User Experience

Can Apple Make a Bigger Screen iPhone but Preserve One-Hand Control?

One of the maddening things about the cult of iPhone news coverage is that immediately upon the release of this year's product the cycle of rumors and speculation begins about next year's product. So it was and is with the iPhone 5s.

Essentially the day after the iPhone 5s was announced the iPhone 6 rumors began. Part of that was fueled by disappointment about the iPhone 5s' current 4-inch screen and anticipation of a larger-screen in the iPhone 6 (or "Air" as it's now being called). 

Indeed, one feature that most US -- perhaps all -- current and would-be iPhone buyers want from the device is a larger screen -- though longer battery life might be a close second. One of the primary ways that Android handsets have successfully competed with the iPhone is by offering larger and high-resolution displays.

Many iPhone owners now have what might be called "screen envy."

Yet Apple has set a very difficult task for itself. It wants to offer a larger screen on the next iPhone -- speculative reports have asserted that there are 4.7-inch and 5.5-inch models being tested -- but the company still prizes "one-handed control." 

That would seem out of the question for a 5.5-inch device; but it might be possible with a 4.7-inch screen. It's difficult to imagine what a one-handed, 4.7-inche phone would look like.

Might it be even "taller" than the 5s, which lengthened but didn't proportionally widen the screen? Most larger-screen Android models (4.8-inch and above) can't be entirely operated by one hand. But they preserve proportionality, which in my view is lacking in the "tall" 5s.

The largest a smartphone screen can stretch before it becomes a "phablet" is about 5-inches. Apple's next phone needs to reach about 4.7 or 4.8 inches to be competitive; 4.5 won't cut it. And despite rumors of curved displays it's not clear how Apple is elegantly going to attain that objective and still make one handed control possible. 

Mobile Impacting Retail Design -- Just Don't Forget Indoor Location Data

A provocative article in Mobile Marketer this morning discusses how the aesthetics and layout of retail spaces are changing to accommodate the mobile shopper. Here's a representative excerpt:

AT&T recently unveiled a new store format intended to reflect customers’ mobile lifestyle where café-style learning tables replace cash registers.

The store layout highlights products and services in three different thematic areas. In the Connected Experience, shoppers can see how solutions can be used in their everyday lives. The Community Zone features an open and interactive space where customers can test products. In the Explore Zone, there are digital monitors to highlight AT&T’s lineup.

This sort of "customer experience" was largely inspired by or modeled on Apple retail stores -- especially the replacement of cash registers with free-roving sales associates. However beyond improving the "flow" and "engagement" of retail spaces there are other considerations to be factored in. 

The article doesn't at all discuss how data gathered from indoor analytics can help retailers do a better job with layout and usability of their stores. Indoor location data and usage patterns should be included in the "aesthetics" and layout discussions because they will lend empirical grounding to what is otherwise a relatively speculative discussion.

How do consumer actually behave in stores? How are they interacting with displays? These sorts of data are readily available and can inform the broader debate about how to reconfigure retail environments.

Another interesting angle here is how mobile payments will be affected by retail store redesign. My belief is that low-skilled and poorly paid store (and QSR) cashiers will be increasingly replaced by mobile payments and self-checkout kiosks.

Loyal store customers will increasingly have a mobile app with stored credit card information. That scenario will become increasingly prevalent in stores. For those customers without a retail/payment app, Apple-style mobile in-store checkout will prevail.  

Google Updates iOS Apps with Hands-Free Voice Search

Google updated its iOS search app today for both the iPhone and iPad. The new app brings some additional functionality to Google Now, which is embedded within the app: 

  • Notifications (appear on home screen)
  • Reminders
  • New Google Now cards

The update also enables hands-free voice searching through the trigger/wake-up word "OK Google." This capability started on Google Glass and has migrated onto Android handsets such as the Motorola Moto X and LG Nexus 5. It's now available to iPhone 4S and above users. 

New Google Now cards include:

  • Tickets for movies, concerts and events
  • Airline boarding passes
  • Reservation confirmations for car rentals
  • Transit information
  • Local event listings

The combination of voice search and Google Now has turned "Google Search" into the "Google Assistant," without being rebranded as such. The combined Google capabilities rival Siri and arguably exceed it in some respects.

On iOS hands-free voice searching (OK Google) isn't as readily available as on Android. Users must first launch or open the Google Search app, which can be done with Siri, ironically. Then the hands-free searching can be initiated. That sort of defeats the point. On Android handsets voice search is immediately available on the home page. 

While probably no single feature launched today will generate massively more Google searches from iOS devices, collectively they may bring more user engagement. 

The new hands free search capability may have the biggest impact on the iPad. While users could perviously perform voice queries from Google's iPad app in the past, this new purely speech activated feature may generate more searches for Google from Apple's tablets -- which drive about 80% of all US tablet traffic.  

To Succeed Surface Pro Must Become True Laptop Replacement

Microsoft will reportedly spend north of $400 million this holiday season on marketing in the hope of selling 16 million Surface tablets. It will likely have trouble because the Surface Pro tablet is neither a true PC replacement nor does it offer as good a tablet experience as the iPad

Surface Pro 2 also starts at $899, making it considerably more expensive than the entry level iPads and even many Windows PCs. The argument in favor of Surface Pro is that it has Office and offers greater productivity than the iPad. However it's not clear that consumers are seeking a unified device for all their computing needs. 

