For several reasons I had occasion to look back at some of the mobile predictions I made in January. At the risk of sounding self-important or boastful many of them have come to pass. In fact I was somewhat surprised by the number, which is why I'm posting about it now.
For review, here are the original predictions from January:
Here are my comments and updates on each item:
Not bad . . .
Nokia announced Q3 earnings yesterday. The company lost 969 million euros or $1.27 billion. It reported sales of 2.9 million Lumia smartphones during the quarter, which was down from 4 million in Q2. CEO Stephen Elop attributed the sales decline to the announcement and impending arrival of Windows 8 and a delay in consumer purchases accordingly.
Nokia sold 3.4 million Symbian handsets for a total of 6.3 million overall smartphone sales in Q3. However Symbian has been discontinued as the company focuses exclusively on Windows Phones. Nokia CFO Timo Ihamuotila said the following about Nokia device sales in Q3:
Our Smart Devices net sales decreased 37% sequentially due to lower Lumia and Symbian net sales. This was partially offset by higher overall Smart Devices ASPs. Looking at our Lumia volumes in more detail, we saw a sequential decrease in shipments to 2.9 million units, with declines in all regions except for Middle East and Africa. From a product-level view, we saw sequential growth in the lower-priced Lumia offering, more than offset by declines elsewhere in the Lumia portfolio.
The evidence suggests that Nokia continues to have success at the lower end of the market but at the higher end it's struggling. Nokia's Elop promises this will change with the release of the Nokia Lumia 920, its first Windows Phone 8 smartphone.
In the US AT&T will reportedly have an exclusive for six months on the handset. Presumably that was in exchange for aggressive promotion and placement in AT&T stores. We'll see if that helps but I'm quite skeptical.
I don't think there's any reason to believe that Nokia will sell a great many more Lumia 920 handsets than it has sold of earlier models this past year. The company should have pursued a dual path with Android and Windows Phones. Of course Microsoft wouldn't have permitted that and still been willing to turn over hundreds of millions of dollars to Nokia in support.
Nokia has lost in excess of 4 billion euros since it announced its partnership with Microsoft. And it doesn't appear that the hemorrhaging is over yet.
Under some pressure to show that it's monetizing mobile, yesterday on its earnings call, Google announced a new "mobile run rate" of $8 billion. That compares with a run rate of $2.5 billion a year ago. The numbers aren't a direct comparison; Google threw everything into the $8 billion figure (ads, Google Play, app sales).
Here's what CEO Larry Page said in announcing the new run-rate number yesterday:
This time last year, I announced that our run rate from mobile advertising hit $2.5 billion . . . But now, we’ve built up additional mobile revenue from users paying for content and apps in Google Play . . . I can announce our new run rate for mobile is now over $8 billion. That’s quite a business.
CFO Patrick Pichette added a small amount of additional clarity:
The new [mobile] run rate is different from the one we gave you a year ago. And more specifically, last year, it included only our gross revenue from mobile ads, but this year, in this number we also added the gross revenue from the mobile sales of Google Play content. And finally, it also includes the consumer spending on the Play apps . . .
[O]f the three categories I gave you, ads continues to be the bulk of it, the vast majority of it. And then on the case of the Google Play, it’s important to note from a modeling perspective that everything’s that’s content, that is whether a book, a movie content is actually booked on our books on a gross basis . . . Everything that is tied to apps is booked on a net basis, but it’s still a huge kind of number in all cases.
Pichette said the "vast majority" of the $8 billion in revenue was comprised of mobile ads. Trying to estimate what percentage of this figure is ads with greater precision than "vast majority" is a bit tricky.
Google is counting content sales on a gross basis and app sales on a net basis (30% of the total). Despite Android's larger footprint than iOS, Google Play makes less money than the iTunes App Store.
In March, Flurry said that revenues in the Google Play market were 23% of the App Store. However this was limited to app sales and not content (if I'm reading it correctly). Google includes content sales (movie rentals/sales, book sales) on a gross basis.
Apple makes roughly $4 billion annually on App Store sales according to financial analyst estimates. Twenty three percent of that would be $920 million. If we assume that Google Play app sales have increased since Q1 Google night now be seeing a $1 to $1.5 billion app sales run rate on a global basis.
