According to a recent report, Android has zoomed past Apple in US smartphone OS share, taking the #2 spot with 28% behind Blackberry (36%) but now ahead of Apple iPhone OS with 21% (and, yes, I know that Apple somewhat lamely queried the accuracy of this). Be it as it is, Android is growing (and we all knew that, did we not?). According to Google’s CEO, Eric Schmidt, the company now sees 65,000 new phones being activated per day; this equates to a run rate of 23.7m for the year.
This is good news for handset manufacturers like HTC, Motorola and Samsung (all of who are shipping successful Android devices) as well as Google (which is fairly tightly embedded in the whole thing) but does it also reflect on the wider ecosystem of developers producing applications and services for the platform?
The main points that are usually mentioned are:
- Low overall numbers: Digital Chocolate’s CEO Trip Hawkins moaned the company sold less than 5,000 units of its hit game “Tower Bloxx” on Android Market, which was indicative for the lack of uptake. If that is so overall, may remain to be seen. I beg to take into a account that Android as a platform is fairly new and the overall install base is still smaller than its competitors.
- High price-sensitivity: according to an AdMob survey in January 2010, 12.6% of Android apps are paid vs. 20.4% on iPhone OS; the same survey revealed however that the average monthly spend was actually similar on Android ($8.36) and iPhone ($8.18) though higher on iPod Touch, which runs the iPhone OS, too ($11.39).
- Return policy: Google allows users to return an app for a full refund within 24 hours of purchase. This is seen particularly onerous for games (a lot of which can be played start to finish inside that time frame).
- Discovery: developers feel Google fell well short of Apple on this one. There is no possibility to discover apps from outside a mobile device (i.e. no iTunes) and Google has not really done anything in terms of marketing either (very much unlike Apple).
- Ease of purchase: I would like to add ease of use of the buying process. Registration with Google Checkout is a far, far cry from setting up an iTunes account. This will very likely change very, very soon as Google will add carrier-billing now that it decided to move distribution of its branded Google Nexus One from D2C web-only distribution to the usual carrier model.
So what about it? Let us not forget how young Android is – even compared to the adolescent iPhone. The platform launched from an install-base of zero some 18 months ago, with the HTC G1 being the only device out there – and available through a single US carrier, T-Mobile (with a market share around 12%). Whilst I do not want to take anything away from Apple’s superior accomplishments with the iPhone, the growth of Android is not too shabby either! And with a plethora of manufacturers deploying Android-based handsets now (cf. the growth numbers above), Android is likely to be powering into the fore even more (irrespective of whether or not the above stats on it overtaking iPhone OS in the US already being true).
Price-sensitivity is not actually as bad as people think: the aforementioned AdMob survey shows nigh identical average spending patterns. Personal impressions may again be hampered with by early experiences: be reminded that, initially, there were only free apps out there. They will surely still be hanging around, but will they also for much longer?
Apple has always been extremely scrupulous on approval of applications on its platform. And whilst this may now be held against it every now and then (e.g. in the case of nipples or Pulitzer-price-winning political cartoons), it has helped it to uphold a fairly high standard of quality, which Android was lacking (initially) and which even led to “crap-filter” apps. One can however safely assume that this will change once the market size improves: Apple’s margins might be superior to everyone else in the world but that does not mean that the margins game developers can achieve with it are the same. With Android OS primed to expand at a much faster pace, the numbers will clearly speak for it, and – I would posit – that will bring more and more quality to the store, with the fads sinking fast.
Also, do not forget the big brands: they do not necessarily care for a small share of the audience only. Whilst Android was fledgling and just starting up, they may have held back but, ultimately, they are about reach, and Android is certainly bound to deliver that. I would therefore suggest that we will be seeing an influx of large brands (gaming and otherwise) onto the Android platform very soon, and this will also help user orientation as to what to go for and what not.
The discovery of apps will also be helped by the more open nature of Android. There have been a number of announcement for curated stores by carriers (e.g. Vodafone, Orange, Verizon Wireless, Sprint, etc.), and these will certainly not be allowing a free for all! Besides that, the app store model does per se pose some challenges on developers: the more successful a platform (and/or store) is, the harder it is to be discovered. One might need to look for other solutions in that respect…
The billing side of things is bound to improve, too. With carrier-billing around the corner (cf. supra), this will get easier and better. And also easier and better than it is on the iPhone: charges will simply appear on your carrier bill (smart pipe anyone?). Besides that, the business models for games are undergoing significant changes anyhow: Freemium takes centre-stage, and so it should: the model allows people to try a game out and be charged for it only when they know that a) they like it, b) what they are being charged for (e.g. that coveted sword, a couple of precious lives, or that cool background theme).
