Mobile Platforms

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.

Tablets 'Shipment' Numbers Inconsistent with Traffic Reality

I'm a big opponent of using "shipments" as an indicator of market share. It may be a directional indicator of market share in some cases. But there are times when "shipments" is simply the wrong metric. IDC's latest tablet numbers offer a case-in-point.

The firm reported the following tablet shipment figures globally for Q1: 

  • Android -- 56.5%
  • iOS -- 39.6%
  • Windows -- 3.3%
  • Windows RT -- 0.4%
  • Others -- 0.2%

Basically the positions of Android and iOS tablets have reversed since last year. Shipments are put forward as a proxy for market share by IDC. However that's a dubious proposition at best. Shipments do not equal sales, let alone usage.

The following chart reflects North American tablet traffic share as of March, according to Chitika. After the iPad's 82%, Kindle Fire has a 7% share of traffic. Samsung Galaxy tablets come in at 4.3%. Needless to say these actual traffic data show a massive discrepancy vs. IDC's shipments estimates.

Screen Shot 2013-05-01 at 5.28.34 PM

Below is StatCounter data from 2012 (via Royal Pingdom) -- I was unable to find more recent global traffic data. These data reflect something very consistent with the Chitika data above.

In these various geographic markets the iPad is generating around 80% or more of tablet traffic. Even if we assume iPad share has fallen by 10 points since last year, these data are still a radical departure from the IDC figures. 

 tablet OS faceoff

Undoubtedly lower-priced tablets and the sheer proliferation of devices will necessarily diminish the iPad's "shipments share" over time. But it remains to be seen how actual usage is impacted. For the moment market share (as measured by consumer usage and traffic data) looks nothing at all like IDC's projections.

PayPal Log-in Takes Aim at Social Log-ins, Could Be Huge for "M-Commerce"

Mobile commerce, at least on smartphones, is partly held back by the UX challenges of forms and inputting credit card digits. Amazon does well in so-called "m-commerce" in part because it has millions of user credit cards on file making the mobile check-out process nearly painless (it also has a trusted brand).

Mobile check-out is part of the larger problem of being compelled to repeatedly sign in to accounts on a mobile device. Though some sign-in credentials are remembered by mobile browsers users are constantly being asked to input usernames and passwords. It's incredibly frustrating. 

Nuance (and others) have tried to address this problem with voice authentication in lieu of manual password entry (one of the topics on the agenda at the upcoming Voice Biometrics conference in San Francisco next week). To date, however, voice authentication has seen limited adoption in mobile applications.

Q1-2013-Social-Login-Trend

Separately Facebook has sought to become the universal log-in, to address the challenges of pain of creating multiple accounts and passwords -- particularly in mobile. Google is now starting to challenge Facebook in that arena, according to a recent study from Janrain. 

Many people are disinclined to use Facebook to log-in to third party websites or accounts because of privacy concerns (uncertainty over what might be communicated to their networks). Enter PayPal log-in (and its mobile express checkout solution). 

This solves a couple problems for publishers/developers and consumers. First it offers an alternative, single set of log-in credentials offering consumers more privacy than Facebook. It also offers a commerce solution that, like Amazon, avoids the "16 digit problem" of manually entering information on mobile sites. 

Screen Shot 2013-02-05 at 7.53.36 AM

Amazon and Google both offer comparable and competing solutions for third party merchants. But PayPal is in a strong position to become both a single sign-on and mobile checkout leader. The eBay division needs to aggressively promote mobile express checkout to merchants and the security and privacy benefits and ease-of-use of PayPal log-in to consumers, which will be a significant marketing challenge. 

As part of that effort PayPal also needs to do something of a reintroduction of itself generally to consumers at large. Its brand needs to be "beefed up." However among "digital wallets" PayPal by far has the greatest consumer awareness, which the company can use in its argument to merchants.

Google Brings Virtual Assistant to iOS 'Now'

Whether we call Google Now "predictive search," "anticipatory search" or a "virtual assistant," the capability is highly useful and improving regularly. Previously exclusive to Android devices with OS 4.1 or higher ("Jelly Bean") Google Now is now available for the iPhone and iPad.