It's harder to estimate gross content sales; I haven't seen any estimates of Google content sales at all. Google's content sales are nothing like Amazon's. However, let's be extremely generous and say that it's $2 billion (gross) on an annualized basis.
Using these extremely loose estimates, $5 to $6 billion of the $8 billion run rate would be attributable to ad sales and $3 to $3.5 billion to content and app sales. Pichette's language "vast majority" to me implies something around 70% to 75% (or more) of the $8 billion is ad revenue. That would be right between $5 and $6 billion.
Google inadvertently released its Q3 revenues early today. The company reported that consolidated revenues (including Motorola) were $14.1 billion, a 45% increase vs. last year. Google said that Motorola brought in $2.58 billion. However there was an operating loss of $527 million. Indeed it was argulaby the weak link in the Q3 earnings report.
Minus Motorola, Google's revenues were $11.5 billion with 67% of that coming from Google sites vs. its third party network and other revenue sources. Paid search clicks grew roughly 33% vs 2011. However cost per clicks (CPCs) were down about 15% vs. last year.
While Google has yet to directly address this, the reason for the lower CPCs is likely the growth of mobile search and the shift of some categories of queries to mobile devices from the PC.
Mobile search volumes have grown significantly; however marketers value mobile clicks less than PC search clicks. The main reason is the challenge of proving ROI. Consistently we see that mobile click-through rates (CTR) are higher than on the PC. But "conversions" are much lower.
Part of the reason may be the infamous "fat finger" problem. But the larger issue is how marketers are defining and tracking conversions. The e-commerce-centric way of thinking about conversions just doesn't work for mobile. Most users don't transact on their smartphones. They go into stores -- where 95% of retail spending happens -- or they follow up on PCs and tablets later to buy.
Because marketers can't generally track in-store transactions or later PC/tablet conversions they assign a low ROI to smartphone based queries. This in turn causes them to bid less on those keywords.
In the local segment, there's a shift going on from PC map-based queries to smartphones. A Google representative recently said that up to 50% of mobile search queries carry a local intent. And comScore recently documented that trend and argued that map-based search on the PC had peaked and was now in decline:
In the past six months alone, according to comScore Mobile Metrix, the number of smartphone visitors to Maps websites and apps has jumped 24% to 92 million unique visitors – a monthly penetration of 83% among smartphone users . . .Searches with a Mapping/Navigation intent on the Big 5 Engines are down 34% over the past 15 months, going from 74.8 million to 49.5 million in August. comScore Search Planner shows that search clicks to Map/Navigation sites show an even steeper decline, down 41% to just 55.2 million in August.
We're likely to continue to see a flattening of local search volumes on the PC and a continuing shift to mobile devices (mobile web and apps). Nobody really knows how much local search query volume is flowing through mobile apps. However a January 2012 survey found that half of smartphone owners conducted local search in apps, with Google Maps being the leading app.
Once marketers more fully embrace mobile and get more sophisticated about ROI we should see the price of mobile advertising and mobile CPCs increase. Google of course will be one of the chief beneficiaries of such a development.
When Microsoft introduced its Surface line of tablet computers earlier this summer the burning question was: how much would they cost? While price isn't the only variable that will determine success or failure it's a big one.
Since that time several PC makers have started to announce their Windows 8 laptop lineups, with most machines coming in above $600. However today Microsoft inadvertently revealed the pricing of the devices. The screen in the Microsoft store has since come down. Below is a screen capture of the pricing page.
The basic RT model, which is Microsoft's direct iPad competitor, starts at $499 (32GB). If you want the "Touch Cover" keyboard, it goes up to $599 and then more for greater memory. The more fully equipped Windows 8 Pro models will cost more. But they essentially are the PCs of the future; a hybrid machine that will combine on-device and cloud storage.
The interesting question now that the RT's pricing has been revealed is whether consumers will consider it an iPad competitor or a laptop alternative. If it's the latter it will be in something of a different category and could do quite well. However if it's regarded and positioned as a direct iPad competitor it may suffer.
