Mobile Market Wrap-up, September 20

In last week’s mobile market wrap-up, I referenced a rumor that Windows Phone 7 is launching next month. I’ll admit I was impressed at the speed with which Microsoft completed the development of Windows Phone 7 and that they hit their end of year release target, which I thought was an impossible goal they set for themselves earlier this year. Well, last week the caveats started to emerge. Apparently, in a trade-off for schedule, Windows Phone 7 will be available on GSM phones only, which eliminates the largest carrier in the US, Verizon, from launching the device until mid-2011 at the earliest. While the engineering side of my brain understands the trade-off, the marketing side sees one word – FAIL! After seeing how the iPhone’s lock to AT&T’s network has limited its market share in the US, I am surprised that Microsoft would take this shortcut. I guess if you had to cut one of the two technologies, CDMA would be the first to go since it is not as prevalent worldwide as GSM. However, for a project of such importance to Microsoft, I would have figured supporting both technologies would have been a top priority. I have a feeling that Microsoft will regret this trade-off as it will allow Android to become even more entrenched as the smartphone OS of choice on Verizon.

In other handset news, Nokia and BlackBerry maker RIM, two manufacturers that are falling out of favor with investors, made major announcements last week. At their self-hosted Nokia World Show, Nokia touted that they are still the industry leader with 260,000 smartphone activations a day (compared to Android’s 200,000 and iOS’ 80,000). Unfortunately, perception is reality, and while Nokia still has the lead, they are suffering from a perception problem that John Biggs at MobileCrunch so eloquently describes. Along those same lines, RIM announced earnings last week. While the results blew past analyst expectations and a bright future was painted by management, the reality remains that Android continues to rapidly close the gap on RIM’s dominance in North America according to the latest ComScore stats. Both RIM and Nokia had better not be content to rest on their laurels because as they say in the mutual fund world – “past performance is not an indication of future performance.” I’m not surprised that Nokia and RIM are doing well when you look at past and current stats. When you look at trends, though, both Nokia and RIM should be concerned, and I mean very concerned.

As usual, I wanted to wrap up this week on a fun note. Motorola is launching a Star Wars themed R2-D2 Droid handset later this year on Verizon. While the hardware and wallpapers for the device look cool, they are not nearly as cool as this prototype Star Trek Communicator themed Nokia device. It’s quite a shame that only 14 were made back in 2008. I’m not even a Star Trek fan, and I found this concept prototype just too cool. Definitely worth spending the 9 minutes to watch the video.

Mobile Market Wrap-Up, August 16

Yes, I’m a day late this week, but you know how it goes. It’s been one of those weeks – already!

Following up on last week’s statistics, two more interesting reports were released last week. The first I’d like to highlight is from Chetan Sharma, a consultant in the mobile industry. He reports on mobile statistics quarterly, and his latest report indicated that mobile phone penetration is the US is nearing 100%. The number needs to be taken with a grain of salt as a lot of people these days are carrying two phones (me included), so the real number is likely lower – probably around 75-80%. Still yet, even at 80%, it’s clear that the mobile market in the US is nearing saturation and that brands and companies who do not have a mobile marketing strategy are missing out on a great opportunity to connect with consumers.

The other interesting report was released by the Gartner Group. The first statistic to highlight from the report is that mobile device sales grew 13.8% last quarter, so the market is definitely healthy and growing. A more telling statistic was that Android surpassed the iPhone in units sold worldwide last quarter, and outsold RIM in the US. As I pointed out in last week’s wrap-up, Android just keeps on rolling. Units sold is a clear trend of future overall marketshare, so I would expect to see Android make more gains in overall handset marketshare in the coming quarters.

Speaking of Android, two new Android handsets of note were released last week – the Motorola Droid 2 on Verizon and the Dell Streak on AT&T. The Droid 2 is a refresh of the original Droid while the Streak is an interesting “hybrid” device. I say “hybrid” because it sports a 5″ screen which makes it much larger than what people consider a phone but smaller than the new tablet form factor established by the iPad. It seems like an awkward tweener size, so I’m expecting it to be a device people will use a companion to a simple flip phone rather than their primary device. Either way, the diversity of Android devices in terms of screen sizes, features and form factors is exactly why Android is dominating the market. As opposed to the one size fits all Apple approach and the flavor of the month QWERTY keyboard BlackBerry approach, Android devices are available in all sorts of shapes and sizes at all types of price ranges. It’s easy to find an Android device that has the features you want to fit your budget.

Finally for this week is a fun survey that was released by dating site OK Cupid. The survey talks about how to make yourself look more attractive in digital photos (seems like it would be important for online dating). So what does this have to do with mobile? Well, about halfway down the page is a claim that iPhone users have more sex than Android and BlackBerry owners. So here’s the question, are the results of the survey accurate, or do iPhone users just tend to stretch the truth more than their smartphone counterparts?

Mobile Market Wrap-up, August 9

Last week was a big week for mobile industry statistics, with multiple reports released. There was one common theme in all of them – Android is growing rapidly! In fact, one report pegged the year-over-year growth at 886%!!! It’s pretty obvious that Google’s mobile strategy is paying off, as not only is it dominant in the mobile search market (as I pointed out last week), but it’s also making huge gains on the OS side. What’s most interesting is that while Android is gaining market share, a report from Nielsen shows that the iPhone is still the most desirable handset out there. Personally, I’m fascinated by the Android-iPhone battle. Google is taking an “arms dealer” approach to Android by giving any handset manufacturer who wants it a platform to build a smartphone.  Apple, on the other hand, is targeting the market carefully and controlling all aspects of the user experience. The result so far is that Android is winning the battle for market share, but Apple is winning the battle for mindshare and profits, at least for now. I’m interested to see if Apple can continue to rake in the profits as Android gains market share. Something tells me Apple is repeating the mistakes they made in the early days of the PC market, although people keep telling me it’s different this time. I’m not sure I buy it….