You'll need to download the latest version of the Google Search app to get it.

Google Now is partly Google's answer to Siri (and Passbook) and partly a wholly independent development that takes your search history, your Gmail entries, your calendar, your location and other "context" to deliver a range of personalized information without having to actively search for it.

Google Now for iOS operates in essentially the same way as it does on Android devices: users swipe up from the bottom of the screen to receive customized information cards. The cards feature weather, traffic, stock quotes, recent sports scores, local places of interest, movie showtimes and so on. Below is a complete list of the content/data available through Google Now. 

Google Now comparison iOS vs. Android

Source: Google

The cards on the chart above "missing" from iOS are newer cards that will soon come to iOS. Google confirmed this. 

Those who download and use the service will likely find themselves using it regularly (as I do). While it can sometimes be flawed or inaccurate -- if you travel a lot it will often give you information about the city you just left rather than where you are -- it offers a growing corpus of useful information. As mentioned, it continues to expand and improve. 

Google requires users to sign in to get access to Google Now, so the company will gain mobile usage data it wouldn't otherwise have in the process. It's a very effective way for Google to get iOS users re-engaged with search on their iPhones and iPads. 

A survey we conducted in June of last year (n=503 US iPhone 4S owners 18 and older) found that most people who searched Google on their iPhones didn't use the Google Search app: 

Which of the following do you use MOST OFTEN to search the web on your phone?

  • I visit Google.­com to search: 44.9 percent
  • I use search in the Safari toobar: 26.4 percent
  • I use the Google mobile app: 19.3 percent
  • I use Siri to search the web: 11.1 percent
  • I use Bing and/or Yahoo: 6.6 percent

If this survey were done today we might see slighly different percentages but directionally the results would be similar. It will be interesting to see whether and how the numbers change several months from now -- and whether the introduction of Google Now for iOS has had a meaningful impact on user behavior. 

Is Apple's Resistance to Larger Screens 'Making the Perfect the Enemy of the Good'?

The iPhone 5 introduced a 4-inch (diagonal) screen that in my view distorted the proportions of the handset. (I wanted it to be slightly wider as well.) That was an upgrade from what was essentially a 3.5-inch screen on the 4S. Yet at the time of launch the 5's new larger screen already appeared small next to some competitive devices.

Samsung's Galaxy S3 and others were at 4.8-inches or beyond. The newly released Galaxy S4 has a 5-inch screen and the Galaxy Note 2 offers a 5.5-inch screen. Samsung has also made an 8-inch tablet that works as a phone. 

Earlier this week during Apple's earnings call CEO Tim Cook was asked about a potentially larger iPhone screen, which several surveys indicate iPhone buyers want. Here's the exchange:

Analyst: [D]o you think there is a long-term case for a larger screen size or at least the larger variety of screen sizes for iPhones and for the smartphone category in general?

Tim Cook: The iPhone 5 offers as you know a new 4-inch Retina display, which is the most advanced display in the industry and no one comes close to matching the level of quality as the Retina display. It also provides a larger screen size for iPhone customers without sacrificing the one handed ease-of-use that our customers love. So, we put a lot of thinking into screen size and believe we’ve picked the right one.

Tim Cook acknowledged that “some customers” value screen size. He explained that larger displays require trade-offs (technically speaking). He added that the company won’t ship a larger iPhone display “while these trade-offs exist.” That implies the company has larger screen iPhones on its roadmap somewhere in the future.  

However Apple is indeed putting itself at a disadvantage by not offering a larger-screen iPhone. Perhaps not everyone wants it but lots of people (including me) do. An ideal device would marry the LG Nexus 4 (4.7-inch screen) form factor with iOS as its operating system. 

Apple and Tim Cook seem to be nearly alone in their belief that the iPhone's screen is vastly superior to competitor-device screens. Third party analysis shows that this is not the case. However it does come out on top in some areas. Yet the public may not be noticing these relatively subtle differences. And Samsung's display has been found to have superior resolution and better blacks. 