TeleNav has been generally in the business of personal navigation devices and smartphone apps. Over the past couple of years the company has also gotten into mobile advertising, taking ads from the YP and xAd networks, in addition to increasingly selling its own ads to brands and franchises. The ads are all location based or geotargeted.
TeleNav decided it wanted to get into local-mobile advertising in earnest and has announced the acquisition of ad network ThinkNear. The price was $22.5 million in cash and stock. The ThinkNear team now joins TeleNav.
ThinkNear offers precise geotargeting and what it calls "situational targeting," which is a mix of context and audience targeting:
ThinkNear helps advertisers reach consumers within 100 meters of any location, which is more precise than the zip code and designated market area (DMA) targeting typically offered by most ad networks. The ThinkNear network reaches tens of millions of customers across more than seven billion impressions per month. The precision and scale of ThinkNear allows advertisers to take advantage of the most distinctive aspects of mobile phones, which more than 85 percent of American adults now own.
ThinkNear's targeting technology also enables Situational Targeting, which takes into account where consumers are, what they are doing, and what is happening around them. For example, a sports memorabilia store can target an NFL fan with an advertisement for a nearby sale on branded jackets, blankets and umbrellas while the fan is tailgating on a cold and rainy day. Hyper-local Situational Targeting provides consumers with ads that are more relevant to their real-time needs and interests as they go about their day.
The company also announced that ThinkNear would become Scout Advertising, which includes search and display inventory. (Scout is TeleNav's smartphone app/consumer navigation brand.) ThinkNear sources some of its inventory from the various mobile "exchanges."
Scout Advertising is essentially a more complete and extensive version of the "hyper-local" ad network Navteq (Nokia) was trying to build. However Navteq appears to no longer be in the business of advertising.
In addition to the usual metrics, Scout Advertising can also tell a marketer whether the consumer actually arrived at his/her destination. Thus business models can be click, impression and arrival-based. TeleNav also says that its CTRs are "well above online and mobile industry averages, and over 40% of customers who click on an ad will ultimately take action to drive to an advertiser's location."
While most ad networks offer geotargeting, with varying degrees of accuracy (but generally not lat-long), TeleNav/ThinkNear join a short list of ad networks that can deliver much more granular location targeting. Indeed, its current (or perhaps former) partners, YP and xAd, are now its most direct local-mobile competitors.
It's possible that "T-commerce" and "tabvertising" may over time become more important to brands than advertising on smartphones. Mindful of the growing number and importance of tablet devices ad network Mojiva today announced a dedicated tablet network:
The Mojiva ad network reached an estimated three million tablet devices in January 2011, grew to 25 million by January 2012, and reached 40 million tablet devices as of June 2012. The number of tablet ad requests per month on the Mojiva ad network was 119 million in January 2011, increased to 655 million as of January 2012, and reached an impressive 2.13 billion tablet ad requests per month as of August 2012 – a nearly 20-fold increase in 20 months.
Mojiva's new tablet network will give advertisers and agencies the opportunity to purchase prime inventory and display rich media ad units across highly valuable audience channels, which include luxury goods, entertainment, news, parenting, tech enthusiasts and sports enthusiasts.
The Mojiva announcement was being touted today as "the industry’s first tablet-only mobile advertising network." However that's not entirely accurate. Google introduced tablet-only targeting in July of last year.
Data aggregator eMmarketer has forecast that by the end of the year there will be 53 million tablets in the US. However this estimate is probably low. It will probably be closer to 60 million or more, especially with more lower-priced tablets, the forthcoming iPad Mini and a big holiday shopping season in store for tablets. (PCs probably won't be so lucky.)
Third quarter reports from several digital agencies and marketing firms (RKG, Covario, Kenshoo) show that the tablet ad spend is growing and that ad performance outpaces smartphones and rivals the PC. In the chart below, according to Covario, the tablet share of mobile ad spend has grown to 48% from 27% a year ago. That suggests it will exceed 50% by the end of the year.
