Other Mobile Devices
iPad: How Do We Reconcile Tablet Projections with Actual Traffic Data?
IDC and Gartner both released revised tablet projections in the past month. According to Gartner Apple will control 61.4% of the tablet market in 2012. IDC says Apple had a 68% share of the global tablet market in Q1 2012. Gartner is counting projected sales, while IDC is measuring shipments.
Shipments have been definitively shown to be an inaccurate metric in the past. Shipments do not equal sales.
Yet late last week ad network Chitika found, based on millions of impressions on its US-based network, "that the iPad accounted for 94.64% of all tablet based traffic." By contrast Chitika said that the nearest competitor, the Samsung Galaxy tablet, "boasts a lack luster market share of 1.22%."
The ad network found that for every 100 iPads there were just over 1 Samsung Galaxy Tabs, as measured by traffic generated. For every 100 iPads there were 0.8% Kindle Fires. As an aside Kindle Fire sales have dramatically slowed this past quarter.
While Chitika's network is not synonymous with the entire Internet it's going to be generally representative of traffic trends. In Q3 2011 comScore reported that "iPads delivered 97.2 percent of all tablet traffic in the US."
There's something really out of alignment between what IDC, Gartner, NPD and several others are reporting in terms of tablet market share and what's actually happening "on the ground" in terms of usage.
Kindle Fire Controls More than 50% of Android Tablet Market
Today comScore confirmed what we already knew: Kindle Fire is the dominant tablet in the non-iPad universe. Comscore reported that the Kindle Fire had 54% of the US Android tablet market and was far ahead of all other Android tablet OEMs including Samsung.
Here's the market-share breakdown in the US Android tablet market according to comScore:
Kindle Fire is a weak competitor to the iPad in terms of overall user experience. However its $199 price has made it extraordinarily successful. Accordingly it set the bar for Android pricing in the 7 inch category, if not the rest of the Android tablet market.
Google will reportedly match or beat that pricing when its own branded tablet goes on sale later this year.
Cheap Google Tablet Almost Certain to Be a Hit
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:
- Co-branded Google tablets (think Nexus smartphones) will be made by Asus and Samsung
- Google's Motorola unit will make Google-branded tablets
- Pricing of a Google tablet would match or beat the Kindle Fire ($199); Google will subsidize the device accordingly
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.
Report: Newsstand iPad Apps Generating $70K per Day in Revenue
In a new report on the iPad and related user behavior just released by app-store analytics provider Distimo finds that news publications and magazines on the iPad in the US are generating $70,000 daily (among the top 100 newsstand apps). The top five grossing US publications in order are Murdoch's The Daily, The New York Times, The New Yorker, National Geographic and Cosmopolitan.
The report also says that China is now the largest market in the world for free iPad apps, but it's not among the top five countries for paid app revenues. Distimo reported that the top 200 paid apps globally are generating roughly $2 million per day in revenues. The top iPad app-revenue countries are US, UK, Canada and Australia.
The iPad has far more tablet-specfic apps than any of its competitors. The company says that Samsung tablets have roughly 32,000 apps available for various screen sizes. According to Distimo:
However, only a small proportion of applications in Google Play are optimized for tablets. When we look at the Samsung Appstore . . . we see that roughly 32K Android applications are available in the device stores for tablets (Galaxy Tab 10.1, Galaxy Tab 7.0 and Galaxy Tab). The majority of applications are available for the Galaxy Tab and Galaxy Tab 10.1 only, but there are also a substantial 4K applications available for the Galaxy Tab 7.0, which has a different screen ratio.
I'm quite surprised by the finding of 32K apps for Android tablets. In my roughly 9 months of 10-inch Galaxy Tab ownership I found almost zero apps for the device. This paucity of tablet-optimized apps is one of the reasons for the failure of Android tablets generally. It's the same catch-22 scenario I discussed yesterday regarding Windows Phones and the lack of apps: because most Android tablets haven't sold, developers so far aren't creating tablet-optimized apps for these devices (Kindle Fire may be an exception).
Given the success of Kindle Fire and Nook it appears that Android tablets will mostly focus on the 7-inch form factor. And at that size smartphone apps are not as glaringly ill-formatted as they are on the 10-inch screen.
Distimo also identified most popular iPad app categories (by downloads) in pink in the chart below:
The gray bar on the right indicates the number of available apps in the category. Where the pink bar exceeds the gray bar, Distimo says there's high demand vs available supply and a corresponding developer opportunity.
