Owning the iPhone is expensive and Sprint is planning to exploit its competitive advantage around data pricing (apparently) as one of the key marketing angles for the new Pre, due out June 6 in the US. As an aside, I'm generally annoyed by the faux shortages that Sprint hopes will boost demand and buzz for the device.
According to Engadget, which got a copy of an internal Sprint Pre launch guide the relative pricing of competitors' data plans is one of the key points. Of course Sprint has been pushing this angle more broadly for some time.
The hardware and software comparison points in the table above (i.e., layered contacts, NASCAR content) are unlikely to win converts. Indeed the Pre may stop the post-paid subscriber bleeding (as will a Samsung Android phone expected later this year) but I don't believe you're going to see any big defection from AT&T and Verizon to Sprint to get the Pre. Sprint and Palm are hoping that such predictions are proven to be wrong.
However the cost of data-plans will get attention and may be a successful hook for those contemplating upgrading from a feature phone and considering one of the other carriers for a G1 or iPhone.
Related: O2 will distribute the Pre in the UK. And the WebOS Palm EOS (Centro successor) is reportedly coming to AT&T in the second half of 2009. Getting this device to market quickly will help Palm if early Pre sales fail to live up to the hype.
UK directory and local search site Scoot, which embraced Twitter recently on behalf of its local advertisers, has added an iPhone site. It uses icons and location-awareness to find the nearest business in the given category. From the release:
Scoot uses the iPhone’s GPS capability to locate the user, then find the nearest cafe, bank, restaurant, petrol station and much more. “It’s so quick and easy to use when you’re on the move”, said Sue Barnes, Scoot’s managing director. “There’s no need to type anything in: you just open the app and tap the relevant icon – cafe, for example. Scoot will then show your nearest cafes with name, address, phone number and distance from your current location.
The mobile user can tap the ‘More’ button on each business listed to see further information such as descriptions, opening times, payment methods, special offers/coupons, pictures and even videos. They can see the business on a map, get directions, click to call or view their website. Your browser may not support display of this image.
The application includes a number of standard icons as the default, representing some of the more popular business categories within the Scoot UK business directory. These include banks, cafes, car repairs, chemists, dentists, doctors, drinks, estate agents, food, hospitals, hotels, newsagents, petrol stations, post offices, supermarkets, special offers and favourites. However, the user can easily customise the application by using the simple on/off toggle button to add search icons for more categories or even their favourite brands. Scoot will be adding more categories and brands in future releases of the application.
Earlier this week Gartner released its Q1 handset numbers. What they show is that conventional mobile phones are off almost 9% YoY and smartphones are up almost 13% YoY:
Worldwide mobile phone sales totalled 269.1 million units in the first quarter of 2009, a 8.6 per cent decrease from the first quarter of 2008, according to Gartner, Inc. Smartphone sales surpassed 36.4 million units, a 12.7 per cent increase from the same period last year.
Nokia continues to feel pressure and lose share in a much more competitive environment:
Global handset sales
If smartphones are 13% - 14% of the market today, we can expect them (depending on pricing) to become 20% - 25% in five or six years. That will mean much more mobile Internet engagment. But it also means that 75%+ of the market will still be on lower-end phones. Lots will happen in the next five years in the mobile market, including the introduction of new tablets, continued growth of netbooks and other IP-connected devices. So it's very difficult to predict mobile user behavior.
But it's safe to say that most people will not be on these high end devices. Marketers and publishers should be mindful of that.
So it's official: The Palm Pre will be available on June 6 and cost $199 with a two-year service agreement and rebate. Here's the Palm statement:
Sprint has announced today that the Palm Pre will be available on June 6. Sprint announced that it will be available nationwide in Sprint stores, as well as at Best Buy, Radio Shack, and select Wal-Mart stores. The webOS-based phone will retail for $199.99 (after rebate and service agreement).