What consumers probably notice more is that the iPhone's screen looks small and by some measures inadequate vs. other devices. One-handed operation of the iPhone is great in a few instances but not entirely necessary. Indeed, it may not be an important feature for most people (though that's an "empirical question").

It does seem to me that screen size is one case of Apple (if it's to be taken at face value so to speak) "making the perfect the enemy of the good." And I think a "5S" without a larger screen option will be a significant disappointment to many.  

What Retail Can Learn from the Hotel Industry about Using Technology

The challenge of "showrooming" has been met by traditional retailers with either indifference and inaction or its opposite: aggressive price matching. Best Buy and Target are examples of the latter approach. They decided in February to match any price on Amazon year round.

However this strategy lacks "depth."

Price matching alone will not successfully address showrooming; it will in fact encourage it as more smartphone shoppers check Amazon and other sources to see if in-store prices are the best they can do -- and to demand a lower price in store if they find one online. 

Signs like the one below invite someone to go to Amazon (if they weren't thinking about it already) and compare prices. 

Screen Shot 2013-04-24 at 2.31.12 PM

It may be necessary to price match in selected categories such as electronics. But price matching is not a panacea. Instead the retail industry can take a lesson from the hotel industry, which is doing some very creative things with technology. 

The New York Times ran a story today about how hotels are using technology to improve the customer experience (including personalization) and lower costs in many instances: 

Hotels around the world are using technology in new ways, with the goal of speeding up or personalizing more services for guests.

David-Michel Davies, president of the Webby Media Group, said he visited Internet companies around the world each year for the Webby Awards, which honor excellence on the Internet. He said he had found that hotels were using technology as a substitute for human hospitality.

Instead of the staff at the front desk offering advice on where to go for dinner, guests may be lent an iPad loaded with maps and suggestions for local restaurants and sightseeing. A hand-held device in the room might control the television, blinds and temperature, replacing the role of the bellman who would describe how the features in the room work when he dropped off a guest’s luggage. “Hotels are transforming service into a digital concept,” Mr. Davies said.

There are an enormous number of ways that technology, and mobile technology (apps) in particular, could improve the in-store retail experience. Personalization, notifications, offers, product information and reviews, loyalty, payments and other use cases, if creatively implemented, could make the in-store experience richer, more fun and more rewarding for shoppers.

This creative, "diversified" approach to mobile and the in-store experience holds great promise against showrooming. Retailer size and resources would affect the scope of what might be pursued -- but every brick and mortar retailer could do something more interesting and creative than simple price matching. And the hospitality industry points the way. 

Apple Sells More iPhones, iPads than Wall Street Expected

Apple has just released earnings. The company reported quarterly revenues of $43.6 billion. Second quarter revenues in 2012 were $39.2 billion. Total 1H 2013 revenues were $98 billion. 

There were better-than-expected iPhone and iPad sales in the quarter. Gross margins came in at 37.5%. This compared to 47.4% last year.

Now the device numbers:

  • iPhone: 37.4 million (vs. 35.1 million a year ago)
  • iPad: 19.5 million (vs. 11.8 million a year ago)
  • Macs: "Just under 4 million" sold last year (vs. 4 million a year ago)
  • iPods: (5.6 million; iPod Touch represents 50%+ of sales)
  • iTunes: $4 billion (new sales record) 

On cheaper devices: There were lots of questions during the earnings call about Apple's competitive position and ability to compete in markets around the world. CEO Tim Cook repeated several times that an aggressively priced iPhone 4 is the crux of Apple's strategy to attract first time smartphone buyers in developing markets. 

This is a product, however, that's two generations old. While Apple says it won't make "cheap products" it's very likely that Apple will develop a less expensive iPhone to compete in those markets where "first time buyers" can't afford the state-of-the-art iPhone. 

On mobile payments: Tim Cook was asked about getting into mobile payments. Cook responded that the market was in its infancy, implying that Apple would be waiting to enter it in earnest (if at all). 

On the prospect of a larger iPhone screen: One of the financial analysts asked about a larger iPhone display. Cook respondend, " The iPhone 5 has the absolute best display in the industry." However he acknowledges that "some customers" value screen size. He explained that larger displays require trade-offs in quality. He then said that the company won't ship a larger iPhone display "while these trade-offs exist." That in turn implies that a larger display may be on the iPhone 6 or a later model. 