Tablet Share of Mobile Ad Spend Has Grown
Source: Covario Q3 2012 Quarterly Global Paid Search Spend Analysis
Mobile devices generated 21% of paid search clicks in Q3. While the numbers vary from firm to firm, paid-click volume on PCs is still significantly greater than mobile devices. Accordingly there's quite a lot of growth ahead for paid clicks on mobile.
Source: Kenshoo Global Search Advertising Trends Q3 2012
Despite the fact that Internet traffic is still dominated by the PC, many data sources indicate that tablet CTRs are significantly higher than corresponding CTR rates on the PC. It's also harder to discount or dismiss tablet clicks as "unintended" the way that several firms are now doing with smartphones. Furthermore, RKG's Q3 digital advertising report shows that the revenue per click from ads on tablets is nearly as high as on the PC.
Mobile vs Desktop: CPCs & Click-Through Rate
Source: RKG Digital Marketing Report Q3 2012
While some data indicate that the cost per click of tablet ads may be approaching or even exceeding comparable ads on the desktop, most sources still show the cost of tablet ads being lower and a better value than ads on the PC.
Mobile vs. Desktop: Revenue per Click by Device
Source: RKG Digital Marketing Report Q3 2012
The emerging challenge with tablet advertising, of course, is the varying screen sizes that are starting to take hold in the category. This is especially true with the 7-inch form factor. An equivalent of responsive web design will need to be created for advertising to accommodate the range of screen sizes coming into the market: 4-inch, 5-inch, 7-inch and 10-inch.
The US Center for Disease Control (CDC) is tracking the number of US households that are "wireless only" or primarily wireless. Wireless only means there is no landline in the house; primarily wireless means that people receive "all or almost all calls on wireless telephones despite also having a landline telephone."
My wife and I, and others we know, fall into that second category. We have a landline but rarely use it. It's a number we give out for "official purposes" and it acts as a telemarketing "spam catcher." The majority of people who call that number get voice mail.
The last time I wrote about this data, in June, the CDC reported that just under 30% (29.7%) of American households were wireless only. Beyond this, 15.7% of US homes received all or almost all calls on wireless telephones." In total, 45.4% of US homes were either mostly mobile or wireless only. The CDC findings were based on polling data from the first half of 2011.
Earlier this week I checked back to see if the numbers had changed at all since June. They have; they've continued to grow.
According to CDC data collected between July and December 2011, 34% of American homes are now "wireless only." In addition 16% are mostly mobile, receiving "all or almost all calls on wireless telephones despite also having a landline telephone." This means that a total of half of all US households now rely primarily or exclusively on mobile phones.
The populations, according to the CDC, mostly likely to be mobile only are the following: younger people under 34, adults living alone, those without higher education and less affluent or poor families. Those more likely to be mostly mobile are: affluent adults, parents and adults with college degrees.
Because these data lag about six months we can estimate that the current combined figure is probably closer to 55% of US homes being mobile only or mobile first.
The IAB released its half yearly digital ad revenue report for the US market earlier today. Total "online" revenues were approximately $17 billion, compared with $14.9 billion a year ago. Search was the single largest revenue category and has been for some time. It accounted for 48% of total digital ad revenue in 1H 2012 or $8.1 billion (vs. $6.8 billion in 2011).
Mobile revenue for the first half was $1.2 billion or 7% of total digital ad revenue. That compares to $636 million for the same period in 2011. Ironically the MMA is recommending that brands and marketers devote 7% of their ad budgets to mobile.
As might be expected, the IAB said that mobile was the fastest growing of the various digital ad categories it was tracking.
If we extrapolate from the numbers in the report we can project that full-year US mobile ad revenues will come in between $2.4 and $2.6 billion depending on how good Q4 is this year.
Several data sources over the past week have indicated very high levels of enthusiasm for the iPhone 5 and the iPad "Classic," but not as much interest in the rumored (yet forthcoming) iPad Mini.
Financial services and investment firm Pacific Crest reports that its checks reveal continuing, high levels of demand for the iPhone, which is reportedly hurting Android sales. According to a report in Fortune:
[Pacific Crest's James] Faucette writes that he's seeing several Android-based vendors aggressively discounted previously "high-end" flagship-type products to mid- and low-tier pricing. "While the [Samsung] Galaxy SIII will continue to generate positive news flow as a viable iPhone competitor," he writes, "we continue to believe that as an ecosystem, Android's shipment levels likely peaked in the U.S. as far back as last October and are likely to see further declines in the future if the retention gap doesn't close."
