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.
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:
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.
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:
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:
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
Earlier this morning Nielsen released its latest smartphone data for the US market:
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.
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.
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:
Tablets -- Just over 70% of tablet owners said they will use their "pads" for shopping and buying:
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:
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.
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.
Yesterday comScore released its "digital omnivores" report, which is really about smartphone and tablet usage in major US and international markets. I covered it in preliminary form on Search Engine Land. The report is full of data but it makes the overarching point that smartphones and tablets are now critical platforms for publishers (as well as advertisers). Below I highlight some of the findings.
As a preliminary matter, comScore now says there is 36.1% smartphone penetration in the US (against a base of 234 million adult mobile subscribers). By comparison Nielsen says that smartphone penetration has reached 43%. That's a pretty big discrepancy. Nielsen's figure is probably somewhat more accurate in my view.
Either way, however, we've now crossed the 100 million mobile Internet user threshold. ComScore reported that "The mobile media user population (those who browse the mobile web, access applications, or download content) grew 19 percent in the past year to more than 116 million people at the end of August 2011."
ComScore adds that in the US and UK roughly 7% of Internet traffic is coming from non-PC devices.
It also shows how these devices reflect peaks and valleys at different times of day, with tablets being used much more heavily in the evening.
ComScore also discusses, that despite Android's now greater smartphone population, iOS overall has more users (including iPod Touch and iPad). But the most dramatic slide is the second one below that shows how much more Internet traffic comes from iOS devices.
The report has considerable information about tablet usage. And as the headline suggests, perhaps we should stop talking about "m-commerce" and start talking about "t-commerce" (for "tablet"). Consumers use smartphones for shopping and product comparison information, but they use tablets to buy. This is due almost entirely to the larger form factor. But tablets also beat conventional PC e-commerce in some ways too -- because their more engaging devices.
Retailers and e-commerce sites in particular need to focus on tablets even more than smartphones.
I'm not a big fan of the Swype keyboard but many people are. Yesterday Nuance agreed to acquire Swype for $102 million, $77 million of which is up front. The rest will apparently be paid 18 months later:
The aggregate consideration payable to the former shareholders of Swype consists of $102,500,000, of which $77,500,000 was paid at the closing and the remaining $25,000,000 (the “Contingent Consideration”) is payable on the eighteen month anniversary of the closing.
Numerous people have now reported on the deal but almost no one has penetrated the rationale except to say, in effect, "Swype is popular." (Read my colleague Dan Miller's interesting and somewhat different take on the acquisition.)
When I first read about the deal on Mike Arrington's new blog Uncrunched I was puzzled. Why would Nuance be spending $102 million for technology it already owns. The Nuance Flex T9 Android keyboard does speech and Swype-like tracing, among other things. It's the most complete Android replacement keyboard in the market.
In fact Nuance often favorably compared itself to Swype, saying that it effectively out-swyped Swype itself. As mentioned Flex T9 does more than Swype; it's more flexible (hence the "flex" part). So why would Nuance buy Swype? There are a few potential reasons:
Stil it doesn't entirely add up for me. I'll be curious to get Nuance's perspective and see where they're going to try and take their keyboard business.
Flex T9 costs users $4.99; so maybe there's a revenue aspiration in the acquisition as well (bolster the offering). It's not clear whether that $4.99 pricing will be extended to the otherwise free Swype or whether Nuance will will rebrand the Flex T9 as Swype and make it all free.
You can see Flex T9's Swype-like capabilities in the video below.
As we wrote when the Kindle Fire was announced at $199, other Android tablets would have to match or nearly match that pricing to stay alive. It now appears that HTC got the message. US retailer Best Buy will be dropping the price of the 7-inch Flyer from $499 top $299 on October 1:
Best Buy, a leading retailer of consumer technology products, today announced it is reducing the price of the HTC Flyer from $499.99 to $299.99 starting Saturday, Oct. 1. Customers can take advantage of this permanent lower price online at BestBuy.com and at all Best Buy and Best Buy Mobile standalone stores nationwide.
The HTC Flyer is a fast, portable, light-weight tablet that integrates the immersive and highly intuitive HTC Sense(TM) experience and enables content including videos, music, games and more to be easily accessed and enjoyed. The 7-inch (measured diagonally) tablet operates on the Android 2.3 Gingerbread operating system and comes loaded with 16GB of memory.
Motorola, LG, RIM and others will now be compelled to lower their prices to at least $299 if not below. My contention is that non-iPad tablets (especially 7-inch tablets) will simply not sell if they're priced too much above the Kindle Fire.
This morning Amazon introduced a revamped line of E-Ink Kindles and lowered prices: Kindle Touch 3G for $149, Kindle Touch for $99 and a new, cheaper Kindle for $79. But the Kindle Fire, it's 7-inch color Android tablet was the star of the show.
