We'll find out the actual numbers at some point soon but it was estimated by financial analysts that the iPhone 3G sold three million units in its first month. Now US electronics retailer Best Buy is going to sell the device. According to an article in the Wall Street Journal:
Starting Sept. 7, both the eight- and 16-gigabyte models of the 3G phone will be available at all Best Buy stores, except for a handful located in areas where AT&T's wireless service isn't available, Best Buy said.
"Quite honestly, many of our customers come to our store every day asking for it," [a Best Buy spokesman] said. "We're excited we're going to be able to say yes."
Best Buy has hundreds of stores in the United States, Canada, Europe and China. It's unclear whether non-U.S. locations will eventually be able to sell the device. Best Buy also offers buy online, pick up in store capability. It's also not clear whether the iPhone will be among those products that one can buy online and pick up in store.
By making the device more broadly accessible in another chain of physical stores iPhone sales will likely get a boost. By how much is another question to be determined.
HSBC is considering replacing its BlackBerry fleet with iPhones (to the tune of about 200K units). If it happens and other enterprises follow that would be a big deal and ring alarm bells (I'm sure it already is) in the halls of the BlackBerry enterprise kingdom.
First there were the rumors of technical problems and delays surrounding Android. Now there are rumors that the first T-Mobile Android phone (the HTC Dream) will be available in mid-to-late September.
The first Android phone to hit the market will be important and influential in terms of determining how much of a competitor the platform will be for the iPhone. In addition, T-Mobile will be seeking to capture subscribers with the phone and if early sales are strong it may persuade larger carriers (Verizon, AT&T) to offer Android handsets -- although Verizon has said it will permit "any legal handset" on its network.
I'm eager to see and play with an actual Android phone to see how compelling it is.
Strategy Analytics said that BlackBerry devices comprised just over 10% of all Q2 US handset sales. In the smartphone market the battle is shaping up to be between BlackBerry and the iPhone, Symbian will struggle in the US (though it's the global leader). Overll US market leader Motorola is not really a force in smartphone sales. Palm, despite the success of the Centro, is a diminishing factor.
Android and Windows Mobile are unknown variables. Android could be a hit or a flop and, absent substantial innovation, Windows Mobile may find itself overshadowed by these other platforms and thus vulnerable.
One key to success in the smartphone market will be software development. Platforms that are neglected by developers will probably languish.
MediaPost's Steve Smith wrote a column "Waiting For The Local Train To Arrive" in which he expresses skepticism about the outlook for local content in a mobile context:
For the 15 years or so I have been covering digital media, local media has been in a persistent state of becoming. Those piles of local ad dollars always seem so ripe for the picking, and most users are hitting the Web to locate nearby information and services…aren’t they? And yet, moving all those mom and pop stores to buy digital media, and getting users to think of the Web as a local resource, both proved to be a long, slow process with no visible tipping point.
Smith isn't entirely dismissive of LBS on mobile, he just thinks it's very hard and companies are largely unmotivated to make the necessary investments:
It has taken years to get onliners to think of the Web as a local medium, and one wonders if mobile will suffer its own long hard trudge towards getting people to think of their handset as a window into local media. Part of this has to come down to the media themselves. Navigation and discovery on the deck still sucks, and it probably will for a while.
Here are a few responses:
Consumers have for years been way ahead of advertisers and publishers in their interest in local information online and use of the Internet as a research tool before buying offline-locally.
Local applications and various tools coming "online" now (e.g., Yahoo Fire Eagle) will help make that user behavior more transparent to advertisers and more flexible. And dynamic ad platforms (including in mobile) should help address the gap between consumer behavior and advertiser (in)action.
Leap Wireless, which relies on both Verizon and AllTel for roaming agreements, wants the FCC to block the $28 billion acquisition of the latter by the former:
Their smaller rival Leap said risks include less competition and difficulties creating roaming agreements that allow customers of one carrier to use another's services when traveling outside their home network coverage area.
Presumably, compulsory roaming would satisfy Leap. But it's unclear that will happen. It's also unlikely that the FCC will block Verizon's acquisition.
