Google introduced a new YouTube app for the iPhone today, ahead of the release of iOS 6 which removes YouTube from the group of pre-installed apps on the device. There are a number of feature improvements over the current built-in YouTube app.
Depending on your perspective, one of those "improvements" will be pre-roll ads. The current YouTube app didn't feature any advertising, thus depriving Google of a potentially significant mobile ad revenue stream. The new app will have ads and pre-roll.
Here are some screenshots of the new YouTube app:
Below is a side-by-side comparison of the current and new YouTube apps for the iPhone:
The new app is nice and a bit simpler visually. But what's more interesting is what it suggests about another potential Google app for the iPhone: Maps. The question is whether (or more likely when) Google will introduce a more complete mapping app for iOS.
Just as it does with the pre-installed YouTube app, Apple iOS 6 will remove Google completely from mapping on the iPhone, replacing it with Apple's new mapping application. That could mean a potentially significant loss of local query volume for Google -- unless the company dramatically improves its HTML5 mapping experience and/or releases a new iOS Google Maps app.
There's a small possibility that if Google were to submit a new Maps app to Cupertino it might get blocked as trying to replace a core feature of the device. However there are numerous third-party mapping apps that already exist for the iPhone so I doubt it. In the event Google did submit a new iOS mapping app it would ironically mean a much better Google Maps experience for the iPhone than has been the case to date. In all probability it would also include Google Navigation, which had been missing or withheld from maps on the iPhone.
Google's dilemma is that it uses Maps and Navigation for Android as something of a competitive differentiator vs. the iPhone. If Google were to provide the same functionality to Apple it would potentially remove that particular incentive to buy Android devices.
With Android increasing its dominance around the globe, the US market seems to be something of an anomaly. Measurement firm comScore reported this morning that Apple has gained share in the US.
The iPhone now represents one out of every three smartphones in the market. Android also grew its share slightly, while Windows has continued to lose share according to comScore:
The firm also said that 114 million US adults own smartphones, representing just under 49% of the mobile subscriber population (using a base of 234 million). Nielsen, Pew, Flurry Analytics and others have found, however, that more than 50% of US adults own smartphones.
Flurry asserted recently that more than 70% of US adult mobile subscribers owned smartphones.
Whether or not responding to the recent Apple patent victory in US federal district court, Samsung has said it will be first out of the gate with a Windows Phone 8 device. The new device, announced yesterday, is called "Ativ S" and will be out before Nokia's first Windows Phone 8 handset. Indeed, Samsung will be formidable competition for Nokia with the new OS.
Meanwhile an analyst at Bernstein Research argues that US consumers simply aren't interested in the Microsoft mobile OS:
“Our research shows that for many years, poor sales of Windows-based phones stem from a deep and stable lack of consumer interest for the product. Despite numerous and repeated efforts of manufacturers (Nokia, but also Samsung and HTC) and Operators to develop an alternative to Android and Apple based on Windows, and despite the launch of numerous phones based on Windows with strong features, reviews and marketing support, the operating system remains cornered to less than 5% market share in smartphones.”
Currently Windows Phones' market share in the US is 3.8% according to the most recent comScore figures:
A consumer survey conducted by Opus Research in April indicated something quite similar in terms of demand for Windows Phones:
My next mobile phone will likely be . . .
Source: Opus Research, April 2012 (n=1,504)
These responses won't necessarily translate into sales figures -- Android is obviously leading the market -- however they do indicate a level of interest or demand for the various handsets and operating systems.
Both Microsoft and Nokia have high expectations for Windows Phone 8. It's not clear what will happen if consumer demand fails to materialize.
Many retailers are wringing their hands over the so-called "showrooming" phenomenon, where consumers visit stores to investigate and try products but ultimately make purchases through Amazon and other e-commerce sites. There have been various articles written about how traditional retailers can combat this. Some emphasize loyalty programs while others focus on more "defensive" measures such as developing proprietary SKUs (e.g., Target) so consumers can't scan products in the store and obtain competitive pricing information.
Yet the use of smartphones in stores will only continue grow. It's important for retailers not to fight but to embrace the trend.
