Mobile Platforms

Apple's $35.3 billion Quarter Visualized

Apple just reported a $35.3 billion quarter, which was somewhat better than a year ago and beat financial analyst expectations -- largely on the strength of iPhone sales. The company also announced profit was $6.9 billion (vs. $8.8 billion a year ago). Sales outside North America accounted for 57% of revenue.

The company sold 31.2 million iPhones (vs. 26 million a year ago). But it sold fewer iPads than expected:14.6 million. Mac sales were down but Macs outperformed the PC industry as a whole, which is slumping badly. 

Below are two charts that show the distribution of revenues by segment/geography and by product line (figures in $billions): 

Unit sales of iPads were a concern for many financial analysts. The company sold 14.6 million tablet devices compared with 17 million last year and more than 19 million last quarter. While this implies market share erosion or shift away from the iPad, today Chitika released data showing that in North America at least, the iPad's web traffic share had grown since April and now stands at just over 84%. 

June iPad traffic

Source: Chitika

While Apple continues to generate huge quarterly revenues growth has slowed or declined in some cases. Accordingly there's enormous pressure from investors to bring out new products or create new product categories: TV, wearables, etc. On the earnings call Apple CFO Peter Oppenheimer said, “We are on track to have a very busy fall" though he wouldn't elaborate.

New iPads and iPhones are expected to be introduced. There may even be "surprise" products such as the rumored iWatch. 

Report: Apple Considering Building a 'Phablet'

The term "phablet," used to describe devices that operate like a phone but approach the size of small tablets, is horrible. But what may be more horrible is that Apple is reportedly considering creating one, potentially mimicking Samsung's strategy of a range of devices of differing screen sizes. 

Samsung is throwing a lot of mobile device spaghetti at the refrigerator, metaphorically speaking, to see what sticks with consumers. One might even describe its strategy as "incoherent." Nonetheless Apple may be moving toward introducing more devices with various screen sizes. That's according to an article in the Wall Street Journal:

The tests with suppliers seem to suggest that Apple is exploring ways to capture diversifying customer needs when many mobile device makers offer smartphones and tablets in various sizes.

In addition to potentially developing a device in-between the iPhone and current iPad mini, Apple is also apparently experimenting with larger screens for iPads. Most of these prototype experiments probably won't come to market.  

The huge-screened Samsung Galaxy Note has proven popular; however it's unclear how many units have sold. Indeed, Samsung has been the primary creator of market demand for larger-screen smartphones. And now Apple is feeling pressure to respond with a larger-screen iPhone. However that's not likely to be the 5S, due out later this year.

It might make sense for Apple to offer two iPhones: one with the current screen (small) and one with a 5-inch screen (large). However beyond that it makes little sense for Apple to go.

When Steve Jobs rejoined Apple as CEO 1997 one of the first things he did was to simplify Apple's product lineup, which had become cluttered and confusing to consumers. This is the danger if Apple tries to follow Samsung and create multiple device screen sizes.

Consumers do want a larger-screen iPhone but they haven't been asking for multiple devices of incrementally larger screens. It's also not clear that anyone wants or cares about a larger iPad. Maybe one with a slightly larger screen would be interesting but that would need to entirely replace the current iPad.

It makes sense for Apple to have four devices at most: iPhone (two screen sizes perhaps), iPad Mini and iPad. Beyond this the product lineup becomes muddled and confusing. And to the extent that Apple seeks to imitate Samsung's approach it may indicate the company has lost confidence in its vision. 

Retailers Fail to Connect with Customers Via In-Store Technologies

While countless retailer apps and mobile websites are designed specifically to deliver an "omnichannel" experience -- tracking a customer through the lifecycle of a purchase -- retailers are missing out on opportunities to engage customers through in-store technologies, says a new report by EKN Research.

A survey of more than 60 large retailers found just 13% of retailers are offering in-store features for mobile apps indicating a significant gap in leveraging the use of smartphones or mobile devices for customer engagement.

In terms of providing the infrastructure for ubiquitous connectivity, only 1 in 5 retailers currently offer free in-store wi-fi, with 42% of retailers having no intention of ever offering free wi-fi in stores.

InStore_Technologies_Jul8

Mobile technologies may offer new opportunities for customers but many retailers are not willing to make the investment. The report finds that IT spending on store technologies will remain relatively flat in the next three years, representing 31% of the total IT budget in 2013. Though the share is expected to increase to 35% by 2016.

"In 2013, increasing store operations efficiency remains retailers’ top goal from investments in store technologies. Running an efficient store should be table stakes for mature retailers, and their top goal should focus more directly on improving customer engagement. EKN views this as evidence that the focus hasn’t yet shifted for a majority of the retailers."

