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:
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.
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:
Current mobile OS:
Future purchase intentions:
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.
Separately investment firm Piper Jaffray conducted another wave of its research among US teens about device ownership and future intentions.
Notable findings include the following:
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.
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.
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.
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.
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.
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.
As Apple reportedly prepares to release a less expensive, plastic version of the iPhone to boost sales in the developing world, it's trying to strike a balance between cost and quality. It will simultaneously have to make the phone appealing (perhaps with a slightly different design and color) while not cannibalizing its flagship.
The perception of higher quality is one of the few remaining advantages that the device has over Android rivals, who over the past three years have dramatically closed the quality and features gap. Despite these gains, the iPhone has consistently beaten its smartphone competitors in customer service ratings from JD Power. The latest survey is no exception.
JD Power surveyed nearly 10,000 US smartphone owners. The satisfaction criteria, in order of importance, were the following:
This is the ninth consecutive time that the iPhone has ranked #1. JD Power said the Apple device did particularly well in the areas of design and ease of operation.
In a bit of a surprise, Nokia edged Samsung in the survey. However Nokia has many fewer users (by an order of magnitude) than Samsung, whose Galaxy smartphone line is the best-selling Android handset in many markets around the world.
It's interesting that LG performed so poorly given the success of the LG-made Nexus 4, which repeatedly sold out and to date remains overall best Android handset on the market. In contrast, among feature phone OEMs, LG performed best, which is somewhat curious.
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.
In terms of market share by OS, Apple still clearly shows an advantage holding steady at around 65% for the month of February 2013.
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’s "State of Mobile Advertising" report gathers data from the Mobclix Exchange and is provided on a monthly basis.
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."
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).
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":
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.
Many developers and digital marketers still cling to the assumption that HTML5 and the "mobile web" will eventually win out over native apps. There's a kind of logic to that position. However they may be waiting a very long time for that to happen.
As has previously been written, the overwhelming majority of consumer time spent with mobile devices is spent in apps ("4 out of every 5 mobile minutes," per comScore). And according to a new survey from Compuware the majority of international respondents (85%) preferred apps over mobile sites.
The survey had a total of just over 3,500 respondents from the US, UK, France, Germany, India and Japan.
Despite the positive news for app developers the survey also had some harsh findings. For example 59% of respondents said that an app should load in two seconds or less. In addition, poor user experiences result in app abandonment, switching to competitors' apps, negative word of mouth and erosion of brand perception -- among other negative consequences.
The most common problems encountered were freezing/crashing (62%) and slow load times (47%), as well as the more generic "didn't function as expected" (37%). A majority of users had encountered one or more of these problems in using apps. Users expect apps to load faster and perform better than mobile sites: "78% expect mobile apps to load as fast as — or faster than — a mobile website."
Nearly 80% of the survey respondents said that they would give an app one (maybe two) more chances if it didn't work correctly the first time. And app-store ratings are being taken very seriously by users: "84% users say app store ratings are important in their decisions to download and install a mobile app."
The survey report cited third-party data for the proposition that the average number of apps on users' smartphones is 41.
There has always been a somewhat awkward relationship between Google's Chrome OS (PC) and Android OS (mobile). Many people have remarked about it. Today that tension was potentially resolved.
Google CEO Larry Page announced that Android founder and Google Mobile chieftan Andy Rubin was transitioning to another role at the company. In his place SVP Sundar Pichai (who was once unsuccessfully recruited by Twitter) will take over leadership of the Android team. Pichai is currently responsible for Chrome OS and the two groups will be under his combined command.
Here's what Page said about him in a blog post announcing the change:
Sundar has a talent for creating products that are technically excellent yet easy to use—and he loves a big bet. Take Chrome, for example. In 2008, people asked whether the world really needed another browser. Today Chrome has hundreds of millions of happy users and is growing fast thanks to its speed, simplicity and security. So while Andy’s a really hard act to follow, I know Sundar will do a tremendous job doubling down on Android as we work to push the ecosystem forward.
There's a clear logic here and the move makes sense. But my instincts tell me that all may not go as smoothly as that logic suggests.
By all measures Android is flying high: "60 manufacturers; more than 750 million devices have been activated globally; and 25 billion apps have now been downloaded from Google Play." Yet device activations have slowed somewhat and Samsung has all but taken control of Android handset (and perhaps eventually tablet) sales. Samsung Galaxy devices represents an increasingly large share of all Android sales.
Windows Phone is unlikely to challenge Android, nor is BlackBerry -- for at least the foreseeable future, if ever. Android can coast for some time (which is clearly not happening) and the platform would continue to dominate globally. By some estimates Android is on 80% or more of Chinese smartphones.
