Droid's Solid Start, Nokia's Blues

Analyst polling and estimates put the Motorola Droid weekend "box office" at about 100,000 units a "good start." According to Bloomberg:

Verizon Wireless, the carrier for the device, had 200,000 Droid phones on hand, and most stores sold at least half of their stock, Mark McKechnie at Broadpoint AmTech Inc. said yesterday. Including other models, Motorola will sell 1 million phones based on Google Inc.’s Android software in the fourth quarter and 10 million in 2010, he said.

Motorola and Verizon are competing against a new version of Apple’s iPhone, offered in the U.S. through AT&T Inc. Apple sold more than 1 million of the latest model in its weekend debut in June. Motorola’s share of the global phone market dropped to an estimated 4.7 percent last quarter from about 5.5 percent in the second quarter, the company said last month.

Earlier today I wrote about Samsung's new mobile OS and its rumored adoption of Android (and its own OS) at the expense of Windows Mobile -- and Symbian. And speaking of Nokia, today it began shipping the much anticipated N900 "mobile computer," which is also a phone.

Om Malik gave a mixed but upbeat review of the device and in a blog post today GigaOM tentatively suggested that this Maemo 5 handset  "may be a first step in reversing its fortunes." I'm here to say that assessment is incorrect and that the device -- in the US at least -- is very unlikely to succeed.

First it doesn't offer a strong enough user experience from what I can tell. And priced at €500 (almost US$750) there's absolutely no chance it will succeed as a mainstream device without a major carrier subsidy. The de facto price ceiling for smartphones (with operator subsidy) is $200. That figure will be used to judge the N900 when it makes it to the US. That means it must have a pretty aggressive subsidy to be competitive. Even with such a subsidy it will have difficulty competing. 

The Nokia brand has limited value (after years of neglect) in the US and there are very few apps that Nokia's Ovi store offers:

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Source: news reports and company documents

It doesn't matter that there are no apps; it's a handheld PC, a "mobile computer" right? Netbooks cost less than this device and thus people with that mindset ("I want a mobile computer") will likely buy a netbook before they buy an N900. As a smartphone it will lose to the iPhone and Android in terms of brand, UX and consumer appeal.

Accordingly, this is not the device that will turn Nokia's fortunes around in the US or probably at "home" in Europe. Indeed, at a conference in Europe last week I heard a number of people discuss how they had left Nokia for the iPhone and how Nokia was "falling behind." That was the phrase they used. These comments are isolated and anecdotal but I consider them to be significant because they were from people who had generally be loyal to Nokia until now. 

I've argued in the past that Nokia's "way back" in the US market lies in cheap but reasonably high functioning smartphones to develop mass appeal, as a springboard for other product launches. However even that may be foreclosed to Nokia with the likes of the Droid Eris at $99 and a $99 iPhone, not to mention sub $200 BlackBerry devices). Because its operating systems are not as strong as competitors' it will have difficulty competing at the high end. A radical step would be to try and acquire a Palm and simply throw Symbian and Maemo away.

Nokia retains global handset and smartphone leadership but its share continues to erode. 

Canalys Smartphone Sales and Share Data

Research firm Canalys put out Q3 smartphone sales and share data that tracks handset sales and market share for the major platforms and providers. Here's the top-line from the firm as well as their charts and figures:

Global smart phone shipments in Q3 2009 rose 4% year on year, slower than the 13% annual growth seen last quarter, and held back primarily by a 6% fall in EMEA. Shipments in North America were up 5%, but the APAC region saw a remarkable 26% rise after several flat quarters. 

Nokia retained its worldwide smart phone lead, with a share of 40% – slightly up on its year-ago position, but down almost 5% sequentially. RIM held onto second place with a largely unchanged (compared to Q2) share of 21%, while Apple reached a new high of 18% share in third, significantly up from the 14% it held in Q2 as supply of the iPhone 3GS improved in many countries. HTC retained its fourth-place position with 5% share.

Looking at the market by operating system, Symbian’s overall lead shrank as its share fell to 46%, ahead of RIM and Apple. Microsoft remained in fourth with its share dipping slightly below last quarter’s previous low point of 9%. The proportion of smart phones running Google’s Android OS climbed to almost 4%, from just under 3% in Q2.

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Compare data from:

Is Vodafone 360 a Model for Other Carriers?

In this new era of branded handsets and OEM app stores carriers are having to scramble to figure out how to remain relevant to users and prevent connectivity from becoming a pure priced-based commodity. Several US carriers, Sprint, AT&T and Verizon, have all anounced apps stores and are courting developers. I'm very skeptical that these app stores will be very successful among smartphone users (given the competition from the OEM app stores); however I could be wrong.

