Mobile Platforms

Report: Windows Phone Continues to Gain Share in Europe

Kantar Worldpanel ComTech has released new smartphone market share data showing significant gains for Windows Phone in Europe. The research firm says that Windows Phone is now within a point of the iPhone in Germany and that its growth is outpacing Android across the Continent: 

Android remains the top operating system across Europe with a 70.1% market share, but its dominant position is increasingly threatened as growth trails behind both Windows and iOS. Windows Phone has hit double digit sales share figures in France and Great Britain with 10.8% and 12% respectively – the first time it has recorded double digits in two major markets.

Kantar also says that Apple is continuing to show momentum in the US: "Apple continues to grow strongly year on year and now makes up 39.3% of sales." These data do not include the recent 9 million handsets sold by Apple upon the debut of the iPhone 5s and 5c.

Windows Phone's strongest markets are France, UK, Germany and Italy, where Nokia's brand is still relatively strong. It continues to lag in the US and China, however. 

  

Apple Now Top Global Brand, Followed by Google

Technology and internet companies have supplanted traditional brands at the top of Interbrand's annual "Top 100 Global Brands" list. Apple and Google are number 1 and 2 on the list respectively, beating out perennial winner Coke and others such as IBM, Disney, Microsoft and GE.

Notwitstanding its beating at the hands of investors and doubts about its future performance, Apple was picked by Interbrand as the world's "most valuable brand" for 2013. Google was last year's number 4. 

Facebook is number 52 on the list and Amazon comes in at number 19. Yahoo and BlackBerry dropped off the list entirely this year and Nokia "experienced the largest decline in brand value" in the 13 year history of the report. The top 15 on the list are below. 

Interbrand determines its annual ranking using a formula that combines:

  • The financial performance of the branded products or service
  • The role the brand plays in influencing consumer choice
  • The strength the brand has to command a premium price, or secure earnings for the company

Apple's rise to become the world's most valuable brand is striking. Interbrand says the Apple brand is currently worth $98 billion, which is considerable but much less than the company's overall market cap of $435 billion. According to Interbrand:

Apple has appeared on Interbrand’s Best Global Brands ranking since 2000, when the ranking debuted. In 2000, Apple ranked #36 and had a brand value of USD $6.6 billion. Today, Apple’s brand value is USD $98.3 billion– almost 15 times the amount of its brand value in 2000. Apple’s meteoric rise in brand value can be attributed to the way it has created a seamless omnichannel experience for customers. By keeping consumers at the center of everything it does, Apple is able to anticipate what they want next and break new ground in terms of both design and performance. With 72 million Macs in use and record-breaking sales of both the iPhone and iPad, Apple has made history by unseating Coca-Cola and becoming Interbrand’s most valuable global brand of 2013.

Amazon's New Devices, Aggressive Pricing Seek to Reclaim Tablet Spotlight

When Amazon introduced its original color tablet the Kindle Fire its chief innovations were aggressive pricing ($199) and the fact that the company used a "forked" version of Android that declared its independence from Google. There have since been two updates to the line (including yesterday's), which now includes four color tablets.

Yesterday Amazon CEO Jeff Bezos introduced refreshed Kindle hardware and software. There's a new "operating system," called Mojito (based on Android Jelly Bean). There are essentially two new tablets: Kindle Fire HDX (as in "beyond HD") in 7 and 8.9 inch versions. The Kindle Fire HD (7 inch) has been dropped to $139, which is sure to be the biggest seller, though it's effectively last year's model. There's also a clever new cover/stand called Origami

The big software innovation is "Mayday," which is live video tech support on the tablet screen. Here's how Amazon describes it: 

Kindle Fire HDX also introduces the revolutionary new "Mayday" button. With a single tap, an Amazon expert will appear on your Fire HDX and can co-pilot you through any feature by drawing on your screen, walking you through how to do something yourself, or doing it for you—whatever works best. Mayday is available 24x7, 365 days a year, and it's free.