According to data from app marketing platform Fiksu, the iPad Air had a powerhouse opening weekend. The device "is seeing five times the usage the iPad 4 did two days after launch - and more than 3 times that of the iPad mini," explains Fiksu.

iPad Air launch

Stellar reviews and early momentum indicate the iPad Air may have a very good Q4. The new iPad Mini "Retina" launches later this month, which could either divert some iPad Air sales or simply generate more tablet "shelf space" for Apple. That would be potentially bad news for Microsoft, which is competing directly with the iPad.

On the Android side in the US market it's really Kindle vs. Nexus 7 (Samsung has more of a presence in Europe). Between the two Kindle has the stronger brand and greater distribution through Amazon. But the Nexus 7 is probably the better device overall. In the 9 - 10 inch category the Air really doesn't have any competition from an Android tablet. 

In order to see more than token sales, Microsoft will have to truly make the Surface Pro (RT is RIP) a laptop replacement, with a longer battery life and better typing experience. Surface Pro 2 is not that device; so we'll need to wait for Surface Pro 3. That won't be out until next year -- if then.

That means Microsoft, no matter how much it spends on marketing for the holidays, is unlikely to meet its ambitious sales goals for Surface. That is, unless it starts cutting prices very aggressively, with a capital "V."  

Future of Privacy Forum Announces Indoor Location Privacy Rules

The Future of Privacy Forum's Jules Polonetsky was one of the featured speakers at the inaugural Place Conference. He spoke about indoor location and privacy with Jennifer King from UC Berkeley. We alloted 30 minutes for the discussion but could have easily spent an hour on it.

Privacy is the 800 pound gorilla of indoor location and the issue that challenges and potentially threatens its roll out. Ever since the negative publicity and coverage suffered by Nordstrom retailers have been scared to death of talking about what they're doing with indoor location -- despite the fact that consumers stand to benefit greatly through these innovations. 

Hoping to head off regulatory intervention and preempt more ill-informed coverage and negative publicity, Polonetsky's Future of Privacy Forum (and Senator Charles Schumer of New York) announced a code of conduct that will govern indoor analytics and seek to protect consumer privacy.

The companies involved include Euclid Analytics, iInside, Mexia Interactive, Nomi, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions. Euclide and iInside spoke at the Place Conference.

This list doesn't include all the companies involved in indoor analytics (e.g., Retail Next) but the rest will adopt and abide by the rules announced today. And retailers will follow them. Basically the new rules require clear disclosures, enable consumers to opt-out of indoor tracking, make any tracking anonymous and prevent the misuse of information gained by venue owners. 

People always forget that much more intrusive closed-circuit video cameras have been in retail environments for more than a generation.

As our panel on indoor analytics pointed out most of the data aggregated and anonymously captured by retailers will translate into in-store improvements, from staffing to store layouts. However consumers need to be educated about all of this given how new and little understood it is. This is where retailers need to step up (rather than cower) and help consumers understand why and how indoor location will benefit them. 

Hopefully this new code of conduct will enable them do that with confidence.  

_____

Below is the full text of the press release: 

New York, NY – U.S. Senator Charles E. Schumer, The Future of Privacy Forum (FPF) and a group of leading location analytics companies – including Euclid, iInside (a WirelessWERX company), Mexia Interactive, SOLOMO, Radius Networks, Brickstream and Turnstyle Solutions – today announced that they have agreed to a Code of Conduct to promote consumer privacy and responsible data use for retail location analytics.  The companies responded to privacy concerns raised by Senator Schumer and the FPF about the use of this new technology.  The code of conduct includes in-store posted signs that alert shoppers that tracking technology is being used, and instructions for how to opt out. 

“This is a significant step forward in the quest for consumer privacy,” said Schumer.  “This agreement shows that technology companies, retailers, and consumer advocates can work together in the best interest of the consumer.  There is still much more work to be done and I will continue to push for privacy rights to be respected and strengthened, but this represents real progress and I thank the Future Privacy Forum and these tech companies for their hard work hammering out this agreement.

“Today, location analytics companies have introduced a comprehensive code to ensure they have data protection standards in place to de-identify data, to provide consumers with effective choices to not be tracked and to explain to consumers the purposes for which data is being used,” said Jules Polonetsky, executive Director of the Future of Privacy Forum. “These standards ensure that consumers understand the benefit of the bargain and have choices about how their information is used while allowing technology to continue to improve the shopping experience. As we quickly approach the holiday shopping season, this is not only the right move – but a timely one as well, adding a layer of trust, choice and transparency onto a shopping experience that in 2013 is more mobile and hi-tech than ever before.”

In July, Schumer warned that major national retail chains were testing technology that would allow them to automatically track shoppers’ location through stores.  Following this warning, FPF worked with the technology companies to develop a Code to ensure that appropriate privacy controls are in place as retailers seek to improve the consumer shopping experience. These technology companies use mobile device Wi-Fi or Bluetooth MAC addresses to develop aggregate reports for retailers.   

The Code puts guidelines in place to create best data practices that will provide transparency and choice for consumers. The Code calls for the display of conspicuous signage by retailers and for a central opt-out site for consumers.

