Mobile handsets already outnumber PCs across the globe. However, in terms of internet access (including apps) PCs could fall into third place after smartphones and tablets. That would represent a radical change from today, where PCs still represent the most common way that consumers in most developed countries access the internet.
Hardware monitor NPD Group is predicting that this year tablet shipments globablly will exceed notebooks (laptops). Here's the projection:
NPD also takes a stab at forecasting penetration of tablets by screen size. However this is somewhat less important than the fact of tablet adoption.
Rather than the cornucopia of screens displayed in the graphic above, we're likely to see standardization around three primary tablet screen sizes:
The general publisher response to the rise of tablets is probably going to be responsive web design, which has limitations. However tablets will further reinforce app usage among consumers, though surveys and behavioral studies show more mobile web usage on tablets vs. smartphones.
Tablet adoption also ends the reign of Microsoft as the most important company in the PC universe. Windows 8 and Surface adoption to date has been quite tepid. And the inevitable availability of Office for tablets removes yet another incentive to buy a PC.
The "big takeaway" here is the simple fact of more tablets than new PCs. PCs will remain prominent in the workplace and among business users. However for consumers they will see less and less "face time." Tablets and smartphones will become primary internet access points in the home, with PCs being used for more limited and specific things.
One of the challenging things for marketers these days is to figure out how to efficiently reach consumers on the growing array of screens they interact with. The growing complexity of consumer behavior and the interplay among devices is dizzying.
Last year Google did some terrific research about the parallel and sequential usage of smartphones, tablets and conventional PCs along the path to purchase. The company found that 90% of US adults surveyed used multiple screens during the day. It's really challenging to track this behavior in real time let alone create coherent, integrated campaigns to address it.
One of the central behaviors identified in the Google research was the multi-screen path to purchase. Consumers often start on one screen but complete transactions on another. The behavior wasn't random, however. Smartphones were found to be the most commonly used screen but people chose different screens depending on the context and nature of the task at hand.
Harris Interactive has released similar research that reflects different user preferences and behaviors depending on the particular screen and use case. Harris found overlapping usage scenarios but also consumer preferences for one screen vs. another in several instances.
The survey sample consisted of 2,383 adults, about 42% of which owned a smartphone. However that's lower than the US mobile average of 50%+. The data were collected in November 2012.
The question fielded was: "Thinking generally about your media and communication behavior on a smartphone versus on a computer, please indicate which of these actions you regularly perform on each." Multiple responses were permitted.
In some cases smartphones tended to be used more and in others PCs dominated. Unfortunately Harris didn't ask about tablets.
General activities (penetration/usage):
Social media usage (penetration/usage):
The presence of children in the home was correlated with increased smartphone activity across almost all categories of activity.
In looking at these data one can see that certain kinds of activities, better suited to smartphones (texting, map usage, checking in), are more often performed on mobile devices. However activities that require larger screens or where the mobile user experience is sub-optimal, favor the PC (e.g., product research, purchasing).
Independent analyst Ben Evans has teased out a range of Facebook mobile usage and user data, partly derived from the company's own public statements and partly from his own calculations. You can read what he says here. Below I use some of his data and one of his charts.
Mobile users as of Q3 2012 (mostly public numbers):
Accordingly, roughly 44% of Facebook's global user base doesn't access the site on mobile according to the company's own data. However that figure is likely to get smaller over the next 12 - 24 months and become a very small minority.
Evans estimates the following smartphone app usage for Facebook (based on Q3 data above):
Below is a chart from Evans showing the relative growth of Facebook access on the various mobile platforms from September 2011 to September 2012:
Assuming these numbers are accurate you can see the reversal of positions of the iPhone and Android since last year, which makes sense. However the larger point is that a majority of Facebook users now access the site via mobile.
Facebook has argued that mobile is ultimately a much larger revenue opportunity than the PC. The following verbatim Facebook remarks come from the Q3 earnings call transcript:
Social and paid-search ad platform Kenshoo came out with data today that argue the percentage of ad revenue coming from mobile is now up to 20.3%.
Facebook is expected to generate roughly $1.5 billion in overall revenue in Q4. Not all of it is ad revenue, however. Roughly $260 or so million would be attributable to mobile if the 20.3% figure holds and the forecast is correct.
Google sees lower CPC prices on mobile paid search ads but better performance on mobile devices vs. the PC. However Facebook is experiencing the opposite phenomenon, according to Kenshoo. It sees higher mobile prices but lower engagement vs. the desktop.