As a practical matter Mayday is mostly a marketing gimmick, which probably won't see a great deal of actual use but will give some confidence to older and less tech-savvy buyers. What's more interesting to consider is the degree to which Mayday may be emulated by other industries (e.g., travel, shopping) for customer care purposes. That will be fascinating to watch. 

North American Non-iPad Traffic Share

Source: Chitika, September 2013 (North American Android tablet traffic share)

Currently in North America the iPad controls about 84% of tablet-based web traffic according to Chitika. The remaining 16% is mostly Android tablets and really a battle between Amazon, Samsung and Google (in order of market share). The $139 price point on the Kindle Fire HD will capture buyer attention and may put pressure on Samsung and Google. 

When Google introduced its new Nexus 7 earlier this year the company raised the price from $199 to $229 for the entry level model. The price increase was justified on the basis of new specs and a higher resolution screen. Amazon's Kindle Fire HD is almost $100 cheaper at $139. Without ads it's $154. The Nexus 7 is a superior device (to the Kindle Fire HD) but many people will not see a difference and opt for the much cheaper Kindle. 

The Samsung Galaxy Tab 3 is $199. Accordingly it will be very challenging for Google, Amazon or anyone to sell many smaller tablets at much above a low $200 price point. Whether the iPad Mini feels similar pricing or sales pressure is a question that remains to be answered. However I suspect iPad Mini sales will only be affected at the margins. 

First Weekend iPhone Sales Exceed 9 Million

Apple announced this morning that it had sold more than 9 million iPhone 5s and 5c devices this past weekend. It did not indicate how many of the 9 million were 5c devices vs. 5s devices. Most of the demand globally is likely to have been for the 5s. That's what our survey showed (see below).

The market became very nervous after the 5c went on sale for pre-orders a week ago and Apple didn't issue a press release last Monday. Many institutional investors sold Apple shares. Then the very postive 5s reviews came out stoking consumer demand.

Here's what Apple said in its release this morning: 

Apple today announced it has sold a record-breaking nine million new iPhone 5s and iPhone 5c models, just three days after the launch of the new iPhones on September 20. In addition, more than 200 million iOS devices are now running the completely redesigned iOS 7, making it the fastest software upgrade in history. 

Essentially the 5s sold out of its initial supply.

demand for 5s

Source: Opus Research, n=1,508 US adults (Sept 16 – 19 2013)

Last year Apple said it had sold 5 million iPhones during its first weekend. That was a record at the time. This nearly doubles it. The company also announced this morning that since iOS7 became available late last week, 200 million devices around the world have been upgraded.

I was concerned that I would dislike or be ambivalent about the new OS. However I actually like it quite a bit. 

The iPhone 5s sellout will only fuel further demand for the device. Supplies of the 5c remain available. But the public seems to recognize the 5c as "last year's model" with a new coat of paint. While that's not entirely true (there are some upgrades) demand for the 5c has been much less than the 5s as our survey last week predicted. 

Update: Localytics now answers the 5s vs. 5c sales question, saying that the 5s outsold the other device by a factor of more than 3X in the US and an even larger margin outside the US:

Carrier market share for iPhone 5s and 5c

5s vs 5c global

Report: PayPal Nears Deal for Rival Braintree

According to the Wall Street Journal, "PayPal is near a deal to buy Braintree Payments Solutions." Braintree has had great success as a payments platform and processor both for e-commerce and in mobile.

Braintree is behind payment processing for companies such as Uber, AirBnB, LivingSocial and OpenTable among others. The company has roughly 4,000 customers according to the WSJ piece. 

Braintree processes roughly $12 billion in payments annually, about $4 billion of which come from mobile commerce transactions. PayPal, by contrast said that it would process roughly $20 billion in mobile payments in 2013.

The deal would help further accelerate PayPal's mobile business. PayPal would also acquire Venmo, a P2P payments aoo, that Braintree bought in 2012 for just over $26 million. 

Among mobile wallet/payments companies PayPal is far and away the best-known brand, though US consumers still show relatively little interest in generic "mobile wallets," according to our survey data.