The Palm Pre will provide access to all of the exclusive content on the Sprint Now Network, including Sprint Navigation, Sprint TV, and NASCAR Sprint Cup Mobile Live. More details about Sprint’s service plans and retail channels can be found on the company’s website.
There had been speculation that the Pre might be more aggessively priced to boost demand. But, disappointingly, not so.
It's very unlikely that the Pre, despite its appeal and buzz, will win many converts to Sprint, which has been losing roughly a million subscribers a quarter. More likely it will prevent some defections to Verizon and AT&T. By contrast Sprint's pre-paid unit Boost Mobile's $50 unlimited plan has proven enormously successful and may be the growth engine for the company in the near term -- so much so that it's opening 50 new retail locations in 2009.
With other carriers such as MetroPCS and Virgin Mobile trying to go head to head with Boost in pre-paid, that price war threatens to bleed over to the post-paid market. We can only hope so.
Sprint is very bullish on the Pre:
“It’s the highest confidence I’ve ever had going into a device launch that this is going to be a blockbuster,” said Kevin Packingham, senior vice president for product and technology development at Sprint. He noted that he expects to know quickly whether the device has captured consumer enthusiasm. “I’m pretty sure we’ll know within the first week.”
For Sprint's sake -- but especially for Palm's -- I hope he's right that it will sell well.
What's very clear is that the Internet is fast being "mobilized." What's not as clear is how the various competing devices will fare over the long term. Right now both smartphones and netbooks are hot. Netbooks are slightly hotter than smartphones, because they seem really cheap by comparison to conventional laptops. And now netbooks are being sold like phones.
Verizon joined AT&T recently in offering a smartphone-like deal to potential subscribers. It's selling the new HP Mini for $199 (after a rebate) with a two-year agreement that costs $40 per month for the IP connection. Yet RIM Co-CEO Jim Balsillie believes that despite the rise of netbooks smartphones will win because of their form factor:
“Form factor is a personal preference but it’s got to be something that lasts the better part of the day and you can hold up to your ear and clip onto your belt,” he said in response to our question about his vision for future products. “Those are a very tight systems constraints for a netbook.”
And, if a phone’s dimensions seems too cramped for the increasingly sophisticated media, entertainment and business services offered, Balsillie said this: “If you want richer keyboards and richer displays you can just use peripherals and bluetooth.”
Along those lines, products like Redfly turn a smartphone into a CPU. Useful though it may be there's something that strikes me as awkward about the device. Admittedly, however, I haven't used one.
Then there's this related development: the personal WiFi node from Novatel Wireless, the MiFi. Unlike a dongle, it allows multiple devices to connect to the Internet. However, it costs $100 and $40 per mo (from Verizon). Consumers are not going to own smartphones, netbooks with plans and personal hotspots at the same time because of cost. They will be forced to make choices.
Along those lines, we recently asked consumers whether they would prefer a smartphone or a netbook as their mobile Internet device (if the price were identical). Here's what they said:
As I've argued before, once the connectivity problem is solved then lots of new mobile Internet devices can come into being.
Nokia wants to be a player in the US market again. However the handset OEM is facing fundamental challenges as it tries to get back in the game here. For example it doesn't having billing support from carriers for its Ovi apps store. Despite having potentially lots of apps, the absence of simplified billing will be an initial (if not long term) problem for Nokia.
Nokia will also be hard-pressed to compete at the high end of the smartphone market. The US market is now the most competitive in the world for smartphones and the dominance of RIM and the iPhone is not likely to be successfully challenged in the near term by Nokia. In addition, any smartphone costing more than $200 (with subsidy) is dead on arrival as a mainstream device.
Price is a huge driver or barrier to adoption -- often unappreciated by those writing about mobile issues.
What then can the company do? It can pump out low-end smartphones (or smartphone-like phones) that are inexpensive. Getting handsets into the hands of US users is the first order of business and right now the only way to do that is to offer phones that are priced around $100 or so.
Related: AT&T considering lower-cost iPhone plans.
