Operating Systems

Palm in Turnaround?

My colleague Dan Miller speculated a few days ago about Chinese PC maker Lenovo as a potential purchaser of Palm for its WebOS. In my view that's a great guess of who the potential buyer could be. And if not Lenovo then other similarly positioned hardware OEMs are candidates: HP, Dell, Acer, etc.

The mobile Internet is here so is true "personal computing" with the advent of the iPad. These "old line" PC makers all know they've got to diversify and reposition for the future -- a future when people spend less time with PCs and more time with mobile devices. Owning a great mobile OS thus makes sense.

Meanwhile Palm's CEO continues to argue that the company is just at the beginning of its turn around road map. In a Q&A interview with Fortune's Adam Lashinsky, CEO Jon Rubenstein said:

Clearly we've hit a speed bump. No question about it. It’s really disappointing, and it's frustrating. But, the company has tremendous assets.  We've got a great team we've built over the last couple of years.  Remember this whole thing was a transformation story.  It  wasn't like we took something that was working and didn't run it well.  We started off with a company that had no future, and we have been transforming it. We have arguably the best mobile operating system out there. It’s clearly the easiest to use and has the most intuitive user interface. We've got good products that get critical acclaim.  It's in its early stages still, but we've got great quality of apps, and new apps coming all the time.  By the time you get this published, we'll have commerce going in Europe, which is a big milestone for us.  We've got good relationships with carriers.

We've got all those things going for us, and what we need to do is get more commercial success and get to scale.  And that's going to take longer than we'd hoped, obviously, but that doesn't mean we can't get there.  We do have $590 million in the bank, and we have a plan that carries this company forward. Now, we need to be frugal and we need to invest in those areas that have the best return for us, but when I read that we're going out of business or our stock is worth zero or those kinds of things, it defies logic to me.

But as the owner of a Pre (I know I've said this before) there may be a great OS inside but the overall execution and user experience is inferior. Palm got a bunch of "little things" wrong, making the device more difficult to use and far less intutitive than the iPhone or even Android.

Some have argued that Palm should come out with new devices -- the underpowered Pixi emerges as more "viable" than the Pre -- and I would agree. Perhaps use a Treo body with a WebOS interior; get a few new devices into the market. Maybe get a tablet out there too. That would be very interesting. 

But continuing to bank on the Pixi and the Pre is futile. While the Pixi might sell to younger users and the crowd in transition from feature phones to smartphones, these devices aren't really going to bring Palm the coveted "scale" Rubenstein is looking for.

In Hollywood when a movie project is taken out of pre-production and basically cancelled it's called "turnaround" -- the project is done, toast. That's what Palm is now facing, a promising launch gone awry. Radical moves are necessary -- not patience -- if the company wants to remain independent. 

More likely however is an acquisition, which we've been talking about almost since the launch of the Pre (intitially re Microsoft or Nokia). The problem with the acquisition scenario is that the WebOS is worth less -- and a buyer wants to pay less -- than for the entirety of Palm, its good will and related overhead. Palm shareholders will want more money than a potenital buyer, primarily interested in WebOS, will likely be willing to pay.

Lenovo Contemplating Palm Purchase on the Eve of iPhone 4.0 and Project Pink's Debut

Spring has sprung and industry thoughts naturally turn to mobile operating systems. Just a day before Apple's "sneak peak" at OS 4.0 (which is expected, at a minimum, to add multi-tasking and improved ways to handle and display mobile advertising), Microsoft indicated that it is ready to launch its long-awaited mobile phone/media player combo, called "Project Pink". While everyone was distracted by these developments, a group of investors bid up Palm Inc.'s stock price, fueled by speculation that Chinese OEM, ODM and laptop aficionado Lenovo has eyes on the WebOS prize. Before day's end on Wednesday, Palm's stock price jumped 20% to $4.62 per share.

Given Lenovo's distribution channels and reputation for making and supporting the ThinkPad line of laptop and mobile computers, the prospective acquisition would be a good move for both parties. Although it's early in the game, Apple's iPad has, at a minimum, sparked heightened interest in the mobile tablet as a complement, substitute or replacement for netbooks and laptops. What's more, the iPhone's new operating system is expected to be just as important in its role is software platform for the iPad as well.

Lenovo has proven to be a great steward for ThinkPad, a brand and product line it acquired from IBM in 2004. At the time ThinkPad got high marks for industrial design and product innovations, even though it was never going to be a monster money maker for Big Blue. Palm is a little different. Both the Pre and Pixi have failed to capture market share in the smart phone market, where they have suffered from a certain lack of support in the carriers' retail channel. Meager sales all but destroyed WebOS's prospects to rival alternative smartphone application platforms, especially the iPhone and Android OSes. Its appeal was predicated on its ability to run a multiplicity of applications designed for predominant standards and quasi-standards, like HTML5, Java and Flash. At a minimum, it could have given Windows Phone and RIM's Blackberry an interesting run for their money.