I had an interesting experience this past week with my 13-year old daughter, which illustrates the challenges but also the opportunity for Windows Phones. One of several smartphones I have is a blue/purple HTC 8X (Windows Phone). The phone offers Beats Audio integration. It's a very attractive handset and looks very much like a Nokia Lumia device, only not as heavy. (Nokia is not too happy about the close similarity.)
My daughter is currently a feature phone user and really wanted an iPhone 5, which my wife and I cruelly denied her. But she spied the 8X on my desk and really liked how it looked. She also had seen (on Hulu) the relentless Microsoft Windows Phone ads -- "as unique as you are" -- and was parroting some of the ad copy/dialogue to me almost verbatim. (The campaign must be working.)
She asked for the phone and I agreed that she could have it. I gave it to her to try at home on WiFi to make sure that she was really interested before I went through the trouble of changing carriers and so on. I suspected the OS might throw her; she's had an iPod Touch for several years and we've also had several Android phones. She's familiar with both operating systems but hasn't ever used Windows.
Another factor: she was intrigued by the Microsoft Surface tablet, which she saw at a friend's house. The colorful and different look of the UI appealed to her. The Windows "metro" design -- I can still use that term even if Microsoft cannot -- on both devices got her attention.
Then she started playing with the phone and found out that some of the key apps that she and her friends routinely use weren't there. She wasn't thrown by the metro UI and "live tiles," as I expected. Rather it was the fact that Instagram, Oovoo, Snapchat and other apps she uses were missing. She was particularly annoyed by the pseudo Instagram apps that appeared (e.g., Instagram blog). After discovering that these beloved apps were missing she rejected the phone.
Had those and a few other critical (in her mind) apps been present, she would have kept and used the phone. I told her that Instagram would eventually come to Windows Phones as would other missing apps. That didn't satisfy her.
Windows Phone now has 150,000 apps; however as indicated by the above it's still missing many key apps. For example, as part of its antitrust argument against Google Redmond says it's being unfairly denied access to YouTube metadata. It's makeshift YouTube app is deficient in fundamental respects:
Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft’s YouTube “app” on Windows Phones is basically just a browser displaying YouTube’s mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.
If Microsoft can manage to get the key/top apps onto Windows Phone it will be able to attract buyers who like the different look of the UI and/or who may be attracted by the aggressive subsidies offered by carriers. The 8X is available for $49 with a two-year contract at Verizon, for example.
However until these apps (enough apps, key apps) are there would-be users, such as my daughter, won't bite. Microsoft can break the "catch-22" of Windows Phone app development through developer payments and incentives, which it's trying to do. The company needs to identify all the "necessary apps" and make sure those are built for Windows Phones.
Beyond this the current messaging isn't really successful in attracting buyers, notwithstanding my daughter's ability to parrot the commercials. Microsoft needs build messaging around three ideas:
Finally, ideally, there should be something about the hardware and software (beyond the UI) that is different. Microsoft argues there are already such things (e.g. Kids Corner). And the colorful phone cases offer an approach taken by Nokia and HTC. A better camera (i.e., Lumia) is another.
Yet these things aren't quite enough. There needs to be a highly visible feature or dimension of Windows Phones that truly isn't present on iPhone or Android handsets. Right now, nothwithstading the nicely designed metro UI, Windows Phones continue to seem like "wannabe" devices that are still playing catch up to other smartphones.
Earlier this month (on December 17) Facebook transformed its “Nearby” mobile-app friend finder into a local search tool. Nearby had previously been a way to locate friends who had enabled location or checked-in somewhere in the immediate area. The new (mobile only) Nearby is a logical and complete overhaul of the service, which holds significant implications for the entire local search landscape – with one major caveat.
Everything depends on Facebook’s commitment to Nearby and how much the company is willing to invest in local.
There has long been an expectation that Facebook would get into search, beyond its existing relationship with Microsoft. A robust search capability on Facebook could provide significant new revenue, in the form of paid-search ads, as well as greater utility to Facebook users overall. The question is: what is the scope of Facebook’s search ambition? Would it be limited to better site search or would it extend to web search more generally? It’s likely that Facebook will take a kind of middle course that relies primarily on site search but holds competitive implications for Google and others. Nearby is something of a model.