I think there is an opportunity for carrier app stores among lower-end phones. (See also Microsoft's OneApp, along these lines.)

In the UK Vodafone, minority owner of Verizon Wireless, has officially launched Vodafone 360, a multifaceted service that offers social networking apps/tools, photo tagging/sharing, online backup and enhanced mapping. Will this turn out to be like "bloatware" on PCs or will it be a valuable suite of services that prove compelling and "sticky" among users?

he group communication aspects of the service could prove to be quite popular. Of course it all depends on how well these things work in practice. 

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Vodafone is very aggressively marketing 360 across London and chiefly emphasizing the social elements of the service. The marketing and "value proposition" are not unlike the social software layer on the Motorola CLIQ/DEXT (through Orange in the UK). 

If the Vodafone 360 service proves to be a hit it could be something of a model for other carriers -- value-added services built around contacts, with a PC tie-in -- which must be creative, even experimental, to now avoid the "dumb pipe scenario."

Opera: We Save Consumers $8 Billion per Year

Opera has released its monthly State of the Mobile Web report for September. This month's report is focused on the Russian-led Commonwealth of Independent States. The company is also highlighting how its Opera Mini server-side compression of data/sites speeds up the mobile Web and saves consumers money on data charges (unless you're on an unlimited plan of course).

Here are some of the data and findings from the report:

  • In September 2009 more than 35.6 million people used Opera Mini
  • Those 35.6 million people viewed 15 billion pages in September 2009 . . . On an average day, Opera Mini users view 500 million Web pages on their phones.
  • Opera Mini users generated nearly 227 million MB of data for operators worldwide in September 2009 . . . Opera Mini is compressed up to 90%, meaning Opera Mini servers processed up to 2.1 petabytes of data this month.
  • Users in the top 10 countries save up to 672 million USD per month, or over 8.1 billion USD per year.
  • On a monthly basis, users in the United States and the United Kingdom save the most money using Opera Mini, based on their usage and the average cost of browsing (per MB).

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One thing that's great about the data Opera provides is that it reflects a part of the market that typically isn't captured by all the smartphone focused reports.

Note Yahoo's gains in the UK and US, especially the US. Also in the US most of the top ten handsets are BlackBerry, which offer a generally poor mobile Web experience today. RIM has promised to change that "within a year." We'll see and we'll see how that impacts Opera usage in the US. However in the Windows Mobile smartphone we demo'd (HTC) Opera was pre-installed as was IE. It's probably safe to say that Opera's brand is strong in mobile than on the PC. 

For additional data and information on more countries you can get the full report here

BBC Finds Tepid Interest in Mobile TV

The BBC has decided not to go forward with ambitious mobile TV syndication plans, in another sign of lackluster consumer interest in mobile TV. In a year-long trial with top mobile operators (save O2) the BBC found limited interest among users. According to a published report:

The 12 month trial was held by the BBC last year in partnership with Orange, Vodafone, T-Mobile, 3 and Sky. A subsequent BBC consultation document said the trial results ‘suggested that the level of demand for content delivered via 3G is uncertain and may, at least in the short to medium term, be relatively small’.

At its peak, only 580 users per day accessed the BBC’s TV channels during the trial.

Apparently however the BBC still has plans to stream Olympics coverage to mobiles. 

These findings are consistent with limited consumer interest in the US in "mobile TV." Mobile video continues to grow as a broader category; however consumers have little interest in paying premiums to watch TV on their handsets. Pricing and user experience are the central challenges for mobile TV. As part of a bundle to lure subscribers into an "unlimted" tier of service, mobile TV may have some appeal. 

However given increasing price competition among US operators such deals may be unprofitable for both them and the mobile TV vendors. Eventually we predict that TV subscription revenues will provide only a small amount to the involved parties and most of the "mobile TV" revenues will come from advertising. There may eventually be some appeal for on-demand programming on a per transaction basis, but that will probably need to wait for 4G. 

Is Palm's Acquisition Inevitable?

I have a like-hate relationship with my Pre. The device is elegant as a phone; as a mobile Internet device it leaves a lot to be desired. Simple and obvious things have been left out: no voice diailing or searching, no virtual keyboard, no predictive text or auto correct and so on. But next to the iPhone it's in some ways the best device in the market.

It can't do everything that the Android devices can do but it's crisp and more "coherent" (integrated) in some ways than Android. But the Pre and the forthcoming Pixi seem destined to be overshadowed by the iPhone, Android and probably RIM's devices. Depending on how Palm's EU push and the Pixi do, the company may or may not be bait for an acquisition.