Apple CEO: 'We Had a Record [iPad] Weekend'
On a conference call this morning discussing Apple's decision to issue a dividend and buy back $10 billion worth of shares, CEO Tim Cook said the following about iPad sales so far: “We had a record weekend and we’re thrilled with it.” He declined to discuss it further.
Some analysts and pundits over the weekend were arguing that sales were less than anticipated. However, according to AT&T (via CNN) the company said it saw record activations of the 4G iPad on its network:
On Friday, March 16, AT&T set a new single-day record for its iPad sales and activations, demonstrating robust demand for the new iPad on the nation's largest 4G network, covering nearly 250 million people.
We won't know what pre-order and initial weekend sales were unless or until Apple puts out a press release. Given AT&T and Tim Cook's remarks, however, I suspect the company will do so.
Update: And they did a little while ago. Apple said it had sold more than 3 million "new iPads" as of today: "Apple today announced it has sold three million of its incredible new iPad, since its launch on Friday, March 16."
Pew: Almost 30% Getting News on Smartphones, Tablets
According to a sweeping report from the Pew Reseach Center ("State of the News Media 2012"), 27% of the US adult population now gets its news on smartphones and tablets. The report says that "70% of desktop/laptop owners report getting news on their computers. Half of smartphone owners (51%) use their phones for news. A majority of tablet owners (56%) use the devices for news."
Mobile news consumers, especially users of news apps, are more engaged than their PC counterparts: "People spend more time per session with news on mobile devices than they do on computers, and read more articles per session and more articles per month."
The data were collected through various surveys earlier this year. They show that people are accessing news on multiple devices, more frequently. Mobile news consumption appears to generally be "additive" to consumption on the PC, although there's evidence that smartphone and tablet owners are shifting some of news reading to those devices.
Pew also says that "mobile news consumers are even more likely to turn to news organizations directly, through apps and home pages, rather than search or recommendations — strengthening the bond with traditional brands."
Although people are getting news on multiple devices, 82% of survey respondents get their digital news primarily on a computer. Pew adds, however, "But much of that may mainly come from the computer being their only digital option . . . 43% of all desktop/laptop owners [do not] own another device."
Pew observed that for people with multiple devices some amount of their news consumption is shifting, "[A]s we have seen with other technology shifts, consumers are drawn to newer forms and may even make them their primary mode, but they are not abandoning older forms altogether. Instead their news experience widens and deepens."
Smartphone owners who read news on their handsets are evenly split, "46% still get most of their news on the desktop/laptop; 45% get most on their smartphone." For iPad and Kindle Fire owners, "47% still get most of their digital news via desktops or laptops, while a third, 34%, have already transitioned to consuming most of their news on the tablet."
On the PC Web most news publishers were largely "disintermediated" by search (Google). Their brands were diluted and weakened as they were presented among hundreds of news sources for a given story. They were often out-maneuvered by aggregators and others more skilled at SEO. Mobile news apps and the move away from search as universal content gateway (in mobile) gives publishers an opportunity to reestablish a more direct relationship with the consumer -- and with that capture more digital revenue.
Despite iPad Lead, Forecast Shows Android Overtaking It in 2016
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.
Why PC Vendors Are Compelled to Compete with the iPad -- but Probably Can't
In two years, the iPad has gone from being a "frivilous" and "unnecessary" device to outselling PCs. Yesterday Apple unveiled the "3rd generation iPad" or "the new iPad," if you prefer. It boasted a range of upgrades, including the "retina display," 4G models, improved cameras, improved software and a new quad-core processor, among others.
Last week ad network InMobi surveyed North American users and found that 30% of respondents were interested in buying the new iPad (many would also buy an iPad2 at a reduced price). The following was a list of most desired features according to the survey:
Interestingly Apple delivered on almost all of these except "size & weight" (smaller, lighter iPad). On battery life the iPad already does incredibly well, better than any laptop or other tablet (except the original Kindle). So that was probably something of an unreasonable expectation. The fact that it was able to deliver 4G with a nine hour batter life is pretty remarkable actually.
Users also got the ability to buy the iPad2 at an entry level price of $399. Apple is going to sell a lot of those also. The price is close enough to Amazon's Kindle Fire that it could affect sales of that device.