All the data in the Nearby “index” are provided by the businesses themselves. Facebook doesn’t show places for which it doesn’t have local Pages. This is by design, partly as an incentive for SMBs to create Pages for their businesses. The company isn’t licensing data or crawling the web for local business information. This makes the database potentially more reliable but also less extensive than competing offerings. There are other significant user-experince limitations as well.
Notwithstanding these current limitations Facebook Nearby could become a major competitor in local search relatively quickly. We won’t have a sense of how real that possibility is until roughly the middle of next year. By then we will know something about consumer adoption, as well as Facebook’s commitment to improving the service.
But despite Facebook’s privileged position in the marketplace the company doesn’t have years to develop Nearby. In order for Nearby to succeed, it must become more visible to consumers. It also must improve considerably during a time-window that is probably not longer than 24 months. Otherwise, Nearby could easily go the way of Facebook Deals and simply be remembered as a provocative experiment that failed.
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As part of a year-end release of data Nielsen indicated that 56% US mobile subscribers owned smartphones as of Q3. By contrast, comScore says smartphone penetration currently stands at 52%. And Pew said earlier this year that it was 53%.
In the smartphone segment, the following are Nielsen's data regarding US mobile operating system share (again, end of Q3):
Here are similar data from comScore's for comparison purposes (November, 2012):
Below are Nielsen's lists of top apps for 2012 for both the iPhone and Android devices. While the lists are different there are several apps that appear on both: Faceobook, YouTube, Pandora, Twitter and "weather."
Google's Gmail and search apps are at the top of the Android list but absent from the iPhone list.
Nielsen is also reporting that there are an average of 32 million Maps users on the iPhone each month. That's more usage than Facebook or YouTube, which both have huge mobile audiences in the US.
It's also a significant loss of traffic for Google. However because there were very few ads on the iOS 5 version of Maps it's not a revenue loss for Google.
Millennial Media has released an infographic that offers year-in-review data. I've excerpted what I thought were the most interesting aspects. However you can see the entire infographic here.
There were two data sets that I found most interesting. The first is verticals ranked by ad spend on the company's network. Automotive was the leading vertical and biggest gainer in 2012. This is mostly car makers doing broad, awareness-oriented brand advertising.
Below is an example of automotive general awareness advertising (though not necessarily from Millennial Media). The screens I've presented are just a few from the ad. The ad makes it possible to locate a dealer to do a test drive -- but that capability is buried a few clicks down and below the fold.
If you take a look at all the categories in the Millennial top verticals list, all are categories in which most of the transactions will be realized offline. However I would bet that few if any of the advertisers in these categories are doing anything like trying to drive consumers into local outlets or stores.
For example, the graphic below shows Millennial's most recent data on the distribution of "post click" objectives associated with the campaigns on its network. Only 19% of these ads contained a "store locator." And those are probably not prominently displayed. Most of these campaigns are simply branding campaigns.
This is a significant missed opportunity. Only 5% of retail spending in the US happens online and an even smaller amount through mobile devices. The rest -- literially more than $4 trillion -- is offline. The ability to lead consumers to a store or point of sale is one of the great opportunities of mobile. However it's not really being utilized or exploited by advertisers.
The other interesting piece of data in the Millennial infographic shows the growth (and decline) of Android OEMs. Samsung is winning and HTC, Motorola (Google) and LG are losing when it comes to Android share.
As I've now argued numerous times Android is increasingly identified with Samsung. Partly this is because Samsung is making compelling devices -- although the LG Nexus 4 is the best Android handset on the market -- but it's equally because Samsung is spending so much money on marketing around the globe.
Just as Android now controls more than 50% of the global smartphone market, Samsung will soon control more than 50% of the Android market.
This morning the IAB reported that Q3 US online ad revenue came in at $9.3 billion. First half digital revenues were $17 billion. It's quite possible that the second half will see $19 or $20 billion total, bringing FY 2012 to $36 or $37 billion in online ad revenue (including mobile). However the IAB didn't provide a detailed breakdown of Q3 revenues by segment.
Two days ago eMarketer revised its mobile ad forecast upward for 2012 from $2.61 billion to just over $4 billion.
The IAB said that mobile advertising revenue was $1.2 billion for the first half. It also said that mobile represented 8% of Q2 2012 revenues, or $661 million. While mobile is the fastest growing digital ad segment it's still small relatively speaking. If mobile continued to represent 8% of digital ad revenue in Q3 that would translate into $744 million.
However if mobile grew as a percentage of overall digital revenue to, say, 10% that would represent $930 million in revenue. That's probably the range that's reasonable to assume: $744 to $930 million. Let's take the midpoint of that: $830 million.
