Mobile Platforms

Facebook's Remarkable Transformation into a Mobile Company

Yesterday Facebook reported Q4 and full-year earnings figures. The company strongly beat earnings estimates and reported revenues of $7.87 billion for the full year. Facebook said that Q4 2013 revenues were $2.34 billion, which was a nearly 80% increase from the previous year.

Mobile was 53% of total ad revenue for the fourth quarter of 2013, or $1.24 billion. That's roughly what the company earned in total ad revenue in Q4 of 2012. Facebook's revenue growth is accelerating as it emerges as a clear number two alternative advertising platform to Google. 

Facebook also reported: 

  • 1.23 billion monthly active users globally 
  • 757 million "daily active users" and 556 mobile daily active users
  • 945 million mobile monthly active users 
  • 296 million mobile only users 

What's striking is that the mobile and PC numbers are getting very close. Facebook has effectively transformed itself into a mobile (marketing) company, where most of its users are largely if not primarily interacting through the site's apps. 

Recently Facebook took steps to launch its long-awaited mobile ad network for apps. Assuming that Facebook goes "all in" it would become the second largest or potentially the largest mobile display network in the world. Four years ago we anticipated this

It also introduced Custom Audiences retargeting for mobile.  

In addition, Facebook is pursuing a new strategy: starting to launch a number of stand-alone mobile apps outside of its flagship Facebook app. Those include Instagram (which it acquired), Messenger and now mobile "news" app Paper. This approach will enable Facebook to potentially appeal to different market segments and use cases, as well as create new mobile ad inventory for the company. 

Facebook CEO Mark Zuckerberg also said on the Facebook earnings call yesterday that Graph Search would be coming to mobile "pretty soon." That promises to be very interesting and could have significant implications for local-mobile search. Indeed one could imagine a stand-alone local search app from Facebook (to rival Yelp, etc.). To date, its "Nearby" functionality has been buried and not really lived up to its promise. 

Survey: Half of Consumers Like Idea of in-Store Mobile Concierge App

Coinciding with the recent National Retail Federation conference, Cisco released the results of its annual Consulting Digital Shopping Behavior survey. The survey polled 1,174 US adults, "representative of the United States broadband population by age, income, and region." 

Cisco grouped its survey respondents into two categories: "Digital Mass" shoppers and "Uber Digitals." The Digital Mass category had a media age of 40 to 44 and were primarily PC-based shoppers (though they possess other devices). The Uber Digitals were younger (median age 30 to 34) and were more mobile and tablet oriented. They comprised 18% of the audience, while the Digital Mass was 80% of the respondent population.

Beyond age and device preferences, a key distinguishing factor between the groups was the use of mobile devices in stores by the Uber Digitals. This group, its attitudes and behaviors are leading indicators of where the entire market is headed. Beyond this there were a number of interesting and potentially important insights from the study: 

  • Consumers distrust retailers; a "clear majority of shoppers are willing to share only . . . 'transactional' information' (i.e., data created by a purchase in the store) with retailers"
  • Sharing personal information (demographics, preferences, Likes, etc.) would only happen on an opt-in basis. However Über Digitals (25%) and Digital Mass (13%) didn't want to share any personal information with retailers 
  • Most survey respondents wanted personalized offers but wanted them via email at home: "76% of of Digital Mass and 69% of Über Digital shoppers want to receive email at home. For the Digital Mass segment, only 15% want offers upon entering a store, and 6% want offers while moving in the store. For the Über Digital segment, only 26% want offers upon entering a store, and 13% want offers while moving in the store."
  • Shoppers wanted both peer and expert reviews on retailer websites. Reviews were clear influences on the decision to buy (sales associates ranked well below reviews) 

The research showed that some of the privacy and trust objections to retailers could be overcome with discounts and other incentives. Both categories of shoppers said (in nearly equal numbers -- roughly half) that "they would provide more personal information if a retailer guaranteed either a percentage or dollar savings on their next purchase."

Cisco also tested a number of shopping concepts with these respondents. Among them: 

  • Gamification of the shopping experience
  • Mobile in-store concierge app (with navigation)
  • Best personal price tracker app
  • Consultation/assistance via video
  • Automated or suggested shopping lists
  • Automated in-store pick-up

Among these the two that had the highest positive response were the 1) best personal price app and 2) in-store mobile concierge. In the latter case, here's what was presented by Cisco:

An opt-in smartphone application that greets customers as they enter the store, guides them to the items they want, and provides shoppers with interest- and location-based information and offers. With 42% of all respondents saying they would use Mobile Concierge frequently or always, it was the second most popular concept. Among Über Digitals, 66% selected this concept. The top segment was consumer electronics, at 47%. 