This news comes on the heels of a recent comScore report that found consumers are open to communications from retailers on their mobile devices with 47% of shoppers willing to have a retailer to send a coupon to their smartphone when they are in-store or nearby.

And previous data suggest a majority of mobile users are accessing retailers' websites for in-store sales or customer service functions.

We'll be exploring the current pulse of retailers and in-store marketing technologies at our upcoming Place Conference this October in San Francisco.

Superman Can't Save Nokia, But Can Iron Man Help HTC?

Nokia paid for product placement in the wildly popular Dark Knight films and released a special Batman-themed Lumia 900 when The Dark Knight Rises was released. The short answer: no, it didn't really "work."

Nokia Windows Phones (Lumia 925) also appear several times in the also extremely popular Man of Steel. Apparently in the alternate reality of Metropolis Nokia-made Windows Phones are the only smartphones in existence. However even the Man of Steel with all his remarkable alien abilities and strength probably won't do much for Lumia handset sales. 

The Superman film is opening in China this week and Nokia is offering a Chinese "Superman Limited Edition" Lumia 925 with the "hope" (S) insignia on the back. Depending on how excited the Chinese are by Man of Steel there may be some sales lift. However the Chinese market is dominated by Android devices. 

Meanwhile over in the Marvel universe (Superman is a DC Comics character), Iron Man's Robert Downey Jr. is reportedly being paid $12 million in a two-year deal to promote HTC smartphones. It doesn't look like the Iron Man character is part of the deal or will appear in the ads. 

Downey is a recognizable and popular celebrity but he probably isn't powerful enough -- at least without the Iron Man suit -- to compete with Samsung's Galaxy juggernaut (The Avengers might collectively have a shot at defeating it). The Korean company spent over $400 million in 2012 to achieve and maintain its Android smartphone lead. That compares with HTC's $46 million and Nokia's almost non-existent $13 million. 

Office Comes to the iPhone -- by Necessity

Microsoft has been in a kind of "double-bind." It has been trying to use Office integration with Windows Phone and Surface tablets to differentiate those products vs iOS and Android. However they haven't been selling particularly well (save in a few isolated countries). Yet the longer Microsoft held Office back from iOS (and Android) the more it faced the prospect of people getting used to alternative software or (Google) docs in the cloud.

Rumored for a very long time, today Office officially comes to the iPhone in app form (though not the iPad). In order to use the app iPhone owners must be subscribers to Office 365. It also requires iOS 6.1 as well and works on the iPhone 4 and above. 

The product appears to require a SkyDrive account in addition but that may be a built-in feature of Office 365. (I'm not a subscriber.) 

The new iPhone app allows users to view and edit Word, Excel and PowerPoint documents. However you can only create Word and Excel documents on the app. Users will also be able to edit docs "offline" and they will sync when the connection is resumed (think airplane flight). Microsoft promises that "formatting and content remain intact" on the iPhone and back to the 365 documents in the cloud.

As mentioned, there's no Office for iPad app but that will ultimately come in all probability. For the time being iPad users can access Office 365 through the browser. So effectively Office is available for the iPad. 

There are now hundreds of millions of iOS devices in the market globally. This year more tablets are expected to ship than laptops and by 2015 more tablets than PCs in general. In the aggregate there will be more "mobile device" users than PC users in the very near future. Thus Microsoft was all but compelled to bring Office to iOS (Android users can access via the browser). 

After Windows, Office is Microsoft's most important and lucrative product -- generating rougly $25 billion in revenue last year. The rise of mobile devices puts enormous pressure on both product lines. However the arrival of Office for iOS means there's less reason to buy a Surface tablet. 

Google Will Start to Punish Sites not Optimized for Mobile

There's a great deal of debate and discussion about the right approaches to mobile site development in the "SEO community." Should people build dedicated mobile sites; should they use responsive design; what about dynamic serving? The debates revolve around three considerations: complexity, optimal user experience and impact on mobile visibility (chiefly in Google search results).

Yesterday morning Google posted on its "Webmaster Central" blog that desktop sites using faulty or "irrelevant" redirects -- sending people on smartphones to the mobile site homepage, "page not found" pages or otherwise the wrong page in mobile -- would potentially suffer ranking consequences in mobile search results. 

Google expressed concern that "irrelevant redirects" are frustrating and disruptive to users -- and by implication reduce confidence in Google's mobile results. The company didn't address the precise ranking implications of not following its recommendations. However sites that don't correctly send people from PC pages to equivalent mobile pages will be demoted in the future.  

This is part of a larger push by Google to create good mobile user experiences and reinforce mobile search among consumers.

Last year, in a first, Google recommended responsive web design. Most marketers accepted that as gospel accordingly. However Google did not say that responsive was mandatory or recommended in every single case. It's certainly the lowest common denominator solution for publishers (though not always easiest to implement). 

