Category: Apple Page 4 of 8

iPhone outsells N-Series

On 27/07/2009

Last week was quarterly reporting week, and both Apple and Nokia let us have a glimpse on whatever they did. Subsequently, some reported (via Twitter) that the iPhone outsold the N series for the first time.

Nokia first: In Q2, Nokia sold 103.2m units (down 15% year-on-year but 11% as compared to Q1). Total sales of “smartphones” amounted to 16.9m devices, of which 4.6m were N series (the balance being made up of E series and some “numbered” devices, of which the 5800 series took the biggest share). The total number of Nokia smartphones (or “converged devices”) in market was thought to be 41m. Nokia estimated its share of the smartphone market to amount to 41%, which would be up 2 points from the previous quarter. I wonder…

Apple, by contrast, reported that it sold a whopping 5.2m iPhones in Q2 (Apple’s financial Q3), which means that the iPhone outsold the Nokia flagship smartphone series for the first time. A couple of years ago, no one would have thought this was possible! It is noteworthy that this does not even include the iPhone 3GS, which only went on sale after the close of the quarter.

After all the worries about Nokia’s performance (see e.g. here, here and here) and the relevance of Apple’s “minute” market share in relation to the total handset market, this is a very important benchmark: not only does Apple beat Nokia in an important segment (the N-series traditionally spear-headed Nokia’s mass market assault on the higher-end side of handsets) but it also shows the dynamics behind Apple. Nokia’s distribution and incumbent market footprint is hugely superior than Apple’s and yet Apple manages to outsell them. Very impressive indeed!

Is Apple to break iPhone exclusivity?

By Volker

On 18/07/2009

In 1, Apple, OEM

There have been rumours galore about Apple’s exclusive deals for its iPhone all over the place (see e.g. here for Verizon). New reports have now surfaced that appear to confirm that Apple is looking at this option for both the US and the UK (and, if this works, presumably also for other territories):

In the UK, T-Mobile confirmed it was in talks with Apple over stocking the iPhone 3G (the 3GS remaining exclusive to O2, which also has its hands on the Palm Pre) and Orange is “believed”, to be as well.

In the US, the Verizon discussion has been around for a while. A new report now suggests that losing the exclusivity would spell doom for AT&T: the report estimates that as much as 30% of AT&T’s customer are with the carrier solely because of the iPhone exclusivity. This sounds a little high to me: after all, the iPhone penetration in the US is much lower than that (it held just under 11% market share globally in Q1/2009). Are they saying that all the other users (those with the less fancy handsets) just stay on AT&T to share into the iPhone limelight? No, I thought not…

Apple is in any event in a beautiful position at the moment: so far, most of its competitors’ “iPhone killers”(Palm Pre, Blackberry Storm and innumerable devices from Samsung, LG and Nokia) have failed to challenge its numbers and, quite literally, all of the app stores set up by competitors showed meagre results compared to the – now – 1.5 bn (!) downloads in a little over a year from the Apple App Store. The good folks from Cupertino are therefore now in a pretty good position: they proved (a couple of times now) that they shift 1m+ devices – on the opening weekend! They bring a lot of sex appeal in which the carriers, not generally known for coolness, can bask. They cracked the content dilemma and produced a thriving developer community, which made people actually use their phones for all these things that have been promised for so long (iPhones are connected, most others can connect). In short: in carriers eyes, they are – aside from the horrible fact that Apple takes a healthy cut – a really good thing for networks that see themselves locked into cut-throat pricing wars over voice and SMS (bringing in, anecdotally, up to 50% of European carrier profits over the past 5 years) and craving for a way to increase user ARPU (app revenue on the iPhone is, apparently, $27 per device). Happy days…

AdMob on iPhone ad impressions and why Andrew Bud is wrong

By Volker

On 10/07/2009

In 1, Apple, OEM

Mobile advertising firm AdMob has released some numbers on ad impressions on iPhone vs other smart phones and the result is, well, that Apple is basically a 50kg flyweight boxer competing against Sumo wrestlers 5 times it weight (8% smartphone footprint but more than 40% ad impression share).