While a recent Google survey found only 31% of smartphone owners used them in stores (among apparel shoppers), another survey of 1,557 US adults, conducted in March by Deloitte, found that 61% of respondents used their smartphones in stores.
In addition, data from multiple sources (i.e., InsightExpress, Google, Nielsen) published last year and earlier this year indicate much higher numbers: up to 80% or more use or have used their devices in stores while shopping.
The flip side of "showrooming," the discussion of mobile consumer shopping continues to focus on "m-commerce." However mobile's biggest impact wil be on in-store sales (just as the PC Internet's biggest impact is on in-store sales and not e-commerce). The Deloitte study confirms or reinforces this notion.
The chart below mashes up data from several sources to project that mobile will influence almost $700 billion in offline shopping by 2016.
As with most forecasts these figures are likely to be wrong but it's directionally accurate to say the influence of mobile on traditiona retail will grow dramatically.
What's interesting about the first chart above is how progressively more people use their smartphones as they approach "shopping day." This argues that retailers can provide mobile sites and apps that will support and address consumer needs along a spectrum of time and need: when they're planning to shop to when they're actually in the store.
Mobile apps can provide information that supports the sales and customer service function in stores. (Store and inventory maps could help customers find products; out of stock intems could be ordered for home delivery.) These things can be combined with loyalty incentives and even (eventually) mobile payments in stores. US retailer JCPenney, for example, is ditching its current POS and cash register systems for mobile payments and new payment kiosks.
The larger point is that a great mobile retail app can improve and enhance the customer experience. Retailers don't have to fear mobile.
As Deloitte commented in its report, mobile can increase in-store sales: "Our survey shows that 85% of consumers surveyed who used a retailer’s native app or site during their most recent shopping trip actually made a purchase that day, compared to only 64 percent who didn’t use the retailer’s app or site."
Mobile industry and carrier watcher Chetan Sharma has pulled together mostly carrier-published data for a mid-year update across a range of topics relevant to the wireless industry. I pulled four of his slides below; however you can see the full presentation here.
The first slide below shows increasing smartphone penetration in the US and abroad. No surprise here; this has been in the survey data for months. In Q2 smartphone sales exceeded 70% of new handset sales in the US.
Outside the US smartphone penetration isn't rising quite as fast. However it will accelerate and US smartphone growth will start to slow over the next 12 to 24 months. Feature phone sales in the US are now clearly in the minority.
The next slide shows handset market share by manufacturer, with feature phone sales representing only about 30% of total handset sales this year.
Particularly striking in the chart above are the following:
The graphic above shows the relative shares of voice and data on US carrier networks. Data, in red, now entirely eclipses voice. In 2009 the two were had nearly equal shares of traffic on carrier networks.
Finally, the following chart shows the ratio of WiFi-only tablets tablet sales with carrier network connections.
I'm drawing a few inferences but it appears the data show consumers are avoiding additional carrier fees and service plans, preferring to run tablets on WiFi networks. Notwithstanding some of the new shared data plans it appears that carriers will not derive significant new revenues from the growth of tablets.
With nearly 50 million tablets in the US market, carrier-networked devices constitute roughly 8% of the total. The lure of discounted devices in exchange for two-year contract commitments isn't succeeding in getting customers to pay additional carrier fees. Beyond basic consumer resistance to new fees, the $199 Kindle Fire, Nexus 7 and potentially forthcoming 7-inch iPad, undermine the appeal of carrier discounts.
Microsoft did a nice job in reinventing its mobile OS with the advent of Windows Phones. There are ways in which the "Metro UI" is beautiful and strikingly different than iOS and Android. However the UI also represents the greatest barrier to adoption of Windows Phones.
Until people have a chance to use and familiarize themselves with Windows Phones they won't buy them because of the perceived unfamiliarity. Agressive discounting in the US may convince some to do so however. But as long as there are relatively few Windows Phones "out in the world" the impulse to buy them will also be limited.
It's Microsoft and Nokia's version of the "chicken and egg problem." Targeting new smartphone owners is probably the best strategy to gain share for the companies in the near term. Once they have some users they can upsell them to more expensive and high-powered phones.