Piper Jaffray found similarly high demand among US teens for the iPhone, as well as high ownership of iOS devices. Based on a survey of more than 7,000 teens the financial frim found 40% owned an iPhone, while 44% owned (or had access to) a tablet. Nearly three-quarters (72%) of those who owned a tablet had an iPad, according to the survey.
These teens were also interested in the iPad Mini, especially if it were to be priced at less than $300. Pricing an iPad Mini creates an interesting challenge for Apple because it's new iPod Touch is priced at $299 and above. Nexus 7 and Kindle Fire tablets are priced at $199; so Apple can't go much beyond $200 in pricing the Mini. However that would potentially cannibalize sales of the new iPod Touch.
In contrast to the Piper Jaffray survey, e-commerce site TechBargains.com conducted a survey of visitors to its site (n=1,332) in September and found only 18% of respondents were interested in an iPad Mini:
Among the 18% who were interested in buying an iPad Mini:
Pricing and features will ultimately determine how popular a smaller iPad tablet turns out to be.
It's no surprise that PC shipments are set to decline this year. While the enterprise market remains modestly healthy the consumer market for PCs is weak. And it's not just the economy; demand is fading.
We're in a "post PC" world now; consumers have many more device options to accomplish tasks that at one time could only be done on the PC. Indeed, MS Office is reportedly coming to iOS and Android devices. Office was the last barrier to totally giving up the PC for many people.
IHS iSuppli has projected a 1.2% shipment (not sales) decline from 2011. But unlike shipments that never translate into consumer sales, there can be no sales without shipments.
The company said that not since 2001 has the PC market contracted like this on a global basis:
The total PC market in 2012 is expected to contract by 1.2 percent to 348.7 million units, down from 352.8 million in 2011, as shown in the figure below. Not since 2001—more than a decade ago—has the worldwide PC industry suffered such a decline.
When you step back and look at the broader device market, you can see how much growth lies ahead for smartphones and tablets (and who knows what other connected devices) in the future. The PC will likely chug along in workmanlike fashion but its days of robust double-digit growth are over.
Source: ITU World Telecommunication/ICT Indicators database, Gartner, Morgan Stanley (2011-2012)
Digital marketing agency RKG has released a Q3 report (based on aggregated data from its client base). The report covers search optimization, paid search, social media, email, comparison shopping and mobile. I'll focus here only on the mobile data.
The firm said that tablets (mostly iPads) and smartphones combined to drive 21% of organic search traffic in the third quarter. RKG commented that "this was nearly double the level we saw in Q3 last year." Because of the iPad and iPhone, iOS dominates organic search traffic from non-PC devices. According to the RKG report, "iOS held a 77% share of mobile organic search in Q3, an increase from 75% in Q2."
Operating System Share of Organic Search
RKG also said that "revenue per click" (RPC) was almost the same on the iPad as it was on the PC, while smartphone RPC "languished at roughly a fifth that of desktop." Part of this is because only e-commerce events are being measured and captured. RKG and its clients aren't seeing the indirect impact of smartphones on conversions or purchases that happen later on PCs, tablets or in stores. Accordingly these data are somewhat skewed.
What's interesting to observe in a more "apples to apples" context, however, is the discrepancy between iPad owner-users and Android tablet owners: "the iPad generated an average RPC that was more than double that for Android tablets, including the Kindle Fire and Nexus 7."
Mobile vs. Desktop: RPC by Device
From a paid search marketing standpoint tablets and smartphones cost less and outperform PC (search) advertising. The discrepancy between costs and performance was greatest on smartphones. One reason why this may be so is that many marketers and platforms aren't necessarily valuing mobile correctly because of the conversion-tracking problem. Nonetheless it's a great opportunity for those that aggressively embrace it.