As a standalone, single-product company, Palm is just too small to take on and capture share versus Apple, Google, Microsoft and RIM. Lenovo has a chance to integrate Palm's smartphones and the WebOS into a coherent set of complementary products spanning desktops, laptops, netbooks, tablets and smartphones. Even if the acquisition turns out to be "only a rumor", it is a tantalizing one.

CTIA Offers LBS Guidelines, Are They Needed?

In conjunction with its big Las Vegas trade show CTIA has come up with some new rules guidelines for use of location information in the delivery location-based content and advertising. The document is called "Best Practices and Guidelines for Location-Based Services." Below are a few excerpts:

The Guidelines primarily focus on the user whose location information is used or disclosed. It is the user whose privacy is most at risk if location information is misused or disclosed without authorization or knowledge.

The Guidelines apply whenever location information is linked by the LBS Provider to a specific device (e.g., linked by phone number, userID) or a specific person (e.g., linked by name or other unique identifier). 

The Guidelines do not apply to location information used or disclosed:

  • as authorized or required by applicable law (e.g., to respond to emergencies, E911, or legal process);
  • to protect the rights and property of LBS Providers, users or other providers of location information;
  • for testing or maintenance in the normal operation of any network or LBS; or in the form of aggregate or anonymous data.

The CTIA document goes on to discuss consent for the use of location and revocation of that consent by users, among other related issues. One thing it sidesteps is subject of illegal government survelliance of mobile subscribers. It says those involved with "legal process" don't implicate consumer notice or consent. (That implies warrants for surveillance, which the government hasn't felt it needs to obtain in the recent past re accessing telco records.)

The reason I wrote the headline above the way I did is that opt-in consent for LBS is already widely used on the dominant smartphone platforms, and in particular the iPhone. There are undoubtedly others that need this education and these guidelines (for the mobile Web) but best practices are arguably already pretty well established by existing systems and methods in use today.

For its part the MMA hasn't yet opined on the matter. In September of last year the trade group said:

The MMA recognizes the need to provide guidelines for location based advertising. However, models for using location currently vary, and do not allow identifying the most appropriate guidelines at this point in time. MMA’s mobile advertising committee has started exploring the opportunities of using location in advertising and plans to come up with guidelines for location based advertising. In the meantime, MMA encourages experimentation in this space and invites companies to share best practice with the MMA mobile advertising committee.

The MMA will feel some pressure to get its guidelines out now. Either they will mirror (or simply duplicate) those promulgated by CTIA or they'll vary. If they vary at all will that create confusion among marketers and publishers? Probably. But we'll have to wait and see what emerges.

iPad Coming to Stores on April 3

Yesterday I said the good folks at Gartner were effectively clueless about whether or not the iPad would sell in quantity this year. But soon we'll find out what the preliminary (early adopters, fanboy) demand will be.

Apple announced this morning that pre-orders will happen on March 12 and the "magical and revolutionary" device will become available on April 3:

Apple® today announced that its magical and revolutionary iPad will be available in the US on Saturday, April 3, for Wi-Fi models and in late April for Wi-Fi + 3G models. In addition, all models of iPad will be available in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK in late April.

Beginning a week from today, on March 12, US customers can pre-order both Wi-Fi and Wi-Fi + 3G models from Apple’s online store (www.apple.com) or reserve a Wi-Fi model to pick up on Saturday, April 3, at an Apple retail store.

There's lots of conflicting speculation and survey data on demand. Pre-orders and early sales will give the market a pretty good sense of whether this is going to be another hit or not. Price, which could be reduced, will also play a role. The "low-end" iPad, which will be the most successful of the many options, comes in at $499. This price was the big surprise at the launch event and much cheaper than the speculated $800-$1,000. 

If you recall once the iPhone gained its subsidy sales took off. I think there's no question that at the right price, which for the iPhone was sub-$200, this device will sell well. 


As this device moves into the wild, it will be interesting to see how people use it. AT&T CEO Randall Stephenson doesn't believe he'll get a lot of 3G subscriptions off the device. And I would agree; the "use case" is going to be at home, in hotels and other places that have WiFi (maybe in the car for kids and movies/games). In addition the people that buy this will have smartphones already for access to the mobile Internet "on the go." 

Windows (7) Phone: Where Is Voice?

I saw most of Steve Ballmer's Windows 7 keynote at Mobile World Congress this morning. Most of the phone's features were demonstrated and there are some cool ones. Mostly the phone looks different than other things in the market, even as it borrows certain elements from Apple and Google.