Under the Code, companies that collect data through this technology must limit how the information is used and shared and how long it may be retained.  The Code mandates that companies de-identify the data and explain in their privacy policy how they do so. Companies are required to get opt-in consent when personal information is collected, or when a consumer will be contacted. The Code calls for opt-out consent where the information collected is not personal.  In addition, this data cannot be collected or used in an adverse manner for employment, health care or insurance purposes.

"We are just beginning to see the possibilities that in-store analytics can bring to shoppers and to retailers, and yet, as with any new technology, there is the chance for confusion about the intent and possible implications of such technology,” said Steve Jeffery, CEO, Brickstream. “We applaud the Future of Privacy Forum for taking the lead in bringing retailers and technology providers together to address these important issues.”

“We would like to thank Senator Schumer for his leadership on this issue,” said Will Smith, CEO, Euclid. "Privacy has always been a priority as we've designed and built our services, and we have been working diligently with FPF to release best practices for the retail analytics industry as a whole.”

"iInside and industry partners have made it a top priority to assure that consumers are well-informed and their personal privacy and identity are protected.  The newly announced code is a major step forward in establishing and communicating clear and concise standards across our industry," said Jim Riesenbach, CEO, iInside Inc.

“The release of a Code of Conduct to guide industry practice ensures that businesses and retailers are able to enhance their customers’ experience without compromising their privacy,” said Glenn Tinley, President & Founder, Mexia Interactive. “Business and consumers also can be assured that a company listed on the SmartStorePrivacy.com website has committed to following the code.”

"Proximity and location technology is evolving rapidly, and we want to make sure it’s deployed in an open, responsible and trustworthy manner. The retail location analytics Code of Conduct is a solid step in the right direction," said Marc Wallace, Co-Founder & CEO, Radius Networks, Inc.

“SOLOMO sees privacy as an opportunity for retailers to build trust with customers,” said Liz Eversoll, CEO, SOLOMO.  “We’ve collaborated to develop the Code of Conduct to ensure transparency and empowerment for retail customers.   Indoor location technology will offer customers new in-store experiences, special deals, and localized services as retailers introduce it in their stores.  Everyone wins.”“Turnstyle Solutions is pleased to partner with the Future Privacy Forum in the development of this Code of Conduct. We are confident the code lays the foundation necessary to protect sensitive consumer information, while offering retailers and consumers services that enhance their shopping experience," said Devon Wright, Co-Founder, Turnstyle Solutions.

Offering PayPal Provides Modest Conversion Lift to E-Commerce

Digital marketing platform Monetate recently tested whether a site offering the option to buy through PayPal saw any conversion lift vs. not offering PayPal. Using A/B testing and data from a single client the company said there was a modest roughly 1% sales lift by offering PayPal: 

Adding this simple reassurance to product detail pages not only lifted average order value by 1.03%, but it also reduced cart abandonment by 1.21%. Not a huge lift, but not shabby either . . .

We recently asked 1,250 US adults which entities they trusted most to handle mobile payments. The following was the order of results:

  1. My credit card company
  2. PayPal (eBay)
  3. Amazon
  4. Google
  5. Apple
  6. Other (included "my bank") 

Square and Facebook were not on the list of choices. However Facebook is testing its own mobile payments service with some consumers and retailers (stored credit card and details).  

As the survey data above indicate PayPal is in a very strong position to become the dominant mobile payments company (especially after its Braintree acquisition) if it can establish and reinforce its brand and user experience as being the simplest and most secure. 

Apple could quickly enter the mobile payments arena; however so far it has held back. And while Amazon has a presence in mobile payments it's not particularly strong or developed.

Google, for its part, has failed to establish Wallet among consumers. Square is in a decent position but it doesn't have the reach that PayPal currently has. Facebook has massive reach but is not going to be trusted with payments by most consumers without a Herculean education and marketing effort. 

So currently it's PayPal's market to lose really, as mobile payments take hold.  

Google to Build Opt-In Mobile Panel for (Offline) Analytics

According to a report (rumor) in Engadget, Google is preparing to build an incentive-based mobile panel to track browsing and app usage behavior. The initiative is called "mobile meter" according to the blog and it would be directed toward iPhone and Android users. 

Google would offer some incentive (points, rewards, etc) to motivate users to opt-in and allow their usage to be anonymously tracked. This would be nearly identical to the system currently used by Nielsen. 

In addition Placed uses a panel to track mobile and exposures and their impact on store visits. The Placed app (with opt-in consent) watches where users go in the real world and extrapolates their data to estimate the offline impact of mobile campaigns. 

Google recently announced Estimated Total Conversions that will track the impact of search ads across devices and, eventually, into stores. The primary methodology relies on signed-in Chrome browser users. 

A Google mobile panel would complement that approach and, like Placed's panel, provide data to advertisers -- offering a more holistic view of their campaigns, especially the impact on offline store visits.  

Is a Google Smartwatch Imminent?

In the frenzy of speculation leading up to Apple's iPhone announcement last month, there was lots of discussion of smartwatches. Apple supposedly was developing an "iWatch" and would be announcing it along with the new handsets. Samsung, wanting to beat Apple to market, rushed out its Galaxy Gear watch, which has met with scathing reviews as an "unfinished product." 

Google was also rumored to be working on a smartwatch. The 9to5 Google site has some additional information on the potential release of a Google smartwatch at the end of this month: "Details are slim but the person seemed to think that Google Now functionality would be at the center of the product."