By whom? By Microsoft or Nokia, that's whom. 

Palm's market cap is more than $2 billion so it would take some number above that for either company to acquire it. But it would also take a big mea culpa and admission that Symbian/Maemo or Windows Mobile were essentially dead ends. Neither Microsoft (which plans to release WinMo 7 next year) nor Nokia is ready to do something like that just yet. 

Microsoft will need to introduce 7 and see what the response is. If 7 fails to ignite the imagination and sales then more drastic measures may be in order. By the same token if Nokia continues to see its position in the market deteriorate further it may similarly be time to make a big acquisition (Palm would also be a way to get back into the US market in a potentially big way). However the NAVTEQ acqusition, at $800 million, has so far failed to pay off or pay meaningful dividends for the company as far as I can tell. So the company may be reluctant to shell out huge money in another takeover bid. 

Palm itself will resist any takeover discussion until it's clear how the new WebOS and related devices are doing (at least a year from now). But right now at least they're not doing as well as Palm had hoped. At a lower price point, the Pixi might be the right device for the company, but the Pre has to be seen as something of a disappointment. 

If the Pixi doesn't take off, and there aren't any new devices up Palm's sleeve, and Nokia and Microsoft's fortunes don't improve significantly we may see one or both companies talking to Palm about taking it over. Right now an acquisition isn't inevitable (or even likely), a year from now it could be an entirely different story. 

Apple Earnings Call: iPhone Comments

The following are excerpted iPhone-related comments from the Apple earnings call transcript (Seeking Alpha). . .

Apple CFO Peter Oppenheimer:

We are thrilled to have sold almost 7.4 million handsets in the September quarter. That’s a new company record and an increase of 7% over the prior September quarter when we increased channel inventory by 2 million handsets following the introduction of the iPhone 3G and the dramatic expansion of geographic distribution. iPhone sell-through in the quarter increased 38% year over year . . .

We are looking forward to selling iPhones in China beginning later this month as this very large market represents a great opportunity to expand iPhone's reach even more broadly. We also plan to expand our carrier relationships in the U.K. and Canada.

The Apps store continues to be an unparalleled success, with over 85,000 apps available and over 2 billion customer downloads to date, including over half a billion downloads in the September quarter. In addition to adding more apps at an amazing pace, we have continue to enhance the Apps Store experience with iPhone OS 3.1 which includes new features such as genius recommendations and a streamlined way to organize apps within iTunes.

Recognized revenue from the iPhone handset sales, accessory sales and carrier payments was $2.3 billion during the quarter compared to $806 million in the year-ago quarter, an increase of 185%. The sales value of iPhones sold during the quarter was $4.5 billion.

Question (multiple carriers, pricing changes):

[If] you start to go to multiple carriers can you talk a little bit about the pricing of the phone when you go from exclusivity to multiple carriers? And obviously, not specific but any sort of color we can have in terms of pricing dynamics change on the phone from you to the carrier?

COO Timothy D. Cook:

Our pricing is confidential . . . so it’s not something I could comment on in detail but generally speaking from markets where we’re already selling I would not expect to see a wholesale price difference as we bring on other carriers. However, the end user price is really set by the carriers themselves so you may or may not see a street price difference.


So when you go from exclusive to multiple carriers, you wouldn’t necessarily see change in pricing that you are charging the carrier? Is that correct?

COO Timothy D. Cook:

That’s correct.

Question (competition for the iPhone):

There’s a lot of obviously wannabes that are coming to market in the season, particularly Android and many of them are offering touch screens and richer browsing and media and app stores and are being given carrier support. How do you think about maintaining your momentum and differentiation amidst that kind of environment?

COO Timothy D. Cook:

Well, Mike, we feel great about how we ended the fiscal year with selling 7.4 million, as Peter talked about in the preamble. And that put us over 20 million -- almost 21 million for the fiscal year, which was up 78% from before. And so we have significant momentum.

Also when you look at the ecosystem that we’ve got with iTunes and the Apps store with the Apps store having over 85,000 apps, which is a country mile more than anyone else, plus the very strong product pipeline that we have, we feel very, very good about sitting up and competing against anyone.

Frankly I think that people are really just trying to catch up with the first iPhone that was announced two years ago and we’ve long since moved beyond that.

Question (iPhone enterprise performance and Europe):

I have a question on I guess the enterprise business. . .  [On] your iPhone business, any color you can share with us, the break-out between consumer and enterprise? At least qualitatively and how that has been trending?

COO Timothy D. Cook:

The iPhone is either being deployed or being piloted in well over 50% of the Fortune 100 and from an international point of view, if you look at Europe, this is true in about 50% of the Financial Times 100. And so we feel very good with the progress that we've made since the iPhone 3GS was announced.