Among developers however, Appcelerator has discovered that there's an increasing appreciation for the Metro UI. In a survey of more than 2,000 mobile developers, 44% of them characterized the metro UI as "different and beautiful" compared with iOS and Android.
That 44% hasn't yet translated into a belief that Windows Phones will succeed -- even in the enterprise, where Microsoft has had historical advantages over competitors. Developers in this survey do think that BlackBerry is essentially dead in the enterprise (which would mean death for the company overall) and thus by default that Windows will be the "third ecosystem."
Speaking purely for myself, the Windows Phone homescreen is a barrier to adoption. While the "live tiles" are supposed to facilitate quick access to content and enable us to "get back to our lives" I find them awkward and off-putting. I think the modifications of Windows Phone 8 make it worse.
The "inside" of Windows Phone is much better and more pleasing. Regardless, I think the outlook for Windows Phones (and by extension Nokia) remains very mixed at best. Unless or until Microsoft and Nokia can get these phones in people's hands they'll have trouble winning share.
I was in a meeting when the Apple quarterly results came out this afternoon. As you've read, the company had revenue of $35 billion and profit of $8.8 billion. Still, this was below most analysts' expectations. Shares fell 5% in after-hours trading accordingly.
Quarterly device sales were as follows:
All the numbers came in under expectations except for the iPad; 17 million is a new quarterly record (vs 11.8 million last quarter). To date Apple has sold 83.8 million iPads on a global basis.
Sales of iPads will probably cross the 100 million threshold by the next earnings announcement. If not, then certainly by the end of the year.
CEO Tim Cook said that iPhone sales were likely depressed by talk of the forthcoming iPhone and consumers waiting for the new model.
One of the chief innovations Google is bringing to its "Jelly Bean" Android update involves local search and related functionality through Google Now. I've written fairly extensively already about these new features on my Screenwerk blog and Search Engine Land. In short, the new Android OS offers information "cards" (structured data) in response to a range of query types, especially local.
This is at once an evolution of the Google search experience for mobile devices and an effort to better compete with Apple's Siri. The information (search result) is more attractively presented and substitutes for the traditional page of search results, which still can be found by scrolling to the bottom. In addition to the image above right, below are a few example screenshots:
This new presentation is more consistent with what mobile users want ("answers") and offers a better experience overall than a conventional page of "blue links." The potential problem for Google is that this approach goes much further in the direction of substituting "Google's own content" for third party information, which is at the center of Europe's antitrust dispute with Google.
The issue of of Google showing its "own content" at the top of search results or in a preferential position is one of four "concerns" raised by the EU in May along with an invitation to settle. Because it goes to the heart of Google's control over the search results page and the company's ability to experiment and innovate with new content presentations, it's one of the most potentially challenging issues for Google to negotiate with the EU.
Google has been trying to avoid a formal antitrust action by European regulators. But just as it was negotiating to settle the case, EU Competition Commissioner Joaquin Almunia, last week, asked Google to make "broad changes" to its mobile services. While it's not clear specifically what he is asking for, the path adopted by Jelly Bean -- which completely marginalizes third party content in a range of cases -- exacerbates one of the EU's fundamental "concerns" about Google.
Google is not going to want to be locked into any specific search results page in mobile. It will demand the ability to change the look and feel of the page and to innovate around the way it presents content. But to the extent any such innovations don't involve equal exposure of third party information the Europeans will probably have strong objections.
The next couple of weeks should determine whether Google will be able to negotiate a settlement or whether the company will face a formal antitrust action (and potentially billions in fines) from the EU.
The Online Publishers Association followed up its 2011 tablet users survey with the release of an encore study (n=2,540 online adults). It contains a rich trove of data about US tablet usage among adults. According to the survey Android and the iPad have roughly equal shares of the US tablet market. This finding is contradicted by other data sources that show more than 90% of all US tablet traffic comes from the iPad.