Leap is being sober about its situation. Without some sort of guaranteed access to a national network, smaller US carriers are unlikely to be able to remain independent and would have to merge to have sufficient resources and scale to compete with the larger operators.
Leap has roughly 3 million US subscribers (Q1) and rebuffed a merger overture from rival MetroPCS last year.
Zagat may be first out of the gate with this capability but others will soon follow.
Restaurants is one of the heaviest local categories in mobile and many people will make reservations on the go. Mobile reservations will likely boost OpenTable activity, although the site has only a fraction of the total universe of available restaurant inventory in its system.
According to comScore, here are the top content categories for those with mobile data plans in the US:
Source: comScore (2008), n=2,000
On Friday it was reported that T-Mobile is going to get rid of its conventional deck and create an iPhone style Apps store. Google has said it will likely do the same for Android. Accordingly, the iPhone has not only impacted hardware design it's now affecting fundamental carrier strategies and software decisions.
Despite its derivative nature, the T-Mobile decision is smart on many levels; it may help the carrier differentiate or retain customers that might otherwise flee. It will create new revenue opportunities as well, with an Apple-like revenue split (probably more skewed toward developers in this case).
Much of the historical conversation about "off deck" and "on deck" will fade as the carrier "deck," of necessity, transforms into a personalized start page. Sprint already announced such a move, but with an emphasis on personalization rather than third-party software.
Most of this action will be on smartphones, which are gaining and outpacing sales growth of feature phones.
T-Mobile is the fourth largest U.S. carrier and at one time had talked about buying Sprint:
According to an article today in the Wall Street Journal, the iPhone's Apps Store sold about $30 million worth of software in the first month of operation -- that's with most of the apps being free:
In the month since Apple opened an online software clearinghouse called the App Store, users have downloaded more than 60 million programs for the iPhone, Chief Executive Steve Jobs said in an interview at Apple's headquarters.
Software developers also say they've been surprised by the popularity of their iPhone applications. Videogame specialist Sega Corp. says it sold more than 300,000 copies in 20 days of its $9.99 Super Monkeyball game, in which players guide an orb around mazes by tilting their iPhones. "That's a substantial business," says Simon Jeffery, president of Sega's U.S. division. "It gives iPhone a justifiable claim to being a viable gaming platform."
Apple keeps about 30%, while developers retain 70% of any sales proceeds.
LocalEats is the 9th most popular app in the paid category:
What's striking about the figures presented the article above is that there appears to be a viable business model built around one-time download fees/purchase fees. That's important because ads aren't going to be able to support other than the most-used mobile sites and applications. Monthly subscription fees will likely become less and less viable over time for several reasons.
What's also striking is that while established "brands" -- or well established desktop sites -- do have an advantage, new apps or lesser known brands and sites can emerge on the iPhone and gain traction because of greater usability or some other element (fun, novelty, etc.). Urbanspoon is an example of a little known site that built a popular iPhone app and is now "on the map" so to speak. The NY Times coverage didn't hurt of course.
The iPhone exposed the apps to the market but the apps will continue to drive iPhone sales. This is why the Samsung Instinct and other, similar iPhone clones look weak by comparison, there's limited software associated with them. Blackberry knows this and is trying to develop its own apps ecosystem. Android will have one as well and many apps have already been developed for Android.
But Android phones will have "less tight" integration between software and hardware. There won't be a "branded experience" there in the same way as the iPhone and that will, initially, be to the detriment of the platform.
Om Malik (at the end of his post) has some data on usage of iPhone apps (based on Pinch Media information), which appears to be just over once per day for the most-used among them.
An analyst has estimated that Apple sold 3 million of the devices in the first month.
Late last week UK publisher Yell introduced a new offering to make its mobile services more "holistic":
Yell, the directories company, is launching a new mobile internet service in a bid to join together its 118 24 7 directory and Yell.com mobile offering . . .
Callers will receive an SMS when calling the directory service from a mobile phone. A hyperlink on the text will take the consumer to a "landing page" that gives company content in text.
It will include information a 118 call handler would give to a consumer, such as prices, e-mail addresses and web addresses of businesses.
It will also provide maps and directions to find the advertiser - a service that Yell claims is the first of its kind.
