Mobile Platforms

Google Offers Free Mobile Sites to SMBs in Partnership with DudaMobile

Google announced this morning that it is offering free mobile websites to US small businesses for one year through its howtogomo.com portal. DudaMobile is the vendor providing the site building capability (DIY) and hosting.

After the year is up I would imagine that DudaMobile's pricing and rate card kick in. However its basic hosting is free already. So this must be a premium account that Google is offering. Accordingly it would likely cost business owners $9 per month to maintain their mobile sites on DudaMobile.

The company also offers a do-it-for-me service that costs $500 for the build/set-up fee and then $90 per year for hosting. 

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What's interesting here is that Google isn't doing this with its own mobile site builder, which by implication the company is admitting is inferior to the DudaMobile product. 

Survey: 8.5 Million US Teens Have iPhones

Fortune's Philip Elmer-DeWitt reports on the results of the latest teen survey by investment firm Piper Jaffray. The survey polled 5,600 American teens, evenly divided between genders. The average age was 16. 

The following are a couple of the questions and answers from the survey:

  • Do you own an iPhone: 34% yes (vs. 17% a year ago)
  • Do you own a "tablet computer": 34% yes (vs. 22% a year ago)  

While the sample is very large, the question is: how representative of all US teens is this survey?

There are somewhere between 25 and 30 million teenagers in the US, depending on how "teen" is defined, according to the US Census Bureau. Thirty four percent of 25 million would be 8.5 million teens with iPhones. That seems plausible. Another 8.5 million teens have tablets/iPads by the same extrapolation. 

According to comScore's most recent figures 13.5% of US mobile subscribers own iPhones (or roughly 14.04 million people out of a total smartphone population of 104 million). These data points are from different sources but the numbers suggest that more US teens than adults own iPhones. That doesn't seem correct.

What's not exposed is the degree to which teens aspire to ownership of any other type of smartphone. Also not discussed is whether the tablet 34% of teens claim to "own" is actually theirs or owned by a parent. It would be interesting to know whether there are multiple iPads/tablets in the house. 

But Why Do iPhone Owners Use WiFi More than Android Users?

Beyond its February US smartphone marketshare data, released earlier today, comScore also exposed some additional, interesting data about WiFi usage among Android and iPhone owners in the US and UK. In general iPhone owners are apparently much heavier users of WiFi than Android owners. And UK residents are also generally bigger consumers of WiFi than their US counterparts.

In the US the percentage of Android WiFi users is half as large (32% vs. 71%) as iPhone WiFi users. But why?

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As someone who owns both devices I can speculate about why this may be.

More Android handsets operate on 4G networks, whereas the iPhone is limited to slower 3G networks. The move to WiFi alleviates some of the frustration of being on slower networks for iPhone owners. Beyond this, on Sprint and Verizon in the US, iPhone owners can't access voice and data at the same time. Where WiFi is available they can. 

In addition, whenever a new WiFi network becomes available iPhone owners get a prominent, even disruptive, notification that takes over the screen. iPhone owners are thus much more likely to be aware of the presence of WiFi than Android owners. The process of connecting to WiFi is also faster and easier on my iPhone than it is on my HTC Android phone. 

Android at 50%: Is the Platform Surging or Stumbling?

There are two contradictory memes in the market about Android. One is that the platform is surging toward world domination; the competing narrative is that Android is losing adherents and is faltering.

ComScore boosted the first narrative today with a release (based on survey data) that shows Android crossing the 50% threshold in February. In other words, 50% of US smartphones now are Android handsets. 

Interestingly comScore's data show only 44% US smartphone penetration, while Nielsen shows 50%

In addition, Nielsen and financial analysts from Canaccord Genuity claim that the iPhone is "clawing its way back" among recent purchasers and closing the gap with Android. The Q1 2012 Appcelerator also appears to show mobile app developers losing some interest in Android. 

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These indicators suggest Android is losing some momentum, although the comScore data directly contradict that assertion. Regardless, it's clear that Android is on its way to replacing Nokia as the leading smartphone platform globally.

The comScore report also confirms the accelerating decline of RIM and shows that US consumers are not buying Windows Phones. We'll see what happens after the massive marketing campaign that's about to be unleashed by AT&T, Nokia and Microsoft. 