Also, another very key market for us, that some people call enterprise, is that over 350 higher-ed institutions have approved iPhones for their faculty, staff, and students. And in addition to both of these, we continue to be very happy with our sales in the government arena.

Nokia Reports First Loss Since '96

The globe's largest handset maker reported its first quarterly loss since 1996 today. Here are the big numbers from the Wall Street Journal and Bloomberg:

The largest mobile-phone maker took goodwill impairment charges of €908 million ($1.36 billion) on Nokia Siemens Networks, its network equipment joint venture with Germany's Siemens AG, as third-quarter sales at the unit fell 21% on year to €2.8 billion.

The company sold 16.4 million smart phones, it said. Last quarter’s smart-phone sales were 16.9 million.

Sales of the N series multimedia phones were 4.5 million in the quarter, the company said, less than the 4.6 million reported last quarter. Nokia sold 4.4 million of the E series, consisting of business-oriented models that compete with Research in Motion Ltd.’s Blackberry, compared to 4.7 million reported last quarter.

According to Gartner's Q2 smartphone numbers, Nokia has 45% of the world's high-end handsets. However that number will continue to go down with increased pressure from Apple, Android and RIM. Its stronghold in Europe is even under threat long term unless Nokia can improve its user experience considerably.

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I've argued that in the US (re smartphones), absent a low-end, low-cost strategy, Nokia is all but done. There are just too many competitors and the Nokia brand has no resonance at this point in America. However Nokia could gain some traction with a new netbook in the US market. It will sell for $299 but requires a 24 month, $60 per month AT&T contract (which could hurt sales).  

T-Mobile Data and Voice Price War?

To every potential price war I say "bring it!" T-Mobile, which just suffered a massive PR snafu with the sidekick data loss disaster, is potentially going to lower the cost of unlimited data and voice plans in the US to lure subscribers (potentially from Sprint) according to reports. Unlimited plans might come down to between $50 and $80 reportedly. 

If this happens some financial analysts believe that Sprint is the most vulnerable of the big carriers to subscriber defections. However, if prices go low enough, so are the smaller pre-paid carriers. Sprint's Boost pre-paid unit has had a very successful $50 "all in" plan for some time; however the network is the inferior NexTel network and handset selection is limited. So it hasn't attracted many post-paid converts. 

T-Mobile believes that the US market can support four major competitors and suggests that it won't be seeking to do any dramatic deals such as the joint venture with France Telecom in the UK. 

In the UK, the availability of the iPhone from O2, Orange and Vodafone means a big price war with the Apple handseet dropping to free potentially, with a 24 month contract. Something similar might also happen if the iPhone were available from multiple carriers in the US, although it's unlikely that we'd ever see it go free. 

The larger point is that competition (and a certain amount of desperation) is driving prices down. Sprint recently announced a free mobile to mobile calling plan that allows any subscriber to call anyone else on a mobile phone without counting against plan minutes. Only landlines are charged. With the exception of AT&T with the iPhone all carriers have now is pricing -- and to some degree their network reputations -- to compete with. This notwithstanding the efforts of Verizon to be an apps provider or Vodafone to build a social software layer onto handsets. The era of the "dumb pipe" has arrived. 

If T-Mobile USA in fact drops unlimited voice and data plans to $50 or $80 Sprint may be forced to match. However, AT&T and Verizon will likely take a wait and see approach rather than automatically lower prices because they both feel more secure in their subscriber retention.

Nielsen Q2 Mobile Data: Smartphones, Ads, Social Nets

Nielsen blogged about a range of mobile data and user behavior earlier this week. Here's a summary of highlights:

Handset purchase criteria: Mobile consumers around the world applied different criteria when deciding what phone to purchase. Cost was the top factor across the board

US mobile subscriber numbers: the U.S. mobile subscriber base grew 7% to 277 million by the second quarter of 2009, which represented 221 million unique users, adjusting for multi-phone holders. (This argues there are more than 50 million people in the US who own more than one phone.) 

Smartphone penetration figures: Currently, smartphone penetration varies by country. In Italy and Spain, more than one-quarter of new mobile handsets purchased were smartphones, with 28% and 23% market penetration respectively. The United States followed at 17%, Sweden at 13%, Canada-Germany-United Kingdom at 12% and France at 11%.