Last week Google announced barcode scanning for products on Android phones (right now the G1 in the US and Magic in the UK):
After you've installed the application, go back to Product Search in your browser and tap on the 'Scan Barcode' button again. Select "Use by default for this action" and tap on the Barcode Scanner option. After the app opens, center the red line over the barcode and hold the phone steady. When the barcode is read successfully, you'll see a Google Product Search results page back in the browser.
This is not to be confused with ShopSavvy for Android, which also uses barcode scanning and offers local store inventory data. Barcode scanning apparently doesn't work right now on the iPhone because of the quality of the camera (at least that's my understanding).
One of the things that I've been thinking for a long time is that the camera will eventually be used as a "search" tool -- as a way to obtain information more quickly and directly than keying in queries or even using voice. It remains to be seen but movement is in the right direction; there remains a bunch of work to be done on "infrastructure" issues, regarding standardization and pre-installed software.
But here are the forms camera-based search will eventually take:
All of these leverage the camera's ability to take in information and then potentially deliver very exact or complete data on the back end, beyond what a user could independently get with a conventional search approach.
It's potentially quite compelling as a user experience and could trump conventional search in many different scenarios. But it also illustrates the larger point that "search" on mobile phones is going to be a multi-modal experience, rather than a uniform one as on the PC. In as few as five years we're simultaneously likely to have:
The use cases will be both device specific and situational. One way to compete in mobile search is to push into these non-traditional realms more aggressively.
An online survey of 4,000 US mobile users (ages 12 to 64) conducted in January 2009, by Frank N. Magid Associates, found that 51% said they were accessing some type of mobile Internet content on a weekly basis. The study claims to be representative of the population as a whole. If so, that would mean roughly 135 million users in the US are going online at least weekly from their handsets.
In march comScore reported that more than 63 million people were using their handsets to go online at some point during a given month. Thus the Magid numbers emerge as the most aggressive in the market (if extrapolated to the larger mobile population).
Other findings from the Magid survey:
Some of these findings are relatively obvious given that price is a big factor in mobile Internet access and usage, and online social networking is still skewed slightly younger. Here's the smartphone ownership breakdown according to their data . . .
Millenials (18% own smartphone)
Gen X-ers (10% own smartphone)
Boomers (8% own smartphone)
Though the numbers aren't broken out in the release, price/cost and no perception of need are inhibitors. Lack of perceived need and cost uncertainty are the factors we've also found in our surveys regarding why people don't access the mobile Internet:
Source: LMS/Opus Research (3/09)
Among the rumors circulating in the run up to Apple's developer conference in June, there are rumors that the iPod Touch will get a camera at some point in the near future (September). Even if Apple foolishly stays with AT&T exclusively in the US for iPhone distribution, I suspect a "back door" to expanded distribution will be in making the Touch and the iPhone barely distinguishable over time.
There are roughly 17 million (or so) iPhones that have been sold on a global basis. But when the iPod Touch, which runs almost all the iPhone apps, is added in the number jumps to over 37 million. While some people see the iPod Touch as an iPod with apps, others (including me) see it as a stripped down iPhone without AT&T. You can buy an iPhone and use it exclusively as a WiFi device today but it costs hundreds more than buying the subsidized iPhone with an AT&T contract.
The two principal user experience differences between the iPhone and the iPod Touch are: no camera and no mic (as well as no phone service) available to the latter. However, with an available mic-enabled headset or earphones, the Touch can become a phone via Skype, Fring or Truefone -- today. That assumes a WiFi connection of course.
Though an embedded mic is not part of the rumors I suspect that will eventually come to the Touch as well. That would enable the device to function more natively like a phone and to take advantage of voice search apps that currently don't work on the Touch.
As always these are rumors and we've got to wait to see what happens. However, I suspect the devices will almost converge in terms of their functionality over time, athough Apple will keep the products distinct in some ways to perserve a separate identity in the market.