Mobile Search Engine Do@ Now 'Everything.me'

Last May Tel Aviv-based mobile app/search engine do@ (pronounced “do at”) launched with high expectations. The company raised $7 million against the promise of delivering a search experience to smartphones that was both more efficient and more elegant than Google.

Rather than indexing pages, do@ showed live sites that were optimized for mobile. Sites were initially ranked by default but users had the ability to re-order results. It was a radically different and smart approach to mobile search -- and one that might have been expected to work at some level. However nobody used it, reflecting the power of Google's brand and its prominence on both the iPhone and Android devices.

You can see a video of do@ in action here.

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Now the company has re-imagined do@ as a kind of mobile meta-search engine: Everything.me. You enter a query and can search "vertically" in any of the many different sites displayed on the screen. Logos replace Google's blue links. 

Because Everything.me gives you access to familiar, branded sites (and some that are less familiar) it has a better chance than do@ did. However, many people have smartphone apps for common mobile search categories: restaurants, travel, shopping/price comparisons. Then, of course, there's Google for "everything else." 

Accordingly I think the company is fighting the same battle it was before. And even though this relaunch is a clever adaptation of the company's underlying technology it will face the same challenges of adoption and usage. 

Nielsen: US Smartphone Ownership Now 50%

Although the Pew Internet Project was the first to report that at least 50% of US mobile phone owners had smartphones, Nielsen waited until today to make the same statement: "Almost half (49.7%) of U.S. mobile subscribers now own smartphones, as of February 2012." This compares with 36% a year ago. 

However if smartphone ownership is segmented by age and income, the numbers are much higher than 50% for some categories. 

SmartPhone_income-and-age

Nielsen says that Android's share of smartphones in February was 48% while Apple's was 32%. However among 90-day recent buyers, the numbers are much closer (48% vs. 43%), reflecting the popularity of the iPhone 4S and its availability from mulitple carriers. 

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All others, including RIM and Microsoft are under 20% collectively. However the trend is away from these platforms among recent buyers. Microsoft is hoping to reverse that with the expensive and high-profile launch of the Lumia 800 at AT&T next month. 

Report: Newsstand iPad Apps Generating $70K per Day in Revenue

In a new report on the iPad and related user behavior just released by app-store analytics provider Distimo finds that news publications and magazines on the iPad in the US are generating $70,000 daily (among the top 100 newsstand apps). The top five grossing US publications in order are Murdoch's The Daily, The New York Times, The New Yorker, National Geographic and Cosmopolitan. 

The report also says that China is now the largest market in the world for free iPad apps, but it's not among the top five countries for paid app revenues. Distimo reported that the top 200 paid apps globally are generating roughly $2 million per day in revenues. The top iPad app-revenue countries are US, UK, Canada and Australia.

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The iPad has far more tablet-specfic apps than any of its competitors. The company says that Samsung tablets have roughly 32,000 apps available for various screen sizes. According to Distimo:

However, only a small proportion of applications in Google Play are optimized for tablets. When we look at the Samsung Appstore . . . we see that roughly 32K Android applications are available in the device stores for tablets (Galaxy Tab 10.1, Galaxy Tab 7.0 and Galaxy Tab). The majority of applications are available for the Galaxy Tab and Galaxy Tab 10.1 only, but there are also a substantial 4K applications available for the Galaxy Tab 7.0, which has a different screen ratio. 

I'm quite surprised by the finding of 32K apps for Android tablets. In my roughly 9 months of 10-inch Galaxy Tab ownership I found almost zero apps for the device. This paucity of tablet-optimized apps is one of the reasons for the failure of Android tablets generally. It's the same catch-22 scenario I discussed yesterday regarding Windows Phones and the lack of apps: because most Android tablets haven't sold, developers so far aren't creating tablet-optimized apps for these devices (Kindle Fire may be an exception). 

Given the success of Kindle Fire and Nook it appears that Android tablets will mostly focus on the 7-inch form factor. And at that size smartphone apps are not as glaringly ill-formatted as they are on the 10-inch screen. 

Distimo also identified most popular iPad app categories (by downloads) in pink in the chart below:

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The gray bar on the right indicates the number of available apps in the category. Where the pink bar exceeds the gray bar, Distimo says there's high demand vs available supply and a corresponding developer opportunity.