(comScore contends US smartphone penetration is 12%; our data from earlier this year show roughly 15%)

US voice and data spending: All mobile subscribers spend $57.04 in billed services, with the monthly voice plan accounting for $35.40 and data extras adding $12.10 to the bill. Blackberry owners typically rack up $88.85 per month in charges, with $45.10 in voice plan costs and $28.20 in data extras. iPhone users spend nearly as much on data ($37.60) as they do on voice ($42.00) and have an average monthly bill of $89.35.

iPhone usage patterns: iPhone owners lead the way in media usage when it comes to mobile Internet (89%), text messaging (87%), software/application downloads and location-based services (75%), video/mobile TV (41%) and full track music (38%).

US user access to social networks on mobile devices: The distribution of 18.3 million unique social network users by the top three sites is Facebook (26% reach), MySpace (13% reach) and Twitter (7% reach).

Mobile advertising: One-third of all mobile data users were exposed to some form of mobile advertising in Q2 2009. SMS and MMS comprised the two most popular forms of mobile advertising response. Roughly 16% of consumers responded to mobile ads most frequently via text message, a picture or MMS message, email or by visiting a designated web site. Teenagers were the most accepting of mobile advertising—the acceptance rate declines as age increases. Perceptions of mobile ads were highest among all age groups if it lowered their bill. Consumers age 45+ were the least accepting of mobile ads.

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Regarding mobile advertising, here's what our April consumer survey data show about ad exposures and ad types:

/Internet2Go 4-09

Source: April, 2009 (n=707 North American mobile users, exposed to ads [n=75]) 

iPhone UK Price War & 'World Domination'?

As we said before the newly competitive iPhone market in the UK will be one to watch. With Vodafone, O2 (which just sold out of 3GS inventory) and Orange selling the Apple handset in the UK, we're likely to see a price war. How will that play out as each carrier tries to be the one that lures subscribers or seeks to retain subscribers? Some have speculated that prices will rise on other handsets to offset the deep subsidizes that are anticipated for the iPhone. Will it get to free with a 24-month agreement? (My guess is yes).

This could be a precursor for the US when the iPhone comes to other carriers. There's been considerable discussion in the past couple of days, based on a Morgan Stanley analyst report, that the iPhone could more than double market share in the US once it leaves AT&T exclusivity behind. I would agree and be even more aggressive in predicting that the device might climb to nearly 50% of the US smartphone market if it were available from several carriers. 

Under a multi-carrier scenario like this -- think 2011 in the US -- we'd see aggressive pricing on the device as carriers try to lure and retain customers, as we're likely to see in the UK. I don't think we'd get free iPhones in the US but we might hit a new smartphone ceiling of $99 (currently it's $200 with operator subsidy). 

The iPhone in particular has shifted the balance of power from the carrier to the OEM and OS providers. The UK situation illustrates this very clearly. The carriers are the pipe -- notwithstanding Vodafone's new personalization/PC-crossover strategy -- and that's not likely to be changed by software layers, carrier app stores or social media strategies. 

In terms of handset competition, there are only two smartphone "brands" in the US: iPhone and BlackBerry. Windows Mobile is not a consumer brand; we'll see what happens with "Windows Phone." Android is not (perhaps yet) a consumer brand. Nokia is all but done in the US (absent an aggressive low-end strategy). Globally Nokia remains very strong and Windows will be competitive by virtue of the sheer number of handsets in the market. The Pre has lots of buzz and mindshare at the moment, so it's got a good base from which to build a strong brand. However, usability is mixed and will need to be improved for long-term competitive sustainability. 

BlackBerry's consumer future is not entirely clear and contingent upon improved mobile browsing and overall usability. Android should chug along and grow as more OEMs introduce the handsets and more carriers pick them up. Pricing should get more competitive across the board. And there will likely be consumer confusion as people try and decide between, say, the HTC Android handset and one that appears almost identical but runs Windows. Microsoft can try and leverage cloud services and its PC dominance to differentiate, but the OS needs to get better overall.  

In this climate of intense competition and potential consumer confusion, the iPhone wins. This is especially true if it's available through multiple carriers who are aggressively subsidizing it. So far it's an unbeaten device (except for the dropped calls part) and has strong brand recognition in the market. If the price comes down (to $99 in the US and free in the UK) and it's widely available through multiple operators it will fly off the shelves -- and become the iPod of phones to so many other MP3 players in the market. The other handset OEMs and OS vendors must struggle mightily to avoid that. 

Are You Having an Affair with Your Phone?