However, one of Microsoft's core mobile competencies -- voice and voice search -- was not on display in the demo. I would have expected deeper integration of Tellme's technology into 7 and that this would be one of the differentiators or would-be differentiators for the company. Yet it was nowhere in evidence. 

I'm sure that voice search will be available for Bing; but will it be available at a deeper level in the way Google is trying to integrate voice on the Nexus One? That wasn't the case today and it's not clear how and whether Microsoft will use voice as the devices roll out late this year. If the company is smart it will seek to voice-enable as much as possible on the device.

Here's a quick demo of local search from MobileCrunch on the scene in Barcelona: 

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Nokia + Intel Create MeeGo OS

Nokia and Intel announced that they were merging operating systems (Maemo in Nokia's case) to create MeeGo, an open Linux based software platform for smartphones and a wide range of other devices including netbooks and "connected TVs."

This is the first big announcement after the parties announced a long-term strategic relationship:

MeeGo is an open source, Linux project which brings together the Moblin project, headed up by Intel, and Maemo, by Nokia, into a single open source activity. MeeGo integrates the experience and skills of two significant development ecosystems, versed in communications and computing technologies. The MeeGo project believes these two pillars form the technical foundations for next generation platforms and usages in the mobile and device platforms space.

Is this another indication that Nokia will ultimately abandon Symbian? It also suggests that Maemo will get better and be more competitive. Whether it will materially improve Nokia's fortunes in the smartphone market is another question. 

Here's video discussing the "merger" of platforms and the perceived opportunity:

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Related: More than 3 million Ovi Maps downloaded to since Nokia made maps and navigation free in late January. And the "other" Nokia OS Symbian unveils Symbian 3. 

Microsoft Shows Zune-Like Windows (7) Phone

Microsoft has just unveiled its Windows 7 Phone. It "disses" apps, relies more heavily on widgets and promises a more integrated experience -- a "new beginning" in the smartphone story. It borrows elements from both the iPhone and Android but combines them in a new, visually distinctive way (kudos to Microsoft on interface design, except for the homepage, which I don't particularly like).

I don't have one in my hand so I'll rely on third parties and the press materials. It offers a very Zune-like interface (with Xbox Live integrated) and is a complete redesign vs. 6.5.

From the press release:

With Windows Phone 7 Series, Microsoft takes a fundamentally different approach to phone software. Smart design begins with a new, holistic design system that informs every aspect of the phone, from its visually appealing layout and motion to its function and hardware integration. On the Start screen, dynamically updated “live tiles” show users real-time content directly, breaking the mold of static icons that serve as an intermediate step on the way to an application. Create a tile of a friend, and the user gains a readable, up-to-date view of a friend’s latest pictures and posts, just by glancing at Start.

Every Windows Phone 7 Series phone will come with a dedicated hardware button for Bing, providing one-click access to search from anywhere on the phone, while a special implementation of Bing search provides intent-specific results, delivering the most relevant Web or local results, depending on the type of query.

Here's the Ballmer GSM keynote replay; here are Windows (7) Phone screens. Here are some first impressions (with a lot of blanks) from:

Ballmer is still on stage as I write this, promising this as a next generation device and user experience. He envisions lots of Windows Phones but wants more consistency in the user experience and says that Microsoft will work more closely with operators than it has in the past. Here's is the initial partner list:

Mobile operators AT&T, Deutsche Telekom AG, Orange, SFR, Sprint, Telecom Italia, Telefónica, Telstra, T-Mobile USA, Verizon Wireless and Vodafone, and manufacturers Dell, Garmin-Asus, HTC Corp., HP, LG, Samsung, Sony Ericsson, Toshiba and Qualcomm Inc.

Microsoft is trying to position itself as more operator-friendly (vs. RIM, Android, Apple), "They're not just dumb pipes," says Microsoft's Andy Lees who shared the stage with Ballmer. Two key operator partners will be Orange and AT&T. This is a jab at Apple and AT&T asserting its independence a bit too. 

It won't be available apparently until "holiday 2010." We'll need to hold one and use it before any assessments can be made about its competitiveness. It does look much better than 6.5 however. There's no way this is an "iPhone killer," the question is whether it can compete with Android handsets. Regardless, it's good for everyone if Microsoft is more competitive in the smartphone market. 

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Related: See Bloomberg video/interview with Steve Ballmer (Windows Media only)

Carriers Unite in Launch Long-Shot Apps Bid

Everybody's got an apps store, including many carriers. But the carriers increasingly see themselves becoming marginal players, ISPs providing the data connection while software and hardware providers take their place at the center of the mobile universe. Today at GSM a consortium of global operators announced an initiative aimed at creating an open apps ecosystem to bolster and improve their "relevance" to end users.