The Real 'Windows Phone Challenge': Can a $99 Lumia 900 Generate Momentum for the Platform?

No more "early days" excuses will be possible if the Nokia (Windows Phone) Lumia 900 fails to deliver. The flagship Windows Phone will go on sale on April 8 from AT&T in the US for an aggressively discounted $99 (with a two-year contract). It will be the least expensive high-end smartphone on the market.

The price will help but it could still flop.

AT&T promises to support the launch with considerable marketing muscle. It's far from clear, however, that consumers will bite. Some no doubt will buy because of the $99 price. Aggressive pricing is key to Nokia's US market strategy.

The Lumia 710 has apparently done relatively well at T-Mobile (at either $49 or free). However, developer interest in Windows Phones remains muted. And without sufficient apps, Windows Phones simply won't be competitive. 

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Earlier this year I had predicted that Nokia-Windows Phone handsets would see modest but not spectacular uptake in the US market. If this launch is fumbled and fails to generate real momentum for Windows Phones it could be a serious blow to the outlook for the platform -- at least in the US market. 

As a promotion Microsoft has mounted a Pepsi-Challenge like contest, inviting iPhone and Android users to take the $1,000 Windows Phone challenge and supposedly discover that Windows Phones are faster. But the PR value of the effort has already been compromised by a blogger named Sahas Katta.

Katta used his Galaxy Nexus and beat the challenge in a Microsoft store but was denied the $1,000 prize by store officials. He blogged about it and that post has now seen widespread attention.

Mobile 'Showrooming': E-Commerce's Best Friend

Even though increasing numbers of consumers are starting to transact on smartphones, m-commerce hasn't taken off. Trust, security and credit card entry issues still need to be resolved for most e-commerce merchants (though not Amazon).

But there is another way in which smartphones are helping e-commerce -- so-called "showrooming." That's where consumers visit stores to examine and verify products and then order online (mostly from Amazon). This problem has been especially bad for stores like Best Buy but it's a problem that all traditional retailers are starting to grapple with. 

Recent survey data from ClickIQ (via Internet Retailer) confirms this pattern: 

29% of consumers who use a smartphone to research a product while in a retail store end up purchasing the item online, many from Amazon.com . . .

Of consumers who used a smartphone to research in-store and then purchase online, 55% were men and 45% were women, says the survey of 406 U.S. consumers who have researched a product while in a store and purchased that product.

Recently the Pew Internet Project issued similar findings about Q4 smartphone shopping behavior. 

Here's what the Pew survey data say about what happened after the smartphone/Internet was consulted by consumers in stores:

  • 37% decided to not purchase the product at all
  • 35% purchased the product at that store
  • 19% purchased the product online
  • 8% purchased the product at another store

What this means, effectively, is that 64% of in-store smartphone users decided not to buy on the spot -- probably because of some piece of information they accessed then and there (price, reviews, etc.).

The 19% who purchased the product online is 10 points lower than the ClickIQ findings. But both these surveys show that consumer behavior is being affected by access to the Internet in stores, with some meaningful percentage of people buying online after confirming the product is the one they want. 

There are a few things that retailers can do to combat this growing pattern:

  • Train employees and deliver much better customer service in stores (be much more dedicated to service overall)
  • Create or enhance loyalty programs that reward consumers for purchasing through that store (whether online or off)  

However it's foolish for retailers to try and prevent smartphone use in stores or rely on unique SKUs that prevent barcode-scanning based comparisons. 

Are Developers Suffering from 'Android Fatigue'?

The Q1 2012 Appcelerator developer survey is out and it contains some interesting findings. The data are based on a survey of 2,173 Appcelerator developers from January 25-27, 2012. 

Among the findings, HTML5 is being widely embraced: "79% of developers [are] saying they plan to integrate some HTML5 into their mobile apps that they build this year." In addition, a significant minority (39%) of developers "say the network effects of Google’s total assets (like Google+, search, Gmail, Android, Android Market, etc.) are more important to them than Facebook’s social graph." However developers in this survey demonstrate limited understanding of how to fully leverage social in their apps. 