The idea is that Google would take its technology and learning (thus far) from Google Glass and put that in a watch. The emphasis on Google Now is interesting and appropriate -- the watch as a kind of notifications center. Samsung tried to cram too much half-baked functionality into Galaxy Gear.

There's considerable consumer interest in smartwatches (much more than Google Glass). Just over 40% of survey respondents in a recent survey we conducted (n=1,024 US smartphone owners) said they were interested in a smartwatch. Not surprisingly respondents were most interested in smartwatches that were made by the same maker as their current smartphones.

The right mix of features and pricing are key here. Undoubtedly Apple will develop an "iWatch." And Google, as the rumor suggests, will probably roll out a watch itself, given its new commitment to "wearables." But these initial products may not get the mix right: simplicity, aesthetics, functionality and cost.  

The optimal price is probably $99 to $199. But $299 would be OK if the watch were a great product. At $299 and above, the Galaxy Gear is simply to flawed and too expensive for what it delivers. Now we'll see what Google can come up with.  

Place 2013 - Agenda & Presentations

Place 2013 brought together the entire spectrum of companies building the indoor location ecosystem. Retailers, technology vendors, mobile developers, data providers, advertisers, agencies, and investors attended this unique, one-day event at the Palace Hotel in San Francisco and was the first-of-its-kind anywhere.

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Agenda & Presentations

8:45 AM - 9:00 AM
The Consumer Foundations of Place-Based Marketing - The majority of smartphone owners are already using their devices in stores to find product and price information, as well as coupons. Opus Research will present proprietary findings on in-store behavior, privacy attitudes and consumer receptiveness to indoor promotions.
Speaker: Greg Sterling, Senior Analyst, Opus Research
View slides from this presentation

9:00 AM - 9:45 AM
The State of Indoor Location - For the past several years online mapping giants and technology providers have been laying the groundwork for indoor location. What is the current state of the infrastructure? What technologies are already deployed and how accurate are they? What indoor consumer and advertiser scenarios are possible today and what might be possible within three years?
Speakers:
Joseph Leigh, Head of Venue Maps, Nokia
Leslie Presutti, Mobile, Location and Computing Business Unit, Qualcomm Atheros
Zack Sterngold, VP of Americas, Boingo Wireless
Avinash Joshi, Chief Technologist, Wireless LAN Group, Motorola Solutions

9:45 AM - 10:25 AM
Keynote: Why Indoor Location Will Be Bigger than GPS or Maps - The explosion of smartphones with built-in sensors, accelerometers, GPS and WiFi is making indoor positioning not only possible but also inevitable. The emerging indoor opportunity for venue owners, retailers and technology providers is potentially massive. Google’s Don Dodge, an investor and close observer of the space, will explain why he believes indoor location and marketing is going to be huge and potentially larger than GPS and maps.
Speaker: Don Dodge, Developer Advocate, Google

10:45 AM - 11:05 AM
Case Study: Point Inside - Point Inside was one of the early consumer-facing apps in the indoor location space. The company has since shifted its focus to enterprises and enabling retailers to take advantage of indoor location. The company will present a new case study featuring a major home-improvement retailer.
Speaker:Todd Sherman, Chief Marketing Officer, Point Inside
View slides from this presentation

11:05 AM - 11:30 AM
Featured Case Study: Forest City and Path Intelligence - Forest City Enterprises are many years into using mobile device monitoring and advanced indoor analytics to help create a better environment for their shoppers and their retailers. Hear from the project sponsor and partner Path Intelligence on how they have transformed asset management, leasing, and marketing.
Speakers:
Stephanie Shriver-Engdahl, VP, Digital Strategy, Forest City
Cyrus Gilbert-Rolfe, VP, Path Intelligence
View slides from this presentation

11:30 AM - 12:15 PM
Digital Analytics for the Real World - Using a variety of technologies to identify when and where smartphone shoppers are in stores, retailers can now leverage "big data" previously reserved for Internet companies alone. These "real world analytics" hold profound implications for everything from in-store merchandising and staffing to consumer marketing. Leaders in the segment will offer views on opportunities and potential pitfalls for indoor analytics.
Speakers:
Jon Rosen, Executive Vice President, iInside
Will Smith, CEO, Euclid
Alexei Agratchev, Co-Founder, RetailNext
Michael Healander, General Manager, GISi Indoors

1:15 PM - 1:55 PM
Retail Spotlight: Aisle411 & Dick's Sporting Goods - Aisle411 will discuss current retail deployments and their impact on operations, consumer loyalty and marketing. Dick’s Sporting Goods will share how it’s thinking about indoor location, privacy issues and the overall opportunity. And Bob Rosenblatt, former COO of Tommy Hilfiger Group, will outline the intriguing business opportunities for retailers in develop- ing indoor marketing strategies.
Speakers:
Nathan Pettyjohn, Founder & CEO, aisle411
Rafeh Massod, VP, Customer Innovation Technology, Dick's Sporting Goods
Bob Rosenblatt, CEO, Rosenblatt Consulting
View slides from this session from aisle411