The survey found that 31% of the Internet audience (vs. all US adults) owned a tablet today -- or 74.1 million users. Here are a selection of other findings:
Tablet owners have bought plenty of apps but they prefer ad-supported free apps if given the choice. Below is the list of paid-content categories, according to the survey:
The following were the top product-research categories on tablets:
Generally speaking attitudes and response to advertising are positive among tablet owners, with large numbers using the devices for research and buying. According to the survey, tablet owners spent an average of $359 buying products on tablets in the past year.
There are also plenty of indications in the survey that people prefer their tablets to other devices for the various activities they're engaged in.
We can now say that the Microsoft-Nokia partnership isn't working for either company. Nokia's woes are well documented: more job cuts, more losses, more deterioration in the core business. Lumia sales are weak on a global basis, especially in North America where Nokia was plotting its comeback. The company is in an accelerating state of decline, much like RIM now.
For Microsoft, which gave Nokia preferential treatment and established a special relationship, Nokia's fall has to be particularly disconcerting. Redmond is already providing billions to Nokia in support and marketing help. Just like the struggling economies of Europe, Nokia needs a bailout. The company is now a takeover target.
That raises the question: Will Microsoft be forced to buy Nokia, defensively? Most of the Asian handset makers have favored Android over Windows Phones. Indeed, Nokia should consider adding Android phones to its lineup -- unless precluded by its agreement with Microsoft. And that's probably the case.
Right now Nokia has about $12 billion in cash in the bank. Absent a takeover, that cash will prevent the company from disappearing any time soon. But it can't continue to operate in the current manner. Its exclusive relationship with Windows/Microsoft simply hasn't worked. Enough time has passed to make that statement.
There's almost no chance, given the current state of things, that Windows Phones will become the number two smartphone OS, as predicted by Gartner and IDC. Those forecasts were largely based on the reach and perceived brand strength of Nokia. That brand strength doesn't exist in North American and it's declining in other markets.
The chances are growing that someone will bid for Nokia. Rumors are circulating that it could be Samsung (denied by the company) or China's ZTE. However Microsoft will probably be forced to buy Nokia if it comes to that. By default the company would then be following the advice of several tech bloggers who suggested the same to compete with Apple with a more holistically integrated device.
Microsoft's Bing Maps also rely increasingly on Nokia's data and backend, another reason Microsoft may want to acquire the company. Nokia also holds valuable patents that enhance the takeover value of the Finnish company (and Android licensing value for Microsoft).
There will likely be some radical change to Nokia (sale or replacement of CEO Elop) by Q4 of this year if sales don't dramatically improve -- and they're not likely to with the iPhone 5 and Galaxy S III coming.
With today's keynote announcements coming out of the Apple developer conference the company has expanded Siri's range of capabilities, including into navigation and local search. The latter accompanies the introduction of new Apple Maps, which entirely replace Google's mapping product as the default provider on iOS devices.
When Apple bought Siri it did a wider range of things than what Apple introduced a year ago with the iPhone 4S. Siri's original plan was to integrate numerous third party APIs and allow Siri to be a front end for task completion across a range of categories. As of today that earlier vision is partially restored.
There now more datasets available to Siri (sports, movies, app search, local search). Users can also, once again, make OpenTable restaurant reservations. In addition users will be able to find/launch apps using Siri.
With Apple Maps the company now enters the local search market in a big way. Without having the benefit of having used the product, I can only speak in the abstract. However it appears very competitive. There are a wide range of data providers that Apple appears to be working with across a broad array of international markets, including TomTom, Yelp, Localeze, Acxiom, Urban Mapping and Waze.
Assuming a relatively good product, Apple would quickly become the number two player in local-mobile search. And having Siri as the front-end to this experience will potentially reinforce Siri usage and introduce people to the broader concept of Siri as a search tool or potential Google substitute in many instances. While Siri already could already offer directions and find nearby businesses it didn't provide a very good local search experience overall.
To see how widely seen and used Siri was as a search tool, we recently conducted a survey (n=503, 6/12) of iPhone users and asked them:
Which of the following do you use MOST OFTEN to search the web on your phone?