Google Wallet has largely failed to date and other "mobile wallets" and mobile payments providers are almost totally unknown to the public. This deal would help cement PayPal's leadership in mobile payments.

Recently PayPal introduced Beacon, a Bluetooth low energy (BLE) in-store payments and indoor-location solution that is helping, together with Apple, show NFC the door in North America. 

Pew: 137 Million Mobile Internet Users

Today 91% of American adults own mobile phones according to new data from The Pew Research Center. More than 61% (64% per Nielsen) own smartphones. In this latest survey Pew takes a look at common activities on mobile devices (including non-smartphones).

Pew found that 81% of mobile phone owners text, the most common activity, while 60% access the internet. Just under half (49%) use maps or access location-based information on their handsets. All these percentages are higher if non-smartphones are excluded. 

There are approximately 250 million US adults today. If 91% own mobile phones that means about 228 million adults in real numbers. Of that group about 146 million own smartphones (per Nielsen's 64%). If kids and teens are added in we easily have in excess of 150 million smartphones in the US market. 

If 60% of adult mobile phone owners in the US access the internet that would be roughly 137 million people (not counting teens and kids).  

Screen Shot 2013-09-19 at 9.16.06 AM

Among the 60% going online from their mobile handsets (not including tablets) Pew says the following: 

African-Americans and Hispanics are more likely to do so than whites. Younger adults, those with at least some college education, and those with an annual household income of over $75,000 a year are particularly likely to access the internet via cell phone. Those who live in rural areas are less likely than urban or suburbanites to have mobile internet access. Among those who use the internet or email on their phones, more than a third (34%) say that they mostly access the internet from their phone. 

A recent Nielsen study found that 46% of US survey respondents relied exclusively on smartphones or tablets in conducting online research across a range of categories (i.e., retail, banking, gas and convenience). That same study found that, in the banking category, more than 50% of smartphone and tablet users did not use a PC to make purchase decisions (e.g., about credit cards).

What we're thus seeing is the emergence of a "mobile first" population in the US, which may be 50 million people on the low end and 75 million on the high end. 

Nielsen: Smartphones Now 64% in US Market

The first wave of iPhone 5S reviews have come out and they're essentially raves, exemplified by Walt Mossberg's superlative laden missive: “[T]he new iPhone 5s is a delight. Its hardware and software make it the best smartphone on the market.”

While there is some question about the early success of iPhone 5C pre-orders, the 5S is almost a sure sellout when it's released this weekend. According to a survey by Opus Research, the 5S is the most desired "next smartphone" available in the US market, while the 5C is in fourth place (after Galaxy and other Android devices). 

However according to new data from Nielsen, 61% of recent smartphone buyers chose Android devices vs. 34% who bought iPhones. We'll see how those numbers are impacted, if at all, by the launch of the 5S.

Overall Nielsen says that in the US 64% of mobile subscribers are now owners of smartphones. Those in the 25 - 34 age group have the highest smartphone penetration at 81%, with teens 13 -17 closing in at 70%. Feature phones are now concentrated among those over 55 years of age. 

Below is the current smartphone OS market-share distribution according to Nielsen:  


Google Wallet Moves Beyond NFC in Bid for More Consumer Adoption

As I wrote last week the advent of iBeacon and bluetooth low energy may effectively mean that NFC as an in-store mobile payments standard in the US market is dead. Google Wallet had placed a big bet on NFC payments but has been thwarted in its bid for adoption by two principal factors:

  1. The public doesn't understand or care about NFC and the NFC infrastructure is still piecemeal
  2. The major carriers other than Sprint blocked Google Wallet because they have a competing NFC intiative (this anti-competitive behavior was never investigated by the FTC)

Google Wallet 1.0 thus was a failure. Google is now out with a new Android version (and soon iOS) is making a renewed bid for consumer adoption with a range of new features and a partial move away from NFC. In-store payments still depend on NFC and so won't be happening at scale any time soon for the same reasons cited above.