1:55 PM - 2:15 PM
Using Store Visits and Data for Advanced Retail Intelligence - Online to offline has been the dominant but largely invisible paradigm of Internet-driven spending. Using mobile to better target and influence store visits is only the beginning. PlaceIQ CEO Duncan McCall will offer a major retail case study fo- cused on measuring store visits after mobile ad exposures. He will also discuss how to connect online, nearby and indoors for a more complete picture of the customer journey.
Speaker:Duncan McCall, Co-Founder & CEO, PlaceIQ
View slides from this presentation

2:15 PM - 3:00 PM
Ad-Tracking to the Point of Sale - Panelists will discuss the current and future use of indoor location as a way to demonstrate ROI and sales lift on a per- campaign basis. What is the current state of the art in matching store visits to ad exposures? And what are the broader implications of connecting online ads and offline data?
Speakers:
Monica Ho, Vice President of Marketing, xAd
David Shim, Founder & CEO, Placed
Ameet Ranadive, Director of Product, Twitter Ads Team
Michael Shevach, SVP Ad Solutions, Retailigence
Duncan McCall, Co-Founder & CEO, PlaceIQ (moderator)

3:20 PM - 3:50 PM
Opt-in or Opt-out: Indoor Location & Consumer Privacy - Indoor location has already gained the attention of members of Congress and been called "troubling." While not everyone agrees about the level of concern, there are obvious consumer privacy issues raised by in-venue smartphone tracking. How should the companies be addressing these issues today and what might regulation require tomorrow?
Speakers:
Jennifer King, School of Information, UC Berkeley
Jules Polonetsky, Executive Director & Co-chairman, Future of Privacy Forum

3:50 PM - 4:10 PM
Case Study: Meridian/Aruba Networks - Meridian, who was recently acquired by Aruba Networks, will offer two indoor case studies, one involving a small business (Powell’s Books in Portland) and another involving a major U.S. apparel and housewares retailer.
Speaker: Jeff Hardison, Vice President, Meridian
View slides from this presentation

4:10 PM - 4:55 PM
Microfencing: Targeting In-Aisle Shoppers - Billions of dollars are spent each year by brands and manufacturers trying to influence consumer buying in stores. A percentage of that money will migrate to indoor digital marketing. What conditions must first exist and what will those brand-consumer interactions look like? The panel will explore these questions as well as the contours of the broader indoor marketing experience.
Speakers:
Neg Norton, President, Local Search Association Ben Smith, CEO, Wanderful Media
Melissa Tait, VP of Technology, Primacy
Erik McMillan, CEO, BrickTrends
Asif Khan, Founder, Location Based Marketing Association (moderator)

4:55 PM - 5:30 PM
Reality Check: Assessing the Indoor Opportunity - The other sessions explored major opportunities (and challenges) of indoor location and marketing. Now it’s time for a fun, yet sober assessment of whether and how soon these scenarios will come to pass. Is there real demand and who will own the “indoor channel”? Where will the "place-based market" be next year, in three years?
Speakers:
Jeremy Lockhorn,VP, Emerging Media, Razorfish
John Gardner, Partner, Nokia Growth Partners
Chandu Thota, Engineering, Google
Wibe Wagemans, IndoorAtlas

Android Hits a Wall in US While iPhone Climbs

Yesterday comScore released its US smartphone market share report for August. The interesting thing is that these data do not reflect the release of the iPhone 5s and 5c. Apple was the single most popular handset maker, with just under 41 percent of the market. Samsung was second with 23 percent. 

In terms of operating system share, Microsoft gained 0.2 points while Android lost 0.8 points. The iPhone saw a 1.5 percent gain. It certainly will be interesting to see what the September numbers are, post iPhone 5s. 

  August OS share 

In the aggregate Android devices represent just over half the smartphone market in the US (now 64% of mobile users). However it appears that may be the ceiling for Android -- at least for the time being. 

Depsite this it appears from comScore's data that Google has achieved nearly 100% (92%) smartphone reach in the US through a combination of apps and mobile search usage, though Facebook remains the top individual mobile app: 

top mobile apps August

According to research conducted by investment bank Canaccord Genuity the iPhone 5s was the top selling mobile handset at each of the four major US carriers in September, with the 5c taking second place at AT&T and Sprint and third place at Verizon. 

Notwithstanding its second place finish, the 5c is quite a bit less popular than the 5s. Hitwise (Experian) reported that search queries for the iPhone 5s were 4X more than the 5c in early September.

top-five-iphone-search-terms 

This basically mirrors our survey finding correctly predicting the enormous popularity of the 5s and lesser interest in the 5c:

iPhone survey

Source: Opus Research, n=1,508 US adults (Sept 16 - 19 2013)

Elecontrics retailer Best Buy is offering a $50 instant discount on the 5c, which effectively cuts its contract-subsidized price to $50 for the entry level device. Wal-Mart by the same token has cut the 5c's price to $45 "permanently." This should help boost sales of the 5c considerably in the short term.  

Is Amazon's Mayday a New Model for Mobile Customer Care (and Virtual Assistance)?

Arguably the most interesting thing about the new Kindle Fire "HDX" tablets is the so-called "Mayday" button. By pressing a single button HDX owners will see a live human appear in a pop-up window on their screens, as the picture to the right illustrates.

That individual can answer questions and perform diagnostic functions or fixes remotely. And while Amazon Kindle users can see the agent, the customer support person cannot see the Kindle owner (thereby preventing certain unseemly "chatroulette scenarios"). Amazon says most questions or issues are or can be resolved in relatively little time. Live support is free/included and available "24x7, 365 days a year." 