It's not clear how many people pre-ordered a new iPad, although the initial batch of white 4G models may have sold out based on the absence of a March 16 delivery date on the Apple site.
During the press conference yesterday, Apple CEO Tim Cook showed what was perhaps the most significant slide of the event:
Amazingly the iPad outsold PC vendors in Q4 2011 -- not collectively but each individual vendor. And because consumer PC sales are flat this will likely continue to happen in the future. Tablets are an emerging "necessity," not just for gadget savvy consumers but for PC makers who could see their fortunes decline dramatically if the trend holds.
Thus all of the OEMs on this slide shown yesterday are compelled to enter the tablet market. They literally can't afford to ignore it now. They can choose from the Android OS or the forthcoming Windows 8. Dell is banking on Windows 8 to boost its fortunes.
Windows 8, which is supposed to be a cross-platform OS and which has received some favorable early reviews, remains a wild card. There's not going to be a Windows 8 tablet until Q4, if then. In the meantime Apple may have sold 20 - 30 million more iPads, including in the enterprise. (If Microsoft builds an iPad version of Office, that will partly undermine the case for Windows 8 tablets.)
Among the OEMs that have chosen Android, they confront the problem of competing without many specialized tablet apps and against the price pressure created by Amazon's Kindle Fire ($199) and the WiFi iPad ($499). In other words, if they try to price their tablets to create PC-like margins, they won't sell. If they price tablets aggressively (as they must) they may sell units but they won't make any money.
Tablets Become a Key Local Search Platform
We've known for several years how important and influential smartphones are in finding local business information, especially "on the go." However the latest Local Search User Study from Localeze, 15 Miles and comScore documents, among other things, the increasing role of tablets in the process of finding offline information.
Consistent with other consumer data in the market, the survey of 4,000 US adults found that the top reason for conducting a local business lookup on a mobile device/smartphone is the immediate need for information. Interestingly, the survey discovered that nearly half (49%) of smartphone and tablet owners were using apps for local business searches (e.g., Yelp, Urbanspoon, YP.com) vs browser-based search (e.g., Google).
The Local Search Study also found that while tablets were used "throughout the [local search] process," usage was concentrated in the early and middle stages (research + consideration) of the purchase process. This might be expected because of the analogy to PC usage. However comScore found that among the three groups (PC, smartphone, tablet users) tablet owners are the most engaged and active: "most tablet users conduct local business searches at least once a week . . . more frequently than PC/Laptop users and mobile phone users."
Another interesting finding: tablet owners had increased their usage of the devices over the past year. That wasn't equally true of smartphone owners. Part of the higher levels of tablet engagement can be attributed to the fact that tablets are more "immediate" than PCs but offer a larger display for "more complete information" -- as the graphic above reflects.
Consistent with this heightened engagement the study found that tablet owners were more likely to make purchases after local search activity (which in this case largely mean offline transactions) and spend more money on average.
Report: Amazon Sold 3.9M Kindle Fires in Q4
IHS iSuppli released estimates for tablet market share (using shipments as the operative metric). However in the case of Apple and Amazon shipments is the same as sales to consumers.
Apple previously announced that in Q4 it had sold 15.4 million iPads and a total of 55 million to date. But we didn't know the number of Kindle Fire devices that had sold. Some analysts estimated it was between 4 and 4.5 million. Now iSuppli estimates it was 3.9 million.
With strong Kindle Fire sales in Q4, Amazon zoomed past Samsung to become the number two player in the tablet market. Overall in 2011 Samsung "shipped" more tablets; however shipments does not equal sales to end users. Below are iSuppli's global tablet estimates, showing Amazon with 6% of the market at the end of Q4.
I simply don't believe that Samsung has actually "outsold" Amazon. It may have "shipped" more devices but those devices have largely sat on retailer shelves. Furthermore, Samsung's recent announcement of the Galaxy Tab 2 (7"), with Android 4.0, may be another miscalculation. While it appears to be a nice device, a reported $400+ price tag all but guarantees it won't sell. At that price people will opt for iPads.
As I've repeatedly argued in the past no 7" tablet maker can charge more than about $250 now and expect to compete with Kindle Fire. Samsung would likely be taking a loss if it were to do so. Another way to potentially compete and still preserve margins is to get carriers to subsidize tablets. However this strategy has not worked and consumers have largely shunned carrier-subsidized tablets in favor of WiFi-powered devices. (People simply don't want to give any more money to carriers.)
