User Experience

Study: Localization Best Way to Make Mobile Ads Relevant to Users

The IAB has released a fascinating report on mobile shopping and user attitudes. The study wasn't a simply survey. Instead the research involved 260 US adults who agreed to participate in a two-week "mobile diary" project. It thus got an in-depth look at their behavior. Below are some of the findings that I found most interesting and noteworthy.

One finding that illustrates simple assumptions about mobile behavior cannot be made was the fact that most "mobile commerce" activity happened at home:

  • At home: 47%
  • Out and about: 29%
  • At work: 10%

Specifically the study also found that most product searching happened at home and not "out and about." Store location searching did happen mostly on the go. But these findings suggest that behavior many marketers assume is happening on the go is actually taking place at home. 

Screen shot 2012-05-17 at 8.33.03 AM

In a majority of cases "mobile commerce" (shopping) activity was stimulated by the presence of other media. This fact is relatively well known but still needs to be pointed out. Too many marketers think about mobile in a vacuum. Specifically 46% of these users were watching TV or on their computers when they used their smartphones to look up information. 

Screen shot 2012-05-17 at 8.46.52 AM

What stimulated their mobile commerce (shopping) activity? The largest group said that mobile was the "easiest way" to accomplish the particular task. In other words, it was easier for them to do a mobile lookup than it was to go on a PC. Beyond this, mobile advertising was a major "stimulant" of subsequent research or mobile shopping behavior.
Screen shot 2012-05-17 at 8.33.22 AM

One of the most interesting findings, which is an outlier compared to other data in the market, is the overwhelmingly favorable perception of mobile ads, which were viewed by 70% of these study participants as "a personal invitation." That's an incredibly positive finding for mobile advertising. 

Screen shot 2012-05-17 at 8.15.30 AM

Another very interesting finding is that mobile users who click on ads are mostly not immediately interested in buying. They want to learn more about a product or service. Many also want to see related products or services (presumably to see what their options are). 

All this suggests that mobile (display) advertising exists somewhere between pure awareness and direct response. Most people -- at least in this sample -- are not prepared to buy immediately in response to mobile display ads. Search is a different matter because of the directed nature of the consumer behavior vs. display. 

Screen shot 2012-05-17 at 8.15.51 AM

Finally the study indicates that the best way to make mobile ads relevant to users is to localize and personalize them. Personalization is OK, according to the study, with permission (hard to execute for marketers). But localization can more easily be done without capturing personal or behavioral data. 

Screen shot 2012-05-17 at 8.16.17 AM

Samsung Near Bottom of Satisfaction Index for Handset Makers

The University of Michigan's American Consumer Satisfaction Index for May is out. I've pulled two categories: wireless carriers and mobile handsets. The chart immediately below reflects that of the four major US mobile carriers Sprint beats Verizon by a single satisfaction point. They're all clustered very closely together however. 

Screen shot 2012-05-16 at 5.48.44 AM

The next chart is more interesting. It shows consumer satisfaction with smartphone brands. 

Apple comes out on top (83), followed by Nokia, LG and HTC (75). HTC and Motorola are two points behind them. Interestingly, Samsung -- which is now the largest handset maker in the world -- is 12 points behind Apple (71). The only company to score more poorly than Samsung is RIM.

Screen shot 2012-05-16 at 5.48.59 AM

People at the ACSI say that these numbers are predictive of future consumer behavior. A low score implies declining future sales. By the same token a high score should predict positive sales activity. 

Certainly Apple is doing well and RIM is in decline. But Samsung is an anomaly. It continues to see massive sales and would thus appear to defy the predictive wisdom of the ACSI scores. 

Survey: 75% Using Smartphones for LBS Information

On Friday the Pew Internet Project released survey data that showed significant usage of "real-time location-based information" by smartphone owners in the US. Earlier consumer surveys have shown that 90% or more of smartphone owners have used their devices to get "local" or location-based information (at one point or another). 

When you consider that Google Maps is either the top app or one of the top two apps on the iPhone and Android the Pew finding is obvious and not a surprise. Indeed, Pew never clearly defines the cluster of sites, apps or services that constitute the location-based information category. That may be because the question is asked in that way, without further definition, to consumers. 