There are some potential contradictions in the findings but basically everything stated above and in the report can be boiled down into the following ideas: 

  • Consumers are wary of giving personal information to retailers absent transparency and incentives
  • They like the idea of getting personalized in-store information via an app but they don't want to be bombarded with notifications and offers 
  • Consumers want product reviews via retailer websites to help them make in-store buying decisions  

These survey findings underscore the complex and fairly nuanced road ahead for retailers, which will need to be very thoughtful about their rollouts of indoor location and policies around data collection. But the survey data also validate the role that mobile does play and could play in stores to boost sales and enhance the overall customer experience. 

Starbucks: 5M Mobile Payments Transactions Weekly

Last week Starbucks announced its quarterly earnings. Most interesting to us about the announcement and related conference call was the company's discussion of mobile and specifically mobile payments. 

CEO Howard Schultz said on the earnings call that, "together mobile and Starbucks card payments represent over 30% of total U.S. payment." He added that roughly 10 million customers are using the company's in-app payments capability. Schultz also reported that nearly "5 million mobile transactions [are] taking place in our stores each week." 

There are several things interesting about this. First the volume and scale are considerable. These are Starbuck's best customers generally speaking -- Schultz said that 50%+ of the mobile payments customers are "gold status" members -- but the convenience of mobile payments is also helping reinforce their loyalty to the chain.  

Unlike "horiztonal" mobile wallets (e.g., ISIS, Google Wallet) this is the kind of scenario driving mobile payments in the market today: a very specific use case with clear benefits to consumers. On the strength of these data and general recognition of the opportunity we'll see more and more QSR and similarly situated restaurant chains adopt an app-based mobile payments model this year. 

New Facts Argue Apple Payments May Be Closer than Thought

It appears the question is no longer whether Apple will break into mobile payments but when. A payments-related patent application recently surfaced that indicated Apple is quite serious -- at least over the long term -- about mobile payments. After all, it's a natural for the company. 

Yesterday the Wall Street Journal reported additional details that indicate Apple may be preparing to enter the market sooner rather than later. Here are some of the key facts from the story:

  • Eddy Cue, Apple's iTunes and App Store chief . . . has met with industry executives to discuss Apple's interest in handling payments for physical goods and services on its devices, according to people familiar with the situation.
  • Apple moved Jennifer Bailey, a longtime executive who was running its online stores, into a new role to build a payment business within the technology giant, three people with knowledge of the move said.

These moves don't guarantee Apple will enter the space but they're strongly suggestive of it. Apple has roughly 600 million consumer credit cards on file in iTunes. It also has a consumer trust advantage over other competitors in the segment. (Wall Street would celebrate an Apple move into payments.)

Apple's fingerprint sensor could become a key security feature of a Pay with iTunes/iWallet service. However there's considerable complexity still "on the back end" with real-world retailers and merchants and their POS systems. Retailers also have their own mobile payments initiative, which could create resistance to Apple just as carriers supporting ISIS have resisted or blocked Google Wallet. Those factors would probably limit the immediate availability of an Apple payments solution for goods at major retail stores, though not necessarily at places such as QSR and fast-casual restaurants. 

It would be technically easier for Apple to enter e-commerce and create a PayPal or Pay with Amazon competitor. Perhaps most likely, however, Apple could enable app developers to incorporate a Pay with iTunes capability, which would in turn enable payments for offline services (AirBnB, Uber, Dash, etc.). This is where "mobile payments" has traction today -- in specific apps or "vertical" contexts with a stored credit card. 

Apple's Passbook app would probably get merged into or incorporate any Apple payments program. I would also expect that iBeacon (BLE) would be tied in to an Apple payments solution (as with PayPay Beacon). All this potentially adds up to a very powerful set of related capabilities including location awareness/indoor location, couponing/loyalty and in-app payments (for e-commerce and offline services). 

An Apple payments service could also operate as a meaningful differentiator vs. Android handsets for both app developers and consumers. Google Wallet's offline payments capabilities have so far failed to catch on. 

I also wouldn't be surprised if Apple made one or more (high profile) acquisitions before launching payments to bolster technical capabilities. Google would probably be motivated to compete for some of the same acquisitions -- for its own sake and/or to keep them away from Apple.

