You can't turn on the TV, Internet or open a publication without encountering an ad for Windows Phones. And there are conflicting data about whether it's working and the corresponding strength of Windows Phone sales.
Several data sources continue to indicate tepid demand in North America but there is also some evidence that Windows Phone sales may be going reasonably well in certain parts of the world. The blog WMPoweruser identifies growth in the usage of Facebook apps for Windows Phones and extrapolates an increased sales trend on that basis:
Using the number of Monthly Active Facebook users as a guide, we can see around 627,000 MAU of the built-in Facebook app has been added since the 1st October 2012, the start of the quarter.
Last year over the same period less than 150,000 was added by the 15th December, possibly hinting at the source of Steve Ballmer’s statement that “Windows Phones are so far selling at four times the rate of the same time last year” Last year according to Gartner, who claims to measure units actually sold to end users rather than shipments, said 2.759 million Windows Phones were sold in Q4 2011.
The data suggests already 7 million Windows Phones were sold so far this quarter, and we may finally be heading to a + 10 million Windows Phone quarter.
If in fact Windows Phones were to sell 10 million units to end users it would indeed be a breakthrough for the beleaguered platform. However there's other data to suggest that Windows Phones are not doing as well as that. For example, the most recent comScore US mobile market share data show that Windows continues to lose overall share to iOS and Android:
There are also recent sales data from Kantar Worldpanel that show Windows Phones losing share in accordance with the comScore data above:
However in Europe Windows Phones are making some inroads, probably as a result of Nokia's promotional efforts and legacy brand strength. While the EU5 shows a 4.7 percent market share (growth of 1.7% vs. a year ago) individual countries vary widely.
In Italy, Spain and the UK Windows Phones have performed better than in Germany and France. In Italy in particular Windows Phones have gained almost 8 points and now stand at an 11.7 percent share of recent sales according to Kantar. Again, this is probably on the strength of the Nokia brand in Europe.
Elsewhere around the world Windows Phone sales appear to be modest. However in "urban China" Kantar says Windows Phones contstitute 4.2% of all recent smartphone sales.
It is possible that all these sales combined represent several million units around the world. But while there does seem to be momentum in certain countries it doesn't yet appear that this is a 10 million unit "breakthrough quarter" for the operating system.
Former Morgan Stanley financial analyst, now KPCB partner, Mary Meeker did one of her patented blizzard of stats/data dump presentations at Stanford University the other evening. The slides (available here) are essentially an updated version of a presentation given earlier this year.
You know most of the material by now. However, below are the most interesting slides I culled from a much longer set. They go to device adoption and mobile ad revenue projections.
The noteworthy thing about the above chart is that it argues there are 172 million smartphone subscribers in the US. If that's true it would mean a smartphone share of something like 68% or 73% depending on the base used. This is undoubtedly high. But it's not unreasonable to argue that there may be 60% smartphone penetration by the end of Q4 in the US (or early Q1).
From the chart below: there may not in fact be 5 billion individual mobile phone users around the world. There are "only" 7 billion people on the planet. It's probably more accurate to assert there are something like 5 billion subscriptions/SIM cards (there are some dual subscriptions). Still the global smartphone growth opportunity is massive.
The following chart is based on Pew survey data, showing that 29% (as of earlier this year) of US adults owned a tablet or eReader. Tablets are going to be the number one electronics gift item this year. We could be looking at 80 million total tablets in the US in Q1 2013.
What's most interesting about the slide below is that it projects tablet ownership to pass PC ownership by the end of next year; in other words: more tablets than PCs. This may be a aggressive forecast but it's not out of the question.
The final slide is about mobile advertising and app revenue. There are many sources behind this projection. It envisions a $20 billion global market by the end of the year, with mobile advertising around $6 or so billion.
US mobile advertising was worth roughly $1.2 in the first half and is on track to be somewhere between $2.6 and $2.8 billion for the full year 2012. Globally mobile ad revenues will probably reach between $5.5 and $6 billion by the end of Q4 this year.
Numbers are everywhere as we head into the final month of 2012 -- an undisputed "year of mobile" -- and many sources have released loads of market share and device penetration figures over the past week. Some of those numbers are meaningful and some are not.
Among them ad network Millennial Media put out some monthly device figures this morning, based on ad impression share on its network. I'll take a quick look at those numbers and then discuss some of the other recent device data in the market, with an emphasis on tablets.