Because of the holiday shopping activity surrounding mobile devices we can assume that mobile ad revenue will grow further in Q4. Accordingly, it's possible that Q4 US mobile ad revenues might reach or slighly exceed $1 billion.
We can probably expect mobile ad revenues to come in for the full year between $2.6 and $3 billion on the high end. It's very unlikely that they will reach $4 billion this year however.
Earlier this week Appcelerator released its quarterly mobile app developer survey. The survey of more than 2,700 global developers found they were primarily focused on the iOS and Android operating systems, with Windows Phones, RIM and others relatively far behind. This reflects the "duopoloy" of iOS and Android (increasingly "Samdroid') sales in the global smartphone market.
The challenges of creating a strong developer ecosystem for Windows is partly what's holding the mobile OS back. Sales are relatively good in isolated EU markets (e.g, Spain, UK) but lackluster on a global basis and in North America in particular, where Windows continues to lose market share.
According to the survey, about 36% of developers indicated interest in building apps for Windows devices. However Windows Phone's modest market share is creating a kind of Catch-22 for the platform.
Without boosting the perception that Windows has app-parity (at least among the most important ones), there won't be more handset sales. Without more handset sales there won't be more consumer usage and without consumer adoption there are few incentives -- except direct payments from Microsoft -- to develop for the platform. The majority of developers, according to the Appcelerator survey, can only focus on two mobile platforms.
Separately, IHS iSuppli released a full-year, 2012 estimate of global smartphone market share. The calculation is based on the untrustworthy "shipments" metric. However, the company shows Nokia dropping to third position, Apple in second and Samsung-Android now leading iOS "decisively":
Samsung and Apple ended 2011 in a neck-and-neck battle for leadership in the smartphone market, with only 1 percentage point of market share separating them. However, entering the 2012 year, Samsung moved ahead decisively ahead of Apple with a wide range of Android smartphone offerings. Samsung made significant gains in both the high end as well as the low-cost market with its Galaxy line of smartphones. This diversified market approach has allowed Samsung to address a larger target audience for its phones than Apple’s limited premium iPhone line.
The Samsung and Apple duopoly represents the dominant force in the smartphone market, with the two companies accounting for 49 percent of shipments in 2012, up from 39 percent in 2011. While Nokia and Canada’s Research in Motion (RIM) also held double-digit shares of the market in 2011, Samsung and Apple remain the only two players that will each command a double-digit portion of the smartphone space in 2012.
As Google-owned Motorola, LG and HTC struggle for consumer attention and handset sales, Samsung becomes more and more identified with Android in the consumer mind. RIM's forthcoming BlackBerry 10 OS is truly the company's "last hope." Nokia too will likely need to do something fairly radical if it is to remain viable (i.e., adopt Android) in the smartphone market.
Global mobile ad network InMobi has released its latest "Insights Report" for the US market. Interestingly it finds Apple devices generating the majority of ad impressions despite their smaller overall hardware market share.
Apple's iOS devices have a 46% share of impressions on the InMobi network, compared with Android's collective 43.6% share. Here are the top five devices that InMobi sees on its network:
While there is almost no Android presence in the top five (Kindle Fire is a quasi-Android device) the network says that Android growth is outpacing that of the iPhone. Compare InMobi's data to other ad networks, which show Android with a greater share of impressions.
Jumptap (July, 2012):
Millennial Media (November, 2012):
The Millennial numbers above correspond almost exactly to comScore's market share data regarding handset penetration (October, 2012):
There are a couple of studies that suggest a substantial percentage -- perhaps as much as 40% -- of mobile display ad clicks are unintended or "bad" in some way. Pontiflex and Trademob are the sources of these findings.
There are a number of ways to address this. One way is changing the billing or business model (moving from CTR to CPA); another is to ensure that clicks are truly intended. For example, mobile ad networks like YP and xAd ask users to confirm that they want to actually contact an advertiser or visit the advertiser's site/landing page.
Below is an example of that approach from the YP mobile ad network:
Now Google is taking steps in its banner ad creative to make sure that clicks are valid. The company said in a blog post that
[M]ost accidental clicks on in-app image ads happen at the outer edge of the ad unit, likely when you’re trying to click or scroll to nearby content. Now if you click on the outer border of the ad, we’ll prompt you to verify that you actually meant to click on the ad to learn more.