One review of the HDX questioned how scalable this service is. I suspect it's pretty scalable, especially if they offshore the support centers. But given that one can see the person on the other end of the line, offshoring may be less viable for something like this. In his post on the Opus Research Web site, my colleague Dan Miller sees the potential for a speech-enabled, automated personal virtual assistant to populate the agent screen.

My hunch is that Mayday will become a premium service or included with a Prime subscription ultimately. 

What's more interesting to consider is how Mayday might become a new model for customer service and/or sales support for tablet and mobile apps. Think about how much more e-commerce and conversions might happen if live support were available. In a mobile context "chat" doesn't really cut it. 

There are various in-between scenarios possible too, where a static image might be used instead of video together with a VoIP call. That would be the "low rent" version but it could be equally effective if executed properly. 

The success of Mayday and its emulation or replication by others would be a new spin on and give new meaning to the notion of the "personal virtual assistant." 

Amazon's New Devices, Aggressive Pricing Seek to Reclaim Tablet Spotlight

When Amazon introduced its original color tablet the Kindle Fire its chief innovations were aggressive pricing ($199) and the fact that the company used a "forked" version of Android that declared its independence from Google. There have since been two updates to the line (including yesterday's), which now includes four color tablets.

Yesterday Amazon CEO Jeff Bezos introduced refreshed Kindle hardware and software. There's a new "operating system," called Mojito (based on Android Jelly Bean). There are essentially two new tablets: Kindle Fire HDX (as in "beyond HD") in 7 and 8.9 inch versions. The Kindle Fire HD (7 inch) has been dropped to $139, which is sure to be the biggest seller, though it's effectively last year's model. There's also a clever new cover/stand called Origami

The big software innovation is "Mayday," which is live video tech support on the tablet screen. Here's how Amazon describes it: 

Kindle Fire HDX also introduces the revolutionary new "Mayday" button. With a single tap, an Amazon expert will appear on your Fire HDX and can co-pilot you through any feature by drawing on your screen, walking you through how to do something yourself, or doing it for you—whatever works best. Mayday is available 24x7, 365 days a year, and it's free.

As a practical matter Mayday is mostly a marketing gimmick, which probably won't see a great deal of actual use but will give some confidence to older and less tech-savvy buyers. What's more interesting to consider is the degree to which Mayday may be emulated by other industries (e.g., travel, shopping) for customer care purposes. That will be fascinating to watch. 

North American Non-iPad Traffic Share

Source: Chitika, September 2013 (North American Android tablet traffic share)

Currently in North America the iPad controls about 84% of tablet-based web traffic according to Chitika. The remaining 16% is mostly Android tablets and really a battle between Amazon, Samsung and Google (in order of market share). The $139 price point on the Kindle Fire HD will capture buyer attention and may put pressure on Samsung and Google. 

When Google introduced its new Nexus 7 earlier this year the company raised the price from $199 to $229 for the entry level model. The price increase was justified on the basis of new specs and a higher resolution screen. Amazon's Kindle Fire HD is almost $100 cheaper at $139. Without ads it's $154. The Nexus 7 is a superior device (to the Kindle Fire HD) but many people will not see a difference and opt for the much cheaper Kindle. 

The Samsung Galaxy Tab 3 is $199. Accordingly it will be very challenging for Google, Amazon or anyone to sell many smaller tablets at much above a low $200 price point. Whether the iPad Mini feels similar pricing or sales pressure is a question that remains to be answered. However I suspect iPad Mini sales will only be affected at the margins. 

Report: PayPal Nears Deal for Rival Braintree

According to the Wall Street Journal, "PayPal is near a deal to buy Braintree Payments Solutions." Braintree has had great success as a payments platform and processor both for e-commerce and in mobile.

Braintree is behind payment processing for companies such as Uber, AirBnB, LivingSocial and OpenTable among others. The company has roughly 4,000 customers according to the WSJ piece. 

Braintree processes roughly $12 billion in payments annually, about $4 billion of which come from mobile commerce transactions. PayPal, by contrast said that it would process roughly $20 billion in mobile payments in 2013.

The deal would help further accelerate PayPal's mobile business. PayPal would also acquire Venmo, a P2P payments aoo, that Braintree bought in 2012 for just over $26 million. 

Among mobile wallet/payments companies PayPal is far and away the best-known brand, though US consumers still show relatively little interest in generic "mobile wallets," according to our survey data.

Google Wallet has largely failed to date and other "mobile wallets" and mobile payments providers are almost totally unknown to the public. This deal would help cement PayPal's leadership in mobile payments.

Recently PayPal introduced Beacon, a Bluetooth low energy (BLE) in-store payments and indoor-location solution that is helping, together with Apple, show NFC the door in North America. 

Pew: 137 Million Mobile Internet Users

Today 91% of American adults own mobile phones according to new data from The Pew Research Center. More than 61% (64% per Nielsen) own smartphones. In this latest survey Pew takes a look at common activities on mobile devices (including non-smartphones).

Pew found that 81% of mobile phone owners text, the most common activity, while 60% access the internet. Just under half (49%) use maps or access location-based information on their handsets. All these percentages are higher if non-smartphones are excluded. 