It will retail for $199, which is probably break-even or a loss for Amazon. The company hopes to sell content and services to recover its costs and profit from device sales. And sell it will.
Most people will likely see it as an upgraded Kindle with benefits (apps, mobile web). Amazon's pricing strategy is not unlike giving away the printer to generate ink sales.
It will immediately become the most successful Android tablet. Yet it's an Android tablet without the Android brand or Google. Apps will come through Android's app store -- it's unclear whether the Android market will be available -- and content on the device will be dominated by Amazon's books, magazines and movies.
Here's how Amazon's pitching it to consumers:
The device was apparently built by the same company that built the RIM Playbook, which didn't sell. But the Amazon brand and software differences will propel the new Fire.
Bloggers love hyperbole and "X-Killer" headlines. But this is no iPad Killer; it's a better Kindle and a cheaper Android tablet. However its low price and "good enough" value proposition may impact some people who were thinking about buying an iPad. Where all the Android tablets to date seemed like iPad imitators the strength of the Amazon brand and the Kindle legacy will avoid that fate for Kindle Fire.
Kindle Fire is a 7-inch tablet; however it impacts the ability of other tablet makers to sell their devices, regardless of size, for more than $300 at the very outside (maybe $250). In other words, post-Fire $499 Android tablets are DOA.
Google has been a great source of data and evangelism around mobile usage and advertising. The company is now regularly releasing survey data and exposing some of the usage patterns it is seeing internally in an effort to accelerate awareness of the strategic importance of mobile.
One interesting piece of data released yesterday is on comparative usage of PCs, smartphones and tablets (iPads):
What the data above reflect is that PCs are used throughout the day but usage peaks between 4pm and 6pm. Smartphones are also used throughout the day but usage steadily climbs and peaks between 9pm and 11pm. Tablets are primarily used at home during the evening.
There are obvious implications for publishers and advertisers coming from this and other data that show similar usage behavior.
In a previous Google-AdMob survey 77% of tablet (iPad) owners said that they were using their PCs/laptops less often following their purchase of a tablet. What we can infer from that and the above information is that some of the Internet usage at home that would have been on the PC is now happening on tablets. And this substitution will probably continue and grow as tablet sales grow.
The TouchPad "dumping" by HP ($99) set off a frenzy of buying and led HP to briefly reconsider its plan to discontinue the device. HP remains undecided about whether it will simply license WebOS to third parties or sell it outright. HTC is reportedly among those considering buying WebOS, if it's for sale, although Samsung has rejected the notion.
Whether buying WebOS is smart or futile is the subject for another discussion.
Regardless, the demand created for the lower-cost TouchPad may have been instrumental in convincing Amazon to price its forthcoming Kindle-Android tablet at $250 (the Nook Color is also $250). This pricing is speculation but pretty reliable speculation.
It may well be that just as there's a de facto $200 ceiling on smartphones (with carrier subsidy) there may now be a $300 or $350 ceiling emerging for non-Apple tablets. People haven't wanted "imitation" tablets that cost the same as iPads. Below is a chart from a ChangeWave survey about US consumer tablet demand.
Source: ChangeWave (via Fortune)
But consumers will buy non-iPad tablets if they're substantially cheaper -- as the TouchPad rush indicated.
Interestingly the publisher of the Philadelphia Inquirer, Philadelphia Daily News and Philly.com is offering a $99 tablet provided users agree to a two-year digital newspaper subscription. Two things are interesting about this: the $99 price point and the effort to use a wireless carrier business model in the context of a newspaper.
So far non-iPads have yet to sell very well. For example, the 7" Samsung Galaxy Tab reportedly sold only a fraction out of millions shipped. But that will change if prices come down far enough -- again below $350 or $300. Then we'll see these devices take off and probably more tablet apps for Android, which basically don't exist right now.
Apple will probably continue to keep its iPad prices where they are unless we see dramatic sales increases for Android tablets. We're still at least six months to a year from an answer to that question.
Forrester Research has released a report ("delayed a week out of respect for Steve Jobs") that argues Amazon's forthcoming Android tablet(s) will potentially sell 3-5 million units in Q4. This report, in "the works for months," can be boiled down the following:
Amazon’s willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market. If Amazon launches a tablet at a sub-$300 price point—assuming it has enough supply to meet demand—we see Amazon selling 3-5 million tablets in Q4 alone.
The analysis can be further distilled into two points that argue Amazon's got a shot at success:
I agree that Amazon's brand and marketing capabilities will give its tablet(s) a head start. But it's really price that will be the driving factor here. That's the lesson of the TouchPad buying frenzy: people are willing to buy an iPad imitator at the right price. In that case it was $99 and HP took a major loss on the inventory.