In the near term, a comprehensive mobile payments solution will probably require a hybrid approach to offer merchants and consumers a couple of ways to accept mobile payments and to pay. And while mobile payments have yet to gain mainstream adoption, Apple is one of the few companies that could really accelerate the market.

Email Marketers Should Assume 75% of Opens Will Be on Mobile By Year End

Email marketing and "mobile marketing" are now effectively synonymous -- or should be treated that way. There's no trend that illustrates the decline of the PC perhaps better than the consumer shfit from reading email on PCs to mobile devices.

In Q4 roughly two-thirds of all US emails were opened on tablets or smartphones, according to Movable Ink’s Q4 2013 US Consumer Device Preference Report. That's up from 61% in Q3 and it will probably continue to grow (perhaps to 75% by year end). Although these are US data, the trend directionally applies to other developed markets.

 

Source: Movable Ink 

Here are some of the topline data coming out of the Movable Ink report:   

  • Mobile represented 65% of email opens and desktop accounted for 35% (down from 39% in Q3)
  • Roughly 16% of emails were opened on a tablet
  • Apple smartphones and tablets accounted for 50% of total email opens
  • Android smartphones and tablets represented 14% of all email opens (up from 10% in Q3)

Despite the steady climb in mobile email usage, far too many marketers still act as though their emails are being opened mostly on PCs. And even when HTML emails are formatted for mobile devices too often the landing pages and subsequent websites are not.

New Entrants in Indoor Location: Sensorberg and Datzing

The buzz around iBeacons continues this week with a couple new hardware and software technology vendors entering the market for indoor location.

Hardware startup Sensorberg, based in Berlin, Germany, has secured $1 million in funding from Technologie Holding GmbH and undisclosed angel investors. Sensorberg offers various packages to retailers that combine setting up Beacon sensors in stores to deliver mobile marketing campaigns and location features via software developer kits and management dashboards. The prices range from as low as $120 (€89) that includes 3 mini-beacons and an SDK to connect apps to an unlimited package that offers developer resources and enterprise support.

Founded in 2013, Sensorberg began as a startup in the Microsft Ventures Accelerator in Berlin and plans to use the new funding to further develop its platform and build an extensive iBeacon network.

Meanwhile, in Los Angeles, CA, Datzing is positioning itself as a new competitor to Apple's iBeacon with an Android platform for indoor location technology. Profiled this week at The Verge, Datzing is a software-based startup with patent-pending technology to turn a Bluetooth or Wi-Fi device into a beacon. Datzing doesn’t require purchasing any special hardware to set up an access point. The company plans to launch an Android beta app in March and doesn't rule out the possibility of an iOS option down the line.

While iBeacon is getting more than its fair share of press -- notably, a partnership between ShopKick and American Eagle (AE) Outfitters to outfit 100 U.S. stores with iBeacons and Apple's chain-wide deployment of iBeacons last year -- the push for in-store marketing and indoor location is still in its infancy. This year should present a good opportunity to see how the market plays out.

Pay with iTunes: Apple (Finally) Declares Intention to Enter Mobile Payments

For the past several years there's been speculation about whether and when Apple might throw its hat into the mobile payments ring. A new patent application (filed in Q3 2012 and discovered by Patently Apple) indicates that Apple is ready to move and introduce an iWallet. 

Here's the abstract, which indicates use of two or more technologies to enable the transaction:

A commercial transaction method is disclosed. The method first establishes a secure link over a first air interface by a purchasing device. This secure link is between the purchasing device and a point of sale device. The method further identifies a second air interface, which is different from the first air interface, and the second air interface is used to conduct a secure commercial transaction.

Multiple technologies are discussed, including Bluetooth Low Energy (behind iBeacons), near-field communications (NFC) and RFID The failure to incorporate NFC into the iPhone was regarded generally as a rejection of the technology by Apple in favor of others (e.g., BLE). However the patent application suggests that future iPhones (and iPads) would potentially be compatible with it.  

Apple's failure to build NFC into the iPhone is one reason it has stalled in the US. However, as the patent application suggests, NFC in the US may not be dead after all. We'll see.

The precise technologies and methodology described in the application are less important than the existence of the application itself. Mobile payments for offline services or goods are starting to happen but generally not in a "horizontal" context. They're happening today in very specific scenarios (e.g., Uber, Starbucks, parking apps, dining). Google Wallet and carrier-backed Isis, which are broad "horizontal" payments platforms, have largely failed. 

Given its installed base of users and credit cards on file Apple could potentially spark widespread adoption of payments by consumers. Apple has more than 600 million consumer credit cards registered. That's quite a bit more than even Amazon and more than PayPal as well.