Called the Wholesale Applications Community, it consists of the following carriers to start:

América Móvil, AT&T, Bharti Airtel, China Mobile, China Unicom, Deutsche Telekom, KT, mobilkom austria group, MTN Group, NTT DoCoMo, Orange, Orascom Telecom, Softbank Mobile, Telecom Italia, Telefónica, Telenor Group, TeliaSonera, SingTel, SK Telecom, Sprint, Verizon Wireless, VimpelCom, Vodafone and Wind

A selection of these companies are also part of the Google-led Android Open Handset Alliance

The stated objective of the group is the following:

The alliance's stated goal is to create a wholesale applications ecosystem that – from day one – will establish a simple route to market for developers to deliver the latest innovative applications and services to the widest possible base of customers around the world. In the immediate future the alliance will seek to unite members' developer communities and create a single, harmonised point of entry to make it easy for developers to join.

This makes sense and may work for feature phones and in-between devices that are not feature phones but not quite smartphones. However it's unlikely to have much impact on smartphone users/owners. With moves like allowing VoIP over 3G (see Verizon and Skype's anticipated announcement), carriers are becoming less and less central to the user experience. (Indeed, they will likely see the erosion of voice revenues in the near-term.) They provide the pipe and not much else. 

Vodafone has perhaps been the most aggressive of the carriers in offering cross-platform social tools in Vodafone 360 and a range of developer APIs. The company is also getting more involved with mobile advertising. Location and demographic targeting data can be offered to third party networks with a revenue share to the carrier. 

Apple changed the mobile landscape and smartphones forever by making the device and platform more important than the data/voice provider. Carriers are reacting and struggling to play catch-up with moves like this, as ambitious as it sounds.

Notwithstanding this impressive lineup, it's very unlikely that the operators will have much success with consumer services/software for smartphone owners. However I believe there's still a massive feature-phone opportunity that's largely being neglected -- and that's where their efforts should be concentrated. That's where this consortium and its developer community can really play and potentially succeed. 


Related: Google reportedly believes the effort won't succeed.

And speaking of carriers and advertising . . . Orange is rolling out ambitious MMS/SMS marketing throughout its European and some Middle Eastern markets: 

Building on its UK success, Orange is sharing innovation across its footprint, starting in Spain this month with new interactive ad-supported service, Mio. Orange is taking a different approach with Mio, offering all mobile customers in Spain the chance to opt-in, reaching beyond youth audiences. Mio customers will receive gifts, content and the opportunity to win monthly and annual prizes. Interactive SMS and MMS advertising campaigns will roll-out to other Orange markets in 2010. Other mobile advertising trials are also taking place in Egypt and Jordan in the first half of this year, allowing for expansion into emerging markets, as well as mature markets.

The operator has partnered with Blyk in the UK and Velti in Spain, as part of the program. 

WinMo 7: Is It Truly 'Do or Die' for Microsoft?

Windows Mobile 7 (and maybe a few other things) are being formally announced today in Barcelona at the Mobile World Congress. As a quick digression, there will be dozens of announcements coming out of the show; most will be of little consequence. But Microsoft supporters and critics alike are waiting to see whether Windows Mobile 7 can surprise, excite and reverse the growing downward marketshare trend that the OS has experienced over the past year.

There's been recent speculation about whether Microsoft might attempt to buy RIM as a way to "get back in the game." It's unlikely however when you consider that RIM is worth about $40 billion and Microsoft's biggest acquisition to date was aQuantive for about $6 billion. While it could be done hypothetically for cash and stock -- Microsoft's cash on hand is about $36 billion -- a bid for RIM would be a desperation move and a very last-ditch effort.

Certainly there's a logic here about the enterprise market that makes sense and is partly driving the rumor. Palm is a better choice (and much cheaper at $1.7 billion) in many respects but Microsoft CEO Steve Ballmer reportedly isn't interested. Meanwhile Palm's handsets, introduced to much fanfare, are now languishing essentially.

Redmond, which bought the Danger OS a couple years ago, believes that it still has a shot with WinMo 7, which reportedly won't offer Flash. (We're also waiting for the rumored Microsoft-branded phone that is code-named project Pink.)

Because of Microsoft's cash position and resources -- as well as the strategic imperative to succeed in mobile -- you cannot dismiss the company, really ever. However it will have a big challenge to overcome the mounting skepticism that it can match and catch Apple, RIM and Android with the forthcoming OS upgrade.

Mobile Web vs Apps Takes a Turn with Adobe Air

There are a number of firms out there that promise "write once, publish to multiple platforms as native apps." Those companies include Appcelerator and Rhomobile (among others). Add Adobe to that list with the release of Adobe Air for mobile. The company's vision is that developers will use Air and create cross-platform "native" apps for multiple smartphone operating systems simultaneously.