The top "use case" for mobile 411 is someone in the car on his/her way somewhere seeking directions, inventory information and/or hours of operation.
This "multi-modal" model is also what most companies will need to adopt -- if they haven't already -- to optimize mobile offerings and make them accessible and more effective for users who are arrayed across a broad range of handsets.
An individual sport (Volleyball):
More than 100 million people are expected in the U.S. (and perhaps over a billion globally) to tune in.
We get questions about mobile CPMs and ranges. The answer is that "it depends" on the network, the campaign and other variables. However the general range in our survey is $20 to $40, with rates going as high as $120 or more in a couple of outlying cases.
At the IAB mobile show the following was said: There’re a lot of inflated CPMs—anywhere from $25 to $125, which is “completely unsustainable.” In general, Bader sees CPMs ranging from around $7 or $8 to $35. You’re not seeing the $70 CPMs you were seeing a few years ago.”
One big network reportedly just cut rates across the board, which will put downward price pressure on others.
In what it characterizes as a "trial", Google is offering voice search on a toll-free phone line that is accessible in Hyderabad, India (population 10+ million). Callers to 1800-41-99-99-99 reach live operators who provide information on local business and movie showtimes. As with the GOOG411 service in North America, callers are also offered the option to be connected directly to the local business for free and Hyderabad residents will also be possible for users to request this information through SMS.
Like so many voice search services these days, this offering is characterized as a way to gauge user preferences and refine the service before a full-fledged launch.
In a realated story coming out of India, Bangalore-based Ubona Technologies scored Series A funding to help subsidize further development and marketing of a phone-based voice search service for "foodies" in Bangalore. Its patent pending speech recognition software claims that its differentiator is the ability to recognize utterances in various local dialects.
Its Web site exhorts visitors to call the toll-free, automated service at 080-40700000. It says that caller can "just say ‘Mainland China' to get connected to [the restaurant called] Mainland China, or to get their address and phone number." Callers can be connected for free and then "Go on...reserve a table, order a takeaway, or just check out the menu."
Up next for Ubona, according to its Web site is voice search of Automotive, Entertainment, Fashion, Healthcare, Hospitality, Travel & Leisure, Beauty & Wellness, Banking & Financial Services, Insurance and Real Estate.
According to comScore, 132 million people visit a social networking site every month, spending 3.5 hours per month per visitor. That represents about 69% of the total US Internet population. One would thus anticipate that this behavior will translate into mobile. Yet early survey work indicates barriers to adoption.
A recent Vodafone-sponsored study has generated results that are broadly consistent with we found in our study of mobile social networking in North America with Multiplied Media. The Vodafone study was conducted in the UK by ICM Research in May and June of this year as part of a larger, omnibus survey (n=709). The survey was conducted by telephone.
Here are the top-level findings:
Cost was the greatest deterrent to those who didn't access social networks on mobile phones; but this goes beyond social networks alone to all manner of mobile Internet access and activity.
Below are some sample slides from the mobile social networking study we developed (2008, n=1,022). Only 6% of respondents currently accessed social networking sites (mostly Facebook and MySpace) on their mobile devices.
Note: small base
Beyond cost, which is present in our study and the UK study as a barrier to mobile social networking, our study reflected a lack of interest or perceived need: "generally not interested, no need."
But how does one reconcile these findings with the previously reported data from both Vodafone and Opera.
Vodafone (May, 2008):
Top 4 searches on the Vodafone Mobile Internet (VMI) (ranked by most searched first)
Top 10 mobile internet sites on VMI (ranked by most visited first)
Opera (May, 2008):
These Vodafone and Opera data are behavioral data. But there's also reason to trust the UK and LMS surveys. The discrepancy can perhaps be explained by the "early adopter" nature of the Vodafone and Opera browser users. They are potentially a leading indicator of the potential future popularity of social networking on mobile devices.
Cultural factors will likely drive social networking on mobile devices; when the person on your left and on your right are doing it you'll be similarly inclined. Until that time, cost considerations and a lack of need or urgency will likely keep the mass of mobile users from tapping mobile social networking.