Location based info and geosocial services_smartphone owners

An additional finding from the survey is that 18% of smartphone owners are using "check-in" services like Foursquare:

Smartphone owner geosocial and location based information use

In November 2010 Pew said that only 4% of survey respondents were using "geosocial" or "check-in" services. 

We should see "location-based services" hit 100% usage or penetration among smartphone owners, depending on how the category is defined. That's because every smartphone owner is going to eventually use a map or check the weather or look up a restaurant. 

Are Facebook Users Fleeing to Mobile to Escape Ads?

Facebook has again updated its S-1. There are a few reasons for this, including the awarding of additional stock to employees. However there's a very interesting discussion of mobile in the revised document (pointed out by TechCrunch). On page 14 of the document Facebook reiterates uncertainty around its ability to make money off mobile users:

We had 488 million MAUs who used Facebook mobile products in March 2012. While most of our mobile users also access Facebook through personal computers, we anticipate that the rate of growth in mobile usage will exceed the growth in usage through personal computers for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile usage of Facebook.

We have historically not shown ads to users accessing Facebook through mobile apps or our mobile website. In March 2012, we began to include sponsored stories in users’ mobile News Feeds. However, we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.

(emphasis added.)

The only mobile ad unit currently used by Facebook is Sponsored Stores, which put brand and advertiser messages in the user news feed. These units have proven to be successful on the PC but could become annoying to users on mobile devices. I have not yet seen any of these ads myself. 

One reason why mobile usage is growing so rapidly for Facebook is a result of general smartphone adoption among Americans. There are also things about the user experience in mobile that are superior to the PC: the ability to take and immediately upload pictures, for example. 

There may be another reason why usage is migrating to mobile: ad avoidance. People may be choosing the mobile version of Facebook over the PC site precisely because there are fewer ads; it's a "cleaner" experience. If my theory is correct then Facebook has a major problem on its hands. As Facebook puts more ads in mobile to make money it risks alienating users if the company is not very careful and thoughtful. 

Mobile ads on Facebook will have to add value, be compelling (offers) or highly relevant (local) in order to work. For this reason I expect Facebook to make a major mobile ad-network acquisition. This would be for the "infrastructure," the expertise and the inventory. It would be analogous to what Google did with AdMob.

Facebook Has Bought Gowalla, Instagram and Now Glancee

A couple of days ago local-social startup Glancee announced that it was being acquired by Facebook:

We started Glancee in 2010 with the goal of bringing together the best of your physical and digital worlds. We wanted to make it easy to discover the hidden connections around you, and to meet interesting people. Since then Glancee has connected thousands of people, empowering serendipity and pioneering social discovery. We are therefore very excited to announce that Facebook has acquired Glancee and that we have joined the team in Menlo Park . . . 

Glancee, which is really just a 2.0 version of the original Loopt, adds to Facebook's growing arsenal of mobile assets. The social network has identified mobile as both an area of vulnerability and opportunity. In the Facebook IPO roadshow video COO Sheryl Sandberg calls out mobile as "a key area of growth for Facebook." 

What she's talking about is revenue rather than usage. The company already has more than 500 million active mobile users. And Flurry Analytics recently said that social networking activities now consume as much daily mobile app munitues as games, the former number one category. Much of that activity takes place within Facebook. 

The purchase price of Glancee was not disclosed but we can assume it was an "acquhire," rather than a technology acquisition -- though there may have been a bit of technology that motivated the purchase.

Glancee was part of a group of "passive" or "ambient" location startups that include the over-hyped Highlight and a dozen others. I have argued in the past that ordinary people (as opposed to those in the tech industry) don't want to continuously broadcast their locations even to close friends and colleagues. Accordingly these friend finding and pseudo-dating apps are destined to fail unless the offer some other angle or utilitarian functionality. 