By no means an original vision or idea, if this can be achieved by Adobe it will likely mean that the expected migration from apps to HTML5 (mobile Web apps) will not necessarily happen or, perhaps more accurately, happen as quickly. It now becomes a race between Adobe and HTML5 as the company struggles to make itself relevant in mobile. (There were suggestions that Adobe was trying to prevent the current HTML5 "spec" from being published.)

Apple has blocked and publicly disparaged Adobe Flash for mobile. Adobe's announced relationship with Android is a bit of an intentional poke in the eye to Apple. But back to the central question at hand.

This "Air for mobile" announcement and its promise is an example of why mobile is so hard to predict at the moment. People assume that apps won't survive but they could we under a true cross-platform publishing tool. Apps offer a generally better user experience and if they're easy to publish across the top platforms developers will do so for obvious reasons (they also can't make any money off mobile Web apps). 

That doesn't mean that HTML5 or mobile Web apps wouldn't develop as well. Indeed, mobile websites (Web apps) will probably be developed in HTML5 going forward. It just means that the obituary for apps is perhaps been written too soon. 

It's Opera vs. Firefox in the Battle of Independents

Opera showed off a version of its browser for the iPhone (though officially no third party browsers are on the iPhone) that it will demo in Barcelona next week. Hopefully Apple will allow other browsers to be made available on the iPhone and iPad -- or risk an anti-trust issue (see Microsoft and its history with IE). This one-browser-only policy will especially become a problem for Apple if the iPad sells briskly. 

Regardless, and notwithstanding the presence of Skyfire and Dolphin and one or two more providers, the battle of the independent mobile browsers is going to come down to Opera (the incumbent) and Firefox (the insurgent).

I got a demo of Firefox mobile on the N900 from Mozilla's Jay Sullivan last Friday. I know Jay from his PocketThis days (subsquently bought by CallGenie) but he's much in demand as the head of mobile development at Mozilla. I was impressed with what I saw and won't do a review of its features right now. But Firefox's installed base of millions of users globally and the "weave" capability -- am add-on that enables your browser, tabs and bookmarks to be accessed from any device -- will be strategic advantages. The PC-mobile crossover will be huge for Firefox as it comes onto Android, WinMo (already there) and other platforms. 

Opera is well established and just crossed the 50 million user threshold. So it has a big head start. But the company has limited presence on the PC side, which may enable Firefox as it rolls out more smartphone versions to catch up relatively quickly. 

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Would Google Buy T-Mobile? Unlikely

Years ago there were always suggestions and discussion about whether Google would acquire a newspaper or yellow pages publisher. The culture of Google and those types of companies were so different -- which the proponents never fully understood -- that it was never going to happen. Now we have a similar argument going on in favor of Google buying the US operations of German carrier T-Mobile.

T-Mobile is struggling in the UK and US. In the UK the company has sought to form a joint venture with Orange and merge their operations. It has yet to be approved by regulators. In the US there have been persistent rumors that T-Mobile would have to do something similar or buy smaller carriers or merge with Sprint, etc. to advance its position in the market. 

Android devices and aggressive pricing have not been able to move the needle for the company. The same is true for number three US carrier Sprint, however the company did lose a much smaller number of postpaid customers last quarter

From Google's point of view, there's a certain logic to buying a carrier: 

  • It wants to sell phones directly to the market
  • It gets a network
  • It gets retail outlets to push its devices

However, I'm still quite skeptical that this would happen because of HR issues (buying employees) and other questions (direct competition with carrier partners). But it's not as much of a stretch now, given Google's plans and strategy, as the "Google should buy a newspaper" arguments made in the past. 

While Google is unlikely to buy a T-Mobile it's hypothetically possible that Google would make an investment in T-Mobile to gain access to its network, as it has with Sprint's Clearwire. 

New US Mobile Numbers from comScore

Based on activity of US mobile subscribers 13 and older, comScore put out data today that covers September through December 2009. While comScore counts 234 mobile subscribers, CTIA claims 271 million US mobile subscribers. The four major US carriers report approximately 250 million. 

Here are the charts reflecting the comScore data: 

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Google/Android doubled its market share during the Q4 period, while Palm, RIM and Windows Mobile all lost share. These Palm devices, notwithstanding the "plus" versions debuting at Verizon have clearly stalled. 

Here's "mobile content usage" according to comScore: 

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The 27% number for "used (Internet) browser" is very consistent with survey data well pulled in 2009.

What that number translates into in terms of "mobile Internet usage" depends on whether you think the base is 234 million or 250 million users. In the former case, the number of US mobile Internet users would be 64 million; in the latter it would be just over 68 million (a number consistent with Nielsen's figure).