According to these results more people use Siri to search than use Bing or Yahoo. Siri could inch up that ladder if people begin to understand how the tool can be used beyond the relatively narrow range of functions it has been used for to date -- and if Apple rewards people with good results.
Last week Nielsen released data comparing US smartphone users' app adoption and usage vs. last year. Nielsen says that the average US smartphone owner in 2012 has 41 apps on his/her phone vs. 32 apps in 2011:
In just a year, the average number of apps per smartphone has jumped 28 percent, from 32 apps to 41. Not only is the 2012 smartphone owner downloading more apps, they are increasingly spending more time using them vs. using the mobile web — about 10 percent more than last year.
Nielsen also says that smartphone owners spend roughly 39 minutes a day using apps (vs. 37 last year). However this finding is much lower than Flurry's earlier declaration that smartphone owners spent 94 minutes per day in apps. It's not clear why these numbers should be so far apart. It may be that Flurry's data are behavioral (analytics based) and Nielsen's figures are based on self-reported survey data -- in which case the former would be more accurate. However, this is speculation.
Earlier this month comScore released data that asserted "4 in every 5 mobile media minutes" are spent in apps vs. the mobile browser.
According to Nielsen the top five mobile apps across smartphone platforms are Facebook, YouTube, Android Market, Google Search and Gmail. Finally, the measurement firm added that its surveys show users continue to be concerned about mobile privacy and location sharing:
[P]rivacy continues to be a concern with the vast majority (70% in 2011 and 73% in 2012) expressing concern over personal data collection and 55 percent wary of sharing information about their location via smartphone apps.
Ahead of Apple's quarterly earnings call next week, Fortune has rounded up analysts estimates regarding Q1 2012 iPhone sales. The consensus range is 30 to 35 million units:
The average among the Wall Street analysts is 30.5 million . . . To hedge our bets, we've singled out the six analysts who have turned in the most accurate estimates over the past five quarters. Their consensus: nearly 35.1 million units, an increase of 88.5% year over year.
Apple was the insurgent and Nokia the market leader. Now the roles have been reversed.
Nokia will report a loss later this week and expects a similar result in Q2. The bottom has fallen out of Symbian phone sales. However the company said it had sold 2 million Lumia handsets (globally) to date:
In the first quarter 2012, Nokia sold more than 2 million Lumia devices at an average selling price of approximately EUR 220 (reported within the Smart Devices business unit). Furthermore, Nokia has seen sequential growth in Lumia device activations every month since starting sales of Lumia devices in November 2011. Lumia has gained market share with both distribution partners and consumers. The Windows Phone ecosystem is also attracting developers and has expanded rapidly with more than 80,000 applications available.
Dpending on whether you think "it's still very early" or whether the company should have sold more units to date, you either conclude that the device is off to a good start or failing to take off. My view is in-between. I think it will sell moderately well to people interested in an inexpensive handset and not loyal to either Apple or Google.
The phone is apparently selling well on Amazon with overwhelmingly positive reviews, leading one person to question whether the reviews had been faked. I do believe that some of the reviews are fake; though many if not most are probably genuine. Nokia, AT&T and Microsoft have a great deal riding on the success of the handset, creating incentives for people to generate positive reviews.
I have used Windows Phones and found them to be good but not great. The chief problem is a lack of apps. I also don't favor the homescreen UI.
If Lumia is as great as the reviews suggest then sales should pick up considerably in the next quarter. This is the make or break year for both Windows Phone and Nokia as a company.
Beyond its February US smartphone marketshare data, released earlier today, comScore also exposed some additional, interesting data about WiFi usage among Android and iPhone owners in the US and UK. In general iPhone owners are apparently much heavier users of WiFi than Android owners. And UK residents are also generally bigger consumers of WiFi than their US counterparts.
In the US the percentage of Android WiFi users is half as large (32% vs. 71%) as iPhone WiFi users. But why?
As someone who owns both devices I can speculate about why this may be.
More Android handsets operate on 4G networks, whereas the iPhone is limited to slower 3G networks. The move to WiFi alleviates some of the frustration of being on slower networks for iPhone owners. Beyond this, on Sprint and Verizon in the US, iPhone owners can't access voice and data at the same time. Where WiFi is available they can.