It remains unclear whether marketers and NBC will seize the "Olympic moment" to mainstream mobile marketing. I'm skeptical. But clearly fans will be tapping mobile resources (WAP, SMS) to check results and standings. Nielsen Mobile (via Fierce Wireless) has found strong interest in access to Olympics coverage and results on mobile:
What information do users want on the mobile internet?
US mobile users:
UK mobile users:
On the desktop, Google, Yahoo and Microsoft Live Search have created shortcuts and special "onebox" features to efficiently showcase the medal counts and standings. Yahoo has also developed a mobile site (as well as SMS alerts) to provide coverage to mobile users:
Note the Visa banner, which when clicked leads to this site:
The near-term growth for mobile marketing and advertising will come in the form of "mobile response" or other mobile tie-ins with traditional media (e.g., TV, newspapers, magazines). The benefits of this are more self-evident to advertisers and there are fewer questions about reach, analytics, etc.
It will be interesting to see how much mobile is referenced or otherwise promoted by NBC and/or its sponsors during the games. I'm guessing not much. If not, however, it will be a missed opportunity given the huge audiences that are expected to tune in.
The NBC Olympics Mobile website will enable Olympic fans to get real-time access to NBCOlympics.com content wherever they are. The NBC Olympics Mobile website currently offers top Olympic headlines, news for every Olympic sport, exclusive videos, slideshow galleries, profiles of Team USA, and other feature content. During the 2008 Beijing Olympics, the NBC Olympics Mobile website will also offer live results and schedules, medal counts, and detailed TV and online listings for NBC Olympics programming. Mobile users will also be able to watch video highlights, vote in daily polls, and sign up for alerts.
Here's the "alerts" screen:
Forrester's latest demographic research contrasts technology usage and adoption among "Gen X" and members of "Gen Y." Those in Gen Y are currently 18-28 years old, while Gen X are 29-42. (A "generation" used to be 20 years.)
The big "takeaway" is that Gen Y is the first "native online population." That means technology and the Internet are more central to their lives that previous generations, even Gen X.
Here are some of the characteristics of the group according to the Forrester research:
In another "generation" we'll see some of these numbers grow higher, even mobile phone penetration and especially mobile Internet access. Data plan penetration will likely drive more mobile Internet and a further erosion of landlines. We may even see mobile become the primary Internet access vehicle for some number of users.
The Mobile LinuxWorld conference, covered by both InternetNews and InformationWeek, representatives of the LiMo Foundation appeared to reach out to competitor Android/Google to join forces on a common platform to expedite development and create broader reach. Google, for its part, appeared to resist the call:
"Unification for the sake of unification is not the path we decided to go down," [Google's Eric Chu] said during a panel discussion of the mobile marketplace at the LinuxWorld conference in San Francisco. "In the end, what matters most is what consumers are looking for. But having too many people on the design phase, especially early on, would have hurt the project. You could have three different user interfaces and a couple of application layers. That doesn't make sense."
LiMo already has a range of phones from Motorola, LG, Panasonic and others in various markets today. Android phones are supposed to be out (from T-Mobile, HTC) by the end of this year.
U.S. number three carrier Sprint released Q2 results. Losses continued but the company suggested that things were stabilizing:
These continuing subscriber losses compare unfavorably with AT&T and Verizon, which posted subscriber and revenue gains.
Here's more on the Q2 financial results from Bloomberg.
The EU has moved toward broad access to in-flight mobile phone usage and related Internet services. However, the U.S. House of Representatives last Friday voted to advance a bill that would “permanently ban” cellphone use on flights in U.S. airspace.
I agree generally that the prospect of dozens of people talking on cellphones might be disruptive, although one could argue it’s no more disruptive than people talking to one another on the plane.
It’s likely that the following situation will now arise on EU-based carriers leaving U.S. airspace: “We’ve just left the United States, you may use your mobile phones.” A compromise position which will likely survive in the U.S. will be “Internet” but not mobile Internet access. (But if access is permitted via laptops how would they prevent VoIP calls?)
American was the first U.S. carrier to introduce in-flight Internet access on selected flights. Others in the U.S., that have announced similar plans are Virgin America, JetBlue and Alaska. Virgin would allow Internet and email access via a console that is part of the carrier’s in-flight entertainment system (”Red”).