Accoarding to Nielsen survey data captured from 1/09 to 3/09, (presented by Fierce Wireless), here are the top selling touch-screen smartphones in the US:
This is contradicted by NPD Group assertions that the BlackBerry Curve outsold the iPhone in Q1. The data above also suggest that iPhone sales would be much greater if it were available through other carriers -- Verizon in particular.
The new larger Kindle, the "Kindle DX" was introduced today. With its 9.7-inch display it accommodates a full 8 x 11 1/2 inch page and is directed primarily at the student text book market, although it can equally be used for books, periodicals and newspapers just like the smaller Kindle 2. The price is also quite a bit larger than the already pricey Kindle 2, $489.
Sprint is still in the background here, providing "free" wireless access to Amazon (and the Internet). According to Brad Stone who was at the unveiling and blogged the event:
Three newspapers will offer a reduced price on the Kindle DX in exchange for a long-term subscription: The New York Times, The Boston Globe and The Washington Post. These offers will be available starting this summer in areas where home delivery of those papers is not available.
Don't look for Kindle or DX to save the newspapers or magazines (especially magazines) because the cost of these devices is too high to "mainstream" them. I'm guessing a mainstream price point would be about $250 or less. Later this year Kindle will have more competitors and we'll see how those are priced. Cheaper e-readers will force Kindle to discount its devices. If Apple develops a larger iPod Touch or tablet we'll see what that looks like and how it's priced. And ultimately color screens will be required.
Regardless the "e-reader" tablet is here for the long term. Eventually it will join smartphones and netbooks as a mobile Internet access device.
One could credibly argue that Apple invented in the "personal computer" and even perfected it. But Apple saw rivals overtake it and dominate the PC market for years. Now driven in part by the "halo" of the iPod and iPhone more people are buying Macs but they still comprise a tiny share of the overall market.
The iPhone has been the breakthrough device that's redefined the smartphone category made 2008 truly the "year of mobile" -- at least for consumers. But in Q1, the iPhone saw BlackBerry overtake it to claim the number 1 smartphone spot in North America. This was driven in part by the availability of the BlackBerry from multiple carriers as well as some aggressive price incentives.
According to NPD group here were the top selling smartphones in Q1:
The NPD numbers should convince Apple that if it doesn't want what happend in the PC market to happen in the smartphone market, it has to get out to other carriers. Beyond that, what's impressive in my mind is the success of the G1 given its limited availability. BlackBerry has a large, installed base who are upgrading to the OEM's newer phones. But the iPhone and G1 buyers are switching, seeking the better mobile Internet experience that both devices offer.
Reportedly a new, larger-screen Kindle is coming very soon, perhaps this week. It will be out in front of several other e-readers slated for release later this year or early next year. According to the NY Times:
Now the recession-ravaged newspaper and magazine industries are hoping for their own knight in shining digital armor, in the form of portable reading devices with big screens.
Unlike tiny mobile phones and devices like the Kindle that are made to display text from books, these new gadgets, with screens roughly the size of a standard sheet of paper, could present much of the editorial and advertising content of traditional periodicals in generally the same format as they appear in print. And they might be a way to get readers to pay for those periodicals — something they have been reluctant to do on the Web.
Such e-reading devices are due in the next year from a range of companies, including the News Corporation, the magazine publisher Hearst and Plastic Logic, a well-financed start-up company that expects to start making digital newspaper readers by the end of the year at a plant in Dresden, Germany.
There will be two eventual requirements for all these devices: color screens and IP-connectivity. The Kindle has the latter, from Sprint, though few people use Kindle as an Internet device. I would imagine that eventually these e-readers will operate like mobile phones: buy the device and a contract for ongoing Internet access. However the pricing, connectivity and any related subsidies have to be determined as these devices become more mainstream. The netbook with mobile contract is probably the model however.
The Times article is largely about the question of whether or not these larger format digital e-book readers will save newspapers and magazines and whether the subscription model will work in this context. However, I've long been fascinated by these kinds of devices as on-the-go Internet access tools. Because of their larger screens, there would be no distinction between the ads that appear, say, in the NY Times online and in the publication on one of these readers.