Yet there are many reasons why "responsive" may not yield the best user experience overall (page load time, different mobile user intent, etc.). Regardless, Google is beginning to compel publishers to pay more attention to mobile user experiences (if they're not already) or suffer the ranking consequences. 

Google Becomes More Like Siri, As Siri Becomes More Like Google

It's fascinating to watch Google evolve from a "search engine" into something much more interesting and complex. The rise of mobile, the launch of Google Now, the improvements in voice search and the more recent, conceptual introduction of what Google is calling "conversational search" all point to where search at Google is headed.

The search metaphor is giving way to the personal assistant metaphor. The entry of Siri in the market roughly two years ago was the trigger of the transition.

Google search boss Amit Singhal was deeply enamored of Star Trek as a boy and, like others at Google, has openly fantasized about building the "Star Trek computer." In other words, a computer one could simply speak to naturally and get correct and complete information. 

Google Now, also sometimes called "predictive search," tries to go beyond that purely "conversational" scenario by anticipating user needs and interests based on big data and personal search history (and movements). Google Now is highly imperfect but when it works it's impressive. 

While Google has only recently sought to move in the direction of "personal assistant," Siri has always been an "assistant" but only recently aspired to be a search utility. Siri was explicitly conceived as a tool that would enable the accomplishment of specific tasks and not simply the retrieval and display of information.

As Apple has added more structured data feeds to what Siri can access it has improved -- much of Siri's value for users still comes from controlling the device and initiating calls, texts and emails rather than "searching" -- however the great "Achilles heel" for Siri has been its limited dataset and lack of flexibility. 

Although it wasn't true when Siri was first introduced, Google has now exceeded Siri by bringing its web-search capabilities and into the virtual assistant equation. Google has a much deeper (albeit mostly unstructured) knowledge base to call upon vs. Apple. Thus for numerous questions where Siri didn't have a structured response it would have to default to web search (i.e., Google): "I didn't understand XYZ [query], shall I search the web for XYZ."

Google would then ride to the rescue. In the Google universe it can bring increasingly structured answers to the same user queries but also its full index as a backup. 

With the coming integration of Twitter, Wikipedia and especially Bing into Siri's roster of data sources with iOS7, Apple adds a full web index and much more breadth to what Siri can do without having to hand off to a third party search engine (i.e., Google). And unlike current scenarios where users typically have to explicitly ask Siri to "search the web" to obtain XYZ information, soon they'll just ask for "XYZ" -- and Bing will supply the necessary or desired information.

The deal has potential to dramatically broaden Siri's utility and usage frequency. Equally it could, if successful, significantly increase search query volume coming to Bing from iPhone users. The integration will need to be very "elegant" to win over users, who are accustomed to either using apps or Google in the Safari toolbar to "search the web" on the iPhone. Users will need to be educated about Siri's new capabilities.

The integration of Bing's search capabilities is a "crossing the Rubicon" of sorts for Apple as it declares that comprehensive data and search capabilities are necessary to fully deliver on the promise of the personal-virtual assistant. 

Pew: 81 Million US Adults Own Tablets

According to telephone survey data (n=2,252) released this morning by The Pew Internet & Life Project, 34% of US adults now own tablets. What that means as a practical matter is: 81 million adults. There may also be 20 million more people in the US under 18 who own tablets. (Our house has four.) 

I think it's relatively safe to say that if the number of tablets in the US isn't yet 100 million it's extremely close.  

A large majority of tablet owners are substituting tablets for PC usage in many instances and either buying fewer PCs overall or delaying PC replacement for a much longer period. This morning Apple will open its developer conference. A upgraded iPad/Mini is not expected to be among the announcements but it's possible. 

. Pew tablet ownership

As with other device categories, the story is largely the same with tablets. Penetration rates are higher among college educated (49%) and more affluent adults (56%). Affluent means at least $75,000 in income.   

The chart above reflects the growth of tablets since 2010 when only 3% reported tablet ownership. It's possible that by Q4 of 2014 half of the US adult population will have tablets (and 75% of affluents).

Global tablet shipments this year are expected to exceed those of laptop computers according to IDC. IDC also argues most of those sales will be at the lower end of the market (size, price).

Last week both Pew and Nielsen reported that 61% of mobile subscribers now own smartphones.  

It's Official: 61% of US Mobile Subscribers Have Smartphones

Earlier this week survey data from the Pew Internet Project argued that 61% of US adult mobile subscribers now own smartphones. Today Nielsen announced agreement with that number:

More than three out of five (61%) mobile subscribers in the U.S. owned a smartphone during the most recent three-month period (March-May 2013), up more than 10 percent since smartphones became the mobile majority in early 2012.