In terms of platforms, iOS remained at the top of the developer interest graph (below). Windows Phone gained some mindshare since Q4 but, surprisingly, Android seems to have lost some mindshare among developers. This comes at a time when Android's OS market share on a global basis continues to gain. 

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Here's what Appcelerator had to say about what might be called "Android fatigue" (due to monetization challenges and platform fragmentation): 

This quarter, interest in Android phones dropped 4.7% points to 78.6%, and Android tablets dropped 2.2% points to 65.9% from the previous survey. Although close to or within the margins of error, these drops are consistent with the trend of small but steady erosion in Android interest over the last four quarters, even as enormous growth in Android unit shipments continues.

RIM is one of the big losers in the chart above, with developer interest all but falling off a cliff since last year. RIM will be forced to "double down" on the Android app ecosystem or be totally marginalized. But that's already happening in the US market. Elsewhere RIM has greater strength. 

Finally, most developer-respondents in this survey indicated that they had a reasonable but not great understanding of social and how to fully utilize it within their apps, and as a tool for app discovery and marketing. 

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Apple CEO: 'We Had a Record [iPad] Weekend'

On a conference call this morning discussing Apple's decision to issue a dividend and buy back $10 billion worth of shares, CEO Tim Cook said the following about iPad sales so far: “We had a record weekend and we’re thrilled with it.” He declined to discuss it further.

Some analysts and pundits over the weekend were arguing that sales were less than anticipated. However, according to AT&T (via CNN) the company said it saw record activations of the 4G iPad on its network: 

On Friday, March 16, AT&T set a new single-day record for its iPad sales and activations, demonstrating robust demand for the new iPad on the nation's largest 4G network, covering nearly 250 million people.

We won't know what pre-order and initial weekend sales were unless or until Apple puts out a press release. Given AT&T and Tim Cook's remarks, however, I suspect the company will do so. 

Update: And they did a little while ago. Apple said it had sold more than 3 million "new iPads" as of today: "Apple today announced it has sold three million of its incredible new iPad, since its launch on Friday, March 16."

JD Power: iPhone Wins Cust Sat Survey (Again), Nokia Near Bottom

JD Power and Associates yesterday put out its 2012 handset customer satisfaction survey findings, covering both smartphones and non-smartphones. The iPhone won the smartphone category (for the "seventh consecutive time"); LG and Sanyo were at the top of the non-smartphone handset category.

HTC was second in the smartphone category. Android market leader Samsung was third but "below industry average." 

JD Power used a range of criteria to measure satisfaction, which were slightly different in each category. For smartphones the weighted criteria were: performance (35%); ease of operation (24%); features (21%); and physical design (20%).

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The iPhone rankings are not a surprise. The much more interesting aspect of these survey results is the low score of Nokia. On both lists it was second from the bottom.

If this survey were conducted in Europe or developing markets Nokia might get higher marks. But the low scores in the US survey reflect the poor performance of its existing products and the weakness of its brand. That brand weakness is further diminished by the scores themselves.

It will be very challenging, even with its new Lumia Windows Phones, for Nokia to "climb out of the basement." Indeed, the existing weakness of Nokia in the US/North American market creates a "deficit" for Lumia devices as both Nokia and Microsoft seek to market them to North American consumers. 

Related: iPhone Grabs Camera Market From Sony

 

Despite iPad Lead, Forecast Shows Android Overtaking It in 2016

Today the iPad pre-orders arrive and the iPad becomes available in stores. Yesterday reviews of "The New iPad" come out and overall they're very positive. Based on the success of iPad pre-orders, financial analysts have boosted their estimates of iPad sales for 2012. Some are now saying that Apple may sell a combined total of 65 million iPads or more this year. 

One question is whether this lead will be so overwhelming that rivals will be shut out. So far the only successful Android tablet is the Kindle Fire and that success is largely based on its price. It's an inferior product, whose sales could be affected by the reduced price iPad2 ($399). 

Yet IDC has projected that the iPad will be overtaken by Android tablets in 2016. IDC estimated that Amazon sold 4.7 million tablets in Q4 of last year.

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The chart above reflects "shipments" and not actual sales. The logic behind this forecast showing Android overtaking the iPad is based on a simplistic analogy to the iPhone, and Android's growth over a period of years to a dominant market-share position. However, as several others have pointed out, the better analogy might be the iPod, which established a dominant market share and was never challenged.