There are approximately 250 million US adults today. If 91% own mobile phones that means about 228 million adults in real numbers. Of that group about 146 million own smartphones (per Nielsen's 64%). If kids and teens are added in we easily have in excess of 150 million smartphones in the US market. 

If 60% of adult mobile phone owners in the US access the internet that would be roughly 137 million people (not counting teens and kids).  

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Among the 60% going online from their mobile handsets (not including tablets) Pew says the following: 

African-Americans and Hispanics are more likely to do so than whites. Younger adults, those with at least some college education, and those with an annual household income of over $75,000 a year are particularly likely to access the internet via cell phone. Those who live in rural areas are less likely than urban or suburbanites to have mobile internet access. Among those who use the internet or email on their phones, more than a third (34%) say that they mostly access the internet from their phone. 

A recent Nielsen study found that 46% of US survey respondents relied exclusively on smartphones or tablets in conducting online research across a range of categories (i.e., retail, banking, gas and convenience). That same study found that, in the banking category, more than 50% of smartphone and tablet users did not use a PC to make purchase decisions (e.g., about credit cards).

What we're thus seeing is the emergence of a "mobile first" population in the US, which may be 50 million people on the low end and 75 million on the high end. 

Google Wallet Moves Beyond NFC in Bid for More Consumer Adoption

As I wrote last week the advent of iBeacon and bluetooth low energy may effectively mean that NFC as an in-store mobile payments standard in the US market is dead. Google Wallet had placed a big bet on NFC payments but has been thwarted in its bid for adoption by two principal factors:

  1. The public doesn't understand or care about NFC and the NFC infrastructure is still piecemeal
  2. The major carriers other than Sprint blocked Google Wallet because they have a competing NFC intiative (this anti-competitive behavior was never investigated by the FTC)

Google Wallet 1.0 thus was a failure. Google is now out with a new Android version (and soon iOS) is making a renewed bid for consumer adoption with a range of new features and a partial move away from NFC. In-store payments still depend on NFC and so won't be happening at scale any time soon for the same reasons cited above.

However the new features add utility and breadth to the user experience. Here's what's new:  

  • Google has added the ability to send money via email from Wallet (following the ability to use Gmail to send money with Google Wallet). This is a great feature. 
  • The ability to enter/scan loyalty cards into Google Wallet. ("Google Now will notify you when you have a saved loyalty program nearby.")
  • Save and later redeem Google Offers via Wallet (showing the phone at checkout to redeem).

Exactly a year ago we surveyed 1,501 US adults and found the vast majority were not interested in the idea of mobile wallets: 71% said "I'm not at all interested . . . in using [my] mobile phone to pay for things and replace cash or credit cards." Another 15% said they had only "limited interest." Only 14% had some interest or significant interest. 

In specific contexts, where consumers see the tangible benefits of mobile wallets, these numbers change. But in the abstract the public remains largely uninterested in mobile wallets.  

McDonald's Could Accelerate Mobile Payments Adoption

Last week news broke than McDonald's is considering rolling out mobile payments. Currently the McDonald's app is primarily a store locator. The app also offers nutrition information.

According to a Bloomberg report, the company has been testing mobile payments in Salt Lake City, Utah and in Austin, Texas. McDonald's has roughly 14,000 US stores and 35,000 globally. 

Mobile payments would allow McDonald's patrons to pre-order meals online and then pick them up at the drive-thru window. Other fast-food chains have tested, are testing or now using mobile ordering/payments. The McDonald's app will also feature deals and rewards according to Bloomberg.

A mobile ordering/payments capability may also help McDonald's attract younger users and Millennials, who are less inclined than others to visit the QSR chain. According to an AdAge write-up of an NPD Group survey

Millennials are indeed going to burger chains, but they are going less often. The hamburger category, which includes McDonald's, Wendy's and Burger King, still receives 29% of all millennials' quick-service visits, according to NPD, more than any other restaurant category. Fast casual, which includes chains like Chipotle, gets 6% of millennial quick-service traffic.

But hamburger chains have seen a 16% decline in traffic from Millennials since 2007, NPD said. In the year ended November 2012, Millennials made 3.6 billion visits to hamburger chains, down from 4.2 billion visits in the year ended November 2007. There was a 12% decline in quick-service restaurant visits by Millennials in the same time period.

Ultimately all QSR chains will offer mobile ordering/payments. And that will help acclimate a generation to using their smartphones as wallets to pay for things. 

Once people are familiar and comfortable with mobile payments in a specific context (e.g., ordering food) they will be more inclined to embrace them in other scenarios.

Time Spent Online: Mobile 51%, PC 49%

Jumptap (now part of Millennial Media) and comScore released a report last week on cross-platform device usage. The report contains considerable data about smartphone and tablet penetration, day parting and device usage by content category and demographic group.

Much of the data is from comScore and has already been released in other contexts. However there were a number of interesting data points in the report worth revisiting, including the fact that combined smartphone and tablet time online now exceeds time online with PCs.

As a general matter smartphones and tablets have increased overall time spent online rather than simply cannibalizing PC time, though there has been some of that (e.g., maps, local). 

Another interesting set of data in the document explore device share of online minutes by content category or vertical. The PC is dominant (more than 50% of time spent) in a little more than half the categories examined.

PC usage is highest in the automotive segment and lowest in "radio" (think Pandora). Retail sees slightly more mobile than PC time. 