Comscore, for its part, says that the percentage of mobile users with smartphones is slightly less: 58%. Overall we're talking about 140 - 150 million people in the US now with smartphones.

In terms of OS market share, Nielsen reports that Android has 53% of the US smartphone market, while Apple controls 40%.

By comparison comScore says that it's 52% (Android) to 39% (Apple). Kantar (a market research division of WPP) shows a generally similar set of market share metrics for Android and iOS (iPhone).

comscore smartphones April 2013 US market

Source: comScore 

Kantar mobile market share data

Source: Kantar Worldpanel ComTech  

Where these market-share data disagree is with respect to Windows and BlackBerry. Nielsen says Windows Phone has 2% of the US smartphone market, while comScore says it's 3% and Kantar says it's closing in on 6%. 

If we look at actual web traffic in the US, the relationship between Android and iOS flips. (Here iOS may well include the iPad.) Internationally Android is ahead.

The following are StatCounter data showing traffic being driven by each of the major mobile operating systems:

US market:

  • iOS: 54%
  • Android: 40%
  • Windows Phone: 1.3%
  • Other: 4.7%

Globally:

  • Android: 38%
  • iOS: 26%
  • Symbian: 8%
  • BlackBerry: 3.5%
  • Windows Phone: 1.3%
  • Other: 23%

 

Despite Android Device Dominance iOS Devices Drive Much More Web Traffic

Online marketing firm Monetate puts out a quarterly report, like an increasing number of digital marketing firms today. Using customer data, its "EQ1" (2013) report offers a range of metrics, including e-commerce conversions by channel/platform and average order value. It also breaks out traffic by device category and browser. 

This report like others shows that iOS devices are generating a great deal more web traffic than their Android counterparts, which is mysterious given Android's market share dominance. In addition Monetate now shows roughly equal distribution between tablet and smartphone-generated traffic.

According to the chart below smartphone and tablet traffic has roughly doubled since Q1 2012. Tablets are now driving slightly more web traffic to Monetate customers than smartphones. Over all "mobile" traffic is 21%. 

Despite Android's market-share lead the iPhone is responsible for almost two-thirds of smartphone-based traffic to Monetate-client websites. In the tablet arena Monetate says that just under 90% of traffic is coming from the iPad, with Android tablets (including Kindle Fire) generating just under 11%.  

One of the more interesting charts shows browser market share. What we can observe from the data in the chart below are the following: 

  • The decline of IE; Firefox has also lost ground
  • The growth of mobile Safari and slight decline of desktop Safari (together equaling 27% combined market share) 
  • The Android browser has gained a little under 2 points and mobile Chrome has grown to just under 1% share since last year
  • Opera almost doesn't register 
  • Kindle's browser share is flat

If all the Android browsers are combined (assuming that mobile Chrome is mostly Android users) we see that Android's aggregate browser share is just over 5%. If PC browsers are excluded it would be larger however. 

According to StatCounter, among mobile browsers only, mobile Safari has about 53% market share to Android's roughly 36% (with 11% combined other). Notably Chrome has 3.2% according to StatCounter. 

Various theories have been advanced about why iOS devices are responsible for more web traffic than their Android counterparts, given Android's market share lead (in the smartphone arena). But none of them are entirely satisfactory. 

Study: Second Screening of TV Now Done by Majority

TV is arguably the lone traditional medium that been able to retain its premium ad rates and audience reach (mostly), while other media have suffered fragmenting audiences and declining ad revenues. But the fact that millions still watch TV doesn't necessarily mean TV advertising has the power and impact it once did.

A recent study from ad network InMobi, involving 15,000 users from 14 global markets including China, Europe, the US and several African countries, argues that consumers now spend more time with mobile media than TV (there are competing data that show TV is still on top). 

The survey found TV to still be the most influential single medium, followed by PC/online and then mobile. Other traditional media lagged behind in their influence over purchase decisions. The following reflects the percentage of survey respondents who reported that the medium "significantly influenced" their purchase behavior: 

  • TV -- 48%
  • Online/laptop -- 43%
  • Mobile -- 40% 
  • Magazines/newspapers -- 31%
  • In-store ads -- 18%
  • Outdoor/billboard -- 11%
  • Radio -- 10%  

The data above are not broken out by country. Undoubtedly there would be variation, potentially significant variation, accordingly.

With respect to TV, however, users are now widely "second screening" -- that is, diverting their attention from the programming and advertising to focus on some activity happening on their smartphones or tablets. Two-thirds of the TV audience is now doing this on a global basis, with younger users (<35) being the most likely to multiscreen (graphic above).