The payments segment will consolidate in the next 12 to 24 months and there will be a number of additional acquisitions by the major players for technology or to remove competitors from the market. 

Ultimately mobile payments -- paying with smartphones for goods or services in the physical world -- will shake out as follows: mass-market/horizontal mobile wallets dominated by a few major players: potentially Apple, Amazon, PayPal, potentially Square and maybe Google. Banks are a wild card. 

Otherwise individual apps (including retailers) will offer to store consumer credit card information for faster checkout or frictionless offline payments. But the payments giants will also likely be options within these app/vertical contexts as well (e.g, PayPal, pay with Amazon, pay with iTunes). 

Location Analytics Provider Euclid Throws Down Gauntlet, Makes Product Free

Euclid is one of the better known indoor-analytics providers in a new but increasingly competitive and crowded segment. There are well over 150 companies involved directly or indirectly in "indoor location," most of which have some sort of analytics component.

While some companies are closely identified with a particular technology (e.g., Estimote with BLE), most companies can use or do use multiple technologies to gain access to indoor smartphone positioning. It's not unusual to find companies using at least two or three technologies such as WiFi + BLE. Euclid still relies on WiFi exclusively but will likely be expanding in the future to include BLE (assuming it continues to gain momentum). 

This is comparable to how outdoor positioning and mapping relies on GPS, cell tower and WiFi triangulation as a hybrid approach to compensate for the limitations of each technology.  

Today Euclid took a bold step by introducing a free indoor analytics product aimed at the mid-market (e.g., specialty retailers). It's called Euclid Express and it's mostly a self-service offering. Euclid co-founder Will Smith told me that during the beta period his company has enrolled more than 400 new customers. Competitors will undoubtedly see it as a "land grab." 

The product assumes an existing WiFi "infrastructure" in the store locations. If not Euclid will provide a low-cost WiFi set up.

The objective of Euclid Express is to remove friction and barriers to adoption -- including price. It offers a range of indoor analytics data, including:  

  • Average duration of shopper visits
  • Number of unique visitors
  • Daypart concentration of visits
  • Shopper recency and frequency

All this data is provided in real-time. 

Euclid's advanced product has more features and costs $100 per month per store location. The Euclid Express dashboard offers users the option to upgrade to the advanced product. Euclid's Smith also touts his company's privacy practices (anonymous, aggregate data) and argues that privacy is now a product differentiator for the company. 

Below is video from the Place Conference in October: Digital Analytics for the Real World. 

Study: Push Notifications Significantly Boost App Engagement, Retention

Push notifications and mobile marketing platform Urban Airship released data last week that shows how push messaging can boost engagement and app-user retention. The company, which provides notifications functionality for publishers and app developers, compared how opted-in push messaging users behaved vs. those who had not elected to receive notifications in six verticals.

Those verticals were: retail, media, entertainment, gambling, sports and games. The study covered 2,400 apps and more than 500 million push messages during a six month period. At a high level Urban Airship found:

  • Users who receive push notifications open apps more frequently and are much better retained
  • Push messaging drives higher average monthly app opens per user

The company also reported that on average just under half of app users opted-in to receive push notifications. Though this is logical and may be intuitive, this is the first time the impact of push notifications has been documented empirically to my knowledge. 

The engagement and retention differences among those who received notifications vs. app users who did not varied by industry. But in all cases engagement and retention were boosted, sometimes dramatically. 

It may be that those opting-in were more favorably inclined toward the publisher or app and thus were predisposed to be more engaged with the content. However I think it's beyond dispute that push notifications, if used judiciously and correctly, can boost app engagement.  

The problem is that most requests to allow notifications come immediately upon download and often before someone has had an opportunity to see the value of an app or of notifications. I routinely opt out because I fear they'll be abused by publishers and I don't want to be constantly interrupted. 

Publishers, retailers and marketers should do a better job of explaining the benefits of turning on push messages for the end and perhaps not request an opt-in immediately upon download. It would also be interesting to know, for the 50%+ who did not opt-in, what were their thoughts and rationales.

Facebook's Remarkable Mobile Growth Curve

The Wall Street Journal published an interesting overview piece on Facebook founder Mark Zuckerberg's evolution and maturation as a CEO. One of the most amazing aspects of Facebook's post-IPO growth and "turn around" has been mobile. In a little over a year the company has gone from less than $100 million to more than $800 million in mobile ad revenues.