    Mobile Payments Growing but Still More Hype than Reality

    Mobile payments -- as in buying things in a retail store with a mobile device -- still appear to be years away. Two weeks ago the IAB and InMobi released survey data that showed a range of payment and financial-related activities in mobile.

    The survey, conducted in Q1 this year with roughly 1,200 US adult respondents, showed that there were pockets of mobile-financial activity: people capturing coupons, buying digital content and paying selected bills via smartphones. But the road to in-store mobile payments adoption is much longer (say 3 years or more).

    In contrast to other types of "mobile payments" and financial services, mobile banking has taken off more rapidly than financial institutions anticipated. However mobile banking is really a case of people accessing information via tablets and smartphones that they already get from a PC. There's essentially no new behavior here, with the exception of mobile deposits (not yet widely performed). 

    Are you aware of any mobile financial services features from your bank?

    Screen Shot 2013-04-22 at 1.53.18 PM

    Source: IAB, InMobi (n=1,242 US adults)

    Capturing and redeeming mobile coupons was the most popular financial-related activity among this pool of respondents (57%). There's no surprise in that finding; mobile coupons are hugely popular.

    There's also a significant amount of mobile bill paying (probably credit-card bill paying) according to the survey (46%). Mobile phone bill payment is also popular (42%). 

    In terms of in-store/offline mobile payments, 34% of these respondents said they had conducted such a transaction. This number is probably higher than the "real" number if we were able to look at a nationally representative sample of mobile users. I suspect the number is much closer to 10% or 15% perhaps (unless everyone is talking about a loyalty app such as Starbucks).  

    Have you ever used your mobile phone to make a payment? Screen Shot 2013-04-22 at 2.02.33 PM

    Source: IAB, InMobi (n=1,242 US adults)

    It would also be useful to get some additional insight into what "Paid a business for real-world goods/services by mobile" actually means. Unfortunately the survey doesn't further unpack the finding. For example, is it PayPal usage; is it use of a credit being accepted or read by a Square dongle? Is it a loyalty app, as I suggest above? 

    Among financial-related apps, PayPal is easily the leader. (The company is now rolling out its in-store payments system through the Discover network.) In the chart below 37% of survey respondents said they had PayPal on their phones. The survey asks about "downloads" rather than active usage. Thus we don't know how often or whether people actually use these apps. 

    Downloads without more insight into active usage is an almost meaningless statistic.  

    Have you downloaded any of the following apps to help you make payments or keep track of your finances?
    Screen Shot 2013-04-22 at 2.02.44 PM

    Source: IAB, InMobi (n=1,242 US adults)

    Square, which is probably the only other mobile payments brand known by consumers, stands at 8% penetration. This of course is not Square the credit-car-reading smartphone dongle, but the "Pay with Square" app that permits a "contactless" payment where both sides have a Square account. (The "Paid a business for real-world goods/services by mobile" answer probably includes use of the Square dongle.) 

    Google Wallet seems completely stalled at 7%. The widespread availability of NFC in Android and Windows Phones is unlikely by itself to jump-start NFC payments in North America. However that could change if the iPhone 5S were to include the capability.

    The data above present a picture of increasing, incremental usage of mobile financial services and "payments" by the US smartphone population. That will continue as more services adapt to mobile and consumers become increasingly comfortable with using their mobile phones for a range of transaction types.

    However the much-anticipated day when everyone is carrying a digital wallet and using it to buy goods and services in the real-world is still much more hype than reality. 

    Yahoo Quickly Puts Summly Buy to Use with Updated iOS App

    Late last month Yahoo acquired news app Summly for the underlying technology, developed by SRI. It was just the latest in a series of mobile startup acquisitions (mostly for talent) Yahoo has been making.

    Today the company rolled out the fruits of the Summly acquisition: a new iOS (iPod Touch, iPhone) flagship app. This follows last week's release of Yahoo Mail for the iPad and a new Yahoo weather app. 