If indeed this leadership change is a precursor to OS consoidation we may see some technical challenges a la Windows as a unified operating system across devices. But then again, but for Apple (and partner Samsung), Google really has no competitive threats to its global-mobile dominance on the horizon.
New US smartphone figures came out today from comScore for January. According to the comSumer survey Android had 52.3% of the market, while Apple was at 37.8%. Those numbers represent a jump for Apple and a dip for Google since October, the comparison period.
Apple is the top smartphone OEM in the US followed by Samsung. Their relative shares are 37.8% to 21.4%. However Samsung is the dominant Android handset OEM by far, though LG did experience an uptick because of the extremely popular Nexus 4 (the best Android handset currently on the market).
Today also mobile ad network Jumptap released its latest MobileSTAT report for February. In that report Jumptap says that from 2011 to 2012 Samsung's share of Android handsets on its network grew from 42% to 56%. Jumptap is predicting that Samsung's share will continue to grow, perhaps beyond 60% of the US Android handset market this year.
Weaker or fading rivals HTC, LG and Motorola will have a much smaller share: no greater than 11% in any individual case according to the Jumptap prediction. The chart below illustrates the degree of Samsung's dominance in the US smartphone market. The comScore numbers above are not quite as severe.
Operating system share will remain relatively stable in 2013 according to Jumptap. Accordingly, Windows Phones and BlackBerry are stuck in the basement with a combined 4% share. Indeed, 2013 will be the year that Nokia needs to make a decision about whether it wants to "diversify" with Android. If these numbers hold it will be all but compelled to do so.
Tablets will take mobile browsing share from smartphones according to another Jumptap prediction. The firm believes that tablets will grow to capture 29% of mobile traffic while smartphones will generate 70% of mobile traffic. The tablet impact on PCs is not discussed.
According to an earlier report from comScore mobile now represents 36% of internet time vs. 67% on the PC. I believe tablets will continue to take meaningful share from PC usage even has they cannibalize some share from smartphones (chiefly in the home).
Some people have described the competition for business owners in the mobile payments segment as a "race to the bottom" in terms of credit card processing fees. Indeed, there are now at least 10 mobile payments or POS vendors targeting small businesses that are undercutting traditional credit card processing fees. The include LevelUp, Groupon, Square, PayPal Here, GoPago and others.
Clearly this is not the company's long-term strategy. It's trying to create more bar "inventory" for consumers in the hope of driving app adoption and expanding beyond San Francisco, it's only current market. However the zero credit-card processing fee is a major incentive for bars to sign up and use the system.
Coaster is another example of something I've written about multiple times: vertical or point solutions that offer self-evident value to consumers and will drive adoption of mobile payments. My favorite example is mobile parking payments but Coaster is a pretty good example.
By using Coaster smartphone owners can order, pay and tip at bars without giving over their credit cards directly or waiting in line. I've not yet used the app myself. However Coaster offers concrete and obvious value for bar patrons (and bar owners).
These kinds of vertical scenarios or "point solutions" will educate consumers and get them comfortable with mobile payments, paving the way for broader adoption of "horizontal" solutions such as Google Wallet. Exposure to a positive veritcal payments experience will tend to accelerate broader payments adoption.
By contrast people often don't see the reason or need for "mobile wallets" in the abstract.
How interested are you in using your mobile phone to pay for things, and replace cash or your credit cards?
Source: Opus Research (August, 2012; n=1,501 US adults)
Millennial Media has released an infographic that offers year-in-review data. I've excerpted what I thought were the most interesting aspects. However you can see the entire infographic here.
There were two data sets that I found most interesting. The first is verticals ranked by ad spend on the company's network. Automotive was the leading vertical and biggest gainer in 2012. This is mostly car makers doing broad, awareness-oriented brand advertising.
Below is an example of automotive general awareness advertising (though not necessarily from Millennial Media). The screens I've presented are just a few from the ad. The ad makes it possible to locate a dealer to do a test drive -- but that capability is buried a few clicks down and below the fold.
If you take a look at all the categories in the Millennial top verticals list, all are categories in which most of the transactions will be realized offline. However I would bet that few if any of the advertisers in these categories are doing anything like trying to drive consumers into local outlets or stores.
For example, the graphic below shows Millennial's most recent data on the distribution of "post click" objectives associated with the campaigns on its network. Only 19% of these ads contained a "store locator." And those are probably not prominently displayed. Most of these campaigns are simply branding campaigns.
This is a significant missed opportunity. Only 5% of retail spending in the US happens online and an even smaller amount through mobile devices. The rest -- literially more than $4 trillion -- is offline. The ability to lead consumers to a store or point of sale is one of the great opportunities of mobile. However it's not really being utilized or exploited by advertisers.