Facebook may choose to use some of Glancee's capabilities as part of a new version of its app. But my guess is that Glancee, like Gowalla, will be completely shuttered and that Facebook won't turn its app into a ambient friend finder. That would complicate the privacy picture for Facebook -- though I expect geofencing and geotargeted advertising to be part of what Facebook eventually develops for mobile marketers.

We're likely to see more acquisitions from Facebook as the company continues to build up its mobile capabilities. What the company hasn't figured out is how to make money in mobile, commensurate with its mobile usage. It now pumps Sponsored Stories through its users' news feeds, having just introduced mobile advertising. However that by itself won't fulfill the mobile ad revenue imperative about to be imposed on Facebook by its IPO.

Why TGI Friday’s Might Drive More Mobile Payments Adoption than PayPal

As we all wring our hands over the slow and uneven development of mobile payments -- and watch the contest between PayPal, Google Wallet, Square, LevelUp, Boku, mobile carriers and others – it's possible that mobile payments might become mainstream in less anticipated ways. Individual retailers and franchises, for example, might be much more successful in motivating consumers to adopt the technology than the major payments players taking a “horizontal” approach.

Starbucks was a trailblazer with its mobile app and wallet functionality in the US. Home Depot recently enabled PayPal to be used in selected stores. And TGI Friday’s has just followed with iPhone and Android apps that include a mobile wallet. The casual restaurant chain has 600 locations in the US and roughly 350 of them are now equipped to let customers pay by app. Startup Tabbedout provides the payments capability in the new TGI Friday’s app.

After the app is downloaded the TGI Friday’s customer opens a tab. She or he receives a code through the app, which is then shown to the server who enters it in the restaurant’s POS system. No card swipe means greater security for the consumer. (I once had my credit card number stolen by a waiter in a high-end restaurant.) A consumer credit card is associated with the app, which is where the payment comes from.

In addition to paying in the restaurant, the app helps users find restaurant locations, see the menu and receive offers. Payments become a kind of hook for a broader set of services and loyalty efforts. While TGI Friday’s is the first restaurant chain to adopt mobile payments (after Starbucks), expect others in the segment to follow relatively soon.

Fast casual and so-called “quick service” restaurants (fast food) will likely duplicate this move in short order. One can easily imagine a McDonalds or Chipotle app with a restaurant locator and mobile payments. Chipotle already allows mobile ordering.

The integration of mobile payments into loyalty apps by major brands is likely to help educate US consumers, “socialize” mobile payments and drive consumer adoption much more quickly than abstract initiatives from PayPal or Google or mobile carriers. The consumer doesn’t have to think about which merchants or stores will accept mobile payments in the single-store scenario. In other words, the consumer “why” of mobile payments is answered much more readily in a specific context, like the one presented by TGI Friday’s.

Do People Really Want Carrier Billing for Offline Purchases?

Mobile payments provider Boku has now completed a deal with Sprint, making it the final major US carrier to enable carrier billing through Boku. The startup operates in more than 60 countries and claims to process "hundreds of millions" in payments accordingly. It has relationships with more than two hundred mobile carriers around the world. 

Companies like Zong (now part of PayPal) and Boku got started to enable online users (mostly younger people) to purchase virtual goods in a simple and secure way. They evolved to enable purchase of physical goods offline. While Zong was acquired Boku and smaller payments companies like it risk being marginalized in North America and Europe by banks, credit card issuers and others (e.g., Google, PayPal, Square), which are reaching out to a broader population of users that already have credit cards. 

In developing countries carrier billing may be an effective approach for users and merchants in the absence of a more conventional credit card infrastructure. However in developed countries -- with carrier bills already very high -- few individuals (except those without traditional platic cards) will want to load up their carrier statements with additional costs. You may dispute me on this but I firmly believe that in the US, for most adults with existing credit, carrier billing is going to be a non-starter. 

Boku cites a Strategy Analytics survey that argues, "consumers are twice as interested in operator billing as using traditional credit/debit cards." I simply don't accept these findings as valid. Another survey (US only) by electronics site Retrevo found the opposite in June of last year: 

Screen shot 2011-06-20 at 9.15.23 AM 

Companies such as Boku need to branch out into physical goods and move outside of carrier billing to withstand the onslaught from other players with greater brand recognition and momentum. Indeed, earlier this year Boku did an NFC payments deal with Mastercard in the UK as part of an effort to do so. 