What are they doing on those second screens? The survey says they're on social networks or otherwise messaging friends (see graphic below). Note that a substantial number are "searching for information about products" they saw on TV. This represents both a new opportunity for brands and TV advertisers generally. 

Marketers now must be conscious that a significant portion, indeed the majority, of the TV audience is going to "look away" at their smartphones or tablets. Marketers must have a mobile optimized presence on search and social media. But beyond simple presence, TV advertisers need to make it easy for mobile users at home to find their products or services easily (the many hashtags used in Super Bowl TV ads is one example). 

TV advertisers can drive email sign-ups/opt-ins, app downloads as well direct purchases with the right offers and TV-ad messaging. In addition, with coordination and planning mobile can be used to measure TV ad effectiveness as well.

The larger point is that fewer and fewer TV viewers (especially those under 35) are watching TV or online video without a mobile device nearby. That allows them to either take action on ads they see -- or totally ignore them. 

Survey: 52% of Recent Travel Booked in Mobile vs. 48% on PC

Location-based and WiFi ad network JiWire is out with its Q1 insights report. The document contains a range of information drawn from surveys of mobile users who access the internet at mostly JiWire-powered WiFi hotspots. This quarter the company zeroes in on behavior in the travel vertical and examines multi-screen activity and cross-platform conversions accordingly.  

We know that travel is a very mobile-centric vertical with lots of apps for smartphones and tablets. And JiWire confirms extensive multi-device usage for travel research and purchases:  

  • Almost 50% of active mobile consumers are using smartphones & tablets for travel research
  • While laptops remain the preferred device for travel ... 27% [are] already saying they use their smartphone to make travel-related purchases. 
  • Nearly 50% of consumers will spend $500 or more in a mobile-travel booking context
  • 52% of travel booked within the past three months was on a smartphone or tablet vs. 48% on laptops

Next comes a fascinating chart showing the multi-screen purchase process in travel (a microcosm of consumer behavior more generally). Google documented this phenomenon previously in research showing that 90% of consumers move “sequentially” between different screens throughout the same day.

Below is the JiWire chart showing how consumers start on one device and often convert on another:

Below is the comparable Google chart:

Google found, generically, that more people started research on a smartphone than any other device category. This is generally consistent with the Nielsen-xAd-Telmetrics data released today. However, in travel laptops still command the majority of activity according to JiWire -- but not by much. As mentioned above, more travel booked in the past 90 days has come from mobile than the PC (52% to 48%). 

JiWire also investigated what variables influenced travel-purchase decisions and how those purchases were researched and completed on mobile devices. Leisure travelers were more impacted by discounts; business travelers were influenced by loyalty programs and company policies. (This finding has obvious mobile marketing implications.)

As reflected in the chart above, travel aggregator apps (e.g., Kayak) and branded airline apps (e.g., United) were more often used than mobile websites for travel bookings. This makes sense because the user experience is likely to be better and credit card and other personal information may be stored, expediting the checkout process. People who are required to fill out lots of fields, including credit card information are less likely to complete those transactions in mobile. 

Another factor impacting the findings regarding app vs. mobile usage is the probability that many of the people surveyed are frequent travelers and are more likely to have apps on their mobile devices than occasional leisure travelers who may be less aware of their app options. 

Study: As Many As 54 Million May Be Mainly Mobile Retail Shoppers

The latest installment of "Mobile Path to Purchase" research from Nielsen, xAd and Telmetrics drills down into retail-shopping attitudes and behaviors. As with the broader study, previously released, the findings show a significant percentage of users are doing shopping research exclusively on mobile devices. 

The Mobile Path to Purchase study is in its second year. The findings are based on an online survey of 2,000 US smartphone and tablet owners and “observed consumer behaviors from Nielsen’s Smartphone Analytics Panel of 6,000 Apple and Android users.”

According to the report, 42% of smartphone and tablet owners did not consult PCs at all as part of their retail shopping research. The broader study found the overall number to be 46%, who didn't use PCs. This is a staggering data point in my opinion.

Nielsen mobile retail shopping

Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013

If we extrapolate these "mobile only" numbers, assuming they're representative, we're talking about a potential audience of perhaps 54 million in the US who may be relying primarily or exclusively on smartphones and tablets to shop.  

Other noteworthy findings from the study include: 

  • High conversions: More than 55% of mobile retail shoppers ultimately make a purchase
  • Immediacy:30% of smartphone owners and 25% of tablet users sought to make purchases within one hour. However a larger percentage of tablet owners (41%) "take a month or longer to make a purchase."
  • Where conversions happen: 77% of smartphone-based purchase activity happen locally, in stores. Tablet conversions are more evenly distributed: 39% in stores, 32% on PCs and 24% on tablets themselves.