Now, very (!) crudely put, this does not mean that it is 8 times as successful on mobile advertising. It does mean however that users are 8 times more likely to use applications where ads are being displayed. Here’s some of their stats:

iPhone Apps (in AdMob’s network):

The top iPhone apps had more than one million users in the UK in May 2009
5% of iPhone apps had more than 100,000 active users in May 2009
14% of iPhone apps had between 10,000 – 100,000 active users in May 2009
27% of iPhone apps had between 1,000 – 10,000 active users in May 2009

Mobile web browsing market in May 2009:

UK:

48.7% of ad requests came from Apple handsets (iPhone and iPod Touch)
28.4% of ad requests came from the iPhone
282,493,761 ad requests from users in the UK

US:

45.1% of ad requests came from Apple handsets
25.7% of ad requests came from the iPhone
3,804,373,544 ad requests from users in the US

Global:

31.4% of ad requests came from Apple handsets
18.6% of ad requests came from the iPhone
7,997,946,483 ad requests from users around the world

Interestingly, MEF and MBlox Chairman Andrew Bud (who is being quoted at the end of the article) said that Apple’s app store compared to Nokia’s Ovi Store like a niche boutique to Tesco (or, if you are in the US, Walmart). Is that so? No it is not. And here’s why:

Apple is a boutique with more items on sale than a Tesco megastore. And its (less) customers buy trolleys full of wares. Moreover, their high-spending customers leave the store with a spring in their step and committed to come back the next day.

Nokia is a super-store with gazillion potential (!) customers where 1 in 20 stroll through aisles stocked with not so cool things and most of them walk out without buying anything and, on top of that, feeling fairly downtrodden and frustrated about what was on offer.

So, for the time being, I’d choose the Apple boutique. If that choice changes will depend on whether Nokia will manage to stock their shelves with more compelling wares and improve on their tills (less queuing, more bang for your buck, etc). Oh, and get those cold strip-lights replaced, please!

Top 10 Mobile Phones in June 2009

By Volker

On 09/07/2009

In 1, Apple, OEM

Here’s our monthly update on the best-selling phones as derived from accessory sales by Swedish company Krusell. They seem to be having a new product line: the iPhone shows up now (and as a “new entry” no less). It is arguably to show the limited value of this table in terms of overall sales.

It is noteworthy that June’s #1 phone (Nokia 6300) is a handset that was introduced to the market more than 2 years ago. Now it is a very solid performer (as my wife will tell you) and has been used as a very good-value phone (£0.00 when bought on a pay-as-you-go) by a lot of carrier. Or is it that the phone is now so shabby it needs to be covered by a plush holster? :p

I thought it is also noteworthy that Nokia’s new flagship the N97 (or any other N-series Nokia) is not featuring at all… It might be early days for the N97 but the others?

Well, make of it what you will, here’s the top 10 list (oh, wait, it’s a top 11 this month; woah):

1. (3) Nokia 6300
2. (-) Apple iphone 3G
3. (-) HTC Touch Diamond 2
4. (2) Nokia 3109
5. (-) Nokia E51
6. (1) Nokia 5800
7. (5) Nokia E71
8. (6) HTC Touch HD
9. (-) HTC Magic
10. (-)HTC Touch Pro2
11. (4) Samsung SGH-i900/i910 Omnia
() = Last month’s position.

iPhone App Store once again: how much?

By Volker

On 06/07/2009

In 1, Apple, OEM

It is early July and we have not been reading analysts’ estimates on how much Apple may or may not make from application downloads through its app store for at least, what, 2 weeks (here’s a piece from a while ago). High time for another round then… This time, the number is “a few hundred million at best”, per quarter that is. And to be perfectly fair, the number was tagged as a guestimate. With another guestimate putting Apple’s iPhone revenue to $1.5 bn, the revenue per iPhone to Apple is thought to be around $600. Compare this to c. $27 in apps revenue per device (total number of apps divided by total number of devices). It’s 5%.

It is, I think rightly, pointed out that Apple uses applications as a lever for its hardware sales (“there’s an app for that”), and it is undeniable that a device gains more value the more you can do with it. So if you have a device that cannot only make phone calls, take photos (and now video), moonlight as a music player and a sat nav, etc but also finds restaurants, taxis, flight times and undertakers (yes, it does!), allows you to play all sorts of games and do other silly or enlightening things, the perceived value of the device increases and – relative to that – the perceived fair price for it decreases, which means that every little app increases the value of the iPhone a tiny bit, which in turn contributes to another little piece of profit to Apple in addition to its revenue share from the app itself (lowered price sensitivity due to higher perceived value arguably should result in higher sales).