In the US, Apple maintained an exclusive iPhone relationship with AT&T for three years after launch. That allowed Android to develop huge momentum. People were more inclined to buy an altenative smartphone than change carriers. The iPad has no such carrier constraints. 

There have so far been well over 100 Android tablets and all but the Kindle and Nook have fallen flat. It's unlikely there are any new tablets on the horizon that will have great success -- Google's rumored 7" inexpensive tablet could be an exception. As I've written before, Android tablet OEMs are "boxed in" on pricing by Kindle on the one end and the iPad on the other. The lower-priced iPad2 makes their lives even harder. 

The next test for the iPad will be the arrival of Windows 8 tablets, the first of which will probably show up for holiday shopping at the end of the year. But for at least three quarters the iPad will have little or no competition. That could enable Apple to sell 45 or 50 million more tablets. 

Paymentpalooza: PayPal's New Dongle and BOKU's New Bucks

Several years ago I met with someone working for PayPal and we talked about how the company could more deeply penetrate the small-business market. We talked about various ideas but everything seemed "hard." Cut to the arrival of Square; the solution is now obvious.

Square has blazed a trial that has been followed and copied by Intuit and now PayPal, with PayPal Here, a similar but triangular dongle that also fits into smartphones and iPads. In Q4 last year Square announced that it was processing $11 million in payments per day. 

How will PayPal's service differentiate from Square? PayPal Mobile VP David Marcus (who came via the Zong acquisition) explained in a blog post:

So, you’re asking, how is this different from other small business mobile payment solutions? The key differentiator is that it comes from PayPal, a trusted brand in the online payments industry with more than 100 million customers around the globe and years of proven payment innovation, driving growth for millions of businesses globally. PayPal Here comes with our world-class fraud management capabilities, and our 24×7 live customer support. In addition to accepting more payment methods, PayPal Here offers a simple flat rate of 2.7% for card swipes and PayPal payments. Merchants are also given a business debit card for quick access to their funds and 1% cash back on eligible purchases – which means if you use the debit card, your fees are actually just 1.7%!

In other words: 

  • The PayPal brand, merchant support and scale
  • Cheaper transaction fees (1.7% - 2.7%) 

Square's transaction fees currently stand at 2.75%. However I suspect Square will respond to PayPal's reduced rates.

Beyond the (somewhat smaller) transaction fees, if PayPal Here can deliver on its promises of security and customer support it could impact Square's growth opportunity. Yet Intuit has had a competitive solution for some time, and that hasn't really affected Square. More likely, PayPal's entry into the market will grow the overall payment-dongle market and affect banks and existing vendors that make money from merchant accounts and credit card processing. 

Separately, payments startup BOKU received another substantial infusion of capital to focus more on the offline market. Companies like Zong and BOKU initially focused on virtual goods and online transactions. However the real action is offline -- a market that is many times larger than e-commerce and virtual goods. 

The $35 million received by BOKU brings to roughly $75 million (per TechCrunch) the total funds raised to date. Spanish telco giant Telefonica is one of the investors in this latest round. 

In the SMB segment, the growing number of payments options and startups will likely create confusion. PayPal and Square (and maybe Intuit) are the companies that will be able to rise above that noise given their brands. While Square doesn't have the same brand equity as Intuit and probably PayPal, it does have more momentum than either in the SMB mobile payments segment. 

See related posts: 

Mobile Payments Tools Keep Launching, But Is the Public Ready?

Mobile payments companies, apps and trials are launching so quickly -- a new company appears seemingly every week -- that it's tough to keep track of them all. Despite all the activity most consumers are basically ignorant about the entire mobile wallet phenomenon. Among those that are aware, many are simply not interested; 53% to be precise, according to a mid-2011 Retrevo survey, with another group (26%) who don't know enough to respond yea or nay. 

Nonetheless there's a kind of land grab going on, as companies compete for commercial relationships, visibility and mindshare. There are basically three or four major categories of players: the carriers, the credit card issuers, the major independents (Google, Apple, eBay) and the startups. In almost every case the wallet or payments app/tool/platform backs onto a credit card account. 