Mobile vs. Desktop: CPC vs. CTR
This week at the Smarter Mobile Marketing event in New York -- I didn't attend because I was at a competing search marketing event -- Millennial Media CEO Paul Palmieri made the case that mobile ad revenues would inevitably grow to keep pace with consumer time spent on mobile devices. Accordingly he projected, based on a Gartner formula, that by 2015 US mobile ad revenues would be approximately $13.5 billion.
Palmieri also pointed out that traditional media grab a much larger percentage of ad spend vs. consumer time spent. However, the underlying assumption is that there's a seemingly inexorable or inevitable logic to the notion that ad spend will catch up with time spent.
In discussing reports that many mobile ad clicks are unintended, Dow Jones newswires cited a very casual projection earlier this year from Mary Meeker -- based on a similar time spent vs. ad spend formula -- that mobile advertising in the US was a $20 billion opportunity. While I don't think Meeker herself assigned a particular time frame for getting to $20 billion Dow Jones stated that would happen by 2015.
Meeker's slide does point out that time spent and ad spend are now almost at parity when it comes to the Internet. However that has taken essentially a decade to come to pass. And even though the mobile market is developing much more quickly than the Internet did, the notion that US mobile advetising (not all spending on mobile marketing) will be $20 billion or even $13.5 billion in three years is just too aggressive.
It's much more likely that US mobile advertising will still be below $10 billion in 2015.
Although consumers have embraced mobile in a big way, there are more than 120 million smartphone users in the US today, marketers are moving much more cautiously and seem to be slow to fully understand the implications of what's happening. There are also "mechanical" and organizational barriers to mobile marketing within agencies and corporations. These behind the scenes "politics" and culture issues are often a bigger obstacle than anything in the broader marketplace (such as fragmentation or the general absence of mobile cookies).
Recently the MMA issued a mobile ROI report that argues 7% of media budgets should be dedicated to mobile -- despite the fact that at least 10% of consumer media time, if not much more, is being spent with mobile. However at the Smarter Mobile Marketing event in New York agencies reportedly said that the 7% figure was too high and suggested that 2% to 3% of budgets was more appropriate.
Reports like the one from Dow Jones mentioned above and others that suggest mobile ad clicks are the product of consumer mistakes or click fraud merely reinforce complacency among marketers who don't want to have to worry about yet another digital platform. They've already got social media, search and display to deal with, without compounding their problems by bringing additional form factors and behaviors into the mix. And while many marketers have done something in mobile often that effort is weak or perfunctory.
The challenges around mobile tracking and attribution, the challenges of the new multi-platform environment and the cultural-organizational issues I alluded to together suggest to me that mobile ad spending and revenue will grow more slowly than the simple time spent vs. ad spend formula argues. The fact that traditional media have maintained a much larger percentage of ad spend vs. consumer time spent is another indication this will take longer than expected. Marketers understand traditional media more than they understand the much more complex digital landscape.
Though consumers will increasingly use smartphones and tablets as primary Internet devices, and while startups and innovation will continue to accelerate the mobile segment, brands and agencies won't necessarily keep pace with consumer behavior and technology development. My guess is that it will probably take at least 5 years to as many as 7 or 8 years to get to the kinds of numbers that Millennial's Palmieri and Mary Meeker are projecting.
In-app messaging provider Urban Airship has just introduced a very interesting new product: Location Messaging. This is the fruit of the company's acquisition of SimpleGeo last year.
Geofencing (Placecast) and ad geotargeting (xAd, YP) have existed for some time. However Urban Airship's new product offers very precise location targeted messaging -- with the ability to mix in other audience segmentation data as well:
As a result publishers/developers are able target specific types of users by location. There's a wide array of possibilities in terms of the way this can be deployed, for loyalty or yield management purposes or to stimulate new sales. There are two qualifications: users must have the publisher's app installed and s/he must have opted in to receive push notifications.
Urban Airship has created 2.5 million "pre-defined geofences" for publishers. However they can also define (or exclude) their own custom geofences. These can be as wide as a metro area (or larger I suppose) or as precise as a park or city block.
There's lots of hand-wringing going on about publishers being unable to sufficiently monetize mobile. However, mobile push notifications offer a terrific opportunity for brands and offline businesses to drive increased sales -- if used judiciously. Accordingly the company shared some performance data with me. It was impressive.