The other interesting piece of data in the Millennial infographic shows the growth (and decline) of Android OEMs. Samsung is winning and HTC, Motorola (Google) and LG are losing when it comes to Android share.
As I've now argued numerous times Android is increasingly identified with Samsung. Partly this is because Samsung is making compelling devices -- although the LG Nexus 4 is the best Android handset on the market -- but it's equally because Samsung is spending so much money on marketing around the globe.
Just as Android now controls more than 50% of the global smartphone market, Samsung will soon control more than 50% of the Android market.
Earlier this week Appcelerator released its quarterly mobile app developer survey. The survey of more than 2,700 global developers found they were primarily focused on the iOS and Android operating systems, with Windows Phones, RIM and others relatively far behind. This reflects the "duopoloy" of iOS and Android (increasingly "Samdroid') sales in the global smartphone market.
The challenges of creating a strong developer ecosystem for Windows is partly what's holding the mobile OS back. Sales are relatively good in isolated EU markets (e.g, Spain, UK) but lackluster on a global basis and in North America in particular, where Windows continues to lose market share.
According to the survey, about 36% of developers indicated interest in building apps for Windows devices. However Windows Phone's modest market share is creating a kind of Catch-22 for the platform.
Without boosting the perception that Windows has app-parity (at least among the most important ones), there won't be more handset sales. Without more handset sales there won't be more consumer usage and without consumer adoption there are few incentives -- except direct payments from Microsoft -- to develop for the platform. The majority of developers, according to the Appcelerator survey, can only focus on two mobile platforms.
Separately, IHS iSuppli released a full-year, 2012 estimate of global smartphone market share. The calculation is based on the untrustworthy "shipments" metric. However, the company shows Nokia dropping to third position, Apple in second and Samsung-Android now leading iOS "decisively":
Samsung and Apple ended 2011 in a neck-and-neck battle for leadership in the smartphone market, with only 1 percentage point of market share separating them. However, entering the 2012 year, Samsung moved ahead decisively ahead of Apple with a wide range of Android smartphone offerings. Samsung made significant gains in both the high end as well as the low-cost market with its Galaxy line of smartphones. This diversified market approach has allowed Samsung to address a larger target audience for its phones than Apple’s limited premium iPhone line.
The Samsung and Apple duopoly represents the dominant force in the smartphone market, with the two companies accounting for 49 percent of shipments in 2012, up from 39 percent in 2011. While Nokia and Canada’s Research in Motion (RIM) also held double-digit shares of the market in 2011, Samsung and Apple remain the only two players that will each command a double-digit portion of the smartphone space in 2012.
As Google-owned Motorola, LG and HTC struggle for consumer attention and handset sales, Samsung becomes more and more identified with Android in the consumer mind. RIM's forthcoming BlackBerry 10 OS is truly the company's "last hope." Nokia too will likely need to do something fairly radical if it is to remain viable (i.e., adopt Android) in the smartphone market.
Global mobile ad network InMobi has released its latest "Insights Report" for the US market. Interestingly it finds Apple devices generating the majority of ad impressions despite their smaller overall hardware market share.
Apple's iOS devices have a 46% share of impressions on the InMobi network, compared with Android's collective 43.6% share. Here are the top five devices that InMobi sees on its network:
While there is almost no Android presence in the top five (Kindle Fire is a quasi-Android device) the network says that Android growth is outpacing that of the iPhone. Compare InMobi's data to other ad networks, which show Android with a greater share of impressions.
Jumptap (July, 2012):
Millennial Media (November, 2012):
The Millennial numbers above correspond almost exactly to comScore's market share data regarding handset penetration (October, 2012):
Former Morgan Stanley financial analyst, now KPCB partner, Mary Meeker did one of her patented blizzard of stats/data dump presentations at Stanford University the other evening. The slides (available here) are essentially an updated version of a presentation given earlier this year.
You know most of the material by now. However, below are the most interesting slides I culled from a much longer set. They go to device adoption and mobile ad revenue projections.
The noteworthy thing about the above chart is that it argues there are 172 million smartphone subscribers in the US. If that's true it would mean a smartphone share of something like 68% or 73% depending on the base used. This is undoubtedly high. But it's not unreasonable to argue that there may be 60% smartphone penetration by the end of Q4 in the US (or early Q1).
From the chart below: there may not in fact be 5 billion individual mobile phone users around the world. There are "only" 7 billion people on the planet. It's probably more accurate to assert there are something like 5 billion subscriptions/SIM cards (there are some dual subscriptions). Still the global smartphone growth opportunity is massive.