In addition, whenever a new WiFi network becomes available iPhone owners get a prominent, even disruptive, notification that takes over the screen. iPhone owners are thus much more likely to be aware of the presence of WiFi than Android owners. The process of connecting to WiFi is also faster and easier on my iPhone than it is on my HTC Android phone.
There are two contradictory memes in the market about Android. One is that the platform is surging toward world domination; the competing narrative is that Android is losing adherents and is faltering.
ComScore boosted the first narrative today with a release (based on survey data) that shows Android crossing the 50% threshold in February. In other words, 50% of US smartphones now are Android handsets.
Interestingly comScore's data show only 44% US smartphone penetration, while Nielsen shows 50%.
In addition, Nielsen and financial analysts from Canaccord Genuity claim that the iPhone is "clawing its way back" among recent purchasers and closing the gap with Android. The Q1 2012 Appcelerator also appears to show mobile app developers losing some interest in Android.
These indicators suggest Android is losing some momentum, although the comScore data directly contradict that assertion. Regardless, it's clear that Android is on its way to replacing Nokia as the leading smartphone platform globally.
The comScore report also confirms the accelerating decline of RIM and shows that US consumers are not buying Windows Phones. We'll see what happens after the massive marketing campaign that's about to be unleashed by AT&T, Nokia and Microsoft.
Yesterday the Wall Street Journal published what amounts to a round-up of recent Google tablet rumors. None of the information was really new.
Previously Eric Schmidt confirmed that Google would be putting out a "highest quality" tablet at some point later this year. A Google-branded tablet (expected to be 7-inches) is intended to compete directly with the Kindle Fire. It's also a direct response to the failure of other Android tablets to date.
Here's are the quasi-factual nuggets extracted from the WSJ piece:
Earlier rumors suggested that the price might be $149. Either at $149 or $199 a decent 7-inch Google tablet is likely to be highly successful.
The Kindle Fire is actually quite a mediocre tablet compared to the iPad. It's well integrated with Amazon content but that's about it. Email and web surfing are quite painful on the device. Google almost certainly would make a more functional tablet for general purposes. It would also have the benefit of Google's voice actions.
Google also has nearly the content ecosystem that Amazon does (i.e., Google Play). It can also afford to subsidize the device because it will make money on search and mobile display advertising.
A $149 Google tablet would undermine Kindle Fire, compelling Amazon to lower its prices. Pricing here is a key variable. Regardless of whether it comes in at $199 or less, a cheap 7-inch Google tablet will be successful. The outlook for a larger tablet and direct iPad competitior would be more murky.
However I would predict that Google will sell millions of these smaller, highly subsidized devices.
Although the Pew Internet Project was the first to report that at least 50% of US mobile phone owners had smartphones, Nielsen waited until today to make the same statement: "Almost half (49.7%) of U.S. mobile subscribers now own smartphones, as of February 2012." This compares with 36% a year ago.
However if smartphone ownership is segmented by age and income, the numbers are much higher than 50% for some categories.
Nielsen says that Android's share of smartphones in February was 48% while Apple's was 32%. However among 90-day recent buyers, the numbers are much closer (48% vs. 43%), reflecting the popularity of the iPhone 4S and its availability from mulitple carriers.
All others, including RIM and Microsoft are under 20% collectively. However the trend is away from these platforms among recent buyers. Microsoft is hoping to reverse that with the expensive and high-profile launch of the Lumia 800 at AT&T next month.
Some US-based survey findings were released yesterday that show iPhone 4S owners use Siri regularly but only in limited ways. The survey of 482 iPhone 4S owners by Parks Associates reflected that people used Siri almost daily in many instances to send email, initiate calls and send texts. Other types of "more advanced" activities were not performed as often (e.g. setting up appointments or playing music).
Here's a very high-level overview of the findings:
Previously a ChangeWave survey in December found that Siri was the most "liked" feature of the new iPhone 4S.
Siri is clearly a work in progress; Apple has a "beta" label on it. Apple's chief mobile rival Google is working on its own "assistant" to compete with Siri. The rumor is that will include APIs for third party developers. So Google may out-Siri Siri if Apple doesn't keep moving.