    The Yahoo blog, in a post by CEO Marissa Mayer, announced the new app this morning:

    The new Yahoo! mobile app is also smarter, using Summly’s natural-language algorithms and machine learning to deliver quick story summaries. We acquired Summly less than a month ago, and we’re thrilled to introduce this game-changing technology in our first mobile application. And, with the immersive imagery of our virtually endless newsfeed, the new Yahoo! app has both great technology and beautiful design front and center. Because searching for great content is also core to the Yahoo! experience, we’ve also improved the search experience with better video and image search.

    The app offers essentially two views of stories, a kind of list view with thumbnail images (top left) and a more immersive (Summly like) visual view of stories (top row right and below left):

    Screen Shot 2013-04-22 at 9.23.31 AM

    Yahoo enables personalization of news content in the app. If you're signed in each story allows users to select "more" or "less" news about the topic (lower right images). That personalization will also be reflected in the stories presented on the Yahoo PC site. However personalization is far from obvious in the new app and its not clear how many people will notice let alone use it. 

    The "visual" dimension of the experience is not as engaging or successful as Yahoo's new weather app (images below). However it's quite a bit more challenging to duplicate the experience of the weather app with news content, whose stories and images are constantly changing. In addition the list view of news is kind of flat and uninteresting. 

    Screen Shot 2013-04-22 at 9.29.22 AM

    Yahoo is making good progress in updating and mobilizing its user experience under Marissa Mayer. Things are definitely on the right track. However with the new Yahoo flagship/news app it will probably take a few more "iterations" to get things right.

    Nokia Q1: Lumia Sales Up though Brand Dead in US Market

    Nokia released Q1 earnings this morning. They were mixed. The company said that it sold 5.6 million Lumia handsets, which is up from 4.4 million in Q4 2012. Overall shipments of Nokia handsets were down more than 20% however. Sales also fell 20% YoY, to 5.9 billion EUR ($7.7 billion). As a consequence Nokia shares were down 12% this morning.

    The roughly 25% improvement in Lumia sales was encouraging but far from a turnaround. Nokia's lower-end device sales were down, offsetting the Lumia gains and depressing overall sales figures. 

    Since turning to Windows Phone in 2011, Nokia has sold 19.9 million total units. While this isn't outright failure -- and there's growth projected -- Windows isn't going to save Nokia or make it competitive with Android and iOS (enough time has passed to draw that conclusion). Nokia will have to turn to Android to diversify in the near term.

    Nokia reported Lumia sales increases in all geographic regions except the US/North America. That's largely because Nokia's brand remains relatively strong in Europe and other places. However its brand is effectively dead in the North American market. Qarterly shipments of Lumia devices were down 33% vs. Q4 (400K vs. 700K) in North America. 

    This not only reflects the weakness of the Nokia brand but equally the indifference of much of the US public to Windows Phones. Not only will Nokia have to aggressively discount it will need to develop new devices for the US market and may still fail (absent an Android strategy). 

    During its Q1 earnings call Nokia was dismissive of Android. However if the company hopes to compete again in North America and indeed globally in the top tier of OEMs it will have to develop Android handsets beside Windows. In the US Windows Phones are driving less than 2% of mobile internet traffic; their US market share is roughly 3%. 

    Low Awareness, Lack of Interest Plague BlackBerry, Nokia

    It turns out that despite lots of media coverage and celebrity personality Alicia Keys as "creative director" most North Americans don't know about the launch of BB10. That's according to a survey commissioned by MKM Partners. The poll of 1,500 adult consumers (conducted during the past three weeks) asked about device adoption and future purchase intentions. It found, consistent with other data, much higher recognition and interest in Apple and Samsung. Others generally fared poorly.

    The survey found that 51% of respondents owned smartphones, with 39% saying they bought their in the last six months.