The retail report also seeks to debunk a couple of "myths" about mobile usage. The first is that smartphones are used predominantly "on the go" and/or near the point-of-sale. The study found that smartphones were used throughout the pre-purchase research process and that the largest percentage of use was in fact "at the start" of shopping rather than near the end. 

Nielsen mobile shopping behavior

Source: Nielsen, xAd, Telmetrics Mobile Path to Purchase study 2013

The second "myth" debunked (though not quite as easily) is the notion that most smartphone owners are "showrooming" whenever they shop. The report says that showrooming (in-store price-comparison shopping) is relatively rare and practiced by a very small minority of users:

Only 6 percent of smartphone users conducted their most recent mobile retail search in-store . . . Mobile shoppers are in fact using their devices for comparison-shopping before and after an in-store visit. 

However previous survey findings from the Pew Internet Project and Google argue that significant numbers of smartphone owners do compare prices while in stores. For example, Pew's research found that 72% of smartphone owners used their devices while in retail stores. And the more recent Google-sponsored study reported the top in-store smartphone activities were the following:

  1. Price comparisons
  2. Finding offers and promotions
  3. Finding locations of other stores
  4. Finding hours

What the Nielsen-xAd-Telmetrics data argue is that most of this type of activity occurs before or after someone goes into a store. It may be that the wording of the questions influenced these results, though it may not be possible to entirely reconcile the conflicting findings. Regardless, the more important point is that smartphones and tablets are heavily used by consumers as part of their shopping research.

Accordingly, retailers that are not aggressively addressing the mobile audience are completely missing huge numbers of people and potential sales. 

Apple Bests Others but Loses Satisfaction Points, Samsung Gains

The American Customer Satisfaction Index (ACSI) has released new data on mobile phone satisfaction. Apple (iPhone) comes out on top, as it does in the JD Power surveys. However the iPhone has lost two satisfaction points, while Samung jumped seven points, since last year.

The iPhone may be losing ground because Android devices are being released more frequently with a range of feature improvements and form factors. For example, the iPhone 5's screen, which was enlarged vs. the 4S, looks puny by comparison to some of the Samsung devices.  

Most other competitors on the ACSI list gained vs. last year except LG, HTC and BlackBerry. Immediately below are the ACSI rankings. 

 

For comparison purposes, here are the JD Power rankings. After Apple, Nokia came in second beating Samsung. Motorola, second in ACSI's list above, was fourth overall in the JD Power rankings. 

Screen Shot 2013-03-22 at 6.33.48 AM 

The ACSI people will tell you that satisfaction ratings matter because they're broadly predictive of future sales performance. I accept that as sound. However the data from year one have not always correctly predicted market share or sales performance in year two. One case in point is online search, where ratings declines for Google have not translated into market share loses and vice versa for other competitors.

It's also worth noting that the satisfaction rankings differences between JD Power and ACSI are probably the result of a focus on different criteria and different questions to consumers. Thus both lists may not be entirely complete measures of consumer satisfaction. However the iPhone did top both lists, which is significant. 

Google Checkout Is Dead, Long Live Google Wallet

The relationship between Google Wallet and Google Checkout has always been a bit confusing. Essentially Checkout was Google's PayPal competitor for merchant payment processing. It has been around for roughly seven years. It never really got traction, in part because Google didn't aggressively promote it.

Google Wallet is Google's mobile payments platform, the major component of which has been in-store NFC payments. It also hasn't seen much adoption, though that may change. It also can be used to store coupons and offers. 

Some time ago Google merged Checkout into Wallet. This was a bid to unify the two products. The pitch to consumers was "one wallet for online and in-store shopping." And that's still the pitch. It's the merchant side of things that has changed.  

Yesterday Google announced that it was shuttering Checkout (I thought the product name had gone away). The company said it will continue processing payments online until November of this year. Thereafter merchants will need a new payment processor. Google is sending people to Braintree, Shopify and Freshbooks. 

If merchants do have current payment processing Google is encouraging them to apply for what it calls "Google Wallet Instant Buy." The idea is to remove friction from mobile buying by eliminating the need to enter credit card data and other related information (e.g., billing/shipping address). The solution is directed at Android app developers. (I suspect Apple will eventually do something similar with iTunes.) 

Entering credit card data and related shipping/billing information on a smartphone is a major barrier to so-called "m-commerce." More than 90% of mobile users abandon shopping carts, partly for this reason. Security is another concern for many. However if Google Wallet Instant Buy is widely adopted by Android developers (there are no additional fees or changes from Google) it could have a major positive effect on mobile buying. Stored credit card data in one of the factors that has enabled Amazon to become the mobile commerce leader.