However the new features add utility and breadth to the user experience. Here's what's new:  

  • Google has added the ability to send money via email from Wallet (following the ability to use Gmail to send money with Google Wallet). This is a great feature. 
  • The ability to enter/scan loyalty cards into Google Wallet. ("Google Now will notify you when you have a saved loyalty program nearby.")
  • Save and later redeem Google Offers via Wallet (showing the phone at checkout to redeem).

Exactly a year ago we surveyed 1,501 US adults and found the vast majority were not interested in the idea of mobile wallets: 71% said "I'm not at all interested . . . in using [my] mobile phone to pay for things and replace cash or credit cards." Another 15% said they had only "limited interest." Only 14% had some interest or significant interest. 

In specific contexts, where consumers see the tangible benefits of mobile wallets, these numbers change. But in the abstract the public remains largely uninterested in mobile wallets.  

McDonald's Could Accelerate Mobile Payments Adoption

Last week news broke than McDonald's is considering rolling out mobile payments. Currently the McDonald's app is primarily a store locator. The app also offers nutrition information.

According to a Bloomberg report, the company has been testing mobile payments in Salt Lake City, Utah and in Austin, Texas. McDonald's has roughly 14,000 US stores and 35,000 globally. 

Mobile payments would allow McDonald's patrons to pre-order meals online and then pick them up at the drive-thru window. Other fast-food chains have tested, are testing or now using mobile ordering/payments. The McDonald's app will also feature deals and rewards according to Bloomberg.

A mobile ordering/payments capability may also help McDonald's attract younger users and Millennials, who are less inclined than others to visit the QSR chain. According to an AdAge write-up of an NPD Group survey

Millennials are indeed going to burger chains, but they are going less often. The hamburger category, which includes McDonald's, Wendy's and Burger King, still receives 29% of all millennials' quick-service visits, according to NPD, more than any other restaurant category. Fast casual, which includes chains like Chipotle, gets 6% of millennial quick-service traffic.

But hamburger chains have seen a 16% decline in traffic from Millennials since 2007, NPD said. In the year ended November 2012, Millennials made 3.6 billion visits to hamburger chains, down from 4.2 billion visits in the year ended November 2007. There was a 12% decline in quick-service restaurant visits by Millennials in the same time period.

Ultimately all QSR chains will offer mobile ordering/payments. And that will help acclimate a generation to using their smartphones as wallets to pay for things. 

Once people are familiar and comfortable with mobile payments in a specific context (e.g., ordering food) they will be more inclined to embrace them in other scenarios.

Microsoft Bought Nokia to Block Android Lumia Phones

Nokia's Lumia handsets represent about 80% of Windows Phone's sales. However Nokia was continuing to lose share to Android and iPhone in key markets across the globe. By the same token Windows Phones had failed to enable Nokia to re-enter the US smartphone market in any convincing way. 

Since the inception of the Microsoft-Nokia deal in early 2011, we had been arguing it was a serious mistake for Nokia to not offer an Android phone. However the terms of the agreement between the companies precluded that. In 2014 the deal was set to expire. But before that deal was renegotiated, Microsoft acquired Nokia's phone hardware business for roughly $7.2 billion.  

In the middle of last year we speculated that Microsoft might be compelled to acquire Nokia for defensive reasons. When the acquisition was announced a little over a week ago, I argued had Nokia embraced Android it would not have been so weakened and forced to sell itself. I also speculated this summer that Nokia would be compelled to come out with Android handsets if it wanted to survive:

My view is that Nokia will be compelled -- notwithstanding contractual exclusivity with Microsoft -- to adopt Android at some point in the not-too-distant future or remain stuck in what amounts to neutral.

Now the NY Times is reporting that Android Lumia phones were in development: 

A team within Nokia had Android up and running on the company’s Lumia handsets well before Microsoft and Nokia began negotiating Microsoft’s $7.2 billion acquisition of Nokia’s mobile phone and services business, according to two people briefed on the effort who declined to be identified because the project was confidential. Microsoft executives were aware of the existence of the project, these people said.