The single difference -- although the PC will catch up -- is the precise location targeting that will be available to these devices given their mobile nature.
Price will be a big determinant of success. And people will be forced to decide: smartphone, netbook and/or e-reader? (This is also not-to-mention any data plan charges that might be associated with the new readers.) Some people will have all these devices and some will be forced to choose because of budget constraints -- making the mobile world a permanently fragmented place when it comes to devices and platforms.
While we're still waiting for the Palm Pre to come out, apparently a second WebOS device at an anticipated lower cost (an unverified $99), the EOS/Pixie, is being reported. TechCrunch was the first to write about rumors of the device yesterday, but Engadget has more (potential) details and some specs.
This device is reportedly coming to AT&T and is something of a follow-up to the low-cost and popular Centro, which also sold for $99. If Palm's WebOS is that good and this EOS phone is that cheap ($99) it will fly off the shelves. It could also give some would-be Pre buyers pause perhaps as well. As always, however, the proof is in the touching.
Related: Motorola is betting the farm on Android and will have a couple of devices out by year end apparently. As this BusinessWeek article makes clear however, if they're not hits Motorola's once-mightly but now troubled handset division will be all but done.
In November, 2008 JD Power found that the iPhone was the highest rated smartphone in terms of customer satisfaction. In a repeat, the firm has released data showing that the iPhone is again the highest rated smartphone in the US market except in the battery life category.
Apple was followed in the smartphone category by LG and Samsung. LG was the highest rated OEM in the traditional handset category.
Samsung announced the Android-based I7500 this morning. Here are the specs:
Samsung I7500 comes with latest multimedia features. The large and vivid 3.2“AMOLED display ensures the brilliant representation of multimedia content and enjoyable full touch mobile experience. Along with supporting a 5-megapixel camera and various multimedia codec formats, the I7500also provides a long enough battery life (1500mAh) and generous memory capacity up to 40GB (Internal memory: 8GB, External memory: Up to 32GB) to enjoy all the applications and multimedia content. The phone also boasts its slim and compact design with mere 11.9mm thickness.
Previously when Samsung said it would be making Android-based phones it said it would downplay the "Google experience" dimension of the phone:
Samsung also wanted to put its own spin on Android. Hong drew a distinction between devices built on the Android platform and "Google Experience" devices, which not only use Android but are also Google-centric, packed with the search giant's own applications. "Our commitment is more to the Android phone than the Google Experience device," [Won-Pyo Hong, executive vice president of global product] said. In other words, Samsung is doing plenty of customization work on top of the Android platform to make operators happy.
Yet in the announcement this morning the following copy prominently appears:
The Samsung I7500 offers users access to the full suite of Google services, including Google Search™, Google Maps™, Gmail™, YouTube™, Google Calendar™, and Google Talk™. The integrated GPS receiver enables the comprehensive use of Google Maps features, such as My Location, Google Latitude, Street View, local search and detailed route description. Hundreds of other applications are available in Android Market. For example, the application Wikitude, a mobile travel guide, allows consumers to access details of unknown sights via location-based Wikipedia articles.
That's a lot of Google for a purportedly non-Google experience device. It will launch in Europe in June. No word on if/when it will come to the US. However a Samsung Android phone will reportedly make its way into Sprint's line-up this year in the US.
By now you're read it, Verizon and Apple are allegedly talking at a "high level" about bringing the iPhone to the largest US operator. According to USAToday:
The New York-based telecom entered into "high-level" discussions with Apple management a few months ago, when CEO Steve Jobs was overseeing day-to-day business, these sources say. They declined to be named because they aren't authorized to speak publicly.