The social network figure (15.9%) translates into 39.7 million social network users (with a 250 million base).  

Mobile Ads: Best of Times, Worst of Times

Brands, agencies and marketers of all stripes are increasingly interested in mobile advertising (or so surveys reflect), especially in the last six months. However "a fragmented landscape of different devices, operating systems and application storefronts" is confusing to many: What should we buy and how?

Companies such as Velti, Amobee and others aim to simplify mobile advertising with "end-to-end" solutions. But confusion remains. 

Meanwhile the data continue to show that mobile outperforms online by almost 5X in terms of most brand performance metrics. Those that get in now will reap the benefits while others remain on the sidelines whining and scratching their heads. 

Here are recent data from a broad survey of Insight Express-monitored and measured campaigns:

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Here's what the press materials said about these metrics:

The study used norms developed in online ad testing as a benchmark to draw conclusions around the performance of advertising on mobile devices. InsightExpress compared the two using InsightNorms, the company’s normative database containing over one thousand online ad effectiveness campaigns and over one hundred mobile ad effectiveness campaigns . . .

InsightExpress found mobile campaign norms were 4.5 to 5 times higher than online norms against measures of unaided awareness, aided awareness, ad awareness, message association, brand favorability and purchase intent.  “Online campaigns continue to offer exceptional reach, flexibility and variety,” said Joy Liuzzo, Senior Director of Marketing & Mobile Research at InsightExpress.  “However, the high levels of engagement, the explosion in technical capabilities, low levels of clutter and the novelty of mobile advertising all likely contribute to increased brand impact.”
A comparison of three different mobile media types (Mobile Internet, SMS and Mobile video) revealed that Mobile Internet is the current powerhouse. Mobile Internet campaigns resulted in increases of 9 percentage points for unaided awareness, 9 percentage points for aided awareness and 24 percentage points for ad awareness . . . SMS campaigns generated increases of 5 percentage points for unaided awareness, 10 percentage points for aided awareness and 18 percentage points for ad awareness.    

SMS offers the greatest reach, followed by mobile Web and then apps and video. 

Greystripe Extends Support to Ovi Store

Rich media mobile ad network Greystripe announced that it's extending its support Nokia's Ovi Store. According to the release out today:

Although Greystripe has supported hundreds of millions of Java downloads, this is the first time they will be supporting apps in the Ovi store. Greystripe is beginning to migrate 1,200 Gamejump.com Java titles into the Ovi App Store. With this announcement, Greystripe now supports the top three smartphone marketplaces: the iPhone App Store, the Android Marketplace, and Nokia’s Ovi App Store . .

Currently Greystripe supports over 1,400 Java handset models, in addition to iPhone and Android. Greystripe continues to expand its Java/Symbian app downloads, which account for approximately 250,000 app downloads on the network per day. Since Symbian is still a popular platform globally, this announcement is significant for brands that want to reach a wider audience by advertising on the Java/Symbian network, such as Navy and JC Penny.

We learned last week that Nokia's Ovi Store is seeing "more than 1 millions downloads a day." These numbers suggest that, at least outside the US, Ovi will be a force to be reckoned with.

Previously Greystripe did a deal with online ad network Tribal Fusion to automatically translate IAB ad units into mobile: 

Greystripe takes Flash ads and transcodes them using their award winning technology so the ad is compatible on the iPhone. With this process, advertisers are seeing 10-20x higher performance with the mobile ad compared to the same online campaigns, with average CTRs well above 1%.

This model is the future of much of mobile display advertising -- one buy across platforms, or an "extension" into mobile of an existing campaign -- and will accelarate the movement of ad dollars into mobile. Mobclix offers something similar with Advertising.com but on a smaller scale. Google will likely be doing this with AdMob if that transaction gains approval. 

And, in an effort to grow and protect its distribution vs others., last June Greystripe launched what it calls a CPM protection program that guarantees iPhone developers a minimum CPM.

Will Firefox Win the Battle of Mobile Browsers?

Firefox agrees with Google that HTML5 and mobile Web development will ultimately "kill" app stores. There's a logic here that makes sense, but I don't think that app stores -- or at least the iTunes store -- will die any time soon. What you may get is iPhone apps and then mobile "Web apps" for nearly everyone else. Android has apps but Android handsets are much more about the mobile Internet than apps -- at least that's true for the Nexus One. 

Examples of terrific "touch" Web apps that are almost as good as true "native apps" include:

  • new.m.yahoo.com
  • touch.facebook.com
  • mobile.nytimes.com
  • Google Voice for the iPhone 

These prove that you can develop highly functional "apps" for the mobile Web and avoid the app store "tsarus," to use the Yiddish word for grief/trouble.