The iPhone is the single most prevalent device (and has been so for several years) on the Millennial Network. It generated 16% of all the ad impressions in Q3, while iOS devices in total generated 31% of all Millennial's ad impressions. Collectively Samsung devices (phones, tablets) were responsible for 24% of impressions; the second most prevalent device OEM.
RIM devices were responsible for 7% of ad impressions, which is now basically on par ith the company's overall market share in the US. There are no Windows Phones in the top 20 on Millennial's network. Windows Phones (Lumia in particular) has sold reasonably well in select countries in Europe (i.e., Spain, UK, Italy). However they have not sold well in the US.
While Apple is the leading manufacturer and has the leading device on the Millennial network, Android devices dominate collectively -- with 52% of all impressions, compared with 34% for iOS. This share breakdown is almost identical to comScore's September US smartphone market share data.
Finally Millennial ranks the top tablets on its network (see graphic above). The iPad leads, followed by the Samsung GalaxyTab, Kindle Fire and others. Tablets will clearly be one of the most popular holiday gifts and the top electronics item sold in Q4.
It's curious to see the Acer and Motorola tablets on Millennial's list. From a sales and traffic standpoint there are now effectively three tablets in the market: the iPad (and Mini), Google's Nexus tablets (mainly the Nexus 7) and Kindle Fire devices. While the Nook and Galaxy Tab have some market presence they're essentially "also-rans" at this point. The Galaxy Tab has had greater success in Europe.
A new report from ABI Research claims that the iPad's share (of shipments) fell to 55%, down 14 points in Q3. Lower-priced tablets from Google-ASUS and Amazon are driving a lot of sales to be sure. Indeed, Amazon made the claim earlier this week that Kindle device sales more than doubled over last year.
But collectively we need to get rid of "shipments" as a market-share metric. It's widely used because it's easier for analyst firms to track than actual sales. However it's not meaningful in any sense. As an industry we need to shift to actual device sales or even other metrics such as web traffic/transactions. This past weekend's data have shown this.
What do sales matter if devices aren't widely used or are used for very limited purposes. For example Kindle Fire devices, though they're selling well, are essentially used to consume Amazon content. They don't show up very often on internet traffic reports. And while the impact of Nexus devices has yet to be fully felt, the broader notion (promoted by the ABI report) that Android tablets now constitute nearly half the devices in the market is misleading.
As widely discussed earlier this week, the iPad is the only tablet right now that appears to matter in a "real world" sense. According to this weekend's e-commerce data from IBM, the iPad generated 88% of tablet traffic on Black Friday and more than 90% on Cyber Monday.
In Q2 ad network Chitika found that the iPad was responsible for almost 95% of the tablet traffic on its network. Other publishers and e-commerce sellers report similar results: so far the iPad is the only tablet that matters.
E-commerce site Fab.com has said that 95% of its mobile sales come from iOS devices. And tablet content platform Onswipe has said that the iPad is responsible for a remarkable 98% of all tablet-based traffic to the company's publisher partner network. Based on global web traffic data from Q2 this is what actual usage market share looks like:
Despite Android's dominance in terms of device penetration the majority of mobile web traffic in the US (not to mention transactions) is coming from iOS devices. And when it comes to tablet traffic alone, there is no Android surge.
There may be a lot of Android tablets out there but engagement and usage levels are far below the iPad.
As part of General Motors' MyLink in-dash telematics system (GM's answer to Ford's Sync), the Chevrolet division is incorporating Siri access into two 2014 models: Spark and Sonic vehicles.
Users with iPhones will be able to use Siri to execute a number of commands:
Siri's full capabilities won't be incorporated at this point however. Anything that requires a visual display of data won't be available so as not to create safety hazards while driving. Siri and the iPhone connect to the MyLink system via Bluetooth.
MyLink is designed to be broadly integrated with iPhone and Android devices. The console operates very much like a small tablet device embedded in the dash.
The MyLink "infotainment" console is already modeled on the smartphone apps metaphor. MyLink also has a built in virtual assistant, which will operate in those models that don't enable Siri access. It will also remain available to drivers in the Siri-enabled Spark and Sonic vehicles as well for a broader array of functions than what Siri will permit.