One of the interesting observations that iSuppli makes is that in Q4 people may have been choosing between the iPhone 4S and iPad. In other words, more iPads would have sold if the 4S hadn't just been released. If that's correct some number of people who actually wanted to buy an iPad may have opted instead for the Kindle Fire because of price sensitivity. Indeed, the Kindle Fire is a vastly inferior device but that inferiority is masked to a degree by Amazon's content ecosystem.
In a related piece of news, Nielsen released some survey data on how parents and kids use tablets: games, education, entertainment in that order.
Survey Shows Amazon Kindle Fire Subsidy Paying Off in Sales
According to various analyses of Kindle Fire hardware production costs, Amazon is actually subsidizing the cost and taking a small loss on the sale of each device. This was undoubtedly a contributor to Amazon's "disappointing" Q4. The company said it sold millions of Kindle devices without providing any concrete figures.
However the company's strategy has been to use Kindle as a platform or tool to sell other content: e-books, video, music and apps. These are high margin products for Amazon.
A new survey (including 254 Kindle Fire owners) from ChangeWave argues that the company's Kindle Fire strategy is already paying off. Kindle Fire owners reported that they'll be spending more through Amazon in the next quarter than non-Kindle owners:
The relatively low cost of the device ($199) was shown to be the biggest driver of sales and the most "liked" feature of the product:
The chief "dislikes" were: no hardware volume button and no camera. The short battery life was also a complaint. Generally speaking, however, Kindle Fire users seem to be quite satisfied -- though not as satisfied as iPad owners.
Google has vowed to "fight" Kindle Fire and its bid to control the Android tablet market with its own "higest quality" tablet, which may be even more aggressively priced than Kindle.
Related stories:
Nokia Sells a Million Windows Phones, AT&T's 7.6 Million iPhones and Fake Android Tablet Numbers
This morning both AT&T and Nokia reported quarterly earnings. AT&T sold 9.4 million smartphones, including 7.6 million iPhones last quarter, but generally missed expectations and posted a loss (partly because of the blocked T-Mobile deal). The company ended the year with 103.2 million mobile subscribers in the US. Verizon earlier this week said that it had 108.7 million subscribers.
Nokia beat the market's low expectations despite announcing a $1.4 billion (€1.07 billion) loss. More importantly the company announced that it had sold more than 1 million Lumia Windows Phones during the quarter in Europe. That was consistent with analysts' projections and has boosted Nokia despite the accelerating decline of its Symbian platform.
Yet data from forecaster Kantar, discussed by Reuters yesterday, reflected that sales of Lumia handsets in all nine markets where the phones are available were "less than 2 percent." Accordingly there's a long climb up the mountain for Nokia to reclaim its former position as a market leader on the back of Microsoft's OS:
Kantar said Microsoft's Windows Phone share in all of the nine key markets it measures remained at less than 2 percent despite the high-profile launch of the Lumia range from Nokia.
Nokia's flagship Lumia 800 model failed to break into top 10 smartphones sold in Britain by the end of the fourth quarter, the researcher said.
Nokia said in November the model was off to an excellent start in Britain, and had seen the best ever first week of Nokia smartphone sales in the UK in recent history.
Microsoft and Nokia have an arrangement where licensing and royalty payments change hands. But basically Microsoft is paying Nokia billions over a period of years to use the Windows Phone OS.
Finally, in the battle over marketshare numbers, Strategy Analytics put out an attention-getting release this morning arguing, "Android Captures Record 39 Percent Share of Global Tablet Shipments in Q4 2011." This conveys the impression that Android tablets have captured substantial marketshare, which is inaccurate.
The chart below suggests that Android tablets sold 10.4 million units -- in part because Apple actually sold 15.4 million iPads.
Kindle Fire, a quasi-Android tablet (quasi because it marginalizes Google and the Android Market), sold perhaps 4 to 4.5 million units. If correct that would constitute nearly half the "shipments" in the chart above. Beyond this Nook, another low-end Android tablet, may have sold quite well in Q4 also. These are the bestselling Android tablets. All others have had negligible sales.
Previously the HP TouchPad was the bestselling non-Apple tablet because it was reduced to $99 by HP to move units.
Let's end talk of "shipments" as a market share metric. Devices "shipped" does not mean devices purchased by consumers. Nor do "shipments" stand as a proxy for purchases, although they do typically in the unique case of Apple devices.