Report: Mobile Email Opens to Pass PC by Q4

Most marketers' email campaigns are not optimized for mobile. I observe this all the time in my own experience: the majority of emails I open on my smartphone (iPhone) land on an HTML page that assumes I'm on a PC. Yet PC email opens will be the minority use case very soon according to data released by email analytics provider Return Path.

The company examined 500 client email campaigns in Q4, 2011 through Q1, 2012 and found that 30% of email opens were on mobile devices. Further, it said that mobile was on track to become "the dominant email marketing platform later this year." This makes sense because email is one of the primary activities that people do in mobile. Return Path asserts that 42% of all time spent with mobile is spent on email. 

The company doesn't indicate whether iPads are counted as mobile devices here. In that case PC-formatted emails will look OK. 

Regardless, the Return Path data and prediction will come as a shock to most email marketers who are well behind in terms of mobile adoption. Citing third party data Return Path said that of all email opens only 2.4% of people opened the same email on their mobile device and a PC. In other words, marketers get one shot at users and that's going to be mostly mobile as of later this year.

Citing another third party study Return Path reports that 63% of Americans and 41% of Europeans either close or delete emails not optimized for mobile. This shows how high the stakes are for marketers who rely on email -- especially retailers.

Perhaps the second most suprising datapoint from the study, Return Path found that "Apple devices account for 85% of all mobile email opens." What this effectively means is that at some point in Q4 a majority of email opens will happen on iPhones and iPads. 

UC Berkeley Report on Mobile Payments Discovers Highly Negative Consumer Attitudes

A recently published study from the UC Berkeley Law School about mobile payments and related issues finds some significant consumer resistance -- at least in the abstract. A survey discussed in the report found that "over three-quarters (74%) of Americans said that they are 'not at all likely' or 'not too likely' to adopt mobile payment systems. Just 24% say that they are likely to adopt mobile payments."

Enthusiasm or resistance to mobile payments varied by age. Interestingly the people most enthusiastic about the technology were those in the 35-44 age range -- not the youngest adults. Yet attitudes and behavior are often distinct and surveys don't always reflect what people actually do in concrete situations in the world. Still the data potentially reflect a stiff uphill climb for mobile payments purveyors. 

Services like Square and PayPal Here may be exceptions because they don't require a change in consumer behavior. The consumer is still swiping a card; it's the merchant experience which is changed. 

A 2012 consumer survey conducted by the US Federal Reserve found that 12% of respondents had made a “mobile payment” within the past year. However “payment” was broadly defined to include online bill paying, m-commerce, charitable giving and money transfers, among other transactions. Online bill paying was by far the most common “mobile payment” activity according to the survey.

(Source: US Federal Reserve Q1 2012, n=1,780 US adults)

Concerns over security and the lack of apparent/clear benefits were the top two obstacles to mobile payments adoption according to the Federal Reserve survey.

The UC Berkeley survey looked at related areas surrounding mobile payments adoption. It explored location tracking and other privacy related issues (i.e., giving merchants information as part of the mobile transaction). Among other things, the survey asked consumers about how much information they were willing to give to merchants and how comfortable they were allowing their movements in or around shopping areas to be tracked by retailers or other entities. 

The report says that, "Americans overwhelmingly oppose the revelation of contact information (phone number, email address, and home address) to merchants when making purchases with mobile payment systems. Furthermore, an even higher level of opposition exists to systems that track consumers’ movements through their mobile phones." An overwhelming 96% of survey respondents say they objected to having their movements tracked by merchants or retailers; and 79% said they would “definitely not allow” it, with the remaining 17% saying they would “probably not allow” it.

Again this may be an abstract fear that dissipates if consumers realize concrete benefits from permitting themselves to be tracked or by divulging information. Regardless, mobile payments vendors and merchants will need to overcome the catalog of user fears and offer very concrete benefits to drive adoption. There are a large number of people who not only don't see mobile payments inevitable, useful or convenient but see it as a net negative.