Remains the return policy. I have been raising this with Google, and it must be pointed out that similar things exist on the iPhone (they’re just “better” hidden). So besides the obvious (Google’s good intentions came back to haunt them), it is also time to think of new business models (cf. Freemium). It is not something constrained to Android: transparency requires you to deliver value. If you do, there are good and transparent means to monetize that value; and users will follow.
So, yes, there is game in Android. If you don’t believe it now, just wait for it! 
Today seems to be the day of “the others”, huh? First Android, now Symbian. But the news are too significant to ignore:
Nokia’s app store Ovi is now clocking 1m downloads a day. Make that 300m p.a. Compare this to Apple’s, what, 5.7m per day. That was c. 1 year ago though, so let’s double that, shall we? So, 1/10 then shall we say?
However, Nokia and its much maligned Ovi Store shows that it can actually starts flexing its muscle (what the law of numbers can mean, I showed on the example of Vodafone: its app store is bound to deliver – even on the abysmal uptake of legacy J2ME devices – some 200,000 downloads a day).
Nokia says it is growing 100% month-on-month, and with this pace would overtake Apple in the near future. Doable? Almost certainly! Why? Because of the law of big numbers. Nokia has about 5x as many smartphones out there as there are Apple iPhone and iPod Touch devices combined, which of course means that Nokia would overtake Apple in terms of total app downloads when each Nokia smartphone user would only download 1/5 of what iPhone/iPod Touch users download. Same fun? Arguable…
I do not know how many devices come preloaded with the Ovi Store but this has always been a huge driver: embed and prosper. Nokia confirmed as much, too. But let’s only assume that it is a tiny fraction (none of the legacy devices out there had it embedded, that’s for sure). And it shows you the potential: Nokia has a whopping 1.3bn phones out there (yes, you heard correctly), and let only a fraction of these use the Ovi Store, you are looking at a massive number, outstripping Apple immediately. Now, I doubt that they will outstrip the App Store in terms of apps per user but there is no team that plays football as well as FC Barcelona, and the others don’t give up either…
Nokia has made a lot of mistakes recently, with its stores, and others: to come out with something that was thought to be “good enough” is bad: strive to be the best at least, will you? Incidentally, it might have avoided the scrambling it finds itself in since the Apple app store launched. Hah, who would have thought? But let’s be fair: Nokia went about its business better in the past, it has unprecedented scale. Examples? What is the best-selling consumer electronics device of all time? The Nokia 1100 with more than 200m sold devices). Does anyone remember sub-10 Megapixel digital cameras? Well, there are few left, you see. Nokia killed that market by putting out camera phones with Carl Zeiss lenses: good, good stuff. I was in the room of the hotel in Zell am See when they laid the growth curve of camera phones over the shrinking sales curve of digital cameras. Impressive! Stand-alone PDAs? Gone. GPS devices? Hardly existing outside phones anymore (even Tom Tom satnav devices are offered with 50% discounts this Christmas).
It’s not over yet, it is only the beginning! Oh, and then there will be the mobile web to come, huh? Just wait for it!!! It’s bigger than the “other” Internet already (warning: this is one of Tomi’s monster posts… !
I am (nearly) terribly sorry that I appear to be cross-posting a lot of great stuff from the good folks at Gawker/Gizmodo these days rather than furthering the world’s knowledge with my (presumed) insights but this one is – yet again – hilarious:
Image credit: http://gizmodo.com/5419435/a-romance-flowchart-when-is-it-inappropriate-to-use-your-iphone
It is conference season and one of the more exciting ones kicks off in Berlin this week: Mobile 2.0 opens its gates on Tuesday and boasts an exceptional line-up to look at the future of mobile.