The "shipments vs. sales gap" was most starkly revealed last year specifically in the case of Android tablets (and RIM Playbooks). Millions of units "shipped" but almost none actually "sold" to consumers. Instead they sat on shelves. Effectively then "shipments" is a discredited and invalid metric to measure market share.
Statistically valid consumer survey data would be more reliable as a measure of market penetration.
Millennial Seeing 'Hundreds of Millions' of Kindle Fire Ad Impressions
Millennial Media is out this morning with its latest "Mobile Mix" devices report. The report reflects the distribution of devices and corresponding operating systems on Millennial's network. Over time the percentage of smartphones on Millennial's network has grown dramatically and now stands at 70%. By contrast smartphone penetration in the US is about 44% according to the latest Nielsen figures. The other 30% of devices on the Millennial network are feature phones (14%) and so-called "connected devices" (16%): iPod Touches, Kindles, iPads and other tablets.
Connected devices are the main focus of Millennial's newsletter this time, in particular the Kindle Fire. Millennial confirms the popularity and apparently significant sales of the Kindle Fire, saying that the company is seeing a "monthly run rate of hundreds of millions of impressions":
Since its release in mid-November, the Kindle Fire has made an impact on the connected device market right out of the gate with early signs of strong consumer adoption.
On the Millennial Media platform, impressions from the Kindle Fire have grown at an average daily rate of 19% since its launch several weeks ago. We’re not just seeing millions of impressions, we’re seeing a monthly run rate of hundreds of millions of impressions.
The Kindle Fire’s impression growth on our platform has slightly outpaced that of the iPad when the iPad launched in early 2010. Though the Kindle Fire has been introduced into a more mature tablet market than the market which greeted the original iPad, the integration of Amazon’s robust digital entertainment library and the $199 price point may also have helped drive this early use by consumers. (emphasis added.)
The question raised in the excerpt above is whether "the $199 price point may [ ] have helped drive this early use by consumers." It's pretty clear the answer is "yes." The Amazon brand has certainly been critical, but it's mainly the $199 price that is responsible for the device's huge sales. The iPad created the new market for tablets and Kindle unlocked demand among those who we're more price sensitive and resisted buying "no-name" lower-priced Android tablets.
Among the smartphones on Millennial's network, 50% are Android based handsets. However, save the Nook and Kindle Fire, Google/Android tablets have had almost no success for reasons of price and quality.
Retrevo presented some interesting survey data yesterday showing consumer tablet demand is greatest for the iPad, followed by the Kindle Fire and then the B&N Nook. Retrevo shows that there is a market for Android tablets -- the Kindle Fire has already confirmed that -- provided the price is right and at least $100 less than the iPad.
Putting aside quality for a moment -- Android Honeycomb was a major disappointment from a UX perspective -- price is the major variable that consumers are responding to in Kindle Fire (but with the confidence of the Amazon brand behind it). The problem is that it's almost impossible for most tablet OEMs to get prices low enough to make any margin on them and be price-competitive.
If they match the iPad pricing they're perceived as imitators (e.g., Motorola Xoom, Samsung Galaxy Tab). But mobile carrier subsidies, which bring down the prices of smartphones, have not worked so far stimulate Android tablet demand -- mainly because consumers don't want another two-year carrier contract and the associated data fees. They're buying WiFi tablets instead.
Android-based tablets that have been priced at or below $200 in the past have been made by companies that are unfamiliar to consumers and received poor quality ratings from experts and consumer reviewers alike. Even though Kindle Fire has had its share of problems and disappointed many reviewers, consumers know and like Amazon.
It was also shown that Amazon was taking a loss on the sale of every Kindle Fire, to establish a beachhead in the tablet market and because the company figured it could make up the loss and much more on content sales.
There are rumors that Apple will introduce a 7" tablet next year to compete with the Kindle Fire, just as Amazon will go "up market" and deliver a 10" tablet.
Google, for its part, has suggested that it will respond to lagging Android tablet sales by bringing its own "higest quality" tablet to market next year. We'll see whether this is with an OEM partner or Google-branded (i.e., Chrome or Nexus tablet). Google is clearly another company -- one of the very few -- that could offer the combination of brand-instilled consumer confidence and subsidized pricing.