    Ownership breakdown by handset OEM: 

    1. 33% Apple
    2. 28.3% Samsung
    3. 9.9% LG
    4. 9.3% HTC
    5. 9.3% Motorola
    6. 4.4% other
    7. 3.4% BlackBerry
    8. 1.6% Nokia 

    Current mobile OS:

    1. 55.1% Android
    2. 31.3% iOS
    3. 6.4% Windows Phone (higher than other surveys)
    4. 3.4% not sure
    5. 3.1% BlackBerry

    Future purchase intentions:

    1. 44.5% “not sure” of next phone
    2. 19.6% said Samsung (Android)
    3. 17.7% iPhone
    4. 5.9% BlackBerry
    5. 4.4% Motorola
    6. 3.7% HTC
    7. 3.1% LG
    8. 0.7% Nokia

    Asked about BlackBerry 10, 83% of respondents indicated they weren't aware of the launch. Asked about Windows Phones, 61% lacked awareness of the OS. When asked about interest in BB10/BlackBerry or Windows Phones the majority of respondents indicated indifference.

    Not interested:

    • 68% not interested in BlackBerry
    • 63.9% not interested in Windows Phone

    Separately investment firm Piper Jaffray conducted another wave of its research among US teens about device ownership and future intentions.

    piper_jaffray_teen_survey_apr13

    Notable findings include the following: 

    • 51% of surveyed teens owned a tablet
    • 50% owned smartphones

    In both cases iOS was dominant. However Android has made slight gains in both smartphone and tablet categories since the previous survey was conducted last fall. And aggressive pricing, especially in the tablet category, may drive Android penetration up vs. iOS among younger users.

    Will It or Won't It? Microsoft's iOS-Office Dilemma

    Microsoft is in a tough spot: Windows Phones aren't selling well outside of a couple of EU markets and data indicate that neither is Windows 8. Windows RT and Surface tablets have so far been a major disappointment as well. While it's way to early to "count Microsoft out," clearly the company is in trouble as mobile internet access and mobile computing accelerate at the expense of the PC. 

    There have been persistent rumors that Microsoft was bringing a version of Office to iOS and specifically the iPad. You can use Microsoft's Office 365 cloud-based product on the iPhone or iPad. (I have not.) But the experience will not be as rich as with a native app. 

    There are two theories about why Office has not come to iOS as a native app: Microsoft won't pay the 30% "tax" to be in the iTunes App Store and, perhaps more significantly, if Office came to the iPad (or Android tablets) it would undermine the sales outlook for Microsoft's own Surface tablets -- currently the only tablet that offers Office. 

    Microsoft's compromise may be to offer Office 365 through the browser to iPad users. However by not offering a native app it risks ceding the centrality of  Office to a range of apps. Offering a native-app Office would potentially cloud the future of its own tablet devices, which may not be so bright anyway.  

    Low-Cost Tablets to Accelerate Decline of PC Market

    Last week there was a Reuters report asserting the next Google-ASUS Nexus 7 will have an improved screen and may cost as little as $149. The current entry level Nexus 7 is $199. Reuters also said that if it's not the new Nexus 7 than the existing tablet's price may be reduced. The current entry level Kindle Fire from Amazon (with ads) costs $159.

    As this all indicates there's a kind of "race to the bottom" going on that may radically depress margins on Android tablets. Furthermore we're likely to see a decent $99 7-inch Android tablet in the next year.

    Screen Shot 2013-04-07 at 7.19.32 AM

    The growth of smartphones and the emergence of these reasonable-quality low-cost tablets such as the Nexus 7 are accelerating a trend toward mobile device adoption at the expense of PCs and further extending PC replacement cycles. In developing countries PCs will likely never reach penetration levels seen in North America or Europe.

    In its latest device forecast Gartner joins the party, affirming what we already know about PC erosion in favor of smartphones and tablets on a global basis. In its projection Gartner sees Android as the big winner, effectively replacing Microsoft as the dominant OS on tablets and smartphones.  

    Screen Shot 2013-04-07 at 7.02.46 AM

    The particulars and timing of this forecast will undoubtedly turn out to be wrong. However the direction of the forecast is probably accurate. With its resistance to matching price competition (probably wisely) Apple iPads will not reach tablet penetration levels of low-cost Android based tablets (though the company is considering a lower-cost iPhone).

    So far, Microsoft's "2.0" efforts in mobile, Windows Phone and Surface tablets, have only made modest gains in selected markets. However Microsoft still makes money from Android OEMs via patent licensing fees. If it has to rely on licensing the company's future will be pretty grim.