"Taking Facebook public and reshaping it around mobile phones forced him [Zuckerberg] to grow up," assert unnamed sources in the article. The WSJ credits Zuckerberg individually with driving the transformation of Facebook's mobile business though an increasing focus on the bottom line. 

In Q2 2012 Facebook reported mobile ad revenue of roughly $69 million against overall ad revenue of more than $990 million. In Q3 2013 (the most recent quarter available), Facebook advertising revenue was $1.8 billion. Mobile delivered 49% of that amount or approximately $882 million.

Facebook said in Q3 it had 728 million daily active users and 1.19 billion monthly active users, up 18 percent. Monthly active mobile users totaled 874 million on a global basis and mobile daily active users came in at 507 million.

When Facebook reports Q4 2013 revenue it's certain that mobile will account for more than 50% of total ad revenue. Overall, in 2013, it's likely that Facebook will have made about $2 billion in mobile ad revenue globally. 

The 'Battle for the Connected Car' Begins in Earnest

For at least a decade analysts and car makers have been discussing, debating and forecasting telematics. Until this point, however, telematics has mostly been about in-dash navigation. More recently, with Microsoft Sync and similar inititives, we've seen a move to integrate speech and smartphone-like app experiences into in-dash "infotainment" systems.

Apple, Microsoft and now Google are trying to expand their reach into the "connected car." This year's CES has featured a number of auto-related announcements. Among them -- and arguably the most significant -- is the Google-led "Open Automotive Alliance" (OAA). With the OAA Google seeks to bring Android into the car in a deep way: 

The OAA is aimed at accelerating auto innovation with an approach that offers openness, customization and scale, key tenets that have already made Android a familiar part of millions of people's lives. This open development model and common platform will allow automakers to more easily bring cutting-edge technology to their drivers, and create new opportunities for developers to deliver powerful experiences for drivers and passengers in a safe and scalable way.

One can imagine that if the initiative expands and succeeds it will boost Android generally and become a new channel for Google services (i.e., Gmail, Google Maps, Music, Google Play) and advertising.

Early members of the OAA, which mirrors the earlier Google-led Open Handset Alliance, include Audi, GM, Hyundai and NVIDIA. Microsoft currently works with Ford and Toyota via its Sync system. And in 2012 Apple announced partnerships to bring Siri into the car with a number of car makers, including BMW, GM, Mercedes, Audi, Toyota and Honda, among a few others.

It's not clear to me from a technical standpoint whether auto OEMs can built multiple operating system compatibility into their vehicles or whether they'll have to bet on one. However there's much at stake in this "battle for the dash." 

The operating systems that "win the car" will see a boost all around. For example, if Android beats Apple and Microsoft in the car it will help Android more broadly in the market, or vice-versa. As in-dash systems become richer and more complete, people will want their devices and apps to be compatible and accessible in the car.

The "battle for the car" also mirrors the so-called "battle for the living room" among these tech titans. It's really a battle of operating systems and ecosystems across multiple platforms. 

Pizza Hut: Half of 'Online' Orders Now Come from Mobile

It's amazing to think that Pizza Hut has been doing online ordering for 20 years. That would mean Pizza Hut took its first online order in 1994 -- way ahead of the curve. And when it comes to mobile Pizza Hut again appears to be ahead of the market.

Today, according to Pizza-industry publication Pizza Marketplace, roughly 30% of all Pizza Hut orders come from the internet. But half of those are now coming from mobile devices, with momentum favoring mobile (smartphones + tablets) over the PC. 

The Pizza Marketplace interview is with Pizza Hut's Kevin Fish, senior e-commerce manager. He sums up the company's attitude toward mobile as follows: 

It's important that we're where our customers are and that our experience meets and exceeds their needs. The app offers us the opportunity for a highly engaging and personalized experience. Meeting our consumers at their point of need is become more and more important as technology continues to advance. Our opportunity now was to provide the best experience in the industry with enhancements that meet those consumer demands.

Pizza Hut is using its app to not only deliver services but to engage and cement the loyalty of its users. The company also uses location to deliver specific local promotions and offers that aren't necessarily available in all markets nationally.

I'm not a fan of Pizza Hut pizza but the company really has the right attitude toward multi-channel marketing and engagement -- with its mobile app (and all the personalization it allows) now at the center of its "online ordering" strategy. 

Amazon, eBay Dominate Retail App Usage

According to multiple sources roughly 80% of consumer smartphone time is spent in apps vs. the mobile web. However in the retail segment the story is almost the opposite. Most consumers engage with retailers through the mobile web vs. apps. That means loyalty and mobile engagement are more limited in the category. 