That perception will need to be overcome to mainstream the phenomenon. And that will probably happen by getting a sufficient early adopter critical mass of people who can then proselytize and educate their friends, family and colleagues. 

Will Payments Apps Become Next-Gen Local Directories?

Despite all the activity and hype in the segment, mobile payments and mobile wallets have been adopted by relatively few consumers in North America to date. It's well below 10% of the smartphone population according to data I've seen. Lack of availability, lack of awareness and consumer security fears are among the reasons.

Despite slow consumer adoption of mobile payments, companies such as Square, PayPal and Intuit are making major inroads on the merchant side. For example, Square is processing millions of dollars of payments per day at local businesses.

Its main product relies on a traditional card swipe, so the consumer does nothing new and needs no new apps or equipment. PayPal and Intuit have essentially copied Square's product. In particular PayPal's brand awareness and footprint have helped the company generate significant, immediate demand for the new PayPal Here product. 

These and other mobile payments apps (e.g., Levelup) include directories of merchants using their payments systems. It leads me to think these payments apps could become the next generation of LBS or local directory apps. It's natural for them to try and build out more comprehensive local listings, as well as get more deeply into offers and deals (not to mention analytics and CRM). 

It also makes sense for a company like Foursquare, which already has a large user footprint, to acquire or create a mobile payments capability itself -- as a complement to its positioning as a loyalty tool for SMB marketers.

Are Tablets the True 'Second Screen'?

There's plenty of data that shows people are on mobile devices while watching TV. Many Superbowl ads assumed and tried to play off this, largely without success earlier this year. But it may turn out that tablets (iPads) become the primary "second screen" during TV viewing.

According to a Q4 multi-country survey from Nielsen, "88% of US of tablet owners and 86% of smartphone owners said they used their device while watching TV at least once during a 30-day period." In addition Nielsen found that 45% of tablet owners used their devices along with TV "on a daily basis and 26% said they did this several times a day."

simultaneous-tablet

simultaneous-smartphone

While checking email during commercials was a primary activity of the second screeners, the survey also found that there was engagement with TV content and products:  

The most frequent tablet or smartphone activity across all countries while also watching TV was checking email — either during a commercial break or during the show. Yet device owners also seem to engage with content related to the TV as well, either by looking up information related to the show or looking for deals and general information on products advertised on TV.

While shows like QVC, American Idol and The Voice are already doing things with simultaneous TV-mobile use, we should see more formal incorporation of mobile devices into shows. (I'm sure there will be lots of interesting and creative implementations to come.) In a more mundane vein, advertisers may start to direct people to e-commerce sites or offer flash sale incentives to mobile users on the couch. It should be a very interesting trend to watch. 

Tablets are much more likely, however, than smartphones to generate e-commerce sales. This is why they will be preferred by marketers. They'll be preferred by consumers because of their larger screens. 

Google's AR Glasses Cool but Would Anyone Actually Use Them?

Make no mistake Google's augmented reality goggles are fascinating and "cool." I applaud Google for developing them (if they have actually been developed; I suspect there's no working prototype yet) but I also wonder if anyone would actually buy and wear them. Of course some people would; but could the product break out of cult status?

The effort, called Project Glass, is an initiative of Google's advanced products team ("Google X"). It represents a form of "wearable computing" and it's very interesting as an extension of the Internet beyond more conventional devices like smartphones. 

Screen shot 2012-04-05 at 9.40.07 AM

Putting aside the fashion dimension, which I think is awkward in the images shared by Google, AR glasses might be useful while driving, shopping or in an art museum. However they might equally be distracting and annoying, removing you from the experience of being in the "real world."

There's already a backlash building against living your life with your nose in your smartphone. This would take the smartphone obsession one step further.  

Pricing is uncertain. If they were expensive (more than $199) they wouldn't see much uptake I would imagine. And what about advertising? Imagine ads literally popping up in front of your eyes. That would be highly undesirable to say the least. Other issues include battery size and life, as well as data plans and costs. 