One company that is seeing declines in market share is RIM with their BlackBerry platform. BlackBerry has been the dominant smartphone in the US for what seems like forever. However, unless you are addicted to email or are a business user, BlackBerry’s hardware and overall user experience lags behind the iPhone and Android. As BlackBerry users are coming off contract, it’s obvious they are switching platforms. BlackBerry attempted to stem their losses with last week’s launch of the BlackBerry Torch 9800. While it closed the gap on features, it still does not put it on the same level as the iPhone or Android. At this point, RIM needs to stay focused on its bread and butter, the enterprise. As I pointed out in an article last week, RIM cannot serve both enterprise users and consumers with the same platform. They have a dominant position in the enterprise that they need to protect. So while the consumer market is where all the media attention is, RIM needs to stay focused on who’s paying their bills.

In the end, I see Android winning the market share game by dominating the middle and low end of the smartphone market, Apple winning the high end of the market, which is the most profitable, and RIM winning the enterprise. Left on the outside looking in are Nokia, Microsoft and HP. I’m not so sure that any of these three can carve out a piece of the market as I don’t think the smartphone is big enough, at least today, to support more than three strong companies.

Mobile Market Wrap-Up, August 2

News was a bit slower last week on the mobile front. It seems as though the market took a little breather to digest all of the hot new summer phone releases. Speaking of which, we got our hands on the Samsung Galaxy S, or Vibrant as its known on T-mobile. The handset has not disappointed. The device is thin and light, lightning fast, and the Swype keyboard application is awesome. It’s worth a look if you’re in the market for a new phone. Look for the Captivate if you’re on AT&T, and later this year as the Fascinate on Verizon and Epic on Sprint.

With the hot summer handset releases behind us, who is the worldwide leader in the market? According to Strategy Analytics, Nokia (remember them?) sold the greatest share of the 308M handsets sold in Q2. Nokia’s share was 36.1%, follwed by Samsung at 20.7%, and LG at 10%. RIM, the only dedicated smartphone maker in the top 5, came in fourth at 3.6%. So while smartphones grab all of the media attention, the low-end of the market accounts for all the volume. If the market is largest at the low end, then why are all the manufacturers chasing the smartphone market? Because that’s where all the profits are. For example, Apple is nowhere to be seen on the market share list, yet they are far and away the most profitable mobile phone company.

Speaking of market share, a report on mobile search was released by StatCounter last week. At the top of the heap was Google, with a whopping 98.29% share of the market. I’m not sure how accurate the numbers are, but even if they are off by 20%, that’s still a dominant share of the market. If that doesn’t convince you that you should have a mobile presence that Google can index, then you’re losing lots of business to your competitors who do have one – without even knowing about it! Both Yahoo! and Bing, the two other big mobile search providers, account for just 1.25% of the market. On the bright side, I guess Yahoo! and Bing’s share can only get bigger, because it certainly can’t get any smaller!

Finally, just to kick start everyone’s favorite rumor mill, I am going to jump on the bandwagon and say that AT&T’s iPhone exclusivity may be coming to an end this year. Why? Well, AT&T made a statement that they are going to be the premier vendor for Microsoft’s latest mobile operating system, Windows Phone 7. I don’t understand why AT&T would back a competitor to the iPhone unless their exclusivity is coming to an end. It’s time to place your bets. I say that the iPhone is available on another carrier for the holidays, and I’ll predict T-mobile over Verizon since T-mobile’s GSM technology is the most compatible with AT&T and Apple, out of spite, wants to stick it to Verizon for their Android promoting, iPhone-bashing ads. What do you think? Feel free to sound off in the comments!

Exclusivity Does Matter

AdMob released their April 2010 Mobile Metrics report yesterday. As always, it’s full of a bunch of interesting information. However, one key piece of data stood out.

In the US, AdMob is reporting 10.7M iPhone OS and 8.7M Android devices accessed its network in April. That is a ratio of 1.2 iPhones for every one Android device. In the rest of the world, 16.8M iPhone OS and 2.9M Android devices accessed its network in April. That is a ration of 5.8 iPhones for every one Android device.

Why the big difference? The iPhone does not have a carrier exclusive relationship in the rest of the world as it does here in the US with AT&T. In fact, lets look at the ratio of iPhones to Android devices in a few select countries to show just how dominant the iPhone is in countries with no exclusivity:

Country Ratio Exclusivity
United States 1.2 AT&T
United Kingdom 6.6 None
France 10.2 None
Canada 10.8 None
China 0.8 China Unicom

Source data: AdMob Mobile Metrics Report, April 2010

I sure hope that Apple is getting paid well by AT&T, because the data confirms what I pointed out earlier this month – Apple is losing the opportunity to dominate the US smartphone market through its exclusive AT&T arrangement.

Head over to the Admob blog at metrics.admob.com to download the April 2010 Mobile Metrics report and the country specific data.