Market research company Synovate released findings from a wide-ranging survey of 8,000 mobile phone users in 11 countries (504 respondents in the US). The markets included Canada, Denmark, France, Malaysia, the Netherlands, the Philippines, Russia, Singapore, Taiwan, the UK and US. Here are some of the top-level findings (largely verbatim):

  • 82% of Americans never leave home without their phones
  • 36% of people across the world (42% of Americans) say they 'cannot live without' their cell phones
  • Almost 50% report sleeping with their phones "nearby"

More than two phones + smartphones:

  • 23% said they own more than two mobile phones. Americans and the French are more likely to own more than one phone
  • UK and US mobile users are most likely to own a smartphone: 21% and 20% respectively

Most used features:

Beyond voice and text messaging, the most regularly used phone features were:

  • Alarm clock – 67% globally use this regularly / 56% of Americans
  • Camera – 62% globally / 68% of Americans
  • Games – 33% globally / 31% of Americans

Mobile Internet access:

  • 17% of respondents use email on their mobile on a regular basis: 26% in the US and 25% in the UK
  • 17% access the mobile Internet: UK at 31%, US at 26%
  • 11% say they social network regularly via mobile: UK (17%), US (15%)

SMS behavior, dating and lying: 

  • 31% of people across 11 markets have lied about their whereabouts via text
  • 20% have set up a first date and 12% have broken up with someone by text
  • 20% have set up a first date, including 9% of Americans
  • 12% have broken up with someone via text, led by 23% of Filipinos. Just 4% of Americans have done this
  • 35% agreed that they have hidden behind text to say no or send a difficult message, led by 49% of Filipinos.
  • Least likely to hide behind text are Canadians (79% say they haven't done this) and Americans (71%). 31% agreed they have lied about why they were running late or where they are, led by 57% of Filipinos. Least likely to lie via text (or so they say) are the Dutch (84% say they haven't) and the Americans (79%)

What these data show (once again) is that people find their mobile phones an indispensible piece of personal technology and communications tool. They love them; they're more attached to them than the PC.

The figures above on mobile Internet access are consistent with what we've independently found -- 27% of US users accessing the Internet on their mobile phones. We also found an identical number regarding social network access via mobile phone among US users: 15%

GetJar Launches Smart App Downloads for Publishers

Independent, cross-platform app store GetJar launched what it calls a App Download Page, which enables publishers and developers to consolidate their apps and drive more downloads through their own sites (as opposed to the app stores). Essentially this is a hosted, white label offering that enables a mobile site to detect a user's phone and offer the correct version of a mobile app to download (BlackBerry vs. iPhone vs. Android vs. Windows Mobile vs. Symbian vs. Java). Hence the headline of the press release "GetJar Launches Service to Convert Mobile Visitors Into Application Users."

According to research by comScore and AdMob (n=1,117 US users, 8/09), there are a range of ways that apps are discovered (word of mouth, apps stores, ads, etc.) But the proprietary apps stores and their rankings are the principal way: 

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GetJar CEO Ilja Laurs told me that with the App Download Page GetJar's initial partner Facebook was driving "a million downloads a day" through its site during the trial period. Now that has tapered off to a million a week reportedly. 

Apps have become strategic for many publishers to offer a better mobile Web experience and drive higher levels of engagement and loyalty. In a future webinar we'll feature an apps vs. mobile Web debate with GetJar. 

August AdMob Metrics: Globally Apple, Android Up, RIM Flat

AdMob put out its monthly metrics report showing market share trends, among other things. Here are some of the highlights (verbatim) from August:

  • Worldwide iPhone OS marketshare has increased from 33 to 40 percent in the last 6 months, with substantial share in all regions except for Asia and Africa.
  • Although its marketshare has been declining, Nokia continues to hold 12 of the top 20 smartphone devices in AdMob’s network. Nokia’s N97 and 5800 XpressMusic touchscreen devices were the fourth and fifth most popular smartphones in the UK in August.
  • RIM smartphone share declined only slightly over the last 6 months.  There are 7 RIM models in the top 20 smartphones in North America.
  • Android is growing rapidly in North America and Western Europe. The HTC Magic (my Touch) is a Top 10 smartphone in both North America and Western Europe.
  • Palm Pre also had a strong month due to the addition of new publishers to the AdMob network.

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Business Insider's Dan Frommer savages the report as being a misrepresentation of the market. While I've always cautioned that AdMob's data reflect its own network, which may be iPhone heavy, I believe it's directionally consistent with the broader market. In addition, internal trends -- changes month over month -- are significant and interesting.

Apple has a disproportionate share of mobile Internet activity, especially given its relatively small handset market share. I was speaking with ad exchange Mobclix, which began life as an iPhone apps analytics platform, and the company said that 90% of the activity it sees is on the iPhone. This too is skewed by virtue of the company's legacy. But it cannot be denied that iPhone users are much more engaged than users of comparable smartphone devices. 