The exceptions are Amazon and eBay. According to early December data from comScore Amazon and eBay apps dominate the mobile retail category (Apple's #3 status almost doesn't count here because of its privileged position on the iPhone). 

The chart below shows leading retailers' audience reach and time spent by device categorty:

Selected Leading Retailers: Unique Visitors by Platform and Percent of Time Spent  - Browser vs. App

Early on Amazon and eBay invested very aggressively in mobile app development vs. traditional retailers and many other e-tail "pure plays." As a consequence consumers downloaded them "early" and have continued to be loyal to these apps.

What comScore doesn't discuss is that eBay and especially Amazon's apps are often used in retail stores to compare prices and for product reviews content. However, as the metrics firm points out, retailers without apps on consumer smartphones are at a competitive disadvantage.

While retail apps are used for buying sometimes, multi-channel retailers need to start thinking very differently about their apps and see them equally as in-store "assistants" rather than just extensions of PC websites. They will also need to expose and lobby consumers in multiple channels on the benefits of downloading their apps. Apps should be seen along with email as part of a broader, more holistic loyalty and engagement strategy. 

Amazon May Buy GoPago and Go into Mobile Payments

Mobile merchant sites can already offer "pay with Amazon" as an option beside PayPal or their own checkout flow. However Amazon may now be preparing a bigger push and more direct competition with PayPal, Square and others in the mobile payments arena.

The Wall Street Journal is reporting that "Amazon.com may be nearing a deal to buy payments startup GoPago." GoPago is a JP Morgan Chase backed payments startup aimed at the small business market. The company provides a range of payment services including a free "Square register"-like terminal and POS system

In the fairly noisy payments market I wouild speculate that GoPago has struggled to gain traction and its investors may be looking for an exit. By the same token it's natural for Amazon to embrace mobile payments more fully. 

Amazon has roughly 200 million consumer credit cards on file. While this is quite a bit less than Apple it's more than PayPal. And although I haven't seen any survey data on this question I suspect that Amazon has a more trusted consumer brand than PayPal. Thus Amazon is a logical candidate to enter mobile and smartphone-based payments directly and could be a major player in the segment.

In a move to bolster its own mobile and e-commerce position PayPal acquired Braintree for $800 million in September.

Apple is another very logical candidate for mobile and online payments given its massive database of consumer credit cards. Indeed Apple CEO Tim Cook keeps teasing this idea by repeating the number of consumer accounts and credit cards Apple has, now at or near 600 million.

If Apple were to power app-store payments and mobile transactions for third parties it could both remove friction from mobile commerce -- with Touch ID as the equivalent of Amazon's 1-click buying  -- and potentially add meaningful revenues to its bottom line. 

Update: PayPal acquires StackMob and gets more serious about being the mobile payments platform of choice for developers. 

Expect Labs' MindMeld App Showcases Dynamic 'Assistant' Technology

Startup Expect Labs has launched its MindMeld app after months of being in private beta. A crude but quick way to describe it is: Google Now meets Skype. Expect Labs, founded by Tim Tuttle, describes it as a "voice assistant." But that doesn't really do it justice. 

Many bloggers and tech sites are reviewing MindMeld. In a way that misses the bigger picture. The app is really a "technology showcase" or demo for something larger and more forward looking. Expect Labs, which charges $4 for the app, doesn't see MindMeld as a money maker and isn't staking its future on the success (or failure) of the app. 

First, here's what MindMeld does: it listens to your conversation, with one or several people, and in real time shows you pages and websites that are relevant to the discussion. The sites and data are coming from various APIs and the internet broadly. If you and your friends are talking about going to New York on vacation, for example, it will start showing hotels, restaurants and things to do based on the specifics of your conversation.

The key challenge here is filtering "signal" from "noise" and finding relevant pages and sites. Expect Labs' CEO Tim Tuttle says that the technology has significantly improved over time and the app has changed somewhat from its inception to its launch today. For example, it used to listen to the entire conversation. However now it will pause and users are required to initiate "searching" via an "OK MindMeld" wake up phrase. 

The underlying technology seeks to deliver a better search and discovery experience on devices where the keyboard isn't particularly useful or there's no keyboard. There are myriad inputs into "search results" (anticipatory search results): time of day, location and "context" broadly speaking. If you sign in with Facebook it also grabs other information about you as another relevance input. 

Expect Labs' technology, while imperfect, is really the fulfillment of the vision behind Google Now: real-time, useful information that dynamically changes based on context. MindMeld is the "1.0" expression of that vision. Speech recognition is from Nuance but the natural language understanding is Expect Labs' own technology. 