The question now for Apple is how much to develop Siri into a broader utility and search or content discovery tool.
Apple removed Siri's earlier “transactional” capabilities, present in the app before Apple bought the company. Those earlier capabilities hint at what's possible. In other words, tapping directly into third party APIs to deliver content results and transactional pages without the interim step of a "search result." This was Siri's ambition when Apple bought the company. But will Apple press on?
In an ideal world Siri would develop into a kind of universal interface for finding and downloading apps, generating queries within apps on the handset ("Find me a flight from NY to Boston on Kayak on April 18") and perhaps initiating payments.
Clearly there are flaws in Siri's performance and it's imperfect, but it has enormous potential to be more than it is. I'm hopeful that Apple continues to invest in and develop Siri -- to help it realize its pre-Apple vision.
No more "early days" excuses will be possible if the Nokia (Windows Phone) Lumia 900 fails to deliver. The flagship Windows Phone will go on sale on April 8 from AT&T in the US for an aggressively discounted $99 (with a two-year contract). It will be the least expensive high-end smartphone on the market.
The price will help but it could still flop.
AT&T promises to support the launch with considerable marketing muscle. It's far from clear, however, that consumers will bite. Some no doubt will buy because of the $99 price. Aggressive pricing is key to Nokia's US market strategy.
The Lumia 710 has apparently done relatively well at T-Mobile (at either $49 or free). However, developer interest in Windows Phones remains muted. And without sufficient apps, Windows Phones simply won't be competitive.
Earlier this year I had predicted that Nokia-Windows Phone handsets would see modest but not spectacular uptake in the US market. If this launch is fumbled and fails to generate real momentum for Windows Phones it could be a serious blow to the outlook for the platform -- at least in the US market.
As a promotion Microsoft has mounted a Pepsi-Challenge like contest, inviting iPhone and Android users to take the $1,000 Windows Phone challenge and supposedly discover that Windows Phones are faster. But the PR value of the effort has already been compromised by a blogger named Sahas Katta.
Katta used his Galaxy Nexus and beat the challenge in a Microsoft store but was denied the $1,000 prize by store officials. He blogged about it and that post has now seen widespread attention.
Today the iPad pre-orders arrive and the iPad becomes available in stores. Yesterday reviews of "The New iPad" come out and overall they're very positive. Based on the success of iPad pre-orders, financial analysts have boosted their estimates of iPad sales for 2012. Some are now saying that Apple may sell a combined total of 65 million iPads or more this year.
One question is whether this lead will be so overwhelming that rivals will be shut out. So far the only successful Android tablet is the Kindle Fire and that success is largely based on its price. It's an inferior product, whose sales could be affected by the reduced price iPad2 ($399).
Yet IDC has projected that the iPad will be overtaken by Android tablets in 2016. IDC estimated that Amazon sold 4.7 million tablets in Q4 of last year.
The chart above reflects "shipments" and not actual sales. The logic behind this forecast showing Android overtaking the iPad is based on a simplistic analogy to the iPhone, and Android's growth over a period of years to a dominant market-share position. However, as several others have pointed out, the better analogy might be the iPod, which established a dominant market share and was never challenged.
In the US, Apple maintained an exclusive iPhone relationship with AT&T for three years after launch. That allowed Android to develop huge momentum. People were more inclined to buy an altenative smartphone than change carriers. The iPad has no such carrier constraints.
There have so far been well over 100 Android tablets and all but the Kindle and Nook have fallen flat. It's unlikely there are any new tablets on the horizon that will have great success -- Google's rumored 7" inexpensive tablet could be an exception. As I've written before, Android tablet OEMs are "boxed in" on pricing by Kindle on the one end and the iPad on the other. The lower-priced iPad2 makes their lives even harder.
The next test for the iPad will be the arrival of Windows 8 tablets, the first of which will probably show up for holiday shopping at the end of the year. But for at least three quarters the iPad will have little or no competition. That could enable Apple to sell 45 or 50 million more tablets.