What's perhaps more interesting than the integration of Siri is the adoption of the concept of the virtual assistant more broadly. My colleague Dan Miller is about to publish a report on "PVAs" (personal virtual assistants) and their impact on a range of use cases including enterprise customer care. Built on decades of speech processing research and technology development, as well as advances in "AI," virtual assistants are changing the way we "search" and interact with devices and technology.
The following video demonstrates MyLink's features.
One of the most eagerly sought electronics products this year is the tablet. We should see millions of them bought over the holidays. Indeed, tablets will be an enormously popular gift item. But which one(s) will be successful and which ones will fade?
Today, for "Cyber Monday," Amazon is promoting the upgraded Kindle Fire (with special offers) for $129 vs. its normal $159 (reduced from last year's $199). This should generate quite a few sales.
However the Kindle Fire is not as popular on Google as the company's own Nexus 7 or the iPad Mini. According to data released by Google earlier today the following are the Top 10 Google Search Shopping Queries (today):
Meanwhile PriceGrabber shows a somewhat different list of "most searched" electronics products:
Both of the above lists indicate the Nexus 7 is the most "searched for" tablet out there -- even the most popular product. However, over at Amazon Kindle Fire and other Kindle devices dominate the electronics bestseller list.
Finally, a recent consumer survey Opus conducted (n=1,048 US adults) asked "Are you planning to buy a tablet computer this holiday season?" Here were the results:
In our survey Nexus 7 was the least desired of the tablets and iPads were the most popular. All this data seems to suggest that iPad, Nexus 7 and Kindle Fire will do well, while Surface, Nook and other "no name" tablets will generally be ignored and suffer.
Apple's products constitute four out of the top five most-requested gifts by US kids (under 13) according to a recent poll by Nielsen. Among those over 13 the iPad still ranks as the most desired object for the holidays.
In the 6-12 age group, "tablet other than the iPad" shows up in 8th position but Microsoft Surface specifically appears second from last on the list, just ahead of Apple TV. In the over-13 age group, non-Apple tablet is 3rd though Microsoft Surface and Kindle Fire are lower on the list. Microsoft Surface is again second from the bottom on the over-13 list with a lower percentage of respondents interested than in the under-13 cohort.
The sample size wasn't disclosed and the question asked isn't technically about the holidays but about purchase interest or intent "in the next six months." However these requests will probably register in December. If parents comply it should be a very good quarter for Apple. Below are the full lists.
Kids under 13:
Kids 13 and over:
Opus is in the midst of a consumer survey asking about which tablet they intend to buy over the holidays. In our survey (still in process) 85% of respondents said they weren't planning to buy one now. However the age group most interested is 25-34; 21% say they plan to buy a tablet in the immediate future.
Overall, among those who've said they're planning to buy a tablet during the holidays, the ranking is as follows:
According to Nielsen, Caucasian/White Americans lag behind other groups when it comes to smartphone adoption. The data below are part of Nielsen's recent cross-media study (Q2 2012).
Based on data from many thousands of users, Nielsen reported that 70% of Asian American adults now own smartphones, while 62% of African Americans and 60% of Hispanics also do. By comparison "only" half of Whites own smartphones.
The year will probably end at or very close to 60% smartphone penetration in the US. That would mean something like 150 million smartphone users, most of whom would also be mobile internet users.
This morning Apple announced that it sold "3 million iPads in 3 days." However it didn't specifically break out the number of iPad Minis it sold, as opposed to iPad 4s. My guess would be that more than 50% of those three million tablets were iPad Minis.
Also today device tracker IDC released new Q3 figures for tablets. The company measures "shipments," not sales to end users, so its numbers may not be an accurate reflection of actual market share. However the IDC data show Android tablets finally gaining against the iPad.
Most of this Android tablet growth has come in the 7-inch category, where the Kindle Fire (a quasi-Android device) and the ASUS-made Nexus 7 have done very well. In other parts of the world, though not in the US, Samsung has done relatively well with its Galaxy Tab devices.
According to ASUS its Nexus 7 is selling nearly a million units a month. The success of Kindle Fire and the Nexus 7 has everything to do with their $199 entry level price. While the first Kindle Fire is a mediocre device at best the Nexus 7 is a terrific smaller tablet for the price. The iPad Mini is indisputably the best 7-inch tablet on the market now, but its $329 price makes the Nexus 7 a very attractive "second best" choice for many people.