There are a number of enterprise use cases in development; and one can see this technology being incorporated into a wide range of general and vertical applications. Google Ventures is an investor, as is Intel. Those are two potential buyers of the company. 

The technology is impressive and the major practical question for Expect Labs will be where to focus and how to fully express what the technology can do in a commercial context. 

Surprise: Nokia Developed "Forked" Android Device, Will It Survive?

I've argued a number of times in the past that had Nokia from the beginning embraced Android it wouldn't have had to sell to Microsoft. It turns out that Nokia had/has developed an Android handset, apparently code-named Normandy. It uses a customized or "forked" version of Android much like what Amazon has done with Kindle devices, taking them out of the realm of Google standards and control. 

Reportedly it's a low-end device designed for emerging markets, where Nokia has had some success with its pseudo-smartphone Asha devices. Other details are scarce.

Microsoft bought Nokia's hardware business (for $7.2 billion) for multiple reasons. One of them was clearly defensive; it wasn't only about "bringing hardware and software together." 

Nokia sells most (80% or more) of the Windows Phones on the market today. The continuing strength of the Nokia brand in Europe is responsible for Windows Phone's roughly 10% market share there now. Had Nokia embraced or "diversified" its lineup with Android devices Microsoft might have felt the potentially negative sales impact as Nokia split its focus and marketing. 

The conventional wisdom is that Microsoft will kill the Normandy device when the acquisition formally closes -- it has been approved by regulators. Some are making the argument, however, that Microsoft might not immediately terminate the project because the version of Android being used is outside Google's control. 

That remains to be seen. Yet the existence of Normandy lends further credibility to the theory that Microsoft bought Nokia's phone business to prevent it from turning to Android.  

China Mobile Gets the iPhone, US Smartphone Growth and 'Nokisoft' Approved

Yesterday the Wall Street Journal reported that China Mobile and Apple had struck a long-anticipated deal to offer the iPhone to China Mobile's massive customer base (estimated by the publication at 7X Verizon Wireless). Neither company has confirmed the deal.

China Mobile is the largest carrier in the world's largest mobile and internet markets. The company has more than 750 million mobile subscribers. According to several estimates Apple has about 5% of the Chinese mobile market. Various flavors of Android are by far the dominant mobile platform in the country, with nearly 80% share. 

Many financial analysts think that the iPhone 5s and 5c are too expensive for China. However there appears to be a meaningful appetite for Apple's devices there. Apple's "greater China" revenue this past quarter was $6.8 billion. That number could easily double through the China Mobile deal -- if it's confirmed. 

October OS share

Back in the US comScore released September smartphone market share data. The firm estimated that 149.2 million American adults now own smartphones. Comscore's figures put smartphone penetration at or just under 64%, generally in agreement with Nielsen's estimates. 

Apple, Samsung and Motorola were the top three smartphone OEMs in the US. HTC and LG lost share and BlackBerry is out of the top five. Android is the top OS, gaining nearly half a point. Apple and Windows Phone also gained modestly. 

I was surprised not to see more of a bump for the iPhone given all the discussion of iPhone sales momentum. However it hasn't really materialized in comScore's data.

In the US Windows Phone share is 3.2%, growing but very small. By contrast, in Europe, Windows Phones now enjoy a 10% share across the EU5 (driven by UK, France and Italy) according to Kantar survey data.

Windows Phone's success in Europe is due almost entirely to Nokia and it's continued brand strength, which doesn't equally exist in North America. Nokia sells the overwhelming majority of Windows Phones globally, which is why Microsoft bought the company -- also to prevent it from starting to make Android handsets. 

That largely defensive acquisition has now been approved by US regulators, with European regulatory authorities likely to follow and permit the transaction. 

Steve Jobs Was Right: People Aren't Searching in Mobile Like on the PC

Roughly three years ago Steve Jobs opined that search wasn't as central to the mobile user experience as it is on the PC. That sentiment elicited dismissals as naive or self-serving and was generally disputed. This is what Jobs said verbatim:

On the desktop search is where it’s at; that’s where the money is. But on a mobile device search hasn’t happened. Search is not where it’s at, people are not searching on a mobile device like they do on the desktop.

It turns out that when you consider what he actually said, Jobs was exactly right.

Various surveys have found that search is widely used on smartphones. But it's not used as often or as centrally as on the PC. Indeed, search is a more occasional or peripheral experience on smartphones (especially the iPhone), whereas people search many times daily on the PC.