There are two overlapping potential scenarios: Nokia was developing Android handsets in part to add leverage in negotiations with Microsoft (for renewal or acquisition); and/or Nokia was developing Android handsets in earnest and would have rolled them out -- forcing Microsoft to avoid that outcome through an acquisition.

Regardless it appears that the idea of Nokia marketing both Android and Windows Phones was a potential disaster that Microsoft sought to avoid at great cost -- literally. As I've written elsehwere, however, it remains unclear that Microsoft's $7.2 billion have been well spent.

Microsoft Readies Its Answer to Siri: 'Cortana'

Microsoft is reportedly readying its answer to Siri and Google Now: Cortana. Named after a central character in the game Halo, Cortana aims to go beyond both Siri and Google Now by being a more comprehensive way to interact with Microsoft devices.

According to Microsoft watcher Mary Jo Foley:

Cortana, Microsoft's assistant technology, likewise will be able to learn and adapt, relying on machine-learning technology and the "Satori" knowledge repository powering Bing.

Cortana will be more than just an app that lets users interact with their phones more naturally using voice commands. Cortana is core to the makeover of the entire "shell" -- the core services and experience -- of the future versions of Windows Phone, Windows and the Xbox One operating systems, from what I've heard from my contacts.

A comprehensive personal assistant powered by AI across all Microsoft systems and devices is a very ambitious plan. It remains to be seen whether Microsoft can do it. 

Yet in order to not be perceived as more than a me-too product Microsoft will have to roll out something truly impressive and more utilitarian than Siri or Google's mix of voice-enabled search and personalized data features.  

Update: TheVerge offers a series of relatively bland Cortana screenshots.  

Apple Shunned NFC, Has Anointed BLE for Indoor Location

I wrote several days ago on my Screenwerk blog about PayPal's new Beacon payments and indoor location initiative. I explained that Apple's decision not to include an NFC chip in the new iPhone means essentially that NFC is marginalized if not dead in the US market. In its place Bluetooth Low Energy (BLE) may become the mainstream alternative to what NFC would have enabled (e.g., mobile payments).

PayPal Beacon relies on BLE. At those businesses where a Beacon device is plugged in PayPal users simply check-in. Beacon identifies them and payment is automatically transferred from the default account. Payment happens “hands free” without a tap, swipe or other app interaction. 

Beacon is also PayPal’s entry into indoor location. PayPal will obviously know you’re in a venue and then can do any number of things, including delivering highly specific, indoor marketing messages or ads. PayPal is also making Beacon available to third party developers, who will be able to do similar things accordingly.

Apple's iOS 7, which will be available on September 18 (to older iPhones as well), will permit all eqipped devices to interact with BLE iBeacons in malls, airports, stores and other venues. 

Apple acquired indoor mapping company WiFiSlam earlier this year. That was the "wake up call" for many people to take indoor location seriously. One of the first and obvious applications of iBeacon is indoor mapping. But it doesn't stop there. 

Just as with PayPal's BLE initiative, iBeacon will enable Apple to move into payments and indoor marketing and allow third party developers to leverage those capabilities. With its more than 600 million credit cards on file I've got to believe that Apple will enter mobile payments eventually and BLE will be the way in all likelihood.

More broadly I suspect that iBeacon will popularize and jumpstart indoor location for a host of third party developers. 

For a comprehensive introduction to the indoor location and marketing opportunity, and its broader implications, come to Place 2013.

iPhone 'Touch ID' Is the New Siri

The Apple iPhone event just concluded. Everything that was announced at the event had been leaked or written about beforehand, including:

  • The cheaper iPhone 5C in 5 colors
  • The gold iPhone 5S
  • The faster 5S processor
  • iTunes Radio
  • The biometric fingerprint sensor that unlocks the phone ("Touch ID")

However that last item, the "Touch ID" fingerprint sensor, was the stand-out announcement in my view. It will enable users to both unlock their phones and confirm iTunes purchases instead of entering a password: 

Put your finger on the Home button, and just like that your iPhone unlocks. Your fingerprint can also approve purchases from iTunes or the App Store.