This holiday season, tablets will be the consumer electronic gift of choice, much more than smartphones and PCs.
Microsoft's new Surface RT will be going up against Android-powered tablets and the iPad. The recently released Samsung-made Android Nexus 10 has, according to Google, the highest resolution screen on the market. However it's surprisingly a big disappointment in several ways (I have one). Indeed, it's unlikely Apple will face much competition in the 10-inch tablet category, even from Surface.
However the 7-inch tablet category is a different story. It will be intensely competitive with price vs. quality being the main calculation in most buyers' minds. Amazon/Kindle Fire will vie with Nexus 7 for those users who are more budget conscious. The iPad Mini will be the clear choice for those who are not concerned about spending more. For those in the middle, however, the Nexus 7 does the best job of reconciling price and quality.
In many respects, because of its portability, the 7-inch tablet is more desirable than the 10-inch version. It may in fact become the most common type of tablet in the market from a unit-sales perspective. Regardless, the "establishment" of the 7-inch tablet as a new category of device (4 inch smartphone, 7 inch tablet, 10 inch tablet) creates new opportunities and challenges for marketers.
Only Apple has a meaningful number of tablet apps -- though that will likely change over time. Accordingly most mobile websites and apps treat the 7-inch device as though it were a big smartphone, which leads to awkwardness in several respects, especially when it comes to ads.
And just when you thought people couldn't own more mobile devices . . . We're moving into a period when affluent consumers have a smartphone, a small tablet, a larger tablet and a PC in their homes. That makes everything more complicated for publishers and marketers, though not the consumer. It also means the PC will continue to be the loser of this diversifying consumer-device marketplace.
Yesterday the first reviews of Microsoft's Surface RT tablet came out. (RT is the iPad competitor starting at $499; a more laptop-like Windows Pro tablet will debut later at higher cost.) There were some positive reviews, a bunch of mixed reviews and a few that were largely negative. Here's a sampling of comments:
Many of the reviews argue and hope that the RT tablet will improve over time and that a second or third generation version of the device will be significantly better after Microsoft addresses some of the weaknesses, bugs and criticisms.
Surface RT had appeared to be off to a good start, selling out pre-orders. However one tech blog, critical of the device and calling it dead on arrival, suggests that the majority of the pre-order sales were to Microsoft itself for employees:
I've heard that Microsoft made 250,000 initial Surface RT tablets, half of which (125,000) were the now sold-out 32GB model. But of those 125,000 tablets, a full 80,000 were purchased by Microsoft itself for employees. That means only 45,000 consumers and corporate IT managers have plunked down for Surface RT.
It's hard to know how much credibility to assign to such a claim. If it's true however it indicates either a lack of public awareness or a lack of interest.
While Windows Pro tablets will compete with higher-end laptops (at similar higher prices), RT competes with the iPad and the larger Android tablets. In that context, given the mixed reviews, Surface RT will probably struggle. Accordingly the first generation device probably will only see modest sales, suffering essentially the same fate as Windows Phones have suffered to date.
The broader Windows 8 operating system has received many positive reviews but some very mixed ones as well. Microsoft is praised for boldly overhauling the PC OS but dinged for creating potential confusion for consumers. There have been a few Microsoft observers who have even predicted "disaster" for the company.
The Windows 8 handsets are shortly to be released as well. The Nokia Lumia 920 has been lauded for its design but the device is no blockbuster or savior for Nokia or Microsoft in the mobile arena.
With potential consumer confusion over Windows 8 (the OS) and the probability that Microsoft powered handsets and tablets will be overshadowed by Apple and Android devices in holiday sales, the company is unlikely to get the immediate sales boost it needs. Indeed, the new Microsoft tablets and Windows Phone 8 devices were supposed to reset the company for the new multi-platform era. However so far it appears that Microsoft has right now only made a kind of down payment on potential future gains.
Nokia announced Q3 earnings yesterday. The company lost 969 million euros or $1.27 billion. It reported sales of 2.9 million Lumia smartphones during the quarter, which was down from 4 million in Q2. CEO Stephen Elop attributed the sales decline to the announcement and impending arrival of Windows 8 and a delay in consumer purchases accordingly.
Nokia sold 3.4 million Symbian handsets for a total of 6.3 million overall smartphone sales in Q3. However Symbian has been discontinued as the company focuses exclusively on Windows Phones. Nokia CFO Timo Ihamuotila said the following about Nokia device sales in Q3:
Our Smart Devices net sales decreased 37% sequentially due to lower Lumia and Symbian net sales. This was partially offset by higher overall Smart Devices ASPs. Looking at our Lumia volumes in more detail, we saw a sequential decrease in shipments to 2.9 million units, with declines in all regions except for Middle East and Africa. From a product-level view, we saw sequential growth in the lower-priced Lumia offering, more than offset by declines elsewhere in the Lumia portfolio.
The evidence suggests that Nokia continues to have success at the lower end of the market but at the higher end it's struggling. Nokia's Elop promises this will change with the release of the Nokia Lumia 920, its first Windows Phone 8 smartphone.
In the US AT&T will reportedly have an exclusive for six months on the handset. Presumably that was in exchange for aggressive promotion and placement in AT&T stores. We'll see if that helps but I'm quite skeptical.
I don't think there's any reason to believe that Nokia will sell a great many more Lumia 920 handsets than it has sold of earlier models this past year. The company should have pursued a dual path with Android and Windows Phones. Of course Microsoft wouldn't have permitted that and still been willing to turn over hundreds of millions of dollars to Nokia in support.
Nokia has lost in excess of 4 billion euros since it announced its partnership with Microsoft. And it doesn't appear that the hemorrhaging is over yet.
When Microsoft introduced its Surface line of tablet computers earlier this summer the burning question was: how much would they cost? While price isn't the only variable that will determine success or failure it's a big one.
Since that time several PC makers have started to announce their Windows 8 laptop lineups, with most machines coming in above $600. However today Microsoft inadvertently revealed the pricing of the devices. The screen in the Microsoft store has since come down. Below is a screen capture of the pricing page.
The basic RT model, which is Microsoft's direct iPad competitor, starts at $499 (32GB). If you want the "Touch Cover" keyboard, it goes up to $599 and then more for greater memory. The more fully equipped Windows 8 Pro models will cost more. But they essentially are the PCs of the future; a hybrid machine that will combine on-device and cloud storage.
The interesting question now that the RT's pricing has been revealed is whether consumers will consider it an iPad competitor or a laptop alternative. If it's the latter it will be in something of a different category and could do quite well. However if it's regarded and positioned as a direct iPad competitor it may suffer.
It's possible that "T-commerce" and "tabvertising" may over time become more important to brands than advertising on smartphones. Mindful of the growing number and importance of tablet devices ad network Mojiva today announced a dedicated tablet network:
The Mojiva ad network reached an estimated three million tablet devices in January 2011, grew to 25 million by January 2012, and reached 40 million tablet devices as of June 2012. The number of tablet ad requests per month on the Mojiva ad network was 119 million in January 2011, increased to 655 million as of January 2012, and reached an impressive 2.13 billion tablet ad requests per month as of August 2012 – a nearly 20-fold increase in 20 months.
Mojiva's new tablet network will give advertisers and agencies the opportunity to purchase prime inventory and display rich media ad units across highly valuable audience channels, which include luxury goods, entertainment, news, parenting, tech enthusiasts and sports enthusiasts.
The Mojiva announcement was being touted today as "the industry’s first tablet-only mobile advertising network." However that's not entirely accurate. Google introduced tablet-only targeting in July of last year.
Data aggregator eMmarketer has forecast that by the end of the year there will be 53 million tablets in the US. However this estimate is probably low. It will probably be closer to 60 million or more, especially with more lower-priced tablets, the forthcoming iPad Mini and a big holiday shopping season in store for tablets. (PCs probably won't be so lucky.)
Third quarter reports from several digital agencies and marketing firms (RKG, Covario, Kenshoo) show that the tablet ad spend is growing and that ad performance outpaces smartphones and rivals the PC. In the chart below, according to Covario, the tablet share of mobile ad spend has grown to 48% from 27% a year ago. That suggests it will exceed 50% by the end of the year.
Tablet Share of Mobile Ad Spend Has Grown
Source: Covario Q3 2012 Quarterly Global Paid Search Spend Analysis
Mobile devices generated 21% of paid search clicks in Q3. While the numbers vary from firm to firm, paid-click volume on PCs is still significantly greater than mobile devices. Accordingly there's quite a lot of growth ahead for paid clicks on mobile.
Source: Kenshoo Global Search Advertising Trends Q3 2012
Despite the fact that Internet traffic is still dominated by the PC, many data sources indicate that tablet CTRs are significantly higher than corresponding CTR rates on the PC. It's also harder to discount or dismiss tablet clicks as "unintended" the way that several firms are now doing with smartphones. Furthermore, RKG's Q3 digital advertising report shows that the revenue per click from ads on tablets is nearly as high as on the PC.
Mobile vs Desktop: CPCs & Click-Through Rate
Source: RKG Digital Marketing Report Q3 2012
While some data indicate that the cost per click of tablet ads may be approaching or even exceeding comparable ads on the desktop, most sources still show the cost of tablet ads being lower and a better value than ads on the PC.
Mobile vs. Desktop: Revenue per Click by Device
Source: RKG Digital Marketing Report Q3 2012
The emerging challenge with tablet advertising, of course, is the varying screen sizes that are starting to take hold in the category. This is especially true with the 7-inch form factor. An equivalent of responsive web design will need to be created for advertising to accommodate the range of screen sizes coming into the market: 4-inch, 5-inch, 7-inch and 10-inch.
Several data sources over the past week have indicated very high levels of enthusiasm for the iPhone 5 and the iPad "Classic," but not as much interest in the rumored (yet forthcoming) iPad Mini.
Financial services and investment firm Pacific Crest reports that its checks reveal continuing, high levels of demand for the iPhone, which is reportedly hurting Android sales. According to a report in Fortune:
[Pacific Crest's James] Faucette writes that he's seeing several Android-based vendors aggressively discounted previously "high-end" flagship-type products to mid- and low-tier pricing. "While the [Samsung] Galaxy SIII will continue to generate positive news flow as a viable iPhone competitor," he writes, "we continue to believe that as an ecosystem, Android's shipment levels likely peaked in the U.S. as far back as last October and are likely to see further declines in the future if the retention gap doesn't close."
Piper Jaffray found similarly high demand among US teens for the iPhone, as well as high ownership of iOS devices. Based on a survey of more than 7,000 teens the financial frim found 40% owned an iPhone, while 44% owned (or had access to) a tablet. Nearly three-quarters (72%) of those who owned a tablet had an iPad, according to the survey.
These teens were also interested in the iPad Mini, especially if it were to be priced at less than $300. Pricing an iPad Mini creates an interesting challenge for Apple because it's new iPod Touch is priced at $299 and above. Nexus 7 and Kindle Fire tablets are priced at $199; so Apple can't go much beyond $200 in pricing the Mini. However that would potentially cannibalize sales of the new iPod Touch.
In contrast to the Piper Jaffray survey, e-commerce site TechBargains.com conducted a survey of visitors to its site (n=1,332) in September and found only 18% of respondents were interested in an iPad Mini:
Among the 18% who were interested in buying an iPad Mini:
Pricing and features will ultimately determine how popular a smaller iPad tablet turns out to be.
It's no surprise that PC shipments are set to decline this year. While the enterprise market remains modestly healthy the consumer market for PCs is weak. And it's not just the economy; demand is fading.
We're in a "post PC" world now; consumers have many more device options to accomplish tasks that at one time could only be done on the PC. Indeed, MS Office is reportedly coming to iOS and Android devices. Office was the last barrier to totally giving up the PC for many people.
IHS iSuppli has projected a 1.2% shipment (not sales) decline from 2011. But unlike shipments that never translate into consumer sales, there can be no sales without shipments.
The company said that not since 2001 has the PC market contracted like this on a global basis:
The total PC market in 2012 is expected to contract by 1.2 percent to 348.7 million units, down from 352.8 million in 2011, as shown in the figure below. Not since 2001—more than a decade ago—has the worldwide PC industry suffered such a decline.
When you step back and look at the broader device market, you can see how much growth lies ahead for smartphones and tablets (and who knows what other connected devices) in the future. The PC will likely chug along in workmanlike fashion but its days of robust double-digit growth are over.
Source: ITU World Telecommunication/ICT Indicators database, Gartner, Morgan Stanley (2011-2012)
Digital marketing agency RKG has released a Q3 report (based on aggregated data from its client base). The report covers search optimization, paid search, social media, email, comparison shopping and mobile. I'll focus here only on the mobile data.
The firm said that tablets (mostly iPads) and smartphones combined to drive 21% of organic search traffic in the third quarter. RKG commented that "this was nearly double the level we saw in Q3 last year." Because of the iPad and iPhone, iOS dominates organic search traffic from non-PC devices. According to the RKG report, "iOS held a 77% share of mobile organic search in Q3, an increase from 75% in Q2."
Operating System Share of Organic Search
RKG also said that "revenue per click" (RPC) was almost the same on the iPad as it was on the PC, while smartphone RPC "languished at roughly a fifth that of desktop." Part of this is because only e-commerce events are being measured and captured. RKG and its clients aren't seeing the indirect impact of smartphones on conversions or purchases that happen later on PCs, tablets or in stores. Accordingly these data are somewhat skewed.
What's interesting to observe in a more "apples to apples" context, however, is the discrepancy between iPad owner-users and Android tablet owners: "the iPad generated an average RPC that was more than double that for Android tablets, including the Kindle Fire and Nexus 7."
Mobile vs. Desktop: RPC by Device
From a paid search marketing standpoint tablets and smartphones cost less and outperform PC (search) advertising. The discrepancy between costs and performance was greatest on smartphones. One reason why this may be so is that many marketers and platforms aren't necessarily valuing mobile correctly because of the conversion-tracking problem. Nonetheless it's a great opportunity for those that aggressively embrace it.
Mobile vs. Desktop: CPC vs. CTR
I've written about this before: the discrepancy between tablet shipment/sales and traffic figures. On the one hand you have the IDCs and Gartners of the world reporting tablet "shipments," showing iPad rivals gaining. On the other are the companies reporting the actual traffic they're seeing, which indicates the iPad still dominates all other tablets by a huge margin.
IDC's Q2 market share data (based on "shipments") argue the iPad has a 68% global share. That's up slightly from Q1.
However, earlier today, digital publishing platform Onswipe put out some data that show that the iPad's share of traffic generated was about 98%. This finding was based on analysis of almost 30 million impressions on 1200 sites earlier this month.
The iPad's nearest traffic competitor, according to Onswipe, is the Galaxy Tab with 1.53% of tablet traffic.
Ad network Chitika has previously published similar numbers. Earlier this summer Chitika found, based on millions of impressions on its ad network, that the iPad "accounted for 94.64% of all tablet-based traffic." The nearest competitor, again the Samsung Galaxy Tab, had "a lackluster market share of 1.22%."
So while Kindle Fire and other tablet devices (e.g., Samsung Galaxy Tab) have sold millions of units, for some reason these devices are not showing up in the traffic logs of publishers. That could well change in the coming quarter with better Kindle Fire devices and the success of the Nexus 7. But for now there appears to be a strange gap between device sales/shipments and traffic figures being generated by tablets.
If you want to see a case study in poor management at a major company look no farther than Hewlett Packard. Once an exemplar of high-quality corporate culture and employee satisfaction the company is a mess. The catalog of mistakes is long. Among them the purchase, fumbling and effective shuttering of the PalmOS.
Late last week current HP CEO Meg Whitman said that the company has to get into the smartphone business -- or more precisely back into it -- because that's where the growth is in the computing market.
If you recall, HP bought the PalmOS for $1.2 billion under former CEO Mark Hurd who was pushed out for falsifying expense reports among other ethics violations. Hurd had big plans for PalmOS but his ouster scuttled them.
When the acquisition was announced in April, 2010 I wrote the following:
It's a good outcome because HP needs to have a mobile strategy and it gives Palm and the WebOS a way to continue. Chief HP rival Dell is very clear on the critical role of mobile and portable Internet devices in its future and is rolling out numerous Android and WinMo handsets later this year.
Lenovo was also taking a look at Palm and will itself be moving more aggressively into mobile.
Given HP's financial clout and resources WebOS could emerge as a reasonably strong competitor -- perhaps most directly to RIM -- in the coming months and years, especially with new form factors. And that probably includes a WebOS-based tablet.
Obviously none of that happened. As a kind of salvage maneuver, HP decided to open-source WebOS but hasn't done a very good job of rolling that out.
Had the Palm assets been better managed HP might have a viable smartphone right now and/or be offering a open-source alternative to Android. But those outcomes would have taken vision and execution, neither of which HP seems to have.
It's quite unlikely that HP can make an Android phone that will effectively compete against Samsung and HTC. It might be able to make Android tablets but it won't be able to make them very profitably given the price competition now in the market. So while there's plenty of growth in mobile (smartphones, tablets) it's unlikely to be an area of strength or profit for HP.
Even though Nokia's Windows Phone 8 handsets and all the new Android devices feature NFC capability, its absence from the iPhone 5 deprives the technology "a mainstreaming opportunity" in the immediate future. Unlike any other company in the mobile industry Apple has the ability to popularize and educate consumers about new technologies.
A case-in-point is Siri. Speech recognition and "voice search" long-predated the iPhone 4S; however Siri was able to popularize them in ways that even Google and Microsoft could not. That would also have been true of near-field communications had the iPhone 5 incorporated it.
Apple's Passbook software/app is a mobile wallet, which will enable transactions (i.e., Starbucks stored value card). However it won't be a full-blown mobile wallet that stores a credit card an enables contactless payments. That could come with the iPhone 5S or "5N" (for NFC).
Obviously "the industry" will be moving forward with NFC rollout plans: Project Oscar in Europe, ISIS and Google Wallet in the US and so on. However consumers still need to be educated about the use cases and benefits of the technology. In some isolated situations they are or have been but for the most part -- certainly this is true in the US -- they remain ignorant of the technology itself let alone what it can do for them.
On the broader subject of mobile wallets and mobile payments (NFC is only one flavor) most US consumers have little or no interest today:
Source: Opus Research (August, 2012), n=1,501
In the US market at least there's a double challenge: sell consumers on the benefits of mobile payments, which Apple can and will help do with Passbook and other third party apps, and sell them specifically on contactless, NFC-enabled payments.
Much like President Obama's speech at the Democratic National Convention, the iPhone 5 announcement today "did what it had to do." It had to deliver a 4G capability as well as a larger screen. It did both, with a 4-inch display as opposed to the current 3.5-inch display.
In addition it offers a slightly longer battery life, a better camera and it's thinner. It also uses a new chip for better performance overall. It has enhanced audio and a smaller dock connector. It doesn't include NFC. While NFC wasn't widely expected it's still a major disappointment to the industry given Apple's ability to elevate new technologies and educate consumers about them.
The handset is the same width but taller than the iPhone 4S, which might make it aesthetically awkward. I haven't seen one in person yet. On a personal note, I would have liked to see hardware that was more of a departure from the 4S but I suppose that will have to wait.
The 3GS has been discontinued. The iPhone 4 now becomes free with a two-year carrier contract. The 4S drops to $99 and the 5 costs $199 for the entry level model (which is what most people buy). In the US it's available from Sprint, AT&T and Verizon.
This phone will probably sell well -- just how well remains to be seen. Pre-orders start on Friday with delivery on September 21.
As many of the pundits remarked after Obama's speech last week, it wasn't entirely inspiring but it "gets the job done." The same can be said for the iPhone 5.
If you're interested in more detailed coverage there's much much more, about every aspect of today's announcement, on Techmeme.
Apple's rivals have been trying to get out in front of the iPhone 5 and the announcement today. Nokia held its Lumia/Windows Phone 8 event last week. Motorola (Google) announced a number of new Android handsets and, of course, Amazon had its big Kindle Fire press conference last week as well. All of these anticipated the iPhone 5 announcement today and tried to preempt it to some degree.
Last night Google's Hugo Barra casually posted some stats on his Google+ page: "Today is a big day for Android... 500 million devices activated globally, and over 1.3 million added every single day."
Android is the dominant smartphone platform in the world -- in case you forgot. And Google wanted to get that stat out there and inserted into the blizzard of articles that will be published today about Apple and the iPhone: " . . . but Android is the market leader with 500 million devices activated globally."
The iPhone 5, as I said on my personal blog Screenwerk," is a critical release for Apple because Android phones have caught up or in some cases surpassed the device (i.e., LTE support, NFC). The new iPhone today must offer a larger screen and LTE support at a minimum to maintain consumer interest.
An unintended leak on the Apple site indicates that there will in fact be LTE support. We'll see what else in less than a half hour.