I own the Samsung Galaxy Tab 10.1 and the user experience is woefully inadequate compared to the iPad. I won't enumerate the ways but the device doesn't hold a candle to the iPad (Apple shouldn't be so afraid of it).
Any tablet Amazon sells under its own brand, based on the Android OS, will also be inadequate by comparison. There are no tablet apps on Android, for example. Accordingly it will have to be very aggressively priced to succeed.
The most expensive "regular" Kindle is sub-$200. The larger "Kindle DX" is $379. Pricing a color Android tablet that doubles as an eReader (which they will have to) at less than the cost of a DX kills the DX.
If Amazon were to price a 10-inch Android tablet at $499 it would suffer nearly the same fate as all of Apple's tablet rivals to date: failure. If it goes down to $300 or $299 it will sell (especially with 3G built in). However, given the poor quality of the Android tablet experience in general at this point, it's far from certain that it will sell as many units as Forrester predicts.
We'll have to wait for the device and see how "good" it is. Regardless, price is going to be nearly the lone determinant of success or failure for Amazon.
Related: Changing demographics of tablet owners.
Looking to move unsold inventory over the weekend, HP chopped TouchPad pricing down to $99.99 and $149.99 from $499 and $599. It ignited a well-documented buying frenzy that melted the HP servers. BestBuy and other stores are now sold out.
The way that people snapped up these devices reveals that for other than iPads consumers are highly price sensitive. As we argued early on and often, the way to compete with Apple's device was on price. (I also earlier argued that smaller tablets could succeed as well, though have reconsidered that position.)
Amazon is about to enter the tablet fray and it may be able to succeed where others have not. However to date all of Apple's main competitors (RIM, Samsung, HP, MOTO, HTC) have failed to generate more than token sales of their tablets. Part of the reason for that is that these non-Apple devices perceived as imitators. So far they also generally offer a poorer quality user experience -- this includes the Samsung devices -- and have priced their tablets at or above (e.g., Xoom) the cost of Apple's iPad.
E-readers Kindle and Nook have succeed in part because they are single-purpose devices, though the Nook has broadened its scope, and they're relatively cheap (sub-$250). It remains to be seen what Google can do for Android tablets after it acquires Motorola. Right now, however, it appears that nobody selling a $499 tablet is going to make inroads against Apple.
While the HP TouchPad $99 frenzy may not immediately impact the market, over the long term it will probably mean that Android and other tablets (regardless of size) will have to come in under $400 without carrier subsidies and much less with them (sub-$250). That also means that non-iPad tablets are likely to become very low margin commodity products -- like PCs today.
And that's not a very attractive market.
Last Monday, when I was out on vacation, Google dropped a bomb on the mobile ecosystem: it entered into an agreement to buy Motorola Mobility for $12.5 billion. Everyone is more than familiar with the story and there's been a ton of analysis in the intervening seven days.
Here's the crux of that analysis:
The response to all of this is yes and yes. While I don't know the actual truth of the Microsoft acquisition rumor (I believe it) all of these motivations likely played a role. Now regulators must approve the deal, which I suspect they will do.
Google said that the acquisition shouldn't change anything among its other hardware partners or the Android ecosystem generally (Samsung, HTC, LG, etc). Here's the quote from the press release:
Our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.
But it clearly does change things. Hardware OEMs will be taking a harder look at Windows now to "hedge" and "diversify." But what about WebOS?
The other bombshell last week was HP's announcement that it's getting out of the PC business and potentially going to unload WebOS. In April last year HP (under a different CEO) bought Palm for $1.2 billion, chiefly to get WebOS. Now it may sell the software assets and it's possible to imagine several parties being interested.
It has been suggested by some that Facebook should buy WebOS. But one could imagine HTC, Samsung (even with Bada), LG and others -- including Nokia -- being interested the platform if the price were right. But what if HP were to hold onto WebOS and open-source it or license it on very friendly terms? Indeed, HP is now saying or clarifying that it will hold on to WebOS and continue to support and even license the software.
The platform, which was early on regarded as platform most competitive with iOS, could gain new life as an alternative to Android for nervous handset OEMs. With a post-MOTO Google competing with its partners in a new, more direct way the market could well be ready for a new "open-source" Mobile platform. It's a long-shot and HP could still sell Palm/WebOS to a single buyer. If that were to happen WebOS would likely continue to languish and ultimately disappear.
However open-sourcing the platform or offering friendly, low-cost licenses to various hardware makers could give WebOS new vitality and a future.
Some financial analysts expect that Apple's iPad will dominate the tablet market through 2020. Competitor after competitor, including Motorola, HP, RIM and Samsung, has launched tablets only to see disappointing sales to date. So why then is Apple so aggressively pursuing legal remedies against tablet OEMs?