What I mean by the headline is that Touch ID is to the 5S what Siri was to the 4S: a kind of "wow" feature that helps it stand out from other smartphones. It partly compensates for the fact that Apple didn't introduce a larger screen, which everyone now wants. That's coming with the iPhone 6. 

Splashy New Apps from Yahoo, Opera Make a Play for iPad Usage

Both Opera and Yahoo introduced splashy new apps for the iPad today. Opera introduced a new browser called Coast. On first glance, the browser has some nice features. In particular users can pin icons to the home screen, much like they can on the iPhone and close pages by swiping them away (like the old PalmOS and Android today). Most of the nagivation is based on swiping or the touch of a single button. 

Opera calls Coast a totally new tablet experience: 

The result is a completely designed-for-iPad browser, subtly elegant, made to fit tablet users in every respect. Crafting Coast meant redesigning the complete experience. We focused on how iPad users actually interact with their tablets. Coast is the perfect companion for your iPad, allowing a more relaxing and lean-back browsing experience when you are on the go or just hanging out on the couch.

The iPad is nearly buttonless; why shouldn’t the apps for it be? Elements such as back and forward buttons are gone from Coast. All navigation is done by swiping the way you naturally would on an iPad – just like in a good iPad app. A single button takes you to the home screen, and another shows the sites you have recently visited – that’s about it for buttons in Coast.

When using touch-based navigation, small buttons that work on a regular computer don’t work well on a tablet. It’s not about just enlarging already existing elements; it’s about making the design interesting and uncluttered . . .

Designing for iPad means rethinking everything. Tablets have a lot of screen real estate, and we thought it was about time to put it to good use. Coast does way more than merely migrating the lessons learned from desktop computers to a tablet.

Yahoo has a new tablet-centric video app (though it also works on the iPhone). Called "Yahoo Screen," the app features video from multiple sources, including Comedy Central and SNL, among numerous others. It's not YouTube but an attempt to created a video destination, with lots of clips that can support video pre-roll ads. There's quite a diverse array of content from food and instructional video to sports and movie clips. 

Yahoo has done a nice job with the user experience. Content is the key to success however. The company will continue to need to feed content to the app if it wants to build and sustain an audience. The company had sought to buy Hulu at one point. And now it's moving ahead with its own video product and increasingly original web-only programming. 

While Opera's iPad app is part of a bid to remain relevant in a mobile-centric world -- its mobile browser has largely been sidelined by Android and the iPhone -- Yahoo is hoping to create a way to generate more mobile revenue from lucrative video ads.

Aisle411 $6.3M Round Shows Growing Investor Focus on Indoor Opportunity

A few years ago companies like aisle411 or PointInside were mobile apps in search of an audience and a business model. In the past couple of years, however, everything has changed.

The proliferation of public WiFi, the adoption of smartphones (now 62% in the US) and the recognition among hospitals, malls, airports, stadiums, grocery and retail stores that indoor location could bring better customer experiences (and compelling data) has radically altered the landscape. The principal business model also went from being an ad/coupon-supported one to a technology licensing model, with indoor analytics leading the way.

Today aisle411 announced a $6.3 million Series A round (Cultivation Capital, Google’s Don Dodge, St. Louis Arch Angels, the Billiken Angels, and the Springfield Angel Network). The total the company has raised since being founded in 2008 is roughly $10 million. 

Most major US retailers (e.g., HomeDepot, Macy's, Wal-Mart, Target, Nordstrom, etc.) and malls across the US are now adopting indoor location, to reap the "big data" and offer more personalized, locally relevant and engaing customer experiences. We're only just at the beginning of a huge wave of indoor innovation.

One of the featured sessions at the Place Conference will showcase aisle411. I'll also be "in conversation" with Google's Don Dodge on why he believes indoor location and marketing will be bigger than outdoor maps and GPS. 