Eventually all major U.S. carriers will probably offer Internet but the question is: will it be available in coach or only business class?
Delta just announced that it will offer broadband on its full fleet.
A post on TechCrunch yesterday suggested ChaCha was cutting the pay rate of its human guides to save costs as a prelude to “implosion.” When I had last spoken to ChaCha the company had presented a very different picture so I decided to investigate and contacted co-founder Brad Bostic.
Bostic told me that ChaCha had been seeing near triple digit growth in query volume and that the company was beginning to introduce advertising, having done a successful mobile campaign with Coke around MyCokeRewards in connection with a Nascar event. He also said ChaCha was gearing up for mobile commerce.
Regarding the compensation of guides, Bostic said that the company was trying to improve the compensation of efficient and successful guides and do the opposite with those who weren’t performing. He told me this was just another step in an ongoing process of refining their compensation.
Based on my history of conversations with Bostic and dealings with ChaCha I have no reason to doubt the veracity of what he’s telling me. But if one was a skeptic one might want additional, “empirical” confirmation of Bostic’s growth claims. I asked the company for some data.
We got time with TheFind CEO Siva Kumar a couple of weeks ago in anticipation of the company's iPhone launch. The company has formally announced its app and it's likely to be a game changer for TheFind, which is a terrific engine but has had limited consumer awareness on the desktop:
TheFind: Where to Shop bridges the gap between online research and offline purchases, enabling shoppers to compare products and pricing -- while out and about -- and ensuring that they find exactly what they're searching for, quickly and easily within their neighborhood. With a comprehensive index of more than 250 million products covering 200,000 store locations, TheFind’s iPhone application aims to be the best resource for savvy shoppers.
TheFind is sourcing local inventory data from Krillion and NearbyNow and will bring that information to the iPhone, together with the phone's location awareness. (Slifter offers a less elegantly presented version of this content.) That means individuals out and about will be able to determine what store near them has the desired pair of Brooks running shoes or the particular flat-panel TV they're interested in.
When they're in store X and it's out of a particular item people will be able to check and see if another nearby store offers the same or a comparable product. There's also nice continuity between the desktop and mobile.
Mobile users are already doing in-store price comparisons on mobile devices and this new iPhone app represents a more complete mobile shopping experience.
On the desktop TheFind offers local shopping as well:
Consistently, consumers use the Internet to conduct product research before buying in local stores. Krillion, Where2GetIt, Shopatron, Channel Intelligence and NearbyNow are creating the inventory data and infrastructure that make possible mobile applications like TheFind and Slifter.
NearbyNow in fact is doing some amazing things with text-based advertising after users reserve products for in-store pick up.
Retail/shopping is a near-term mobile use case and advertising opportunity for obvious reasons. These mobile apps and the supporting inventory data show that product search is just as much a part of "local" as service business lookups.
ABI Research has predicted that mobile social networking with generate $3.3 billion in revenues by 2013. While we agree that mobile applications with social elements will be popular -- although there's very limited adoption today -- there's almost no chance that this sort of revenue can be generated by advertising alone (the release doesn't in fact say advertising will drive all the revenue).It's also doubtful that subscription revenues can exist in a competitive atmosphere where most companies will offer or already do offer free services. If Facebook and MySpace Mobile are free, how can anyone think about charging except on a one-time-only download basis (if then)?
In limited cases, companies such as Pelago/Whrrl or Citysense might be able to charge retailers, some restaurants and selected others for B2B intelligence and data based on tracking of foot traffic and user movements from business to business.
For advertising to work on mobile social networks either targeting or scale or both are required. Blyk, an MVNO in the UK, presents itself in a youth marketing channel, for example. However mobile ad networks may be able to support some companies if they have "enough" scale to cover their basic costs. Yet for other than the largest social networks it's a big challenge to live off ad-support until they can get to scale, if ever.
In all likelihood there will need to be a patchwork of advertising options employed by these sites: search, display and text. Even then it will be tough at the present stage of market development.
Source: Opus-LMS/Multiplied Media (2008), n=826