Somewhat ironically, however, Mozilla sees Firefox as a development platform for third party "add-ons" (as exist on the PC). The parallel between add-ons and apps is pretty direct.

Mozilla just released Firefox Mobile for Nokia's Maemo and the N900. But the real sink or swim platform for Firefox Mobile will probably be Android (at least in the US), unless WinMo dramatically improves with 7's release. Apple locks out browsers other than Safari and RIM isn't compatible with Firefox because of its architecture. That leaves: 

  • Feature phones
  • Nokia (not in US for foreseeable future)
  • WinMo (much is riding on WinMo 7)
  • Palm/WebOS (not a player at scale)
  • Android 

But Android has a webkit browser. You can get Opera Mini on Android today; however I suspect there haven't been tons of Opera downloads because of the otherwise decent built-in browser. On Android, Firefox will be going up against the lesser known and unattractive but functional Dolphin browser, which provides multi-touch where Android's own webkit browser does not (see Droid, Nexus One).

There are also other independent browsers in the market, such as Skyfire, that Firefox will compete against. The company has the advantage of a huge installed base of PC users and trusted brand recognition. But it's a late-comer and will need to produce something pretty compelling to surmount the Android handset's built-in browser advantage.

Millennial Media: Portals & Directories Become Top Category by Ad Spend

Millennial Media's December/Q4 SMART report reflects some interesting trends, but mostly incredmental changes from November. The top ad spending category is now "portals and directories," which includes major Internet players (e.g., Yahoo, MSN). Travel moved up from category number 10 to number eight, as well.

Here are the highlights, as reported verbatim by Millennial:

  • The U.S. Mobile Web: Decreased slightly to 66.6M users, according to Nielsen (Nov.)
  • For the first time since S.M.A.R.T™ was first published in March ’09, Entertainment was not the top advertising vertical.  Portals and Directories took the top slot in Q4. Telecom, Finance, Entertainment and Dating round out the top 5.
  • Engagement: Average monthly page views per user increased to 125 in December from 113 in November; and, average user session times increased from 5:02 to 5:09 (min:sec).
  • Devices: Samsung represented approximately 23% of our network’s impression share in Q4. But the iPhone was the leading smart phone on our network with 41% of our network’s U.S. impressions. 

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We don't know all the specific advertisers in these categories but I would argue that at least five (maybe six) of these categories are substantially or mostly concerned with local "on their face":

  • Entertainment
  • Dating 
  • Retail/restaurants
  • Travel
  • Automotive 

Turning to handsets and OS market share, here's what Millennial is seeing on its network:

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Compare AdMob's smartphone share numbers (North America) from December:

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In both cases the iPhone is has the largest share, but on Millennial RIM is second, while AdMob's network shows Android handsets second to the iPhone. Among the top 20 mobile handsets appearing on Millennial's network, the G1 is the only Android handset reflected to date. 

Could IDC Be Really Wrong on Android?

IDC's recent prediction that Android would be the second most numerous smartphone OS in the world by 2013 has garnered much uncritical coverage. Here are the IDC bullets:

  • Symbian will retain its leadership position worldwide throughout the forecast period. Due primarily to the strength of Nokia in markets outside of the United States, Symbian continues to lead all other mobile operating systems.
  • Android will experience the fastest growth of any mobile operating system. Starting from a very small base of just 690,000 units in 2008, total Android-powered shipments will reach 68.0 million units by 2013, making for a CAGR of 150.4%. Android will benefit from having a growing footprint of handset vendors supporting it and will finish second to Symbian in shipments by 2013.

Before IDC Gartner made the same prediction, but by 2012. Both of these firms could turn out to be wrong -- very wrong.

It makes sense that Android will continue to gain, given the number of OEMs building and releasing devices with the OS. Indeed, Google SVP Jonathan Rosenberg, on the Q4 earnings call, said "Android started 2009 with just one device and is now at 20 in 48 countries." And the Verizon Android Droid is credited with dampening some of the iPhone's recent sales momentum: the iPhone sold "only" 8.7 million units vs. the 9.1 - 9.5 million that some of the most bullish Wall Street analysts had anticipated. 

OK, Apple sold 8.7 million iPhones in the most recent quarter, but it also sold sold 21 million iPods. The company doesn't break out iPod Touch sales. But while iPod sales are declining, iPod Touch sales are up. At the end of the last quarter there were almost 60 million iPhone OS devices around the globe (including the iPod Touch). Morgan Stanley estimated the number at 57 million in early December. 

So let's assume that 5 million of those 21 million iPods are iPod Touch devices. That would put the combined sales of the iPhone OS units at more than 70 million today. So the iPhone OS (not the iPhone itself) has already beaten the IDC Android unit sales projections for 2013. 