This is true in my experience as well. Observing my own usage of the Palm Pre and my iPod Touch. I do email on the Pre and use my calendar (and Pandora). By contrast, my use of the mobile Internet is much greater and broader on the iPod Touch because of its superior user experience. 

iPhone Goes Wide in UK

Ending months of speculation, yesterday France Telecom's Orange announced that the company would sell the iPhone later in the year. In addition Orange rival Vodafone, which already sells the iPhone around the globe (in almost a dozen countries), said that it would also sell the device in the UK and Ireland in "early 2010." O2 had been the exclusive vendor for the device until this point.

None of this was a surprise. But what will be interesting to watch is how the wide availability of the iPhone across the major carriers plays out in a very competitive market. There may be pricing competition as a way to differentiate. To that end Orange said in its release, "more information on pricing, tariffs and availability dates will be released in due course." 

In the absence of any significant differentiation among the operators, the iPhone should now have a non-impact on sales or churn. Thus the operators will probably keep their customers, who might have defected to get the device. However the iPhone itself will likely gain share in the UK relative to other handsets. Individual operators will likely gain data customers however and increase revenues accordingly.

In the US if the iPhone were more widely available, the same thing would likely happen -- more iPhone buyers, more data revenues but little impact to carrier subscriber numbers. This move is clearly a win for the iPhone but offers a more mixed picture for Vodafone and Orange, which must carry (and subsidize) the device to defend against O2. Previously O2 was the exclusive carrier of the device in the UK.

Orange and T-Mobile have agreed to combine their operations in the UK and are forming a joint venture to become the largest wireless operator in that market.

Here's a snapshot of the UK mobile phone market (source: Ofcom):

  • 77 million mobile subscriptions in the UK, more than one per person
  • Users on contract: 30 million in 2008: pay as you go fell to just under 47 million
  • More than 80 billion texts in 2008: 100 texts per person, per month
  • Consumers made 100+ billion minutes of calls in 2008, 123 minutes, per mobile, per month
  • Mobile-only households: 12% of UK HH; compare US: 17% (51 million people)


Related: The Pre goes on sale in the UK on October 13 for free (from O2) with a 24 month contract. 

Struggling to Avoid the 'Dumb Pipe Scenario'

Now is the time for carriers to figure out how to avoid what happened to most ISPs on the Internet, which became "dump pipes" simply providing the connection to services and content that consumers obtained from other providers. In the US Comcast might be an exception to that charge.

However, in mobile, with the advent of the iPhone and movement of the industry toward a similar model -- touchscreen devices with app stores -- the carrier is faced with becoming a marginal part of the mobile user experience over time. There's probably little they can do except to build experiences and tools that are genuinely valuable to users. Most of the carriers have apps store initiatives that are unlikely to rival the handset plays. We'll see. 

In the UK Vodafone has announced "Vodafone 360," which will roll out across its territories in Europe before the end of the year. It sounds very much like Motorola's "Motoblur" service. It seeks to bring contacts and social network updates together in a single interface. It will feature a "connected address book" (Vodafone People) at its core. There will be other apps and it also crosses over to the PC. All this will reportedly work across Vodafone handsets. From the company's release:

  • Vodafone 360 is a brand new set of internet services for the mobile and PC which gathers all of a customer’s friends, communities, entertainment and personal favourites (like music, games, photos and video) in one place
  • At its heart Vodafone 360 has the most personal address book available, bringing together all of the contacts from the mobile phone, social networks and other internet accounts. It works across a range of mobile phones, including the new, exclusive Vodafone 360 phones, and synchs automatically with the PC
  • Connected address book – Vodafone People, open to everyone on any network across over 100 popular mobile phones, automatically synchs all contacts from a customer’s phone, Facebook®, Windows Live Messenger™ and Google Talk™, and will soon also include Twitter, Hyves and studiVZ
  • New suite of internet services accessible on multiple handsets as well as PC or Mac, including a wide range of apps, games, music and mapping services

Well executed it could make Vodafone more relevant to end users. Poorly executed or overly complex and it will fail. But conceptually at least it's a good strategy -- inject a software layer between the handset/content and the user. A related strategy is providing a personalized start page or comparable way to organize content and sites that are frequently used by mobile subscribers. However all of this must be simple, intuitive and work well.

That's a tall order for carriers who are mostly not good at developing Internet-like best of breed user experiences. 

The Pre Coming to O2 in UK, Google App Comes to Windows Mobile

Google's mobile app, with location, is now available for Windows Mobile -- the last of the major smartphone platforms to get it I believe. Microsoft has/had a very strong competitor in its own local-mapping client. I'm not clear when the Bing version comes out. Also, Windows Mobile 6.5 is supposed to include Tellme integration at a deeper level. We'll see what that's like when 6.5 actually arrives. Reportedly it's coming to 30 handsets before the end of the year.