Below are screens from the Google post. The company will require users to now click on a specific area of the banner ("visit site"). The entire banner won't be "clickable."
This is smart and together with other, similar efforts it should ensure that clicks and other consumer actions in response to mobile ads are intended and that advertisers are only charged for "valid" clicks and not fat-finger accidents.
In one sense this is a solution to a practical problem but in another it's a symbolic, confidence-building measure for mobile display advertising.
Last week eBay reported that it will realize "more than $10 billion in mobile volume for the year from its mobile apps and PayPal expects to transact more than $10 billion in mobile payment volume." Those are big numbers. If we visit some of the mobile payments forecasts the numbers get much bigger.
Yet consumer surveys in the US and elsewhere reveal consumer ambivalence and even indifference to mobile payments. It does vary by age however, with younger users indicating greater interest than older people.
A survey we fielded in August (n=926 US adults) found that roughly 29% of respondents had varying degrees of interest, whereas 71% were "not at all interested" in mobile payments.
"How interested are you in using your mobile phone to pay for things as a replacement for cash or your credit cards?"
In our survey people under 45 years of age were considerably more interested than people who were older. A new survey from Harris Interactive is more bullish on the outlook for mobile payments however, with smartphone owners reflecting much greater interest in mobile payments:
“How interested are you in being able to use your smartphone to process in-person payments via tapping a special receiver, rather than using cash or payment cards?”
In other words 27% were "Very" or "Somewhat Interested" while 57% were "Not Very" or "Not at All Interested." This was the full sample population. The following were the smartphone-only responses:
Thus "Very" or "Somewhat Interested" came out to be 44%, while "Not Very" or "Not at All Interested" was 47%. Quite a bit more interest accordingly.
Smartphone owners in the 18-47 age range were most interested in mobile payments according to the Harris survey. In addition, 38% of smartphone owners saw mobile payments replacing card-based transactions "for a majority of purchases" within five years.
Mobile advertising is typically quite a bit more effective than comparable ads on the PC. Indeed, the data show that mobile search and display consistently outperform their PC counterparts. Yet mobile ads (especially display and SMS) are viewed with skepticism and distrust and rank near the bottom of all ad categories in consumer surveys.
This is something of a paradox to say the least. For example, Marin Software's Q3 aggregated client data report indicates the following about the relative performance (CTRs) of paid search ads on the PC, smartphones and tablets:
You might be quick to respond that smartphone click-through rates could be attributable to the so-called "fat finger" problem thus distorting their true performance. This problem -- and we can debate the extent of its reality -- doesn't really exist in a paid-search context.
These clicks are from intent-based queries and thus more inclined be "real" and reflective of a buying intent. In a display context an unintended click may be somewhat more likely. However mobile display outperforms PC display advertising across the board and consistently across studies.
According to 2011 Nielsen US consumer advertising-trust survey data (above), personal recommendations and traditional media ads are near the top and mobile ads are the least trusted of all the major ad categories.
A more recent Millward Brown consumer survey (Q3 2012) found much the same thing. Mobile ads were at the bottom of favorability rankings among all ad types. The list below just shows digital categories:
There's no easy way to explain the apparent contradiction between negative consumer attitudes toward mobile ads and their otherwise superior performance to categories more trusted or ranked more highly.
If you're inclined to believe financial analysts then mobile device ownership (smartphones + tablets) will trump PC ownership on a global basis some time next year. At some point in the next 3 to 5 years we may have as many or more tablets than PCs. These are radical changes in the marketplace that are still slow to sink in with publishers and advertisers unfortunatley.
The essential thing to understand is that tablets are PC replacement devices in most usage scenarios. Smartphones are used both at home and on the go. They tend to complement PC or laptop usage generally speaking. To accomodate these users and usage scenarios much in advertising, mobile site design and e-commerce has to change.
The following chart from Pew lays out US device ownership and trends over the past six years.
PC ownership (including laptops) has really peaked in the US at about 61% according to the Pew survey data. Mobile phone penetration is 85% (smartphones at 50%+) and tablets at 25% (after the holidays it will be greater).
So what does this all mean in terms of real numbers? It means that if there are roughly 250 million US adults then there are:
If teens are included there are more than 120 million mobile internet users today in the US. That's just over half the total PC internet population.
A new forecast from Informa Telecoms argues that the mobile phone market will be dominated on a global basis by sub-$150 devices by 2017. Regardless of the accuracy of that prediction, prices are indeed coming down. That means more smartphone penetration and more mobile internet access.
