial a transactions notification program that is able to send near real-time information to cardholders. Participating cardholders will receive e-mail or SMS text messages on their mobile devices whenever one or more transaction "triggers" occur, sometimes before they leave the store. These mobile notifications will be created simultaneously with the transaction, providing cardholders with an effective way to monitor and manage their accounts.

TomTom 'Goes Live' with New Devices, Services to Stay Ahead of Smartphones

Personal navigation device (PND) maker TomTom (which recently completed its acquisition of TeleAtlas) introduced a new series of "GO Live" devices and services earlier this year. Those will become available in selected European markets (UK, Germany, France, Netherlands and Switzerland) shortly. TomTom is teamed up with Google to provide local search results on devices as part of that larger suite of services.

Before TomTom, Dash partnered with Yahoo to deliver local search results in car. One of its more innovative services, TomTom allows users on the road to correct maps and incorporates those changes and corrections into its network for all users.  

PND makers are transforming their once narrow navigation devices into much broader and more useful Internet-connected utilities in a bid to head off smartphones, which promise broader functionality and increasingly GPS-enabled maps and directions. Garmin, which also has a relationship with Google, has even developed a smartphone.

As PNDs become Internet access devices and more (selected TomTom devices double as audio book readers), they become much more interesting because of their larger screens. But they will need to continue to innovate and evolve to stay ahead of smartphones, which threaten to render them superfluous.

As I wrote in the preceding post, a new wave of non-phone, mobile Internet devices may emerge that also squeeze traditional PNDs and are tied into next-generation mobile broadband networks such as WiMax and LTE. 

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Maps and directions remain one of the "killer apps" for mobile. In May of this year comScore found the following in a survey of 2,000 US mobile users:

Picture 3

In addition, we just found in a survey (n=789) that "access to maps & directions" was somewhat or very important to 45% of mobile users, as one of the top mobile content categories.

UK Smartphone Users Broadly Explore Mobile Internet

British Telecom recently conducted a study of some of its BT ToGo smartphone (an HTC Windows Mobile phone) user behaviors and attitudes. The sample size and other respondent information wasn't disclosed.

Here are some of the top-level findings:

  • 45% have browsed the mobile Internet for goods or services
  • 33% have checked prices "online" while in stores
  • 33% said that their mobile devices "have helped them to make well-informed buying decisions"
  • 20% have made an e-commerce purchase using their mobile phones in the past three months

Other findings:

  • 20% of respondents said they now spend less time surfing the Internet at work because they use their mobile phones
  • Respondents on average spend 2.5 hours each week on the mobile Internet

Compare "time spent" data from comScore's M:Metrics (May, 08) for US and UK users:

Time spent mobile Internet

Source: comScore (May, 2008)

Back to the BT survey data. Here are the major categories of websites visited by respondents:

  • Search sites: 71%
  • News: 66%
  • Travel and transport: 45%
  • Entertainment: 42%
  • Sport: 37%
  • Price comparison sites: 22%

In addition, 34% of survey respondents said that "their mobile device has improved their social life because it makes it easier to stay in touch."

Yell Integrating Mobile Services

Late last week UK publisher Yell introduced a new offering to make its mobile services more "holistic":

Yell, the directories company, is launching a new mobile internet service in a bid to join together its 118 24 7 directory and Yell.com mobile offering . . .

Callers will receive an SMS when calling the directory service from a mobile phone. A hyperlink on the text will take the consumer to a "landing page" that gives company content in text.

It will include information a 118 call handler would give to a consumer, such as prices, e-mail addresses and web addresses of businesses.

It will also provide maps and directions to find the advertiser - a service that Yell claims is the first of its kind.

The top "use case" for mobile 411 is someone in the car on his/her way somewhere seeking directions, inventory information and/or hours of operation.

This "multi-modal" model is also what most companies will need to adopt -- if they haven't already -- to optimize mobile offerings and make them accessible and more effective for users who are arrayed across a broad range of handsets.

Limited Interest in Social Nets -- For Now

According to comScore, 132 million people visit a social networking site every month, spending 3.5 hours per month per visitor. That represents about 69% of the total US Internet population. One would thus anticipate that this behavior will translate into mobile. Yet early survey work indicates barriers to adoption.

A recent Vodafone-sponsored study has generated results that are broadly consistent with we found in our study of mobile social networking in North America with Multiplied Media. The Vodafone study was conducted in the UK by ICM Research in May and June of this year as part of a larger, omnibus survey (n=709). The survey was conducted by telephone.

Here are the top-level findings:

  • 94% of respondents who used the Internet had mobile phones
  • 43% of this group used their mobile phones (at any point) to access emails and websites
  • 24% had visited social networking sites on their mobile phones
  • 7% visited social networking sites via mobile phones on a daily basis

Demographic differences:

  • 18-24 year olds were most active in mobile social networking: 20% used mobile devices to visit social networking sites daily; 37% among this group checked email daily (on mobile phones) and 32% visited mobile websites
  • 25-34 year olds: 11% used mobile devices to visit social networking sites everyday

Cost was the greatest deterrent to those who didn't access social networks on mobile phones; but this goes beyond social networks alone to all manner of mobile Internet access and activity.

Below are some sample slides from the mobile social networking study we developed (2008, n=1,022). Only 6% of respondents currently accessed social networking sites (mostly Facebook and MySpace) on their mobile devices.

Barries

Reasons

Note: small base

Beyond cost, which is present in our study and the UK study as a barrier to mobile social networking, our study reflected a lack of interest or perceived need: "generally not interested, no need."

But how does one reconcile these findings with the previously reported data from both Vodafone and Opera.

Vodafone (May, 2008):

Top 4 searches on the Vodafone Mobile Internet (VMI) (ranked by most searched first)

  1. Facebook
  2. Bebo
  3. eBay
  4. Windows live Hotmail

Top 10 mobile internet sites on VMI (ranked by most visited first)

  1. Facebook
  2. Google
  3. BBC
  4. MSN
  5. Bebo
  6. Sony Ericsson
  7. Yahoo
  8. MySpace
  9. Windows live Hotmail
  10. YouTube

Opera (May, 2008):

Top 10 sites in the US (per Opera):

  1. www.myspace.com
  2. www.google.com
  3. www.mocospace.com
  4. www.yahoo.com
  5. www.facebook.com
  6. www.live.com
  7. www.hi5.com
  8. www.wikipedia.org
  9. www.itsmy.com
  10. www.ebay.com

Top 10 sites in the UK (per Opera):

  1. www.facebook.com
  2. www.google.co.uk
  3. www.live.com
  4. www.bebo.com
  5. www.mocospace.com
  6. news.bbc.co.uk
  7. uk.yahoo.com
  8. www.itsmy.com
  9. www.faceparty.com
  10. www.ebay.co.uk

These Vodafone and Opera data are behavioral data. But there's also reason to trust the UK and LMS surveys. The discrepancy can perhaps be explained by the "early adopter" nature of the Vodafone and Opera browser users. They are potentially a leading indicator of the potential future popularity of social networking on mobile devices.

Cultural factors will likely drive social networking on mobile devices; when the person on your left and on your right are doing it you'll be similarly inclined. Until that time, cost considerations and a lack of need or urgency will likely keep the mass of mobile users from tapping mobile social networking.