Everyone reading this is aware that Apple has obtained a preliminary injunction in Germany (and throughout most of Europe) that effectively prevents the sale of the Samsung Galaxy Tab 10.1. It's also pursuing Motorola over the Xoom on the same IP/legal theories.
I believe that Samsung essentially copied the "trade dress" or "look and feel" of the iPhone with its Galaxy smartphones and the Galaxy Tab 10.1 tablet. However I also think that Apple is going too far with its attempt to bar sales of competing devices. By extension the question arises: would any tablet device that broadly resembled the iPad be vulnerable?
If so Apple would effectively be eliminating competition in this new computing category -- and that would be a very bad thing. I'm sure Apple sees it differently and would simply argue it's protecting its designs and IP.
What I believe is going on is the following: Apple feels that Android and its gaggle of OEMs have simply ripped off the iPhone and its app store and have reaped the benefits accordingly. As I just posted, Gartner estimated that Android devices gained a 43% share of the smartphone market globally in Q2 vs. 18% for iOS. The company feels badly burned by these "imitators" and probably vowed to not let that happen in the tablet market.
In addition Apple's profitability and sales are much more dependent on these mobile devices than even a year ago. However the case illustrates the problems and challenges of current patent law. There's a need to protect IP owners' rights but competitors must be able to make and sell their products. What degree of product and feature similarity should be prohibited?
I certainly understand Apple's viewpoint and the rationale behind its actions. But in seeking to ban the sales of competitive tablets Apple is simply going too far.
Much has quickly been written about the just launched Amazon HTML5 "Cloud Reader." It's a "web app" that could be used to replace the native Kindle iPad and iPhone apps. It's being widely read as a response to Apple's more restrictive App Store terms about in-app purchases/subscriptions. (Amazon has removed the button linking to the Kindle store from the most recent version of its iOS apps.)
I agree with John Gruber and others who believe this has been in the works for longer than Apple's more restrictive terms around in-app purchases. Cloud Reader does, however, completely side-step Apple and its App Store terms. The Financial Times and Walmart's Vudu also recently did something similar. More publishers and developers will follow, who don't want to give money to Apple or simply don't want to worry about Apple's rules.
An added benefit is compatibility with all mobile platforms. However developing native apps is relatively easy these days because, unless/until Windows Phones break out or BlackBerry stops its slide, only two operating systems matter: iOS and Android.
In contrast to some of the rapturous reviews I've seen Cloud Reader is not as strong as the Kindle native app. It works well and allows users to read books offline (e.g., on the iPad). But it's not as responsive or fast the native app.
Yet for certain types of sites or publications HTML5 will be fine and quite usable. However for higher functionality a native app is better, even necessary (e.g., games).
But now that several companies have "validated" the HTML5 strategy will we see the migration from apps to HTML5 that the industry has always anticipated? Not exactly. I think what we'll see is continued development of native iOS, Android (later maybe Windows Phone) apps and HTML5 from everyone else. However Apple doesn't help its cause with all its rules and restrictions.
When I quickly looked at the Strategy Analytics tablets market share data yesterday it struck me as strange. The iPad had 61% of the market and Android 30%. The number seemed way too high for Android.
But as John Gruber points out the data are about shipments, not sales. Even though the word "shipments" is there as plain as day, I didn't focus on it. I just "bleeped" over it.
Many companies, including Samsung and Microsoft, have used shipments to argue market share; for Windows Phones in the case of Microsoft and for the original 7" Galaxy Tab in the case of Samsung. Yet shipments don't equal sales.
Here's the Strategy Analytics breakdown of "shipments market share":
In terms of actual devices sold to consumers and in actual use, it's a very different picture. Almost without exception sales of Android tablets have so far been disappointing. The RIM Playbook has also underperformed. There are a few Windows tablets on the market but none are selling (maybe in Asia).
In June comScore released some data that showed traffic generated by various mobile devices including tablets, for May 2011. According to the data, the iPad was responsible for "89% of tablet traffic across all markets." In the US, however, the figure was 97%.
Even though these figures don't claim to represent device market share, they're likely a more accurate reflection of devcies in the market than shipments. In my travels and interactions with people professionally I don't see any other tablets "in the wild" other than the iPad. I'm one of the few people I know that has an Android tablet. (I also have an iPad2.)
Apple has now sold approximately 34 million iPads globally.
Finally, survey data released a few weeks ago by Bernstein Research found that consumers were far less interested in rival tablets than the iPad.
The "totality of the evidence" thus suggests that actual sales of Android and other non-iPad tablets collectively represent less than 15% of the market and in the US less than 10%.