Glasses are a logical place to put a wearable computer and at some point we will see wearable computers. However I'm skeptical that this product has mainstream appeal. But prove me wrong; I'd love to see it in action.

We're Going to Discover the Capacity and Limits of Marketing with Lumia Campaign

Nokia, AT&T and Microsoft are about to begin their "do or die" marketing blitz for the Lumia 900. Nokia (or someone on its behalf) has set up a site that tries at once to be humorous, viral and to take down the iPhone with actor-dramatized "hidden camera" videos that purport to show its weaknesses (e.g., "death grip"). The site proclaims "the beta test is almost over" and features former "SNL" actor Chris Parnell.

This site is merely one of a multiplicity of efforts and campaigns on behalf of Nokia and Windows Phones that are about to unfold.

Screen shot 2012-04-02 at 7.09.26 AM

Hundreds of millions of dollars will be spent in the coming year seeking to get North American mobile subscribers to pay attention to the Lumia and consider buying it. AT&T has priced the device at $99 and says it's going to put more marketing dollars behind the launch than any other device, including the iPhone.

Depending on whose numbers you believe, Windows has less than a 5% share of the US smartphone market and an even smaller chunk of "recent purchases."

For all the spending we're about to see I think US Lumia sales will only be modest. I could be completely wrong but I think that when the smoke clears a year from now the postmortem will be (once again) that marketing dollars can only go so far in shaping perceptions and getting people to buy a product.

Mobile Search Engine [email protected] Now 'Everything.me'

Last May Tel Aviv-based mobile app/search engine [email protected] (pronounced “do at”) launched with high expectations. The company raised $7 million against the promise of delivering a search experience to smartphones that was both more efficient and more elegant than Google.

Rather than indexing pages, [email protected] showed live sites that were optimized for mobile. Sites were initially ranked by default but users had the ability to re-order results. It was a radically different and smart approach to mobile search -- and one that might have been expected to work at some level. However nobody used it, reflecting the power of Google's brand and its prominence on both the iPhone and Android devices.

You can see a video of [email protected] in action here.

Screen shot 2012-04-02 at 6.16.10 AM

Now the company has re-imagined [email protected] as a kind of mobile meta-search engine: Everything.me. You enter a query and can search "vertically" in any of the many different sites displayed on the screen. Logos replace Google's blue links. 

Because Everything.me gives you access to familiar, branded sites (and some that are less familiar) it has a better chance than [email protected] did. However, many people have smartphone apps for common mobile search categories: restaurants, travel, shopping/price comparisons. Then, of course, there's Google for "everything else." 

Accordingly I think the company is fighting the same battle it was before. And even though this relaunch is a clever adaptation of the company's underlying technology it will face the same challenges of adoption and usage. 

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. 

How Far Will Apple Develop Siri?

Some US-based survey findings were released yesterday that show iPhone 4S owners use Siri regularly but only in limited ways. The survey of 482 iPhone 4S owners by Parks Associates reflected that people used Siri almost daily in many instances to send email, initiate calls and send texts. Other types of "more advanced" activities were not performed as often (e.g. setting up appointments or playing music).

Here's a very high-level overview of the findings: 

  • 87% of respondents reported using Siri at least once a month
  • Roughly one third of iPhone 4S owners said they used Siri "almost daily"
  • Initiating calls and texts were the most common Siri-related activities; 26% said they used Siri for email daily
  • 55% were satisifed with Siri, 9% were not; others were in-between

Previously a ChangeWave survey in December found that Siri was the most "liked" feature of the new iPhone 4S. 

Siri is clearly a work in progress; Apple has a "beta" label on it. Apple's chief mobile rival Google is working on its own "assistant" to compete with Siri. The rumor is that will include APIs for third party developers. So Google may out-Siri Siri if Apple doesn't keep moving. 

The question now for Apple is how much to develop Siri into a broader utility and search or content discovery tool. 

Apple removed Siri's earlier “transactional” capabilities, present in the app before Apple bought the company. Those earlier capabilities hint at what's possible. In other words, tapping directly into third party APIs to deliver content results and transactional pages without the interim step of a "search result." This was Siri's ambition when Apple bought the company. But will Apple press on? 