    If these figures are anywhere near accurate tablets are poised to become the primary computing (and advertising) platform. Yet we're likely to see quasi-converged devices (i.e., tablets with keyboards like the Surface Pro) become laptop replacements in the near term.  

    More than Half of Twitter Ad Revenue from Mobile

    A new forecast from eMarketer estimates more than half of Twitter's ad revenues (53%) will come from mobile advertising this year, up from virtually no ad revenue from mobile in 2011.

    In total, eMarketer estimates global ad revenue at $528 million for 2013, pushing upward to $1 billion for 2014.

    But ads on mobile devices are driving incremental growth over the next two years. By 2015, Twitter is expected to pull in $1.33 billion in worldwide ad revenue, more than 60% of which will come from mobile advertising.

    TwitterMObile

    The rapid growth in mobile ad revenue is due in part because "Twitter has ultimately benefited from the increased focus on mobile by competitors like Google and Facebook, which have both expanded their own mobile ad offerings and worked to convince advertisers to shift dollars to mobile devices," says eMarketer. Advertisers are clearly showing more interest spending money on mobile ads.

    The report shows Twitter ad revenue is slowly shifting globally with 83% of 2013 ad revenue from the U.S., down from 90% in 2012.

    BlackBerry Z10 Is Merely a 'Stop the Bleeding' Phone -- if That

    BlackBerry CEO Thorsten Heins recently got a lot of coverage, in anticipation of the BlackBerry Z10 launch, for the remark that the iPhone was now outdated.

    The much-hyped Z10 is now available in the US from AT&T (soon from Verizon) and a range of carriers in international markets. I went into an AT&T store this weekend to take a look at and get a "hands on" sense of the device. Unimpressive. 

    It was immediately clear that this handset may keep some number of BlackBerry customers from "defecting" to the iPhone or Android. However it's not sufficiently exciting to lure existing iPhone and Android users to the BlackBerry platform. The UI and software are not entirely intuitive for iPhone and Android users. In addition, the collection of apps is limited.

    The phone resembles an HTC device and is generally unremarkable otherwise. Indeed it has a "generic smartphone" quality.

    Much has been made that AT&T employees haven't been trained to promote the phone. That seemed evident in my visit. In the store I entered there was not only a lack of promotional signage but the phone was placed in a far corner almost as an afterthought. It was simply there among a row of competing smartphones -- not highlighted in any way. I had to ask store salespeople multiple times where it was to locate the phone.

    It's almost 100% certain this device will not be the engine of new growth for BlackBerry and that the device maker will continue to fall out of favor in the US market. 

    Apple iOS Devices Continue Market Dominance in Mobile Advertising

    Mobile advertising and platform exchange firm Velti has released its monthly snapshot on the "State of Mobile Advertising" for February 2013.

    Among the interesting tidbits, the report found Apple iOS devices accounted for a whopping 8 out of the top 10 mobile devices serving ad impressions. iPhone devices had a 37.4% share, while iPads comprised 17.2% of all impressions served in February.

    And while Samsung Galaxy devices comprised less than 5% combined market share, the report speculates the release of Galaxy S 4 might significantly alter the mobile ad market in the coming months.

    Velti_DeviceShare

    In terms of market share by OS, Apple still clearly shows an advantage holding steady at around 65% for the month of February 2013.

    Velti_iOSshare

    One noteworthy datapoint in the report highlighted how weekends continue to see the highest levels of app usage, with Sundays accounting for 15.7% of all impressions served. The report stated: "Publishers and marketers should keep in mind daily usage patterns as an important factor in getting the highest return on clicks, and ultimately revenue, for their specific site or app."

    Velti_DayofWeek

    Velti’s "State of Mobile Advertising" report gathers data from the Mobclix Exchange and is provided on a monthly basis.

    Report: iPhone Traffic Still Roughly 2X the iPad in North America

    Recently there have been several reports starting to show that tablet (iPad) traffic is beginning to overtake smartphone traffic. For example, a report last week from Adobe found that, on a global basis, tablet traffic now exceeds smartphone web traffic (8% to 7%).