What it also means is that PC-centric publishing, e-commerce and advertising will need to give way to a multi-platform approach and a more nuanced and sophisticated understanding of consumer behavior -- amid an even more challenging attribution environment.
The US Federal Trade Commission (FTC) today released a study of privacy and mobile apps for kids. The report was a follow up to an earlier study issued in January. Both reports were highly critical of app developers and app stores. Both found that parents weren't given enough information to assess privacy policies and whether or how their kids' information was being used.
The FTC looked at 400 apps (randomly selected) that were directed toward kids. The agency compared privacy policies and actual practices. It found:
[The] industry appears to have made little or no progress in improving its disclosures since the first kids’ app survey was conducted . . . most apps failed to provide basic information about what data would be collected from kids, how it would be used, and with whom it would be shared.
In a few cases privacy policies were directy contradicted by actual practices and the FTC called these apps deceptive and potentially illegal.
The report's findings are interesting and potentially important for the debate over mobile privacy. However the specific finding I want to focus on here has to do with the number of apps that transmitted location information to ad networks.
Mobile apps (for kids) that share information with developers and ad networks
Only 3% of apps that transmitted information back to developers and ad networks shared location data. The iPhone makes that process more explicit than does Android. But when location isn't shared there can't be any location-based ads.
Apps for kids aren't ncessarily representative of the entire universe of apps. Indeed, location may be much less of a factor in apps for kids. But the data may be directionally consistent with the market as a whole, inducating how relatively few apps today offer opportunities to display location-based ad inventory.
You can't turn on the TV, Internet or open a publication without encountering an ad for Windows Phones. And there are conflicting data about whether it's working and the corresponding strength of Windows Phone sales.
Several data sources continue to indicate tepid demand in North America but there is also some evidence that Windows Phone sales may be going reasonably well in certain parts of the world. The blog WMPoweruser identifies growth in the usage of Facebook apps for Windows Phones and extrapolates an increased sales trend on that basis:
Using the number of Monthly Active Facebook users as a guide, we can see around 627,000 MAU of the built-in Facebook app has been added since the 1st October 2012, the start of the quarter.
Last year over the same period less than 150,000 was added by the 15th December, possibly hinting at the source of Steve Ballmer’s statement that “Windows Phones are so far selling at four times the rate of the same time last year” Last year according to Gartner, who claims to measure units actually sold to end users rather than shipments, said 2.759 million Windows Phones were sold in Q4 2011.
The data suggests already 7 million Windows Phones were sold so far this quarter, and we may finally be heading to a + 10 million Windows Phone quarter.
If in fact Windows Phones were to sell 10 million units to end users it would indeed be a breakthrough for the beleaguered platform. However there's other data to suggest that Windows Phones are not doing as well as that. For example, the most recent comScore US mobile market share data show that Windows continues to lose overall share to iOS and Android:
There are also recent sales data from Kantar Worldpanel that show Windows Phones losing share in accordance with the comScore data above:
However in Europe Windows Phones are making some inroads, probably as a result of Nokia's promotional efforts and legacy brand strength. While the EU5 shows a 4.7 percent market share (growth of 1.7% vs. a year ago) individual countries vary widely.
In Italy, Spain and the UK Windows Phones have performed better than in Germany and France. In Italy in particular Windows Phones have gained almost 8 points and now stand at an 11.7 percent share of recent sales according to Kantar. Again, this is probably on the strength of the Nokia brand in Europe.
Elsewhere around the world Windows Phone sales appear to be modest. However in "urban China" Kantar says Windows Phones contstitute 4.2% of all recent smartphone sales.
It is possible that all these sales combined represent several million units around the world. But while there does seem to be momentum in certain countries it doesn't yet appear that this is a 10 million unit "breakthrough quarter" for the operating system.
Flurry Analytics has been chronicling the rise of the app ecosystem and the growth of app usage by consumers for several years. In January of this year the company released data arguing that daily time spent with mobile apps had surpassed the PC internet: 94 minutes vs. 72 minutes per day. And earlier today Flurry released an analysis of US consumer time spent with mobile apps vs. television.
Ad network InMobile asserted earlier this year that consumers are now spending more time on a daily basis with mobile media than they do with TV:
[M]obile ranks first in media consumption among Americans with 2.4 hours of the 9 hours spent consuming media on mobile devices—this is more than a quarter of time spent on mobile, outpacing TV (2.35 hours), PCs (1.6 hours) and any other channel.