Most popular mobile apps

Earlier today Consumer Intelligence Research Partners (CIRP) released survey data about most frequently used mobile apps among US smartphone owners. The survey measured frequency not reach. This is very important to understand about the data. The firm asked mobile users to identify their "three most frequently used [mobile] apps."

CIRP found that Facebook was the leading and most frequently used mobile app. That was followed by Twitter, Candy Crush and Instagram. The surprise is how low Google Search and Google Maps rank on the list. 

Google Maps is #12 and Google (the search engine) is #10. We don't get an analysis of usage by platform (i.e., iOS vs. Android). However I suspect we'd see different rankings on the two platforms, with Google doing better among Android users given search's prominence on the Android OS. 

It's unclear how large the sample in this survey was and so we can't tell how reliable these data are. In addition these are self-reported data and not behavioral or traffic data. People often report one thing and do something else. 

Having said all that, these data strongly argue that what Jobs said is accurate: "People are not searching on a mobile device like they do on the desktop." Although this has been written about at length in the past, if accurate, this more modest mobile search frequency represents an obvious problem for Google as migration from PCs to tablets and smartphones continues. 

Mobile Devices Drove Nearly 40% of Online Traffic Black Friday Weekend

Consistent with pre-Thanksgiving weekend surveys, mobile devices (at home and in the store) played a big role on "Black Friday" and will continue to do so throughout the holiday season. Among others, IBM released a trove of US e-commerce and traffic data for Thanksgiving and Black Friday weekend shopping.

Here's a snapshot of some of the IBM data: 

  • Mobile devices drove more than 39% of online traffic (smartphones 24.9%, tablets 14.2%)
  • Mobile e-commerce was 21.8 percent of total US online sales on Black Friday (tablets: 14.4%, smartphones: 7.2%)
  • iOS devices generated 28.2% of mobile traffic; Android 11.4%
  • iOS was responsible for 18.1% of overall e-commerce sales vs. 3.5% for Android

Separately, e-commerce analytics provider Custora reported that "almost 40%" of online buying on Black Friday came through mobile devices. I'm quite skeptical about the accuracy of this figure; it seems inflated or drawn from too small a sample. IBM's mobile commerce figure is 22%, which is more plausible.

Below is the Custora breakdown of overall US Black Friday e-commerce sales by device category:

  • PC: 63%
  • Smartphones: 23%
  • Tablets: 14% 

While comScore has argued in the past that smartphones are outpacing tablets in terms of mobile commerce -- which makes logical sense because there are many more smartphones -- I'm doubtful of such claims. IBM's figures seem more (directionally) accurate: tablets: 14.4%, smartphones: 7.2%.

Custora said the following about the distribution of mobile commerce by platform:

  • iOS: 84%
  • Android: 16%
  • Other: 1%

We could look at a bunch of other reports and try to determine a consensus about how much e-commerce actually took place via smartphones and tablets. What's more important is the recognition that mobile devices are being widely used by US consumers for shopping and product research, and that serious "m-commerce" is now starting to happen (especially on tablets).

Another interesting fact from the IBM data: "on average, retailers sent 37% more push notifications . . . during the two day period over Thanksgiving Day and Black Friday when compared to daily averages over the past two months." The company also said that retail app installs grew by 23% compared with daily averages over the preceding months.

Apple Makes Incremental US Share Gains Against Android

Earlier this afternoon comScore reported its September US smartphone market share numbers. Nielsen has said that 64% of US adults now carry smartphones; however comScore asserts the number is 62%.

Android continues to be the dominant operating system, followed by the iPhone. However Android lost some ground this month though Samsung gained share. All the other Android OEMs are basically a diminishing sideshow to Samsung. 

 comscore Sept smartphone share

Microsoft also saw a small bump for Windows Phones. It has had considerable success in Europe because of the continuing strength of the Nokia brand but little success to date in the US market. Perhaps that will improve as BlackBerry users are forced to change platforms as they upgrade.   

The numbers above probably still do not reflect sales of the iPhone 5s and 5c, which went on sale on September 20 in the US. The October figures should better reflect the iPhone 5s/c impact on the market. 

comscore Sept smartphone share

Perhaps most interesting is the data about leading mobile apps and web properties. Overall Google has the greatest mobile reach, although Facebook continues to have the single most popular app. This is very analogous to the iPhone and Android, where Facebook is like the iPhone in this example.

Google Maps saw some unexpected loss of usage and reach vs. last month, dropping from the fifth most popular app to eighth position.  

. top mobile properties September 2013