Study: Tablets Are for "Couch, Bed and Kitchen"
Tablets are for fun, entertainment, relaxation, while laptops are for work says a new study from Google. The company is releasing some very interesting (and more nuanced) data today on tablet usage, which has come into sharp focus following all the post-holiday analysis.
The data in the Google study are based on self-reported dairies consumers kept over a two-week period (sample size undisclosed). Google found an emerging bifurcation between tablet and PC usage, as well as some other interesting consumer behaviors.The bottom line here is that tablets are used in the home primarily, mostly by one person for leisure activities and often along side other media.
Most consumers in the study "use[d] their tablets for fun, entertainment and relaxation while they use[d] their desktop computer or laptop for work." Just over 90% of usage turned out to be personal (email is an exception perhaps). Google added, "When a consumer gets a tablet, we’ve found that they quickly migrate many of their entertainment activities from laptops and smartphones to this new device."
Other findings from the study:
- The most frequent tablet activities are: email, games and social networking
- Usage was more compressed during the week and longer on the weekend (e.g., watching video)
- 42% of tablet activities happened during other tasks or along side other media (i.e. watching TV). Email, games, social networking and search are the tablet activities most frequently done in front of TV
- Usage occurs mostly in the home, though some people use them on the commute and on vacation or work trips, “where they use them as a laptop replacement"
- Google also discovered most tablets were used by single individuals; a smaller percentage were shared with family members
Tablets are, according to Google, “mobile within the home, with the highest usage taking place on the couch, from the bed and in the kitchen" (see first graphic above).
Google also offers some implied recommendations for publishers: “For many people, websites and apps designed for smartphones just don’t cut it on tablets" In other words have sites and apps optimized for tablets. That's somewhat ironic given how few tablet apps exist for Android -- they're mostly stretched smartphone apps (which will change hopefully soon with Ice Cream Sandwhich).
In a parallel vein, Google said that consumers expect more interactivity from ads on tablets:
Consumers are engaging with useful, relevant and rich ads that take advantage of the touchscreen interface on tablets. Some consumers expect more interactivity from ads on tablets than they do from ads on their desktop computer.
Interestingly, most activities carried out on tablets were limited to tablets, according to Google. Only 18% were conducted across platforms (on PCs or smartphones).
With the iPad topping wishlists and millions of Kindle Fires being sold this holiday season the influence of tablets will only grow. This seems to be further confirmed by Google's finding that tablets were mostly used by one person. This argues for subsequent tablet purchases by other family members so "each can have his/her own."
And in a bad economy those purchases will likely come at the expense of PCs.
Cutting through the Cyber-Monday Hype
IBM, eBay, comScore and others have been pouring out data reflecting revenue gains over the weekend and on Monday for e-commerce and specifically mobile. In particular comScore says that Cyber Monday became the biggest online shopping day in US history clearing $1.25 billion. PayPal said that it saw a 552% increase in mobile payment volume vs. last year and a nearly 400% (397%) increase in mobile shopping.
There are a range of other statistics that reinforce the fact that there was a great deal of shopping on mobile devices over the weekend and on Monday.
For example, IBM said the following about mobile shopping and mobile traffic over the weekend:
- Mobile traffic increased to 14.3 percent . . . compared to 5.6 percent in 2010
- Sales on mobile devices surged to 9.8 percent from 3.2 percent year over year
- Mobile shopping was led by Apple (iPhone + iPad) . . . Android came in third at 4.1 percent. Collectively iPhone and iPad accounted for 10.2 percent of all online retail traffic on Black Friday.
- Shoppers using the iPad led to more retail purchases more often per visit than other mobile devices with conversion rates reaching 4.6 percent compared to 2.8 percent for overall mobile devices
IBM added on that on Cyber Monday mobile represented 7.7% of all online sales, up from 2.2% last year.
So what does all this mean exactly? As a basic matter, it means that people are using smartphones and tablets to shop for products and some are making purchases on them.
We need to ask several questions, however, before we can take the full measure of what happened:
- Were mobile devices being used mostly in the home?
- How much of the activity happened "on the go" and in stores?
- What percentage of people started with a mobile device and finished on a PC (and vice versa)?
- How many mobile purchases were made through mobile apps vs. the mobile web?
- What percentage of "mobile" purchases happened on the iPad vs. smartphones?
- What percentage of mobile buying happened where the user had a stored credit card on file with the e-commerce site/app?