There's also a good deal of spin in the space. For example, LevelUp (the successor brand of check-in service SCVNGR) recently claimed to be "the nation's second largest mobile payment network (behind Starbucks) with 100,000 users across 8 U.S. cities." But that ignores Square, which is the true breakout company in mobile payments. 

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Source: Retrevo (Q4 2011)

Ultimately mobile payments will be relatively mainstream (probably in 5-7 years). But in the interim consumers and merchants must do the work of adopting a solution before that can happen. The motivation is there on the merchant side; less so for consumers.

Major retailers, grocers and brands will adopt mobile payments for the data, efficiency and potential loyalty and marketing opportunities. Smaller merchants will only adopt mobile payments if there's greater convenience, simplicity and/or reduced costs, which is starting to happen.

For consumers usability, trust and security are major issues. There have been several surveys indicating consumers have many concerns about mobile payments and don't necessarily see the benefits. (Time savings, convenience are benefits but people haven't yet experienced them.)

Ironically the users most concerned about mobile payments are some of the most sophisticated ones. That's according to a recent US consumer survey from Radius Global Market Research (2012, sample size not disclosed):

Interestingly, the segment most likely to make purchases via smartphone, consumers under 35 and those identifying as digitally savvy, are also the most likely to be concerned with security and fraud issues. Fifty-four percent of consumers under the age of 35 are concerned with fraud. That figure rises to 62% among digitally savvy consumers.

Again: 62% of "digitally savvy consumers" are concerned about security with mobile payments. By comparison the survey found that "only 14% say security and fraud don’t influence their future likelihood to make those purchases."

Another 2012 consumer survey from Market Strategies International (n=2,000) found that consumers considered their own banks the most trustworthy to deliver mobile payments solutions: 

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The fact that PayPal ranked higher than Amex and Mastercard surprised me here. I had previously argued that the PayPal brand would stand in the way of an otherwise compelling vision for mobile payments. Perhaps I'm wrong and consumers' simple familiarity with the PayPal brand provides the company with a major boost over no-name competitors and even credit cards.

Regardless of the provider, consumers will need to be provided with "zero liability" assurances to use mobile payments. In addition, any solution adopted by large numbers of people will need to be simple and generally ubiquitous. We're still a long way away from that. 

 

Awaiting the iPad3 and Preparing for When PCs Are 'Just the Work Computer'

Next Wednesday Apple will reveal the iPad3 (and potentially a new Apple TV), with an improved display and Siri among other features. Mobile ad network InMobi released consumer survey data last week finding that 29% of respondents were intent on buying the new iPad, with half of those reporting they don't currently own a tablet. Many people (44% of those intending to buy one) also said they wouldn't consider another brand.

Whether or not these survey findings turn out to be accurate they reflect the momentum and mindshare of the Apple tablet, which has sold nearly 60 million units on a global basis. However, when the first iPad was introduced in Q1 2010 it was met with considerable skepticism and predictions of failure. It was seen as an "unnecessary" product, delivering a "watered-down" Internet experience; it was also "too expensive" and "wouldn't fit in your pocket." 

A year later Dell also predicted that the iPad wouldn't succeed in the enterprise. However in Q3 2011 Apple reported that 93% of the Fortune 500 were testing or deploying the iPad. By comparison Dell recently announced that it's exiting the consumer PC business. This juxtaposition is essentially a metaphor for state the PC industry as a whole. 

Increasingly, instead of buying a second computer or laptop, US (and non-US) households will choose tablets. While there's still growth in the enterprise PC market the consumer PC market is flat-to-declining. Many analysts expect Apple to sell 50-60 million iPads this year. When iPads are considered "PCs" (which they are not), Apple becomes the largest "PC" vendor surpassing HP.  

Mobile display advertising outperforms PC display according to considerable research from InsightExpress and Dynamic Logic. Beyond this, ads on the iPad and other tablets further outperform conventional mobile dislay advertising. Engagement with tablets is higher than PCs and consumers have shown a willingness to buy things through tablets in far greater numbers than they have on smartphones. There's also mounting evidence that people are spending more time with mobile devices and tablets than on the PC Internet and even with TV (in some geographies), according to recent data from Flurry and InMobi.