In an ideal world Siri would develop into a kind of universal interface for finding and downloading apps, generating queries within apps on the handset ("Find me a flight from NY to Boston on Kayak on April 18") and perhaps initiating payments. 

Clearly there are flaws in Siri's performance and it's imperfect, but it has enormous potential to be more than it is. I'm hopeful that Apple continues to invest in and develop Siri -- to help it realize its pre-Apple vision.

Mobile 'Showrooming': E-Commerce's Best Friend

Even though increasing numbers of consumers are starting to transact on smartphones, m-commerce hasn't taken off. Trust, security and credit card entry issues still need to be resolved for most e-commerce merchants (though not Amazon).

But there is another way in which smartphones are helping e-commerce -- so-called "showrooming." That's where consumers visit stores to examine and verify products and then order online (mostly from Amazon). This problem has been especially bad for stores like Best Buy but it's a problem that all traditional retailers are starting to grapple with. 

Recent survey data from ClickIQ (via Internet Retailer) confirms this pattern: 

29% of consumers who use a smartphone to research a product while in a retail store end up purchasing the item online, many from Amazon.com . . .

Of consumers who used a smartphone to research in-store and then purchase online, 55% were men and 45% were women, says the survey of 406 U.S. consumers who have researched a product while in a store and purchased that product.

Recently the Pew Internet Project issued similar findings about Q4 smartphone shopping behavior. 

Here's what the Pew survey data say about what happened after the smartphone/Internet was consulted by consumers in stores:

  • 37% decided to not purchase the product at all
  • 35% purchased the product at that store
  • 19% purchased the product online
  • 8% purchased the product at another store

What this means, effectively, is that 64% of in-store smartphone users decided not to buy on the spot -- probably because of some piece of information they accessed then and there (price, reviews, etc.).

The 19% who purchased the product online is 10 points lower than the ClickIQ findings. But both these surveys show that consumer behavior is being affected by access to the Internet in stores, with some meaningful percentage of people buying online after confirming the product is the one they want. 

There are a few things that retailers can do to combat this growing pattern:

  • Train employees and deliver much better customer service in stores (be much more dedicated to service overall)
  • Create or enhance loyalty programs that reward consumers for purchasing through that store (whether online or off)  

However it's foolish for retailers to try and prevent smartphone use in stores or rely on unique SKUs that prevent barcode-scanning based comparisons. 

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."

http://stateofthemedia.org/files/2012/03/PEJ_12.03.12_Fig.4_NewsConsumptionDevice-022.png

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. 

JD Power: iPhone Wins Cust Sat Survey (Again), Nokia Near Bottom

JD Power and Associates yesterday put out its 2012 handset customer satisfaction survey findings, covering both smartphones and non-smartphones. The iPhone won the smartphone category (for the "seventh consecutive time"); LG and Sanyo were at the top of the non-smartphone handset category.

HTC was second in the smartphone category. Android market leader Samsung was third but "below industry average." 

JD Power used a range of criteria to measure satisfaction, which were slightly different in each category. For smartphones the weighted criteria were: performance (35%); ease of operation (24%); features (21%); and physical design (20%).

Screen shot 2012-03-16 at 8.42.38 AM
Screen shot 2012-03-16 at 8.42.55 AM
The iPhone rankings are not a surprise. The much more interesting aspect of these survey results is the low score of Nokia. On both lists it was second from the bottom.

If this survey were conducted in Europe or developing markets Nokia might get higher marks. But the low scores in the US survey reflect the poor performance of its existing products and the weakness of its brand. That brand weakness is further diminished by the scores themselves.

It will be very challenging, even with its new Lumia Windows Phones, for Nokia to "climb out of the basement." Indeed, the existing weakness of Nokia in the US/North American market creates a "deficit" for Lumia devices as both Nokia and Microsoft seek to market them to North American consumers. 

Related: iPhone Grabs Camera Market From Sony

 

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.

Screen shot 2012-03-16 at 7.52.43 AM

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.