Google has also introduced a Google Wallet Objects API, which allows merchants to integrate their loyalty programs into Wallet and more broadly promote them to Google users. And, as we previously indicated, Google has also introduced the easiest possible P2P send money solution through Google Wallet (via email attachment).  

Google has thrown in the towel around merchant payment processing (Checkout). But it has introduced pretty compelling new features for consumers and merchants that should make Wallet a much stronger and more broadly useful product.  

Aruba Networks Acquires Indoor Location Firm Meridian

Wireless equipment maker Aruba Networks is acquiring privately held Meridian Apps, developers of indoor GPS technologies. Aruba will combine its network-based Wi-Fi technology with Meridian’s software platform for smartphones and tablets to create services for use in public venues. Terms of the deal were undisclosed.

“GPS-based wayfinding solutions are extraordinarily popular, but they don’t work well indoors,” said Keerti Melkote, founder and Chief Technology Officer at Aruba Networks said in a statement. “We intend to address that gap by creating ‘indoor GPS’ using Aruba’s Wi-Fi infrastructure and Meridian’s wayfinding platform … This is a clear opportunity for Wi-Fi to become not only an enabling platform for BYOD, but now across industries, a revenue-producing, customer engagement platform for the business.”

The Meridian enterprise software platform targets large, indoor facilities -- including the Art Institute of Chicago and Macy's store in New York City -- to build custom-made mobile applications that help people get around in public places.

Meridian opened up it platform last November, introducing a pair of SDKs, Nav Kit and Blue Dotto. The company, based in Portland, Oregon, had previously announced a partnership with Aruba Networks competitor Cisco.

For its part, Cisco unveiled Wi-Fi location services and analytics last November, thanks to its acquisition of ThinkSmart Technologies. The features are included in Cisco's Mobility Services Engine built in conjunction with mobile chip maker Qualcomm and AT&T. Cisco has also partnered with IBM for its "Mobile Concierge" service, which enables integrated web applications to be displayed on mobile devices and provides analytics to deliver a customized shopping experience with coupons and promotions.

Indoor Location Apps on the Rise for Retailers

In-store mapping provider aisle411 announced this week that its smartphone app is currently in use by more than 12,000 retail stores, including Walgreens, The Home Depot, Hy-Vee, Price Shoppoer, and Shop 'n Save, among others.

The mobile application provides directions to specific products and offers searchable store maps. Engaging consumers through in-store mobile apps holds considerable promise for retailers, says Nathan Pettyjohn, CEO of aisle411. "Offline Commerce, or purchases occurring at a physical store, make up approximately 90 percent of all retail purchases. aisle411's mobile platform digitizes the in-store shopping experience so that shoppers can find and buy everything that they came in the store to purchase."

Indeed a growing number of technology companies are offering in-store mapping and customer engagement platforms, collecting data about mobility patterns and giving customers information to make better point-of-purchase decisions. Don Dodge, Developer Advocate at Google helping developers build new applications on Google platforms and technologies, sees enormous opportunities in the future of indoor location technologies, saying it will be a huge market, "bigger than Maps or GPS".

Among the growing number of market entrants for indoor location technologies, beyond aisle411, include Wifarer, Meridian, Point Inside, VisibleBrands, Micello, and several others.

With Apple's recent acquisition of WiFiSlam for $20 million, the indoor positioning and indoor marketing industry is heating up. We'll be watching the market closely as retailers begin to embrace indoor marketing technologies and map the potential use cases going forward.

By Saying 'No' to Android Has Nokia CEO Elop Sealed His Fate?

There are some signs of progress for Windows Phones and Nokia's Lumia line of handsets that exclusively use the operating system. Especially in Italy and the UK Nokia seems to be making some headway. There were also some data showing an uptick in Windows Phones' market share in the US.

The following are two sets of survey-based market share data from comScore and Kantar. Kantar shows much greater growth in Windows Phone adoption in the US than comScore. Regardless, over the past 18 months Windows Phones have largely failed to make a dent in the smartphone dominance of Android and Apple devices. 

comscore March mobile market share 1

Kantar Worldpanel ComTech smartphone data

It's almost 100% certain that Nokia, with its well-reviewed Lumia hardware, would be selling more phones if there were an Android option. However Nokia CEO Stephen Elop has essentially refused to consider that option and is sticking to the company's Windows-only strategy. This comes amid intensifying investor pressure to adopt Android.

According to a recent WSJ article:  

Shareholders approved the dividend-suspension proposal, but appear to be losing patience as questions about Samsung and Apple loomed over Tuesday's session. One shareholder asked Mr. Elop why Samsung is achieving what the investor characterized as 10 times better results than Nokia, and another concluded a round of tough questions by saying that right now Nokia isn't displaying "the spirit and charisma" that Apple has.