The totality of all this data leads to the inevitable conclusion that PCs will be outnumbered by smartphones and tablets within a year or two. PCs and the PC-Internet experience will merely be one form of Internet access and not the primary way people access the Internet (except at work). We truly are in a "post-PC" era. (That was a Steve Jobs marketing slogan that is becoming factually true.) Microsoft hopes to change the trend with the introduction of Windows 8 of course. But Windows 8 will also work on tablets. Moreover its consumer success, however, is far from certain. 

Publishers and advertisers that fail to recognize these trends and act on them in the near term will be at a significant disadvantage. (Flash should be abandoned right now, for example.) Indeed, publishers and advertisers should shift the bulk of their attention and development resources away from the "PC Internet" and toward smartphones and tablet-optimized sites. Mobile and tablet site design should guide PC website design (as recently happened with the redesign of Kayak.) This is especially true for certain categories such as retail and travel.

The notion that mobile is just an extension of the PC-centric Web, which still prevails in many companies, is completely misguided.

Tablets Become a Key Local Search Platform

We've known for several years how important and influential smartphones are in finding local business information, especially "on the go." However the latest Local Search User Study from Localeze, 15 Miles and comScore documents, among other things, the increasing role of tablets in the process of finding offline information.

Consistent with other consumer data in the market, the survey of 4,000 US adults found that the top reason for conducting a local business lookup on a mobile device/smartphone is the immediate need for information. Interestingly, the survey discovered that nearly half (49%) of smartphone and tablet owners were using apps for local business searches (e.g., Yelp, Urbanspoon, YP.com) vs browser-based search (e.g., Google).  

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The Local Search Study also found that while tablets were used "throughout the [local search] process," usage was concentrated in the early and middle stages (research + consideration) of the purchase process. This might be expected because of the analogy to PC usage. However comScore found that among the three groups (PC, smartphone, tablet users) tablet owners are the most engaged and active: "most tablet users conduct local business searches at least once a week . . . more frequently than PC/Laptop users and mobile phone users." 

Another interesting finding: tablet owners had increased their usage of the devices over the past year. That wasn't equally true of smartphone owners. Part of the higher levels of tablet engagement can be attributed to the fact that tablets are more "immediate" than PCs but offer a larger display for "more complete information" -- as the graphic above reflects. 

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Consistent with this heightened engagement the study found that tablet owners were more likely to make purchases after local search activity (which in this case largely mean offline transactions) and spend more money on average.

IAB Reveals New Mobile Ad Formats, Bumps into MMA Ad Standards

A couple of weeks ago the MMA annouced 6 standardized mobile ad formats intended to reduce friction around mobile ad creation and media buying. The formats were directed toward smartphones and tablets alike. They didn't address the SMS/MMS market or rich media. 

These MMA ad unit standards were the by-product of widespread industry input and comment. Below are the "final," recommended formats: 

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I asked when these units were announced whether it was premature to try and standardize ad formats for mobile. Ironically, today, competing trade organization the IAB released its own preliminary mobile ad unit standards. Guess what: they're not identical to those generated by the MMA -- though I have not sought to carefully identify areas of conflict and overlap. 

Below is the IAB mobile ad units list, which will be subject to comment and then presumably "codified" among in the IAB Standard Advertising Unit Portfolio.  

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What we have now are like House and Senate versions of the same bill, which need to be reconciled in a conference committee. That is, unless the IAB is making a powerplay and ignoring the MMA's previously announced standards. 

The two competing sets of standards will be self-defeating as "standards" unless the two trade groups come together and hammer out their differences. Current MMA CEO Greg Stuart was the previous head of the IAB. 

Mobile Payments News: ISIS, InMobi-Opera and PayPal Carrier Payment Network

ISIS, the as-yet-unlaunched US mobile payments inititative from T-Mobile, AT&T and Verizon has added new partners to its stable of credit card issuers and banks (BarclayCard, Capital One, and Chase), according to CNET. ISIS has been described as "Hulu for mobile payments."

I have been openly skeptical of the carriers' ability to mount a successful mobile payments intiatitive. But ISIS may turn out to be the tortise to Google Wallet's hare. The latter has been met with carrier resistence (which may be anticompetitive), security problems and limited consumer availability.

Google has been ahead of the market somewhat. But there are now also rumors that Google is internally disappointed with its Wallet initaitive and may be putting less effort into it. If so, it would be premature to "give up" on Google Wallet. 