Urban Airship said it beta-tested Location Messaging this summer during the Olympics. The company reported on its blog that "The Official London 2012 app . . . utilized Urban Airship Location Messaging to send more than 10 million location-based push messages to people in . . . Olympic venues." In addition, "Nearly 60% of app users had location-sharing enabled and location-based pushes achieved clickthrough rates of around 60 percent."
Urban Airship CMO Brent Heiggelke pointed out that despite the potential effectiveness of Location Messaging brands and marketers must be extremely careful about the content of messages they send and their frequency or risk having their notifications shut off or apps uninstalled by end users.
I've written about this before: the discrepancy between tablet shipment/sales and traffic figures. On the one hand you have the IDCs and Gartners of the world reporting tablet "shipments," showing iPad rivals gaining. On the other are the companies reporting the actual traffic they're seeing, which indicates the iPad still dominates all other tablets by a huge margin.
IDC's Q2 market share data (based on "shipments") argue the iPad has a 68% global share. That's up slightly from Q1.
However, earlier today, digital publishing platform Onswipe put out some data that show that the iPad's share of traffic generated was about 98%. This finding was based on analysis of almost 30 million impressions on 1200 sites earlier this month.
The iPad's nearest traffic competitor, according to Onswipe, is the Galaxy Tab with 1.53% of tablet traffic.
Ad network Chitika has previously published similar numbers. Earlier this summer Chitika found, based on millions of impressions on its ad network, that the iPad "accounted for 94.64% of all tablet-based traffic." The nearest competitor, again the Samsung Galaxy Tab, had "a lackluster market share of 1.22%."
So while Kindle Fire and other tablet devices (e.g., Samsung Galaxy Tab) have sold millions of units, for some reason these devices are not showing up in the traffic logs of publishers. That could well change in the coming quarter with better Kindle Fire devices and the success of the Nexus 7. But for now there appears to be a strange gap between device sales/shipments and traffic figures being generated by tablets.
Apple and Amazon are the two major companies that could really shake up the "mobile payments" landscape. To some degree Apple is on deck to do that with its mobile wallet Passbook. However consumers remain to be educated about Passbook and its capabilities.
In addition, we're eventually likely to see iTunes stored credit cards become available to Passbook -- though the current iPhone is incompatible with NFC. Execution at the POS thus would be an issue unless Apple uses different materials in its future handsets.
Amazon is another "sleeping giant" in the realm of mobile payments. Indeed, from an "m-commerce" standpoint, Amazon is already in mobile payments with its existing "Checkout by Amazon" platform. However TechCrunch reported a rumor that Amazon was developing a Square competitor (SMB dongle). I wouldn't be surprised if it happened -- and relatively soon.
Amazon already has a developed payments infrastructure that supports e-commerce (online and in mobile) as well as a peer-to-peer PayPal rival. In addition Amazon may be second only to Apple in terms of the number of consumer credit cards it has on file.
While Apple claims 400 million consumer credit cards on file, Amazon has something above 200 million. The company could almost flip a switch (notwithstanding the POS issues) and become a major player in "mobile payments." It could also quickly enter the segment with the introduction of a Square-like dongle and/or the acquisition of another mobile payments provider (e.g., Braintree, Boku).
We should expect news along these lines from Amazon in the next six months. I would be very surprised if the company sat on the sidelines very much longer.
Far too often in tech journalism and blogging a provocative headline is betrayed by a superficial or "content-free" article. Such is almost the case with a story in the Wall Street Journal that carries a provocative headline Mobile Ads: Here's What Works and What Doesn't.
In a 1,000+ word article with such an intriguing title there's very little light shed on the subject. Here's the substance in the piece:
In fact the article doesn't do very much to illuminate (beyond search) what types of ads are truly working on mobile devices. And the big discussion that the piece neglects is ad creative. More than any other variable ad creative is responsible for the success or failure of the campaign.
There's also no discussion about various flavors of ad targeting and local targeting in particular (although that's implied in the Zillow mention). The article also says nothing about the efficacy of deals or offers as a driver of mobile ad response. Consistently deals/coupons/offers are cited by consumers as the category of mobile advertising they're most interested in.