Across the Atlantic, the Palm Pre is coming to UK carrier O2 next month, which has also been the exclusive UK provider of the iPhone. It's rumored that the iPhone is soon going to be available through Orange in the UK but that is not confirmed. Orange and T-Mobile are combining their operations in the UK to create the largest carrier there. 

But back to the Pre, unless the pricing is dramatically different vs. the iPhone (read: less expensive), there's no way that the Pre can compete with the Apple device. As a Pre owner I have grown accustomed to my phone, but I remain ambivalent and annoyed by many of the awkward aspects of the device. And there are many: 

  • Lack of virtual keyboard
  • Cramped physical keyboard
  • No predictive text, no spell correct
  • No voice control/interface
  • Lack of apps (which is improving)

Hopefully some of these issues can be addressed by software updates and some will be remedied in future devices.


Related: Report finds Pre "second only to iPhone in consumer mindshare." 

Another Acquisition: Is Nokia Drifting?

Nokia seems like a confused company, confused about its identity and strategy. TechCrunch is reporting that travel-oriented social network Dopplr is being acquired by Nokia. Dopplr isn't widely used but apparently has a small, loyal following. TechCrunch says that the acquisition price is between €10 million and €15 million.

This is just the latest in a series of acquisitions for Nokia that include social networks, mapping sites and mobile ad networks. At a high level each of these can be justified but they also suggest to me a quality of drift or a potentially lack of a coherent strategy.

Separately there's a rumor being reported by Reuters that Nokia may be interested in buying Palm:

Palm Inc. shares jumped to their highest level in nearly two years on Tuesday, fueled by short covering and renewed speculation that the smartphone maker may be a takeover target.

Why would it buy Palm? For the handsets, for the WebOS? It has both sets of assets, although Symbian is lagging -- hence the introduction of Maemo. I'm reminded of Yahoo, which bought so many properties over the past three years only to shutter many of them. It's kind of like a corporate mid-life crisis.

Poynt & V-Enable Team Up for Lo-Mo Money

Multiplied Media's Poynt for BlackBerry app has been wildly successful, now with over a million downloads. One could argue that Poynt "owns" local search on the BlackBerry. Today the company announced that it had partnered with V-Enable for directory listings and corresponding advertising in the restaurants category:

Multiplied Media Corporation, an award-winning, Calgary-based provider of mobile local search services, and V-Enable, Inc., a leader in local search and advertising solutions for mobile and internet, are pleased to announce an agreement to deliver local directory related content and listings for the restaurant section of Poynt, Multiplied Media's flagship mobile local search application ...

V-Enable has partnered with multiple information and advertising providers to assemble one of the largest national local business listings and advertising networks offered through an automated turnkey platform that matches user inputs based on their search activity.

V-Enable, which came out of the directory assistance world, distributes local listings and ads from a wide range of directory and mobile advertising partners. Here's a video demo of Poynt in action on the BlackBerry Storm:

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Nielsen: Italy Leads with 28% Smartphone Penetration

Nielsen just exposed some of its smartphone data, which is pretty interesting. Italy leads the West with 28% smartphone penetration; in the US it's now 16.9% according to the metrics firm. Here's the demographic profile offered by Nielsen of the typical US smartphone owner:

[P]redominantly male . . . 65% more likely than the average mobile subscriber to be between the ages of 25 and 34, and nearly two times as likely to make more than $100,000 a year.

This makes sense because of the cost of the phones and dataplans. But those demographics should change over time as plans and hardware become more affordable. We will see many $99 "smartphones" in the market before too long. There will also be a category of phones that are very inexpensive and are optimized for certain types of online activities (e.g., social networking and email).

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Picture 18

The 17% figure is probably a good number -- we've been using 15% based on our own surveys -- but what is the source of that figure?

The first chart above suggests an absolute smartphone subscriber number of 26.1 million (comScore says 29 million). If that 26.1 million number were 16.9% of the overall base, the base would be less than 200 million subscribers. According to CTIA, based on carrier data, there are 270 million US wireless subscribers. So I'm a little confused. I will assume the comparison numbers in the second chart are correct.

Smartphone ownership, with corresponding dataplans, is the single biggest variable in terms of mobile Internet usage, engagement and response to mobile ads. Mobile ad and app revenues will accordingly grow with smartphone penetration. So if you're a forecaster, a great deal rides on your assumptions about penetration and growth of these devices.