The conference will also present other in-venue and retail case studies from PointInside, ByteLight and Meridian (Aruba). If you haven't yet registered for the October 8, 2013 event do so today

Making the iPhone 5C Good but Not Too Good

Apple's iPhone launch event is confirmed for September 10. It will take place at Apple's HQ in Cupertino, California. The company is expected to announce multiple devices at the event, including a new iPhone 5S, potentially an iPhone 5C and possibly an iWatch wearable device. There may also be new iPads.

The iPhone 5C is real and may come in a variety of colors (5 is the rumor) -- hence the colorful bubbles in the invitation. The forthcoming 5S is supposed to come in a champagne or gold in addition to traditional black and white. Pricing of these devices is uncertain, though the 5S will likely follow past pricing ($199 with 2-year contract, etc.). 

Some reports have suggested the 5C will cost between $400 and $500 unlocked. Carrier subsidy pricing is TBD. The real question surrounding the 5C is how appealing will it be? How "good" wil it be?

Apple is walking a tightrope.

The 5C is intended to make Apple more competitive in developing markets and at the "lower end" of the market where there's more price sensitivity. If the phone is "good enough" and cheap enough -- does the "C" stand for "cheap" or "China" or "color"? -- it could potentially cannibalize sales of the 5S. But if the phone is not of sufficiently high quality it will fail and Apple's brand will suffer.

I suspect that Apple will include a previous-generation chip in the 5C (perhaps the current 5 chip), whereas the 5S will get a new more powerful processor. There may also be memory limitations with the 5C. However the apps and app ecosystem should be the same.

The primary differentiators will thus likely be price, color, materials (plastic) and processing power/speed. But how does Apple build an attractive product that is competitive but doesn't overshadow its more profitable flagship product? That's the dilemma. 

Data Smackdown: Two Views of M-Commerce (Smartphones vs. Tablets)

E-commerce hosting and services provider MarketLive released a mid-year benchmarketing report yesterday, covering digital marketing and commerce trends through the lens of its many clients. There are many interesting findings. I'll focus however on the mobile aspects of the report, which appear to directly contradict a comScore m-commerce report released today.

The comScore data argue that there are many more e-commerce transactions happening on smartphones vs. tablets. This was something of a surprise to me. Accordingly, comScore puts the total value of US mobile-drive e-commerce at $10.6 billion for 1H 2013; 6% is from smartphones and 3.5% is from tablets.

mobile commerce

These numbers contradict everything I've seen about conversions and commerce on smartphones and tablets. One potential explanation may be that there are nearly 2X the number of smartphones as tablets in the US market.

However the MarketLive data, as mentioned, show something much more consistent with earlier findings I've seen from many sources: tablet e-commerce conversions are higher and tablets are driving a greater percentage of overall revenue than smartphones. 

According to the very busy MarkeLive slide below, smartphones drive more overall traffic but tablets generate considerably more revenue. MarketLive says that roughly 12% of e-commerce revenue for its clients are coming from tablets, whereas only 2.7% is coming from smartphones. However 19% of traffic comes from smartphones vs. 13% of visits from tablets. 

Tablet conversions are 3X conversions on smartphones. 

I cannot reconcile the comScore data with the MarketLive data. The weight of evidence is on the side of MarketLive however. 

Mobile Teens Voice Privacy Concerns, Facebook Offers More Privacy Control

This morning the Pew Internet & American Life project released new data on teen app usage and mobile privacy. The big "takeaway" is that teens care very much about privacy and have taken action against (deleted) mobile apps they feel unnecessarily or gratuitously collect personal information or location data.

Pew says that 78% of teens have a mobile phone (though not all have smartphones) and 23% have tablets. The teen smartphone penetration number is probably 58%, given that's the number of teens who have downloaded mobile apps. 

Just over half (51%) "have avoided apps due to privacy concerns" while 26% have uninstalled an app because it was collecting personal data. And 46% of teen mobile users have turned off location tracking features (on their phone or in an app) out of concern for privacy. 