The numbers above are aggregate data. Demographic segments are going to display different device behaviors. For example, those in the US under 30 are likely to be more involved and spend more time with smartphones than those over 50. That pattern has been repeatedly shown in our surveys and other third party data, including this report.

Below are the demographic groups profiled in the report:

Age 18 - 24: 

  • 69% own a Smartphone
  • 65% of digital users are cross-platform
  • 59% of time with digital is mobile

Women 25 - 49:

  • 69% are cross-platform
  • 67% own a Smartphone
  • 14% Mobile only (vs. 17% PC only)
  • Spend 63 hours monthly on Smartphone
  • 75% of time on social media is on Mobile

Men 25 - 49:

  • 74% of digital users are cross-platform
  • 62% own a Smartphone
  • 45% of time with digital is Mobile

Age 50+:

  • 39% own a Smartphone
  • 51% are cross-platform
  • Represent 31% of Tablet owners (only 25% of Smartphone owners)

There's quite a bit more data in the report, which can be downloaded for free.

As a broad takeaway marketers can now assume almost everyone above a certain income threshold is "cross platform." The minority are "smartphone only" or "PC only" (select younger and older users respectively).

Marketers can also reliably make the assumption that those under 45 are going to favor smartphones vs. PCs as primary devices in a wide range of categories. However people are also rational and prefer larger screens in many contexts (at least until mobile user experiences are improved).

By comparison tablet behaviors are still being established. However the tablet is typically used as a PC substitute (provided a larger screen) in the home.

Microsoft Readies Its Answer to Siri: 'Cortana'

Microsoft is reportedly readying its answer to Siri and Google Now: Cortana. Named after a central character in the game Halo, Cortana aims to go beyond both Siri and Google Now by being a more comprehensive way to interact with Microsoft devices.

According to Microsoft watcher Mary Jo Foley:

Cortana, Microsoft's assistant technology, likewise will be able to learn and adapt, relying on machine-learning technology and the "Satori" knowledge repository powering Bing.

Cortana will be more than just an app that lets users interact with their phones more naturally using voice commands. Cortana is core to the makeover of the entire "shell" -- the core services and experience -- of the future versions of Windows Phone, Windows and the Xbox One operating systems, from what I've heard from my contacts.

A comprehensive personal assistant powered by AI across all Microsoft systems and devices is a very ambitious plan. It remains to be seen whether Microsoft can do it. 

Yet in order to not be perceived as more than a me-too product Microsoft will have to roll out something truly impressive and more utilitarian than Siri or Google's mix of voice-enabled search and personalized data features.  

Update: TheVerge offers a series of relatively bland Cortana screenshots.  

Apple Shunned NFC, Has Anointed BLE for Indoor Location

I wrote several days ago on my Screenwerk blog about PayPal's new Beacon payments and indoor location initiative. I explained that Apple's decision not to include an NFC chip in the new iPhone means essentially that NFC is marginalized if not dead in the US market. In its place Bluetooth Low Energy (BLE) may become the mainstream alternative to what NFC would have enabled (e.g., mobile payments).

PayPal Beacon relies on BLE. At those businesses where a Beacon device is plugged in PayPal users simply check-in. Beacon identifies them and payment is automatically transferred from the default account. Payment happens “hands free” without a tap, swipe or other app interaction. 

Beacon is also PayPal’s entry into indoor location. PayPal will obviously know you’re in a venue and then can do any number of things, including delivering highly specific, indoor marketing messages or ads. PayPal is also making Beacon available to third party developers, who will be able to do similar things accordingly.

Apple's iOS 7, which will be available on September 18 (to older iPhones as well), will permit all eqipped devices to interact with BLE iBeacons in malls, airports, stores and other venues. 

Apple acquired indoor mapping company WiFiSlam earlier this year. That was the "wake up call" for many people to take indoor location seriously. One of the first and obvious applications of iBeacon is indoor mapping. But it doesn't stop there. 

Just as with PayPal's BLE initiative, iBeacon will enable Apple to move into payments and indoor marketing and allow third party developers to leverage those capabilities. With its more than 600 million credit cards on file I've got to believe that Apple will enter mobile payments eventually and BLE will be the way in all likelihood.

More broadly I suspect that iBeacon will popularize and jumpstart indoor location for a host of third party developers. 

For a comprehensive introduction to the indoor location and marketing opportunity, and its broader implications, come to Place 2013.

iPhone 'Touch ID' Is the New Siri

The Apple iPhone event just concluded. Everything that was announced at the event had been leaked or written about beforehand, including:

  • The cheaper iPhone 5C in 5 colors
  • The gold iPhone 5S
  • The faster 5S processor
  • iTunes Radio
  • The biometric fingerprint sensor that unlocks the phone ("Touch ID")

However that last item, the "Touch ID" fingerprint sensor, was the stand-out announcement in my view. It will enable users to both unlock their phones and confirm iTunes purchases instead of entering a password: 

Put your finger on the Home button, and just like that your iPhone unlocks. Your fingerprint can also approve purchases from iTunes or the App Store.

What I mean by the headline is that Touch ID is to the 5S what Siri was to the 4S: a kind of "wow" feature that helps it stand out from other smartphones. It partly compensates for the fact that Apple didn't introduce a larger screen, which everyone now wants. That's coming with the iPhone 6.