The following chart is based on Pew survey data, showing that 29% (as of earlier this year) of US adults owned a tablet or eReader. Tablets are going to be the number one electronics gift item this year. We could be looking at 80 million total tablets in the US in Q1 2013.
What's most interesting about the slide below is that it projects tablet ownership to pass PC ownership by the end of next year; in other words: more tablets than PCs. This may be a aggressive forecast but it's not out of the question.
The final slide is about mobile advertising and app revenue. There are many sources behind this projection. It envisions a $20 billion global market by the end of the year, with mobile advertising around $6 or so billion.
US mobile advertising was worth roughly $1.2 in the first half and is on track to be somewhere between $2.6 and $2.8 billion for the full year 2012. Globally mobile ad revenues will probably reach between $5.5 and $6 billion by the end of Q4 this year.
As part of General Motors' MyLink in-dash telematics system (GM's answer to Ford's Sync), the Chevrolet division is incorporating Siri access into two 2014 models: Spark and Sonic vehicles.
Users with iPhones will be able to use Siri to execute a number of commands:
Siri's full capabilities won't be incorporated at this point however. Anything that requires a visual display of data won't be available so as not to create safety hazards while driving. Siri and the iPhone connect to the MyLink system via Bluetooth.
MyLink is designed to be broadly integrated with iPhone and Android devices. The console operates very much like a small tablet device embedded in the dash.
The MyLink "infotainment" console is already modeled on the smartphone apps metaphor. MyLink also has a built in virtual assistant, which will operate in those models that don't enable Siri access. It will also remain available to drivers in the Siri-enabled Spark and Sonic vehicles as well for a broader array of functions than what Siri will permit.
What's perhaps more interesting than the integration of Siri is the adoption of the concept of the virtual assistant more broadly. My colleague Dan Miller is about to publish a report on "PVAs" (personal virtual assistants) and their impact on a range of use cases including enterprise customer care. Built on decades of speech processing research and technology development, as well as advances in "AI," virtual assistants are changing the way we "search" and interact with devices and technology.
The following video demonstrates MyLink's features.
There's lots of news today about the role mobile is playing in the just-started holiday shopping season. Most notably IBM reported a couple of days ago that on "Black Friday," mobile buying "soared with 24 percent of consumers using a mobile device to visit a retailer's site, up from 14.3 percent in 2011. Mobile sales exceeded 16 percent [of online commerce], up from 9.8 percent in 2011."
But even more noteworthy than the increasing role that mobile is playing in holiday shopping, is the discrepancy between iOS and Android in terms of web traffic and user purchase behavior.
Call it the "Android paradox." In the US Android handsets represent 52.5% of smartphone market. Apple's iPhone holds 34.3%. The share that is controlled by iOS is larger when the iPad is factored in but Android is the dominant OS in the US and globally.
When you look at mobile internet visits, however, the relationship shifts -- with the iPhone and iOS driving much more web traffic than Android. Apple's devices also generate much more in the way of e-commerce sales vs. Android. Website Fab.com reports that 95% of its mobile sales are coming from iOS devices.
IBM reported that 58% of consumers (of the 16% who bought something on a mobile device) used smartphones to shop for deals, while 41 percent used tablets. Here's how the traffic distribution broke down on Black Friday in the US:
The iPhone and iPad combined for the bulk of mobile shopping, while on the tablet side the iPad generated 88% of the traffic in its category. There's something very strange about the fact that iOS users generate much more internet traffic and mobile buying than their Android peers -- given that there are more Android users out there.
There have been various attempts to explain this traffic and commerce discrepancy, chief among them the theory that Android owners are less sophisticated, affluent and engaged. While there's clearly some validity to this theory it doesn't entirely explain what's going on.
The battle between Apple and Android is quickly turning into a face off between Apple and Samsung as the latter obliterates all other Android competitors. This morning Samsung announced massive Q3 profit, while IDC estimated that the Korean conglomerate had shipped just under 57 million smartphones in the quarter.
By comparison Apple sold just under 27 million iPhones in its fiscal Q4, which ended September 30.
A noteworthy aside related to the chart above, Nokia is gone from the ranks of the top global smartphone vendors.
In contrast to Samsung, HTC, which had been one of the early leaders with Android, is now really struggling. The company saw a nearly 50% decline in revenue for Q3. In part because it's getting squeezed out of the Android market by Samsung's success, HTC has turned its attentions back to Windows in an effort to diversify revenues.
However, unless or until Windows Phones start to gain share, the smartphone landscape is really about Apple and Samsung. Everyone and everything else is just an "also-ran."