Over the next 2 - 3 quarters, Nokia may see slightly better results but they won't show the kinds of growth desired by institutional investors. Unless or until Nokia adopts Android sales won't accelerate to any significant degree, to the increasing frustration of investors. 

One way or another Nokia will likely be developing Android devices by this time next year -- absent a Windows sales miracle. Either Elop will give in to investor calls for Android or, if he does not, he will be ousted by their calls for his head. And the first act of any successor CEO will be to fast-track Android handset development. 

The Sexy-Shocking Number from Nielsen's Mobile Path to Purchase Study

Earlier today xAd put out its quarterly insights report. There were a number of interesting findings and datapoints. The "headline" was that the number of national-advertiser campaigns using more precise geotargeting (more specific than DMA, city or ZIP) had more than doubled over the course of the past 12 months. 

In a very general way this mirrors the movement of the market and the growing sophistication and use of location targeting by marketers. 

xAd Q1 data

There was also a nice case study involving Pinkberry's introduction of a new line of greek yogurt. Pinkberry's objective was to build awareness and drive visits to local stores. It used xAd enhanced geofencing to target users and show ads within 1 mile of store locations. The were a couple of discounts and incentives (coupons) associated with the product launch. 

The display ad clicked-through to a "dynamic landing page specific to the nearest location which features these offers as well as an option to save the coupon, obtain the address, phone number, map, directions and/or more information." According to the case study materials, in two weeks the campaign goals were exceeded by 2X. 

As you can see below, the ad creative was very polished. But the success of the campaign also illustrates how effective the combination of local relevance and offers can be. Indeed, xAd's reported average campaign metrics (for both search and display) outperform the industry averages. 

Screen Shot 2013-05-07 at 8.52.01 AM

More interesting than the findings in the insights report were the findings released last week in the 2013 US Mobile Path-to-Purchase study, undertaken in cooperation with Telmetrics and Nielsen, which conducted the research.

The Mobile Path to Purchase study is in its second year. The findings are based on an online survey of 2,000 US smartphone and tablet owners and “observed consumer behaviors from Nielsen’s Smartphone Analytics Panel of 6,000 Apple and Android users.”

There were a ton of data that came out of this report, and will continue to be released over time. However the single "blockbuster" finding is that across a range of purchase categories (i.e., Finance, Retail, Insurance, Convenience/Gas) 46% of survey respondents said they relied exclusively on their mobile devices (smartphones and/or tablets) in conducting pre-purchase research online. 

Accordingly, nearly half of the respondents did not use or consult PCs -- at all. I was initially shocked by this. I don't have detailed demographic information about who these people were beyond the fact that they skew younger (18 - 34). But this is a huge finding and one that should scare the stuffing out of any brand or advertiser that isn't actively pursuing a mobile marketing strategy. 

Tablets to Dominate 'PC' Sales, Low End of Market Increasingly Cluttered

According to a new forecast by NPD, tablets and touch-screen laptops (tablet-PC hybrids) will dominate the computing landscape in the coming years. More conventional PCs will be in the minority. 

Tablets are a new device category really. But let's put aside the longer debate about whether or not tablets should be considered "PCs" at all. There will be more "mobile devices" than traditional PCs (including laptops) sold in the next five years.

At best forecasts can show the direction of the market. But in this case the market's direction is clear. 

Global Mobile PC Shipments, 2012-2017

Screen Shot 2013-05-06 at 9.02.39 AM

Source: NPD

Last week Acer introduced a 7-inch tablet for $169, besting the aggressive pricing of Nexus 7 and comparable Kindle Fire devices. According to one rumor the next Nexus 7 will be priced at $149. But you can already buy a 7-inch Lenovo tablet for $129 on Amazon (quality is another question). The race is on for a "decent" Android tablet starting at $99. I suspect that will come in Q4 this year or very early next.

I was recently in Best Buy and Office Depot/Max and saw the displays of tablets; there are scores of them. It will be challenging for consumers to differentiate them -- especially at the lower end of the market. There will probably be three or four broad consumer criteria for tablets: OS/brand, price, size, specs like memory or battery life. 

With the exception of Kindle, Samsung and maybe one or two others the Android tablet universe is a sea of no-name devices. Here the battle will largely be about price. Apple iPads will stand apart because of strong brand identity. However a majority consumers will be price sensitive and likely to simply go after the cheapest "decent" (Android) tablet they find. Indeed, the devices are getting so cheap they're almost disposable. 

NPD says "Windows 8 are unlikely to be a major driver of touch adoption." I agree, as presently configured, Microsoft is unlikely to sell many stand-alone tablet devices. Surface Pro tablet-PC hybrids will sell to enterprise customers but Microsoft will struggle to sell basic tablets to consumers unless it reaches that $100 threshold first.