What happens tomorrow with the iPhone is important for the future success of the platform in the US market. Regardless of whether there's a new iPhone OS or 4G device, if Apple announces that AT&T exclusivity is through and that the handset will be available from Verizon and/or others, we're likely to see Android momentum falter. If not, Android will continue to gain steam.

Apple executives made some comments yesterday, however, that suggested AT&T exclusivity may not be done. They expressed confidence in AT&T and its ability to "fix" network problems that have frustrated and infuriated iPhone users. That kind of remark doesn't sound like one from a company about to walk away from its exclusive relationship with AT&T. But we'll see. 

If Apple fails to "cut the chord" tomorrow and broaden iPhone distribution in the US it will cede millions of users to Android. I would be happy using the Nexus One rather than switching to AT&T, with its network's mortally wounded reputation, to get the iPhone (I have an iPod Touch). And while it's not as intuitive or "elegant" as the iPhone, and the apps are not as polished, the N1 generally substitutes. Its speed and screen are better than the current iPhone as well. And the voice-text input features are compelling. 

Apple may not see this timing issue as critical. It will exit AT&T exclusivity at some point. If it does so now, it will establish itself on a trajectory to become the dominant smartphone in the US market and Android's rise will be blunted (though perhaps not RIM's, the current market leader). If it waits for 2011, US iPhone prospects will likely have moved on or set their sites on other handsets. All the defectors that are going to head to AT&T for the iPhone have already done so. 

As suggested, RIM is a wild card in this discussion and so is Windows Mobile, which is declining now but could get a big boost from WinMo 7. Nokia, regardless of Symbian UI upgrades, will continue to lose share in the US and Europe in the coming 12-18 months. It will remain strong in Asia, Latin America and Africa -- emerging markets that seek lower-cost handsets. Palm, I'm afraid, will be largely an also-ran in this race. 

The market for smartphones, however, is very much evolving and in flux. What happens tomorrow (from Apple) could be very significant for both the iPhone and for Android's future in the US. It might be that Apple makes the wrong choice, falters and Android benefits. The thinking that Android will automatically grow to be the world's number two, however, is simplistic. 

Little Overlap in Top Apps on Mobile Platforms

App store analytics provider Distimo has released its latest report profiling activity in the various app stores. The report points out, among other things, that app prices are highest in Europe and on the BlackBerry. It also shows that the majority of apps in the Android market (65%) are from US developers, presumably catering to the US market. However that will change as Android gains momentum in other markets.

Interestingly, the charts reflecting the top free and paid apps don't show much overlap on the major platforms. Below are graphics from the Distimo report about the top free apps:

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Here are a few casual observations. Facebook is universally popular, voice search tools show up across platforms (Bing, Vlingo, Nuance/Dragon). Weather is there a couple of times (RIM and Android). Barcode scanners are also popular. Not reflected above, RedLaser is the top paid app for the iPhone, and two scanners are in the top 10 for Android, according to these data. 

Some of the differences in app popularity may have to do with timing. Pandora was released first on the iPhone and was the most popular app that year. Later it rolled out to other platforms and became popular accordingly, while its popularity in the iTunes store declined.

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Apple Results Out: Best Quarter Ever

The release is just out, here are the numbers:

  • $15.68 billion in revenues vs. 11.88 billion a year ago
  • Sold 3.36 million Macintosh computers during the quarter, representing a 33 percent unit increase over the year-ago quarter.
  • Sold 8.7 million iPhones in the quarter, representing 100 percent unit growth over the year-ago quarter (but somewhat lower than expected)
  • Sold 21 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter (however iPod Touch sales are up)

Listen in on the earnings webcast at 5 Eastern if you're hungry for more.

Selected bits from the call:

  • iPhone in 86 countries now. Sales worth more than $5B in the quarter. 
  • COO Tim Cook says that "AT&T is a great partner," doesn't take bait to suggest that there will be wider availability for iPhone in US
  • Tim Cook: China iPhone sales: 200K units activated to date. "We're building the brand for the long term, we think there's significant potential there." 
  • Tim Cook: 70% of the Fortune 100 deploying or testing iPhone (in US)
  • No comment on Nokia IP litigation
  • Tim Cook: "Joy of surprise at our latest creation" re Wednesday product launch
  • Tim Cook: re iPhone . . . when we add carriers in markets, growth and share increases
  • Apple CFO re Quattro: "We wanted to offer a seamless way for our developers to make more money on their apps, especially those providing free apps." 
  • CFO Peter Oppenheimer: We work with Google in some areas and compete with them in others. Mobile advertising "is in its infancy."