However according to the data compiled by Flurry, consumers are spending 127 minutes per day with mobile apps compared to 168 minutes per day with TV. TV time is basically flat, or slighly down according to Nielsen, while app-time is gaining according to Flurry.
Nielsen itself says that people in the US spend roughly 4 hours and 18 minutes per day on average with conventional TV (vs. 168 minutes [2.8 hours] in the Flurry graph). That would be about 2X of the time spent with mobile apps, using the Flurry figures.
The question of whether time spent with mobile already exceeds TV time or closing in on it is largely symbolic. The larger point is that consumers are highly engaged with mobile devices and the mobile internet. That trend will only continue to grow and gain in the next several years. Mobile ad spending, however, is nowhere near commensurate with the kind of time and attention that consumers are spending with mobile media. The chart below (also courtsey of Flurry) illustrates the huge disparity between the two.
Mary Meeker has argued that, based in part on this familiar time-spent formula, mobile advertising is basically a $20 billion opportunity in the US. That may be the case eventually -- though advertisers and their agencies aren't totally "rational." But in the near term are many barriers to the free flow of ad dollars into mobile right now: organizational politics and culture, lack of advertiser education, lack of budget and perhaps most of all lack of "clear ROI."
It took a very long time for online advertising to attract the kind of ad dollars that were more or less consistent with consumer time spent online. It won't take quite as long for mobile to ramp. But it could still be a number of years before mobile marketing and advertising are significant budget items for the majority of advertisers.
For their part consumers are mostly indifferent to whether or how soon companies embrace mobile marketing and advertising. While they prefer mobile friendly sites and user-experiences they don't particularly care if marketers are fully exploiting mobile ad opportunities.
However, if marketers do not as the Thanksgiving holiday weekend has already proven, it will be their missed opportunity.
Former Morgan Stanley financial analyst, now KPCB partner, Mary Meeker did one of her patented blizzard of stats/data dump presentations at Stanford University the other evening. The slides (available here) are essentially an updated version of a presentation given earlier this year.
You know most of the material by now. However, below are the most interesting slides I culled from a much longer set. They go to device adoption and mobile ad revenue projections.
The noteworthy thing about the above chart is that it argues there are 172 million smartphone subscribers in the US. If that's true it would mean a smartphone share of something like 68% or 73% depending on the base used. This is undoubtedly high. But it's not unreasonable to argue that there may be 60% smartphone penetration by the end of Q4 in the US (or early Q1).
From the chart below: there may not in fact be 5 billion individual mobile phone users around the world. There are "only" 7 billion people on the planet. It's probably more accurate to assert there are something like 5 billion subscriptions/SIM cards (there are some dual subscriptions). Still the global smartphone growth opportunity is massive.
The following chart is based on Pew survey data, showing that 29% (as of earlier this year) of US adults owned a tablet or eReader. Tablets are going to be the number one electronics gift item this year. We could be looking at 80 million total tablets in the US in Q1 2013.
What's most interesting about the slide below is that it projects tablet ownership to pass PC ownership by the end of next year; in other words: more tablets than PCs. This may be a aggressive forecast but it's not out of the question.
The final slide is about mobile advertising and app revenue. There are many sources behind this projection. It envisions a $20 billion global market by the end of the year, with mobile advertising around $6 or so billion.
US mobile advertising was worth roughly $1.2 in the first half and is on track to be somewhere between $2.6 and $2.8 billion for the full year 2012. Globally mobile ad revenues will probably reach between $5.5 and $6 billion by the end of Q4 this year.
Social networks and social-mobile apps are undeniably mainstream at this point. Indeed, mobile is where much of the growth is happening for social media. A new report, compiled from Q2 data and issued by Nielsen, illustrates this and compares time spent and access by media device.
What the data show is that the amount of time people are spending with mobile devices (vs. PC) is growing and that mobile apps continue to be where mobile time is concentrated. Along with smartphone and tablet penetration, mobile time overall has grown vs. 2011 but growth has been concentrated in mobile apps. They see roughly 79% of consumer time with mobile media and the mobile internet.
Mobile media time overall is now roughly 43% of the time spent on PCs as of Q2 2012.
Mobile use of social networks tends to show slightly higher levels of engagement than on the PC. In mobile, as on the PC, women tend to be more engaged than men. But the most engaged groups are slightly different in each category.
The most engaged group of mobile social media users is the 25 - 34 age range, whereas on the PC it's the 18 - 24 year old cohort.