    A new report from ad network Chitika, however, says that at least in North America the iPhone still generates roughly 2X the web traffic of the iPad. The iPad dominates tablet-only traffic with more than 80% market share. 

    In late February, Chitika looked at traffic distribution from "250,000+ publisher websites." The company found that "iPhone users still generate more than two times the traffic of [ ] iPad users."

    Screen Shot 2013-03-16 at 3.09.48 AM
    The iPhone was responsible for 61.5% of North American web traffic from iOS and the iPad for just under 31%. The iPod Touch drove roughly 8% of iOS-generated web traffic according to Chitika. 

    The Chitika report didn't look at engagement or time on site. The earlier Adobe report found that "on aver­age inter­net users view 70% more pages per visit when brows­ing with a tablet com­pared to a smartphone."

    As tablet penetration grows, we should see its share of iOS and all web traffic commensurately grow. The interesting question is whether tablets are substituted in the home for smartphones or PCs. A recent Google-Nielsen report found that 77% of smartphone search activity happened at home or in the workplace (when people typically have ready access to PCs).

    Samsung Debuts 'Life Companion' S4, Apple Compelled to 'Go Big' by Galaxy's Success

    Last night in New York Samsung formally announced its much anticipated Galaxy S4 follow-up to its hugely successful S3. The hardware update was relatively modest: a somewhat larger high-resolution AMOLED screen, more CPU power and thinner body. It will be challenging to tell the S4 from the S3 without a close look. 

    Much of the evening was about software though decidedly not about "Android" or "Google." Android got a single mention and Google was never mentioned.

    Here are the S4's major "specs":

    • Screen: 5 inch HD Super AMOLED (1920 x 1080) display, 441 ppi
    • Processors: 1.9 GHz Quad-Core Processor / 1.6 GHz Octa-Core Processor
    • OS: Android 4.2.2
    • Camera: 13MP (rear), 2MP (front) 

    With its splashy, Broadway inspired show last night Samsung entered Apple's "big launch" turf. It also perhaps unwittingly emulated Apple's "incremental" handset update cycle. Indeed, we might call the S4 the "S3s" because of its "evolutionary" changes over the S3. 

    There were tons of software updates and new additions to the handset; many of them related to the camera and many of them were impressive seeming. However today several outlets are reporting that the Samsung software didn't always work as promised. In fact the S4, which will undoubtedly be popular, has received some quite mixed reviews -- especially from Gizmodo last night, which called it a "missed opportunity." 

    Samsung has taken a bit of an "A/B testing" or shotgun approach, if you prefer, to developing mobile devices. Over the past three years it has released a wide range of tablets and handsets vs. Apple's much more deliberate and controlled pipeline. Yet through its experimentation with larger screens and a range of devices (as a differentiation strategy) it has helped cultivate in consumers an appetite for larger smartphone screens. 

    But for that shift in the public's appetite, Apple wouldn't have made the "taller" iPhone 5. Yet there's considerable pressure to make still larger iPhones. 

    A larger screen has become one of the key hardware features and differences between the first-tier Android handsets (especially from Samsung and HTC) and the iPhone. Thus Apple will be rolling out an even bigger iPhone (probably at 6). Apple would do well to bring that larger phone this summer and not wait another full year to do so.

    Apple is not used to compensating and being on the defensive. It normally leads the market with design. But it has been playing catch-up recently.

    The unexpected success of smaller tablets forced it to create the iPad Mini. And the unanticipated development of giant-screened smartphones (Note II, S4) forces Apple to offer a larger iPhone, thereby betraying Steve Jobs' "single hand" operation philosophy. In addition the need to sell more iPhones in developing markets (vs. less expensive Androids) has given rise to rumors of a cheaper, "more plastic" iPhone. 

    Samsung clearly emulated, imitated or copied (take your pick) the iPhone's look and feel at the outset. But the Korean company has now gone beyond it in several ways -- including in the hyperbolic claim that the S4 is a "life companion." And, ironically, Apple is now being compelled by the Galaxy line's success and by public demand to make the iPhone much more like Samsung handsets.