Answering at least some of these questions will give us a better sense of what's really going on in terms of mobile behavior. Screen size, location, time and the immediacy of user needs are all variables that contribute to a larger consumer-behavior context. For example, a tablet (iPad) user at home is very different from a smartphone user in a store, and so on.
While marketers and publishers can't address all these variables and nuances, they need to strive to better understand them to be effective and understand where mobile sits in the new cross-platform shopping paradigm.
Source: Google-AdMob, March 2011; Nielsen Q1 2011
US Smartphone Share Over 50% for Younger Users, Half Have Apps
Earlier this morning Nielsen released its latest smartphone data for the US market:
- 43% smartphone penetration overall
- Android: 43%
- iPhone: 28%
- RIM: 18%
- Windows: 7%
- Others: 4%
By comparison comScore says that 36% of mobile phone owners have smartphones. However the most recent comScore data show a comparable share distribution for Android and the iPhone (43.7% vs. 27.3%).
Nielsen also reported that smartphone ownership for those under 45 is much greater than the overall population: 54%. It goes even higher (62%) for those 25 to 34 years old.
The Pew Internet Project said in May of this year that 42% of US mobile users own smartphones. And in a release of new survey data yesterday, Pew found that 50% of all mobile phone users have downloaded apps (vs. 43% in May 2010). However, as we know, downloads and usage are not synonymous.
As the chart above indicates, 51% of mobile phone app downloaders use between 1 and 5 apps weekly. A substantial minority (31%) use 6 or more apps per week. Average weekly app usage is higher among tablet owners.
The following chart shows the general categories downloads by populatirty/penetration according to Pew. Curiously the most popular app download category, games, doesn't appear on this list. This is probably a flaw in Pew's survey question design.
Finally, Pew says that just under half (46%) of all app downloaders have paid for apps at some point, with most spending less than $5.
VC's Invest $15 Million in Appcelerator Expand Global Efforts Against Platform Fragmentation
Appcelerator has secured $15 million in funding from a set of investors that is led by Mayfield Fund, TransLink Capital and Red Hat, with eBay, Sierra and Storm Ventures also participating. The proceeds a earmarked to cover global expansion for what the company already calls "the largest 3rd-party publisher in the Apple iTunes store and the Android marketplace. It claims to support a community of over 1.6 million developers who, over the years, have placed 30,000 mobile apps for more than 30 million different devices into its portfolio. The announcement contained other fascinating measures of growth at Appcelerator. For one thing, the firm has grown from 17 to over 100 employees in the space of 12 months. Some of the growth is the result of acquisitions. Aptana, with its mobile app IDE (Integrated Development Environment) was acquired in January as we reported here. On October 24, the company acquired Particle Code with expertise and a development platform focusing on HTML5 apps, especially for gaming.
Both the investments and the acquisitions aim at overcoming platform fragmentation. Far too much attention is paid to the battle between iOS and Android in a world where we all know that each brand, device type and form factor has its own specifications, extensions and design characteristics. Clearly it takes more than a village to provide the development platform and resources to enable application creators and developers to write their code once and see that it reaches the broadest audience (and monetization opportunities) possible. Appcelerator's approach to cross-platform application delivery has led to explosive growth (500% annually by its measure). Just as important, it has attracted high-visibility brands like NBC, Zipcar, ING, Merck, Medtronic, Michael’s Stores, Progressive, and GameStop to use its development and delivery mechanisms. The $15 million in additional capital will provide the wherewithal to take its act global.
Mobile Devices at the Ready for Holiday 2011
According to a new survey of 8,585 US adults, released by the National Retail Federation, consumers plan bring the full authority of their mobile and tablet devices to bear on the challenge and opportunity of holiday shopping. More than anything else the survey data reflect the degree to which people have come to rely on these relatively new tools for shopping.
Smartphones -- Almost 53% of smartphone owner-respondents said they will use their phones in holiday shopping in some form:
- 31% will research products and/or compare prices
- 14.1% will purchase products
- 17.3% will redeem coupons on/with their phones
- 15.6% will use apps to research or purchase items
- 25% will use their smartphones to look up local retailers' information (address, hours, etc.)