Teens and location tracking

Teens are more forgiving of apps that seek location data where there's a logical and clear justification for the information (e.g., maps). Girls are more likely to disable location tracking than boys; 59% of girls vs. 37% of boys have done so. 

Separately but still on the theme of privacy, Facebook announced today that it would give more control to Facebook mobile log-in users over what information is shared by third party apps on the Facebook Timeline and News Feed. Here's what the company said today in its announcement:

Although Facebook Login is widely used, we understand people’s concerns about apps posting on their Timeline or to their friends. For the past several months, we’ve been rolling out a new version of Facebook Login on mobile to address these concerns.

With this new update, mobile apps using Facebook Login must now separately ask you for permission to post back to Facebook.

Don’t want to share your music playlist or workout routine with friends? You can choose to skip sharing altogether.

Clearly separating sharing means people can decide whether they only want to use Facebook Login for fast registration without also sharing back to Facebook. If you want to share later, you still can.

This involuntary sharing element was a selling point for publishers and developers but a turn-off to many users. It became a significant barrier for some to using Facebook log-in for third party apps/sites.

By separating sharing from social log-ins Facebook hopes to remove friction for many people who might log in with Facebook but don't today for privacy reasons. I'm in that group. 

Facebook Closing in on $4B Mobile Run Rate

To say that Facebook's mobile ad revenue growth has been impressive is an understatement. It has been, what you might call, meteoric.

In the course of a 12 month period the company has gone from less than 10% of ad revenue from mobile to 41% in Q2 of this year. By the end of this year (or very early next) 50% of Facebook's ad revenue will likely come from mobile. (By comparison, in 2012 more than half of Twitter's ad revenues came from mobile.)

Facebook mobile ad revenue growth

In Q2 '13 Facebook made more than $650 million in mobile ad revenue. If current trends continue expect Facebook to have a $1 billion mobile quarter by 1H 2014 (and possibly Q1 earnings). That would enable the company to claim a $4 billion annual mobile-ad revenue run rate.  

Based on averages and simple math, Facebook made roughly $0.80 per mobile user in Q2 on a global basis -- up from $0.50 in Q1 of this year. However developed markets offer more revenue than emerging markets and so the revenue generated per mobile user will vary considerably from market to market in practice.

Facebook monetization per mobile user

In 2010 we asked "How Long Before Facebook is a Mobile Ad Network?" and predicted that when Facebook turned on mobile ads it would immediately become the largest mobile "network." 

As formidable as Facebook is becoming in mobile Google is still dominant globally. Incredibly, Mountain View is expected to capture more than 50% of mobile revenues on a global basis this year. Facebook claims a much smaller percentage of mobile revenues, but still ranks as the number two player in mobile advertising today. 

Most Smartphone Commerce Happening in the House

As apps and websites become optimized for mobile commerce, and as the "credit card problem" is addressed (see TheFind and Jumio), there will be more buying on smartphones. Most retailers and brands currently assume smartphone transactions happen on the go or in stores (or on other devices). In the home e-commerce is supposed to be the domain of PCs (and increasingly tablets).

The conventional wisdom is that smartphones are more heavily used for shopping out of home and that's been supported by prior survey data. Yet data released yesterday by Nielsen tell a somewhat different and more nuanced story.

Americans are indeed buying things on their smartphones (24%) but they're mostly doing it at home: 72% of people making purchases on their smartphones did so at home and not "on the go," as one would have expected. Only 3% of smartphone owners buying things on their devices did so in stores; 6% did so in their cars. The remainder, 18%, fall into an unidentified "other" bucket. 

It's interesting that smartphones are so widely used for commerce-related activities (store locators) on the go but buying happens at home. Nielsen doesn't offer any real explanation however. It may be that the "immediacy" and availability of the device make it a preferred option for some. 

There's also no data about audience segments. It would be interesting to see if these at-home smartphone transactors are younger, older and whether they have other devices available to them. 

Regardless this is another "wake up call" arguing that marketers and retailers need to quickly optimize e-commerce experiences for smartphones.