Verizon CEO Ivan Seidenberg hinted at this in remarks to the Wall Street Journal roughly a week ago:
Mr. Seidenberg also addressed the notion of Apple Inc.'s iPhone ever coming to the Verizon Wireless network, saying it is more likely that Apple would be willing to work with the carrier under the fourth-generation, or 4G, network, which follows the same technology standard as AT&T Inc.'s 4G plans. He said Apple never seriously considered making a CDMA version of the iPhone because it didn't have as wide a distribution opportunity.
However on the recent Apple earnings call, COO Tim Cook seemed to reaffirm Apple's relationship with AT&T. I didn't listen to the earnings call but according to ZDNet, Cook described AT&T as “the best wireless provider in the U.S.” and further said the company does not plan to change partners.
Some people are speculating that this rumor has been floated to make AT&T nervous, given how well the iPhone has performed for the carrier. However, I doubt that's the case.
If the USAToday report were true, there would be a number of technical issues and challenges to overcome. Verizon's network is CDMA while the iPhone uses GSM. It may be that the alleged talks contemplate a couple of years down the road with LTE/4G is rolled out and the AT&T contract extension has expired.
Related: iPhone appears to drive data-plan adoption at O2 in the UK vs. other carriers.
The Street is repeating Credit Suisse speculation that Sprint may offer the Pre when it is introduced (c'mon already) for as low as $150 vs. the anticipated $199 or $179. (Any smarphone over $200 now that requires a contract is DOA.)
While this subsidy would potentially cost Sprint a great deal here are the benefits of such a move as I see them:
In the latter category I don't think Sprint will see something as dramatic as what the iPhone has done for AT&T but it may see some new customers. The other benefits (retention, upselling) would probably net out profitably for the carrier, although I don't have access to any of their internal numbers.
One of the other great benefits of the Pre for Sprint is the spark it delivers to the brand. The Sprint brand has been in decline over the past couple of years, notwithstanding their marketing efforts. The Pre and forthcoming Android phones have the capacity to change that.
I'd love to see a Pre for $150, but we'll have to wait to see if the company has the nerve to go that low.
AdMob's March Metrics release compares Android and the iPhone across a variety of measures:
There is no doubt that Android is growing fast and has made an impact since its launch. The HTC Dream (G1) generates 2% of our US requests and is now the #4 smartphone behind the iPhone, Blackberry Curve, and Blackberry Pearl. Android growth accelerated after our launch of ad units in apps at the end of January, which likely reflects strong consumer usage of applications on the Android platform.
However the question we get most often is – how does Android’s growth compare to iPhone’s growth at launch? Our best answer: both grew more quickly than the market, but iPhone growth was much faster than Android. To put some numbers to this, we found that Android traffic in the US grew an average of 47% per month since it launched five months ago while iPhone traffic in the US grew an average of 88% per month in the five months following the launch of their App Store. See the report for more details on the comparison.
Android facts from AdMob:
Remember that these data reflect traffic and activity on AdMob's network and are not necessarily exactly representative of the larger mobile Internet as a whole (although directionally they are):
Global handset data (share of requests on AdMob network):
US handset data
UK handset data
Related: T-Mobile has sold 1 million G1 phones since October. The G2/Magic is coming to Vodafone in May in the UK and probably later this year to T-Mobile in the US.
Yesterday Apple released Q2 results and beat Wall Street expectations. The highlights were the following:
Between the iPhone and iPod Touch there are now 37 million units globally.
Chief Operating Officer Tim Cook who led the earnings call said that the company was going to stay with AT&T. According to ZDNet Cook described AT&T as “the best wireless provider in the U.S.” and further said the company does not plan to change partners.
Cook also cast doubt on whether Apple would produce a netbook:
"When I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware and very small screens," he said. "It's just not a consumer experience and not something that we would put the Mac brand on, quite frankly."
That doesn't mean that we won't see some sort of device that sits between a Macbook and the iPhone.
In a related story, AT&T is apparently gearing up for the challenge of the Pre and has distributed a cheat sheet that will help employees in stores compare and contrast the iPhone and the Pre: