The 'Speech Interface' Now a Must-Have on Phones (and Tablets)

Thu, 11/10/2011 - 01:11 by Greg Sterling

Earlier my colleague Dan Miller wrote up the news that Amazon had acquired speech provider Yap yesterday. So begins a ridiculous "Siri Killer" meme.

What's more interesting however is how Siri, less than a quarter out in its current form, is already reshaping the calculus of what features and capabilities mobile devices must have or offer their users. Call it the "speech interface."

Dan Miller, who is probably the foremost analyst-authority on voice and speech services, has much deeper knowledge of speech recognition and its related manifestations than I. However in my more limited experience I can tell you that Siri offers the best speech user-experience I've encountered to date. (Nuance provides the voice recognition for Siri.) 

As a long-time Android user I've had good experiences with Google's voice search and voice actions and I've had very frustrating ones. Siri (+Nuance) is better. And the way that Siri is integrated into the iPhone 4S (with more to come) is much more compelling than a voice overlay. Siri's "personality" matters as well. It's not only driving engagement and usage it has become a major differentiator and sales-driver for what was otherwise a less-than-compelling product release. 

Sure Android has "voice actions." But Apple has "Siri." You get the difference. 

Google and Microsoft already have considerable speech assets but both will need to "up their game" to compete more effectively. Accordingly we can expect more acquisitions in the voice segment as these companies (and others) create their own versions of the speech interface. This will eventually extend to TVs, cars and other "appliances."

I suspect "virtual assistant" Vlingo will be acquired, because it provides the "assistant" capability as well as speech recognition. (However litigation between Vlingo and Nuance operates as something of a cloud over any potential takeover.)

In a presentation I gave on a range of topics yesterday at the Local Social Summit in London I said Siri is to voice commands and “voice search” what the iPhone was to smartphones in 2007: a breakthrough experience that forces competitors to respond. I guess Amazon just did. 

Amazon, which doesn't have a smartphone, will clearly be integrating voice control and commands into Kindle Fire. Siri isn't yet available for the iPad but that's probably one of the new features that will be bundled into iPad 3. 

Does the Market Want Another Open OS to Compete with Android?

Mon, 11/07/2011 - 07:12 by Greg Sterling

I would argue that Android owes its success directly to the iPhone. Putting aside the claims that Android "stole" the iPhone's look and feel, carriers and hardware OEMs had no response to the iPhone in 2007 other than Android. Hence the carrier and OEM embrace of the Google OS. It was something of a marriage of convenience.

Despite the incredible success of Android, handset makers' relationships with the platform might be described as "ambivalent." They want to avoid becoming merely "commodity producers" of Android devices and reduced to the fate of their desktop brethren, which essentially became vendors of nearly indistinguishable "gray boxes" running PC Windows. Accordingly HTC, Samsung and Motorola have tried to develop, unsuccessfully I would argue, proprietary software on top of Android to differentiate from one another. 

While the new Windows Phone OS represents an alternative to Android, none of the hardware makers other than Nokia has enthusiastically embraced it. If it sells well for Nokia we might see that change. But there are those who also argue that Microsoft risks alienating other hardware OEMs with its Nokia favoritism. 

All this makes me wonder if the market wants yet another open-source OS as an alternative to Android. Reportedly Mozilla, maker of the Firefox browser, is working on a mobile operating system "based on the Web, as opposed to what the project’s wiki calls 'proprietary, single-vendor stacks.'” But this doesn't appear to be viable in the near term as an Android alternative.

What about WebOS? HP was going to kill it. But since the abrupt replacement of CEO Leo Apotheker with Meg Whitman many of his decisions are being reversed. The fate of WebOS is unclear right now and may be decided this year or early next. But what about making WebOS an open-source Android competitor? 

I'm not a developer or engineer but WebOS was and is positively regarded by the developer community; it has just been mismanaged and poorly marketed. But my view is that if HP were to turn it into an open-source mobile operating system there would be takers and it could gain new life. My suspicion is that makers would be interested in a high-quality alternative to Android to further diversify their handset lineups and give themselves some additional leverage vis-a-vis Google. 

WebOS's app ecosystem is paltry by comparison to iOS and Androids but that could be rectified over time. 

I think an open-source WebOS is intriguing; however HP doesn't have a direct way to benefit from it as Google benefits from Android with advertising. Whatever it decides about the fate of WebOS I hope HP doesn't kill it outright.

Samsung Might not Be Smartphone Leader for Long -- IDC

Fri, 11/04/2011 - 05:49 by Greg Sterling

With the caveat that these numbers are focused on "shipments" and not sales, IDC confirms other hardware-tracking firms' estimates showing that Samsung took the global smartphone crown from Apple in Q3. However, the firm said that the iPhone 4S should challenge the Korean company's newly established leadership position.

Samsung and Apple are engaged in an increasingly bitter, global legal dispute over patents, which has just become an EU anti-trust investigation as well. Amazingly, Samsung remains one of Apple's major suppliers. 

According to the IDC data, Taiwan-based HTC also experienced triple-digit growth on the strength of its Android device sales. 

In the chart above, Nokia is off nearly 40%. But this is "BW," before Windows Phones. The firm just released its first Microsoft-based phones, which have received positive but not spectacular reviews.

In the "others" category presumably is Windows Phones generally. In the US, Microsoft's mobile market share stands at either 7% or 5.7% percent according to Nielsen and comScore respectively. 

US Smartphone Share Over 50% for Younger Users, Half Have Apps

Thu, 11/03/2011 - 16:19 by Greg Sterling

Earlier this morning Nielsen released its latest smartphone data for the US market:

• 43% smartphone penetration overall
• Android: 43%
• iPhone: 28%
• RIM: 18%
• Windows: 7%
• Others: 4%

By comparison comScore says that 36% of mobile phone owners have smartphones. However the most recent comScore data show a comparable share distribution for Android and the iPhone (43.7% vs. 27.3%).

Nielsen also reported that smartphone ownership for those under 45 is much greater than the overall population: 54%. It goes even higher (62%) for those 25 to 34 years old.

The Pew Internet Project said in May of this year that 42% of US mobile users own smartphones. And in a release of new survey data yesterday, Pew found that 50% of all mobile phone users have downloaded apps (vs. 43% in May 2010). However, as we know, downloads and usage are not synonymous.

 

 

 

 

 

 

 

 

 

 

 

 

 

As the chart above indicates, 51% of mobile phone app downloaders use between 1 and 5 apps weekly. A substantial minority (31%) use 6 or more apps per week. Average weekly app usage is higher among tablet owners.

The following chart shows the general categories downloads by populatirty/penetration according to Pew. Curiously the most popular app download category, games, doesn't appear on this list. This is probably a flaw in Pew's survey question design. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finally, Pew says that just under half (46%) of all app downloaders have paid for apps at some point, with most spending less than $5.  

 

 

 

 

 

 

 

 

 

 

 

 

Samsung "Shipments" and $18 per Unit to MSFT

Fri, 10/28/2011 - 16:48 by Greg Sterling

It's becoming clear that "shipments" is a bogus metric that obscures whether products are actually selling to consumers. Accordingly it shouldn't be used to measure market share. Sales to consumer-end users is really the only valid market-share metric. Yet IDC, Strategy Analytics, Canalys and others persist in reporting "shipments." These numbers are easier to measure and capture than actual sales.

But OEMs can also manipulate the perception of market share by reporting "shipments." For example Samsung misrepresented their tablet sales by reporting "shipments." So did RIM. And Microsoft also did this early on with Windows Phone "shipments" to show momentum that had yet to really develop. And there are many other such examples. 

It fair to say that in many cases there is a positive correlation between shipments and sales for popular products. However as the examples above suggest it's not always true. Samsung claimed 1 million Galaxy Tab (7") shipped but popular reports put actual sales at well below 100,000 units. 

One of the big stories today is Samsung becoming the world's top smartphone vendor. That may well be true; Samsung has had enormous success with Android and it's the leading Android OEM in North America and now globally. According to numbers released by Strategy Analytics, Samsung shipped nearly 28 million handsets in Q3 vs. 17 million for the iPhone.

The only problem is that's an "apples to oranges" comparison. Apple actually sold 17+ million iPhones in the quarter (vs. shipped). Recently Strategy Analytics, using the same "shipped" methodology, incorrectly estimated tablet market share.

As tablet OEMs release their dismal numbers we're seeing just how off "shipments" can be as an indicator of true penetration. Accordingly hardware tracking firms should shift to a consumer-sales metric rather than the more manipulable and opaque "shipped" concept.

Having said all that I don't doubt that Samsung is selling millions of smartphones and may indeed have taken the top spot from Apple. We just don't know how many the company actually sold. 

Another piece of interesting information related to Samsung Android sales involves the amount of patent-licensing fees that may be changing hands. I was told (caveat: double hearsay) that Samsung is now paying Microsoft $18 per Android handset in IP licensing fees. This is in contrast to the widely reported $15 figure. Eighteen dollars is apparently the same amount that HTC pays, according to the same source, while other Android vendors are paying less.

I don't know if all this is accurate information, but I was surprised by the relatively high $18 per handset figure. This is pretty close to what I understand Microsoft charges for its own Windows Phone license. As a colleague of mine remarked, "this is the best business model I can imagine." And if we assume that about 85% of Samsung's smartphone "shipments" are Android handsets (that may be conservative) and Microsoft is getting $18 per unit that means the company would have made approximately $414 million in Q3 on Samsung Android handsets alone. Impressive. 

Nokia Makes 'Fashion Statement' with New Phones

Wed, 10/26/2011 - 08:23 by Greg Sterling

Probably the most notable thing about the new Nokia Windows Phones (Lumia 710, 800) is that they generally look different than the iPhone and the gazillion Android models in the market. Most of the phones are colorful and stand out accordingly. This follows in the footsteps of the mostly unreleased N9 handset.

The specs are unremarkable and the software and apps ecosystem are not different or compelling enough (at this point) to grab significant adoption or attention. But the overall package, combined with color and generally nice design of the Lumia handsets, will attract some users to these phones over the blander and more generic Android handsets. 

Nokia's new marketing campaign around these devices is "The Amazing Everyday." This is wrong. The campaign should focus on individuality, personality and customization -- how Nokia Lumia owners can stand out with their colorful handsets from a gray sea of other smartphone users. Nokia should emphasize the "sex appeal" of these devices. After all, handsets are fashion statements for many people. 

In terms of the outlook for these new phones, I would say they are very definitely not Android or iPhone "killers." They may sell relatively well in Europe and developing markets. But they're not even being released in North America until 2012. This is a strategic mistake. 

Price will be another factor in how successful they are. Nokia has fumbled on pricing in the past. If these phones show up in the US for more than $199 (subsidized) they won't sell at all. They won't sell unlocked in this market for $600 either. 

This is a good first step for Nokia and Microsoft but not one that is going to dramatically alter or transform the mobile fortunes of either company at this stage. 

Update: It appears that Nokia is doing some promotion around the idea of personalization and customization. This was part of an email I received today: 

Mobile Devices at the Ready for Holiday 2011

Tue, 10/25/2011 - 10:45 by Greg Sterling

According to a new survey of 8,585 US adults, released by the National Retail Federation, consumers plan bring the full authority of their mobile and tablet devices to bear on the challenge and opportunity of holiday shopping. More than anything else the survey data reflect the degree to which people have come to rely on these relatively new tools for shopping.

Smartphones -- Almost 53% of smartphone owner-respondents said they will use their phones in holiday shopping in some form:

• 31% will research products and/or compare prices
• 14.1% will purchase products
• 17.3% will redeem coupons on/with their phones
• 15.6% will use apps to research or purchase items
• 25% will use their smartphones to look up local retailers' information (address, hours, etc.)

Tablets -- Just over 70% of tablet owners said they will use their "pads" for shopping and buying:

• 50.8% will research products and/or compare prices
• 34.8% will actually make a purchase with their devices
• 21.5% will redeem coupons
• 33.8% will search for or lookup retailer information
• 21% will use apps to research items or buy products

Demographic data:

• Those 18-24 are most likely to use smartphones (72.2%) and tablets (86.4%) in shopping this year
• Smartphone owners: 17.6% of men and 10.8% of women plan to buy with the device
• Tablet owners: 38.5% of men 31.3% of women plan to buy with the device

It's a Four-Screen World Baby

Tue, 10/25/2011 - 05:59 by Greg Sterling

People speak of "three screens": TV, PC and mobile. We need to change that to four screens to acknowledge the growing importance of tablets. We already know that tablets (iPads) have the highest engagement metrics of any of the many screens and that the devices are much more significant for transactions -- "t-commerce" -- than smartphones.

Today the Pew Research Center's Project for Excellence in Journalism put out a report that shows tablet owners are huge news consumers, often to the detriment of other news mediums: PC, TV and print. They're also an older, more educated and more affluent bunch than other screen users. 

You can read the full report, but here are a few top-level bullets:

• Consuming news is roughly as popular as sending and receiving email and more popular than social networking, gaming, reading books or watching movies and videos
• 77% of all tablet users get news at least weekly and now spend "more time getting news than they did before they had their tablet."
• 33% of tablet news users say they are turning to new sources for news on their tablet, sources they had not turned to on other platforms such as television or their desktop computer
• 40% get news principally through a browser; 31% use both browser and apps; 21% get news mainly through apps. While news-app consumers are the minority they’re more engaged and more satisfied than browser-news consumers

The demographics of tablet ownership (right now) make them a way to target affluent and educated users more directly than on other screens. However all publishers and marketers will need both smartphone and tablet strategies going forward. Do you need an app or are you simply going to rely on your browser-based site?

Attribution and tracking become much more complicated as people bounce from real-world stimuli to PC to smartphone to tablet and back. 

Not counting Nooks and Kindles there are 46 million tablet devices globally in market: 6 million Android devices and 40 million iPads. In the US more than 95% of tablet traffic is from iPads. Millennial Media said that iPad impressions on its network grew 456% year over year.

By the end of Q4 or early Q1 there should be several million Kindle Fires in the market and as many as 55 million iPads. Other than the Kindle Fire, however, none of the other full-fledged Android tablets are currently in a position to capture much market share. 

Related: iPads Change Economics, and Speed, of Hotel Wi-Fi

 

Microsoft Getting Fees on 50% of Android Devices

Mon, 10/24/2011 - 04:46 by Greg Sterling

This week Nokia is set to reveal its first batch of Windows Phones. Unless they're remarkable it's unlikely that they will dramatically alter the positions of either Nokia or Microsoft. However Microsoft has built a powerful "insurance policy" on the back of Android's success: patent licensing. The company continues to line up licensing partners in the Android ecosystem.

Yesterday Microsoft announced yet another company had licensed its patent portfolio, Taiwan-based Compal. More significantly, Microsoft also said that with this deal "over half of all Android devices have now entered into patent license agreements with Microsoft."

Google has reported that 550,000 Android handsets are activated daily. If Microsoft makes an estimated $5 per handset from 53% of all Android devices now being activated would mean Redmond is poised to take in roughly $501 million from Android on an annualized basis. As Android sales increase that number will only go up. 

Nokia Q3 Beats Expectations, Nokisoft Phones Debut Next Week

Thu, 10/20/2011 - 06:23 by Greg Sterling

Nokia reported a Q3 loss of $94 million (68 million EUR) but that was better than financial analysts were anticipating. Shares jumped, accordingly, on the hope that Nokia's decline is now at an end. 

The company shipped 106 million handsets but only 17 million were smartphones. On a year over year basis, growth was off in most markets. In North America, Nokia's weakest, it shipped fewer than a million devices. However there modest growth in the Middle East and Africa and strong growth in India. 

 

Nokia has bet the farm on Windows. Reportedly the first of those handsets will be revealed next week in London, on October 26. The handsets will apparently come in three colors and physically resemble the N9. 

Expectations are extremely high for these new smartphones, both for Nokia and Microsoft. If they're going to do well, Europe is probably the market to watch. It's unlikely that the initial Nokisoft devices will perform well in North America however. 

Huzzah: Apple's 4M iPhone Weekend

Mon, 10/17/2011 - 05:44 by Greg Sterling

Coming in at the very high end of analyst estimates the iPhone 4S sold "more than four million" units over the course of its first weekend, including pre-orders. This was "more than double the iPhone 4 launch during its first three days." 

Other stats released by Apple: 

• More than 25 million customers are already using iOS 5
• More than 20 million customers have signed up for iCloud
• iPhone 4S is available in the US, Australia, Canada, France, Germany, Japan and the UK, and will be available in 22 more countries on October 28 and more than 70 countries by the end of the year

Many if not most tech bloggers and analysts (including me) were disappointed by the lack of a hardware redesign and the absence of 4G capability. (However I purchased one nonetheless.) Some people have attributed the massive sales in part to Steve Jobs' death with Apple die-hards buying the 4S as a kind of tribute to Jobs. Others see the Siri "assistant" feature as driving sales. 

However the sheer availability of the device -- on three of four major US carriers and in multiple countries simultaneously -- is also responsible for the quick uptake. Even though there are many improvements in the 4S over the iPhone 4, sales reflect pent-up demand for iPhones among non-iPhone owners, as well as upgrades from those with 3G and 3GS iPhones. 

What would also be interesting to know is how many $99 iPhone 4 devices were sold over the weekend (not included in the 4 million figure). 

During the iPhone 4S launch event Tim Cook reported 250 million iOS devices in market globally. Roughly 130 million of those are iPhones. Google's CEO Larry Page last week said that 190 million Android devices had been activated globally. 

Google Announces $2.5B in Mobile Ad Revenues

Fri, 10/14/2011 - 08:31 by Greg Sterling

Google announced a "blockbuster" quarter yesterday: revenues of $9.72 billion which was an increase of 33% vs a year ago. Google handily beat analyts' revenue expectations.

There was also a blockbuster of a statement around mobile advertising. Google CEO Larry Page said that mobile had grown from an annualized run rate of $1 billion to $2.5 billion.

Here are the mobile-related comments and discussion from the earnings call:

Google CEO Larry Page: 

I'm super pleased with Google Maps, it's a favorite with our users, especially on mobile devices. In August, we launched in 40 new countries, taking our total to 130 countries. The growth of Android is mind-boggling too. Over 190 million devices have now been activated globally. I'm super excited about the soon-to-be released new version of Android called Ice Cream Sandwich, that's right, Ice Cream Sandwich. You won't believe what we managed to get done in this release.

We're also seeing a huge positive revenue impact from Mobile, which has grown 2.5x in the last 12 months to a run rate of over $2.5 billion.

Nikesh Arora, Senior Vice President and Chief Business Officer:

Larry mentioned $2.5 billion as a run rate. Our revenue growth continues to accelerate even in Mobile, driven primarily by mobile search. This growth, obviously, is driven both by the underlying expansion of Android devices and of tablets, as well as stellar performance of our sales teams who are working closely with our customers to help them craft compelling mobile advertising solutions. Many advertisers have greatly increased the size and frequency of their mobile campaigns. Mobile is becoming a must-have. This includes clients like InterContinental Hotels Group, which spans pretty much across our entire portfolio of properties, including Mobile search, Mobile GDN and AdMob. 

To repeat the nuggets:

• 190 million Android activations globally
• $2.5 billion annualized mobile ad run rate, which is being driven by mobile search revenue growth (of which calls are a big part).  

Nuance Pays $100M for Swype, but Why Exactly?

Fri, 10/07/2011 - 06:50 by Greg Sterling

I'm not a big fan of the Swype keyboard but many people are. Yesterday Nuance agreed to acquire Swype for $102 million, $77 million of which is up front. The rest will apparently be paid 18 months later:

The aggregate consideration payable to the former shareholders of Swype consists of $102,500,000, of which $77,500,000 was paid at the closing and the remaining $25,000,000 (the “Contingent Consideration”) is payable on the eighteen month anniversary of the closing. 

Numerous people have now reported on the deal but almost no one has penetrated the rationale except to say, in effect, "Swype is popular." (Read my colleague Dan Miller's interesting and somewhat different take on the acquisition.)

When I first read about the deal on Mike Arrington's new blog Uncrunched I was puzzled. Why would Nuance be spending $102 million for technology it already owns. The Nuance Flex T9 Android keyboard does speech and Swype-like tracing, among other things. It's the most complete Android replacement keyboard in the market.

In fact Nuance often favorably compared itself to Swype, saying that it effectively out-swyped Swype itself. As mentioned Flex T9 does more than Swype; it's more flexible (hence the "flex" part). So why would Nuance buy Swype? There are a few potential reasons:

• Swype had a patent or patents that Nuance wanted or felt it would ultimately confront
• Swype has stronger mobile carrier relationships than Nuance 
• Swype has a stronger consumer brand than "Flex T9"
• Swype offers a more accelerated path to a wireless consumer business
• Nuance wanted the team behind Swype
• Some or all of the above

Stil it doesn't entirely add up for me. I'll be curious to get Nuance's perspective and see where they're going to try and take their keyboard business.

Flex T9 costs users $4.99; so maybe there's a revenue aspiration in the acquisition as well (bolster the offering). It's not clear whether that $4.99 pricing will be extended to the otherwise free Swype or whether Nuance will will rebrand the Flex T9 as Swype and make it all free. 

You can see Flex T9's Swype-like capabilities in the video below.

Steve Jobs Has Died (1955 - 2011)

Wed, 10/05/2011 - 16:07 by Greg Sterling

There was perhaps a decade of an embryonic mobile Internet access before the iPhone appeared in 2007. But it took the Apple device to mainstream and give birth to what we know today as the mobile Internet. It can be said with some confidence that no other individual is more directly responsible for the mobile industry as it looks today, including mobile advertising, than Steve Jobs.

Apple announced that he died this evening and issued to the following statement: 

iPhone Anticipation Builds to Fever Pitch

Tue, 10/04/2011 - 06:43 by Greg Sterling

At 1pm Eastern time we'll know how many of the iPhone 5 rumors are true. We'll learn whether Sprint has "bet the company" on the new iPhone and whether it's getting some form of exclusivity. (Extended exclusivity would be foolish for Apple.)

We'll know whether there are two devices or one and whether one of those is a different (larger) form factor than the iPhone 4. A larger screen is very much in demand, especially with Android devices now routinely exceeding 4 inches. 

We'll also hear more about the anticipated "Assistant," built on the earlier Siri acquisition. Some people have called it a "game changer" but that very much remains to be seen. Siri itself was novel and sometimes useful but not a "game changer."

We'll also discover whether the new iPhone (or iPhones plural) run on both CDMA and GSM networks. The new device(s) won't be 4G enabled, however, according to the WSJ. This is certainly a disappointment to many. 

Surveys have shown "unprecedented pent-up demand" for the next iPhone, leading some financial analysts to anticipate or predict that sales records to be "shattered." It will all be contingent on what Apple actually delivers. 

Although many others don't agree, I believe that the iPhone(s) being introduced today is/are critical for Apple, which now has a less-than-annual refresh cycle. If there's only a "4S" device or one that doesn't reflect obvious improvements it will fail to generate sales that live up to the outrageous expectations that have grown up around the launch. 

Android is now dominant in terms of sales and market share, though Net Applications data reflect that iOS dominates all other mobile operating systems combined in terms of Internet access. 

Regardless Apple's early multi-year commitment to AT&T exclusivity in the US was a strategic mistake, allowing Android OEMs to establish momentum with "good enough" copies of the iPhone. However now, larger Android screens, 4G capabilities and other features make Android handsets preferable for many people. And for this reason and others, a Sprint-exclusive iPhone 5 won't cause many (or any) to change carriers. 

Android phones are now strong enough that Apple's brand strength is not enough if the next iPhone doesn't "wow." The pressure is on the company and new CEO Tim Cook. There are only a couple more hours to wait. 

Apple Must Get iPhone Right or Android KOs It

Wed, 09/28/2011 - 10:12 by Greg Sterling

The stakes are incredibly high for next week's unveiling of the iPhone -- higher than most people realize. With Android now firmly in the sales lead and fast on its way to being the top mobile OS around the world, Apple has to get this next iPhone right or Android will leave it in the dust. If the iPhone unveiled next week is great, the device will regain some lost market share and momentum. 

I'm a great test case: I want to buy an "iPhone 5" but if the device is doesn't look any different and have a larger screen I won't. 

At various points in the "next-iPhone hype cycle" we've heard the following rumors about what's being introduced next week:

• Two iPhones, with one intended for prepaid and emerging markets
• A "4S" incremental improvement, with most changes being inside
• A redesigned iPhone with a larger screen and various other improvements (including a voice-guided "assistant")

We won't know what's true until next week. But a new survey from ad network InMobi confirms what I said above and previously argued: the next iPhone needs to be an obvious improvement (including cosmetically) over iPhone 4.

InMobi surveyed current mobile phone owners in the US, Mexico and Canada and found that a staggering 41% overall were intending to buy an iPhone 5. But far fewer were interested in an incremental iPhone 4S: 

Nearly 30% of Android users were interested in switching (I'm among them) and a remarkable 52% of RIM users. As I said, however, if the next device looks the same and is merely an incremental improvement sales will turn out to be considerably lower than what they might have been. 

In addition a similar looking iPhone 4S will send Apple's stock down because of fears that the company will no longer be able to compete against Android devices, which are "refreshing" much more quickly than Apple's annual cycle. I'm hopeful on a personal level that the new iPhone is not merely a minor change but offers a larger screen and new form factor overall.

Kindle Fire Won't Kill the iPad, but It May Kill Other Android Tablets

Wed, 09/28/2011 - 07:20 by Greg Sterling

This morning Amazon introduced a revamped line of E-Ink Kindles and lowered prices: Kindle Touch 3G for $149, Kindle Touch for $99 and a new, cheaper Kindle for $79. But the Kindle Fire, it's 7-inch color Android tablet was the star of the show.

It will retail for $199, which is probably break-even or a loss for Amazon. The company hopes to sell content and services to recover its costs and profit from device sales. And sell it will.

Most people will likely see it as an upgraded Kindle with benefits (apps, mobile web). Amazon's pricing strategy is not unlike giving away the printer to generate ink sales.

It will immediately become the most successful Android tablet. Yet it's an Android tablet without the Android brand or Google. Apps will come through Android's app store -- it's unclear whether the Android market will be available -- and content on the device will be dominated by Amazon's books, magazines and movies.

Here's how Amazon's pitching it to consumers:

• 18 million movies, TV shows, songs, magazines, and booksAmazon Appstore - thousands of popular apps and games
• Ultra-fast web browsing - Amazon Silk
• Free cloud storage for all your Amazon content
• Vibrant color touchscreen with extra-wide viewing angle
• Fast, powerful dual-core processor
• Amazon Prime members enjoy unlimited, instant streaming of over 10,000 popular movies and TV shows

The device was apparently built by the same company that built the RIM Playbook, which didn't sell. But the Amazon brand and software differences will propel the new Fire. 

Bloggers love hyperbole and "X-Killer" headlines. But this is no iPad Killer; it's a better Kindle and a cheaper Android tablet. However its low price and "good enough" value proposition may impact some people who were thinking about buying an iPad. Where all the Android tablets to date seemed like iPad imitators the strength of the Amazon brand and the Kindle legacy will avoid that fate for Kindle Fire.

Kindle Fire is a 7-inch tablet; however it impacts the ability of other tablet makers to sell their devices, regardless of size, for more than $300 at the very outside (maybe $250). In other words, post-Fire $499 Android tablets are DOA. 

Paradox: Android Sales Surging but iPhone Buyers Most Loyal

Tue, 09/27/2011 - 06:12 by Greg Sterling

All the data indicate that Android is increasingly taking over in the US market and globally. Recent Nielsen survey data argue that 43% of US mobile phone owners have smartphones now. As an aside figure is quite a bit higher than comScore's 35% number. Nielsen also (confusingly) says that 43% of smartphone owners are Android users (43% of 43%).

Significantly, however, a dominant majority of recent smartphone purchasers are choosing Android devices. The iPhone represents 28% of smartphones -- and an equal number of recent purchases.  

Data released last week by ad network Millennial Media showed that Android dominated the sources of ad impressions on the company's network: 54% were from Android handsets, while iOS impressions had a 28% share -- exactly in line with the Nielsen survey data above.

Smartphones and "connected devices" (everything else) accounted for 86% of ad impressions on the network; feature phones delivered 14% of ad impressions vs. 33% in August of last year. 

Despite the Android surge, the iPhone remained the top device on the Millennial chart. Herein lies something of a paradox: the iPhone bar far and away the favorite individual device. Yet, in the aggregate, Android is overwhelming it. 

A recent survey conducted on behalf of UBS (confirming earlier ChangeWave surveys) shows that the iPhone has the highest loyalty and retention rates of any smartphone. While current customers of other smartphone OEMs are far less loyal, with especially bad news for RIM and Nokia (charts via GigaOm).

The iPhone's "implied retention rate" from this relatively small survey of just over 500 smartphone users is 89%, down somewhat from a year ago but much greater than competing handsets.

On the cusp of iPhone 5's release, there's considerable speculation about the device's impact on the market. It appears that Sprint will finally get the iPhone in the US, although it's less certain to come to beleaguered T-Mobile. This will give the device a boost but probably won't do much to stop Android from continuing its climb to mobile OS dominance.