The very, very high-profile set-up of speakers includes:
- Olivier Laury, Content Director, Bouygues Telecom
- Jonathan MacDonald, Managing Director, JMA
- Damien Byrne, Head of Entertainment, T-Mobile
- Mark Curtis, CEO, Flirtomatic
- Amer Hasan, Sr Manager Apps & Developer Programms, Vodafone Group
- Alistair Hill, Analyst, Comscore
- Antoine Vince Stabyl, CEO, ItsMy.com
- Romi Parmar, CEO, The 3G Dating Agency
- Olaf Kroll, Director Business Development Europe, MySpace
- Chris Wade, CEO, Shozu
- Antony Beswick, Global Strategic Product Manager Social Networking, Ericsson
- Stefanie Hoffmann, Founder Aka-Aki
- Jonathan Medved, CEO, Vringo
- Mo Firouzabadian, Global Business Line Director – Carrier Solutions, Buongiorno
- Ilja Laurs, CEO GetJar
and many, many more, including, yes, yours truly (I’ll be on two panels, namely on the succinctly titled panel on “redefining the mobile content marketplace: exploring the growth, development and industry implications of mobile app stores” and on “building strategies around the drivers of innovation in mobile web 2.0″).
You can register here, and, believe me, it’ll be worth it. It is an exciting topic with top speakers in an exciting city. Make your way over and join us!
See you all in Berlin! Ping me on Twitter (@vhirsch) if you want to get in touch.
There have been reports (referred to by this here) pondering if Motorola grabbed an “exclusive” deal with the Google-led Open Handset Alliance for Android 2.0 on its Droid (or, in Europe et al, Milestone) handset. There does not appear to being any formal confirmation of this but it was mentioned that, anecdotally, other vendors (and fellow members of the Open Handset Alliance) like HTC, LG, Kyocera and Samsung were still deploying version 1.5.
They quoted industry analyst Ross Rubin as to why Android 2.0 debuted on a Motorola device:
[...] There could be several reasons. Verizon’s subscriber strength and more direct competition with AT&T and the iPhone may have led it to push for Android 2.0 to be more competitive. Or it could be simple product development timetables. Moving forward, HTC will want to put its Sense user experience on top of Android 2.0, which requires development time. Google wants a healthy Android ecosystem and a competitive Motorola contributes to that.
The article went on to refer to the respective releases for 1.0 and 1.5 (both to HTC). However, one might argue that, for the first two releases, there was not much harm done in working more closely with HTC as they were the front-runners on deploying an Android phone, so that the concerted marketing buzz etc might have been justified. However, now that there is a large number of vendors deploying, one might query the compliance of the term “open source” with such exclusivity arrangements.
It also highlights the dominance Google has in the Open Handset Alliance which might, longer-term, lead to assertions that Google is in fact using the open source road as a cover to push what is effectively an OS largely driven by them. I am not implying that it is and a healthy ecosystem with multiple strong is important in particular for the launch of a new OS in a space so full of powerful multi-nationals but there is a fine line to walk in order to get it right.
A couple of weeks ago, I pondered Spotify’s impact on music business models and suggested that mobile may have a role to play in the monetization end of it (which is, unless you’re Twitter, an inherent part of a business model indeed). It didn’t take them long:
Today, the UK arm of 3 – always one of the more creative carriers - announced a handset (and not a bad one either) to be bundled with Spotify Premium (i.e. on the go and no ads): users will pay £99 up front, and then £35 a month for 24 months for a tariff including a Spotify Premium subscription covering both PC and mobile, 750 minutes voice calls, unlimited texts, data and Skype-to-Skype calls. Listen up: all bandwidth included. For a streaming service. Now we’re talking!
3 said that the Spotify Premium service was
worth £240
which suggests that they might want to stick to the £9.99 price point (which would surprise me). But then it is hard to tell which bit of such announcements is marketing and which actual price-setting for the sake of royalties and such like…
3 also said
that the deal with Spotify would extend to other products in the coming months, including 3′s mobile broadband service.
Again, I am curious about the price point: the way it is, it would be a nice marketing deal for Spotify but it could be said that not much was going for taking exactly that offer vs just signing up as it is already. A little discounted however (with the difference paid for by 3′s marketing department) might change the ball game altogether…
It’s all good though: I for one am truly intrigued by the prospect of having more than 6 million tracks (equating to, what?, 6 terabyte or so of music) on my phone!
And one little thing on the side: it is – again – an app and not the mobile web that they choose – in spite of bandwidth apparently not being an issue at all. It is thus another argument for the superiority (for the time being) of apps over mobile web when it comes to UI and input constraints.