Finally, mobile loyalty marketing (vs. media/ad buying) and mobile CRM can be extremely effective marketing tools but these too are not mentioned.
So much for "what works and what doesn't."
Nokia CEO Stephen Elop famously opined that there would have been less "opportunity for differentiation" had Nokia developed Android handsets. So it went with Microsoft -- and the two negotiated exclusivity provisions and other agreements. For example, Nokia Maps replaces Bing on the new Lumia 920. And Windows is the only software being used on high-end Nokia smartphones.
As part of the overall deal Microsoft is also giving Nokia billions of dollars in payments and support. What probably would have been better for the Espoo, Finland-based company is a deal that gave it the flexibility to develop Windows and Android devices, much like Nokia's Asian competitors Samsung and HTC.
To date Nokia has sold roughly 7 million Lumia units, with 4 million of those sold in Q2. Accordingly there is some positive momentum. But it's far from clear how Nokia handsets will fare in Q4 2012 with the iPhone 5 and very popular Samsung Galaxy 3 and Galaxy Note 2 competing for consumer attention.
Though impossible to estimate with any certainty, my speculation is that had Nokia produced its current hardware but with an Android OS version it would be looking at millions more units sold (perhaps 2X - 4X). My view is that the drag on Nokia handset sales is Windows rather than the hardware. This is especially true in the US market where Lumia sales are below 1 million units.
Indeed, comScore (see chart) continues to report declining Microsoft market share in the US. It's now below 4 percent. Windows Phone 8 is supposed to change that but there's nothing to indicate that the new devices will see an explosion of consumer interest.
It's not entirely clear why Nokia didn't reserve itself the option to produce an Android handset. Perhaps there's an unannounced "escape clause" that allows Nokia to explore alternative operating systems if the existing Lumia line fails to deliver enough sales for a long enough period of time.
Appcelerator released its Q3 developer survey. The quarterly survey this time polled more than 5,500 developers globally on their attitudes toward various platforms and future-trend predictions.
The survey result that's going to get most of the attention is the one that found 66% of developers believe "that it is 'likely to very likely' that a mobile-first social startup will disrupt the market for social applications on mobile devices and take market share from Facebook." Indeed, this describes Instagram before Facebook acquired it for roughly $1 billion.
Other top-level survey findings include the following:
The survey also indicated that developers were interested in Windows Phone 8 smartphones but that they were taking a wait-and-see approach. Only when Windows Phones crossed relatively high penetration levels would developers turn their attention to the platform in earnest. However developers were more sanguine about the prospects for forthcoming Windows 8 tablets.
It's also interesting that despite sales developers don't seem very interested in the Kindle Fire. Perhaps that will change if the recently upgraded line of Kindle tablets sell well.
Finally it's curious that despite continuing market-share gains developer interest in Android continues to erode. This must be a reflection of the challenges of making money on the platform.
Bango says this will allow users to buy game credits, apps and other virtual goods through "frictionless operator billing, paying on their phone, without the need to register personal details."
Bango also has deals with Google (Play), Amazon, BlackBerry App World and Opera's Mobile Store. The company added that its conversion rates are higher than the industry average for carrier billing:
Conventional operator billing is expected to achieve a 40% conversion rate. Put simply, most mobile commerce customers who click ‘buy’, do not successfully buy. Billing with the Bango payment platform delivers an average conversion rate of 77%. Most users who click ‘buy’, do buy.
While carrier billing is useful in countries where there are many "unbanked" or where the specific transaction is likely to be conducted by a younger user, in the US and much of Europe credit cards are a preferred method of payment by most adults.
Carrier billing is much more widely available than other forms of mobile payments for obvious reasons. However carrier fees are much higher typically than credit card fees and settlement can take months depending on the country.
Even though Facebook eliminated Facebook Credits, which was a surprise to me, it's possible that Facebook will eventually acquire a mobile payments provider. Bango's market cap, for example, is only $118 million. Facebook could buy the company and associated revenue stream, as well as a set of global carrier relationships -- instantly.