The following chart illustrates that among the major social sites, Facebook dramatically leads in terms of time spent (although Instagram isn't present on this list). In addition, time is roughly divided 85% mobile apps vs. 15% mobile web. And while the ratios are slightly different for each social media publishers the directional trend is the same -- toward mobile apps.
Nielsen also looked at the major ways in which consumers connect to the Internet generally. It found that the PC was still the dominant way but that PC penetration was down slightly since a year ago. By contrast, as you might expect, mobile access to the Internet has grown significantly on smartphones and especially on tablets.
Marketers who continue to ignore or only nominally address smartphone and tablet users -- especially app users -- are losing access to an increasingly large user base and may be doing their brands and reputations harm in the process.
Numbers are everywhere as we head into the final month of 2012 -- an undisputed "year of mobile" -- and many sources have released loads of market share and device penetration figures over the past week. Some of those numbers are meaningful and some are not.
Among them ad network Millennial Media put out some monthly device figures this morning, based on ad impression share on its network. I'll take a quick look at those numbers and then discuss some of the other recent device data in the market, with an emphasis on tablets.
The iPhone is the single most prevalent device (and has been so for several years) on the Millennial Network. It generated 16% of all the ad impressions in Q3, while iOS devices in total generated 31% of all Millennial's ad impressions. Collectively Samsung devices (phones, tablets) were responsible for 24% of impressions; the second most prevalent device OEM.
RIM devices were responsible for 7% of ad impressions, which is now basically on par ith the company's overall market share in the US. There are no Windows Phones in the top 20 on Millennial's network. Windows Phones (Lumia in particular) has sold reasonably well in select countries in Europe (i.e., Spain, UK, Italy). However they have not sold well in the US.
While Apple is the leading manufacturer and has the leading device on the Millennial network, Android devices dominate collectively -- with 52% of all impressions, compared with 34% for iOS. This share breakdown is almost identical to comScore's September US smartphone market share data.
Finally Millennial ranks the top tablets on its network (see graphic above). The iPad leads, followed by the Samsung GalaxyTab, Kindle Fire and others. Tablets will clearly be one of the most popular holiday gifts and the top electronics item sold in Q4.
It's curious to see the Acer and Motorola tablets on Millennial's list. From a sales and traffic standpoint there are now effectively three tablets in the market: the iPad (and Mini), Google's Nexus tablets (mainly the Nexus 7) and Kindle Fire devices. While the Nook and Galaxy Tab have some market presence they're essentially "also-rans" at this point. The Galaxy Tab has had greater success in Europe.
A new report from ABI Research claims that the iPad's share (of shipments) fell to 55%, down 14 points in Q3. Lower-priced tablets from Google-ASUS and Amazon are driving a lot of sales to be sure. Indeed, Amazon made the claim earlier this week that Kindle device sales more than doubled over last year.
But collectively we need to get rid of "shipments" as a market-share metric. It's widely used because it's easier for analyst firms to track than actual sales. However it's not meaningful in any sense. As an industry we need to shift to actual device sales or even other metrics such as web traffic/transactions. This past weekend's data have shown this.
What do sales matter if devices aren't widely used or are used for very limited purposes. For example Kindle Fire devices, though they're selling well, are essentially used to consume Amazon content. They don't show up very often on internet traffic reports. And while the impact of Nexus devices has yet to be fully felt, the broader notion (promoted by the ABI report) that Android tablets now constitute nearly half the devices in the market is misleading.
As widely discussed earlier this week, the iPad is the only tablet right now that appears to matter in a "real world" sense. According to this weekend's e-commerce data from IBM, the iPad generated 88% of tablet traffic on Black Friday and more than 90% on Cyber Monday.
In Q2 ad network Chitika found that the iPad was responsible for almost 95% of the tablet traffic on its network. Other publishers and e-commerce sellers report similar results: so far the iPad is the only tablet that matters.
E-commerce site Fab.com has said that 95% of its mobile sales come from iOS devices. And tablet content platform Onswipe has said that the iPad is responsible for a remarkable 98% of all tablet-based traffic to the company's publisher partner network. Based on global web traffic data from Q2 this is what actual usage market share looks like:
Despite Android's dominance in terms of device penetration the majority of mobile web traffic in the US (not to mention transactions) is coming from iOS devices. And when it comes to tablet traffic alone, there is no Android surge.
There may be a lot of Android tablets out there but engagement and usage levels are far below the iPad.