Tablets -- Just over 70% of tablet owners said they will use their "pads" for shopping and buying:
- 50.8% will research products and/or compare prices
- 34.8% will actually make a purchase with their devices
- 21.5% will redeem coupons
- 33.8% will search for or lookup retailer information
- 21% will use apps to research items or buy products
Demographic data:
- Those 18-24 are most likely to use smartphones (72.2%) and tablets (86.4%) in shopping this year
- Smartphone owners: 17.6% of men and 10.8% of women plan to buy with the device
- Tablet owners: 38.5% of men 31.3% of women plan to buy with the device
It's a Four-Screen World Baby
People speak of "three screens": TV, PC and mobile. We need to change that to four screens to acknowledge the growing importance of tablets. We already know that tablets (iPads) have the highest engagement metrics of any of the many screens and that the devices are much more significant for transactions -- "t-commerce" -- than smartphones.
Today the Pew Research Center's Project for Excellence in Journalism put out a report that shows tablet owners are huge news consumers, often to the detriment of other news mediums: PC, TV and print. They're also an older, more educated and more affluent bunch than other screen users.
You can read the full report, but here are a few top-level bullets:
- Consuming news is roughly as popular as sending and receiving email and more popular than social networking, gaming, reading books or watching movies and videos
- 77% of all tablet users get news at least weekly and now spend "more time getting news than they did before they had their tablet."
- 33% of tablet news users say they are turning to new sources for news on their tablet, sources they had not turned to on other platforms such as television or their desktop computer
- 40% get news principally through a browser; 31% use both browser and apps; 21% get news mainly through apps. While news-app consumers are the minority they’re more engaged and more satisfied than browser-news consumers
The demographics of tablet ownership (right now) make them a way to target affluent and educated users more directly than on other screens. However all publishers and marketers will need both smartphone and tablet strategies going forward. Do you need an app or are you simply going to rely on your browser-based site?
Attribution and tracking become much more complicated as people bounce from real-world stimuli to PC to smartphone to tablet and back.
Not counting Nooks and Kindles there are 46 million tablet devices globally in market: 6 million Android devices and 40 million iPads. In the US more than 95% of tablet traffic is from iPads. Millennial Media said that iPad impressions on its network grew 456% year over year.
By the end of Q4 or early Q1 there should be several million Kindle Fires in the market and as many as 55 million iPads. Other than the Kindle Fire, however, none of the other full-fledged Android tablets are currently in a position to capture much market share.
Related: iPads Change Economics, and Speed, of Hotel Wi-Fi
Is iPad's Tablet Share 67% or 85%?
We've got way too many analyst firms estimating market share based on "shipped" rather than "sold" hardware devices. Joining that esteemed club, this morning Strategy Analytics put out tablet data saying that iPad and Android tablets combined for 94% marketing share in Q3:
Global tablet shipments reached 17 million units in the third quarter of 2011. Apple iOS and Android dominate the worldwide market with a combined 94 percent share . . . Apple shipped a record 11.1 million iPads and registered a healthy 67 percent global tablet market share during the third quarter of 2011. Apple iOS remains the world’s dominant tablet platform with the most established services ecosystem.
As the company's press release above says, Strategy Analytics estimated Apple's Q3 tablet market share at 67%. But that's not an accurate reflection of the iPad's market share overall -- though journalists and bloggers will report it that way.
Effectively Apple and Android combine to form 100% of the "tablet" market in terms of devices sold. If we include eReaders, which implicates Kindle and others, then the 94% figure is probably accurate or close. Strategy Analytics is estimating on the basis of tablets "shipped" rather than "sold," which leads to distortion of the numbers. Samsung shipped many more Galaxy Tab devices than it actually sold.
Let's look at the actual numbers.
Android boss Andy Rubin said this week at the "D" conference in Asia that there were "more than six million Android tablets out there." That also doesn't mean "sold to consumers." But it's helpful as a figure representing the total universe of Android tablets "in market." By contrast Apple has actually sold 40 million iPads to date.
If we exclude eReaders from the "tablet" market, the numbers above show Apple with an 85% market share and Android with 15%. But the Android figures also probably include tablets shipped but not actually sold (as with the Samsung G-Tab example). So Apple's market share is probably closer to 90%.
Indeed, in June of this year comScore put out data that argued the iPad delivers “89 percent of tablet traffic across all markets.” In the US the figure was 97 percent. We can safely assume that in the US the number is now somewhat lower -- but not much.
Kindle Fire is selling well and will greatly boost Android's share numbers. But the implication that more than 30% of the market is now controlled by non-Apple tablets is simply wrong.