In two related mobile payents developments, PayPal (through its Zong acquisition) is launching what it calls PayPal Carrier Payment Network; and InMobi and Opera have joined for digital goods payments. The PayPal effort is designed to build on top of the Zong-carrier infrastructure (eBay acquired Zong last year) and expand carrier billing to encompass more types of transactions and larger dollar amounts:

Historically, carrier payment has been utilized primarily by online game developers and publishers to provide a fast and easy way for users to purchase goods directly in-app or in-game. While convenient for consumers, this method of payment has inherent challenges for other digital goods merchants – such as digital books, music, dating and content – to adopt as a primary payment method. Among the challenges is the cost of doing business – sometimes upwards of 40 percent – since transactions are processed through the carrier, merchants must share part of their revenue.

Similary InMobi and Opera announced that the latter will integrate InMobi's payments platform to enable virtual goods payments and purchases through Opera:

InMobi SmartPay will enable Opera users to pay seamlessly for digital goods in key markets around the globe, when they make purchases with some of the leading publishers that partner with InMobi. The two companies are committed to providing choice to consumers, mobile content developers and app developers, by building viable third-party monetization solutions in the mobile browsing and computing space.

Most US consumers have no experience with mobile payments and still need be educated about their benefits. However, large numbers of smartphone owners will eventually adopt mobile payments over time. Four tenents of success will be: simplicity, ubiquity, rewards and security.

The convenience of not having to sign credit card slips will be a welcome imrovement in the retail and restaurant worlds. The abandonment of signature requirements for transactions under $25 in many places has created demand and some experience with a simplified transaction experience. Merchants have incentives to adopt mobile payments as well for greater efficiency at the point of sale and, if don't correctly, greater security too. 

Almost all of these mobile payments systems and platforms back onto a credit card. However, it's still early to pick winners and losers. As I indicate above, Google could wind up a loser and ISIS a winner -- though that's a bit counter-intuitive (given the challenges carriers face in execution generally). There are still others (e.g., Apple) that could enter the race at any point.

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MWC: Mozilla's B2G Platform Emerges As 'More Open' Alternative to Android

Today the smartphone world is essentially divided up between Apple and Google, much like Spain and Portugal divided up the known world in 15th century Europe. Right now, it's not clear whether Nokia-Microsoft will become a viable third platform. Palm's WebOS, though it has been open-sourced, is effectively dead and one could convincingly argue that Blackberry is dying as an OS.

Now Mozilla has emerged to challenge Apple but more specifically Android, with a new "truly open" mobile platform: Boot to Gecko (B2G). In many ways not unlike Google's browser-based ChromeOS for PCs, it was formally announced in Barcelona at Mobile World Congress. Deutsche Telekom and Telefonica are on board:

This week Mozilla is previewing open Web apps and Mozilla Marketplace, enabling the creation and distribution of apps powered by open Web standards like HTML5, CSS and JavasScript. We are also previewing Persona, the first identity system truly of the Web, including Browser ID. Each offering represents the latest tools available to developers and users to take control of their online lives.

Since the beginning, it has been our mission as an organization to develop and bring about a completely open and standards-based Web as a platform for innovation. Mozilla’s latest innovations are being proposed to the W3C for standardization, helping us move the needle to advance the Web and make it a more people-centric experience for all.

There are lots of questions about whether Mozilla can make this a viable platform; however the support of two global carriers lends immediate credibility to the initiative. It also shows that there's an appetite for alternatives to Android, which was itself initially embraced as an alternative to the iPhone. 

Now Android is on its way to becoming the dominant smartphone platform. It was quickly embraced by carriers and handset OEMs who had no immediate response to the iPhone when it launched. Android became the de facto alternative, driving huge penetration and adoption. Now that Android is the dominant smartphone platform, demand is emerging for alternatives. 

B2G is one potential alternative, especially for lower-end handsets. There are, however, many questions about whether Mozilla will be able to make B2G a viable, alternate smartphone platform. Microsoft sees Windows Phone as the true third alternative; however there's evidence of only modest Windows Phone success thus far (including the Nokia handsets). 

While there's enormous momentum around iOS and Android the smartphone race is far from over and, especially at the lower end of the market, B2G could become an attractive alternative to Android.