Now this is largely known and acknowledged that Apple is – at least to an extent – replicating the iPod/iTunes model (though Apple also happened to provide the first commercially successful “cure” to free music downloads; hence a slightly different proposition here). But is this all bad?

Let’s have a look at the thing from an app provider’s perspective: if we take the above numbers (“a few hundred million” per quarter), the annual total would be, say $1 bn for Apple, which in return means that the app store “ecosystem” would generate c. $3.3 bn p.a. across the value chain (Apple takes 30% revenue share). That’s not too shabby for a device with such a small market share.

Also: iTunes (which is the world’s largest music retailer) took longer than the app store to generate the downloads it does today, and it is still early days, is it not?

iPhone Usage

By Volker

On 06/06/2009

In 1, Apple, OEM

Here’s a report about an interesting piece of research into the elusive animal that is the iPhone and Android user, or more precisely that animal’s usage of apps (“… there’s an app for that…”).

The researchers from Gravity Tank chose Android (well, the G1) next to the iPhone because Android Market and Apple’s App Store both allow “unlike older smartphones [sic!] easy access to a range of free or low-cost applications”. Now this is what the (mobile) world has become in the last 12 months…

Anyway, the survey finds that the average (!) user has 23.6 applications on his/her phone and uses 6.8 of them every day. 48 percent report shopping for apps more than once a week. About the same number (49 percent) report using apps on their phone for more than 30 minutes a day. Woah, nice!

But it goes on: 32% said they used portable gaming devices less because of their app-enabled phones. This reminds me of one of my predictions on how the iPhone would eat into the handheld gaming market (see here, here, here and here).

And it shows, more importantly maybe, that these owners of the “newer” smartphones use them as true multimedia devices rather than only phones: 31% read newspapers less, 28% use GPS devices less, 28% use MP3 players less (well, they have one of the better ones if they use an iPhone), and 24% are watching less TV. Media going mobile then, finally…

And then – another indication on how far we have gone – the NY Times starts to whine: it notes that “despite Apple’s relentless advertising of its App Store, it seems that the availability of applications is not the primary driver of phone-buying behavior.” Doh. Now, here’s a finding. 74% of the respondents said the device “allowed” them to check their e-mail and calendar, and it allowed them to consolidate multiple devices into a single device whereas “only” 67% cited the availability of new games and applications. Only 67%, huh? Brave new world!

App-sharing coming to iPhone and Android?

By Volker

On 05/06/2009

In 1, Apple, OEM

The breath of fresh air that Apple has been bringing to the mobile content industry does not seem to end. However, this time, it is not so much fresh air by Apple but rather a borrowed deodorant from Microsoft (more specifically the iPod killer called Zune) and that is app-sharing. Whilst this might be largely superfluous for the Zune (how often will you find a group where more than one person has one? – as the good folks from the Apple Blog mention), it would be upping the usability game again and, for iPhone and iPod users as well as for the quickly growing Android device-base, it would arguably impact the market a little more. This also since the iPhone has become so much of the benchmark every OEM tries to emulate.

So what is it? According to Business Week who have been speaking to someone “familiar with the technology”, the iPhone 3.0 software kit provides for a functionality that could “if activated by Apple” allow users to share apps between them (note to self: ask my contacts familiar with the technology if they came across this, too).

Technically, it’s compelling and simple, well, the latter at least in Apple’s case: It was a nightmare for an engineer (as much as a dream for every “guerilla” marketeer) in the face of a gazillion different handsets with a gazillion different screen sizes, heap sizes, soft key allocations, etc, etc. In Apple’s case: 1 device, 1 screen size… off to the races…

Now, the same thing is supposed to happen with Android devices, too. And there, this might actually be a little harder to achieve; different devices, etc – well you get the gist.

From a user perspective it is of course fantastic: you can try things out before you have to commit to buy (rather than relying on the voluntary “lite” versions). So rather than buying an app that a friend likes (which increases the likelihood you might to but does not necessarily give you certainty to part with your precious cash). So: try it out. You like it, you buy it… It also (as mentioned above) is a big one on the marketing side: the strongest sales people will be happy users. So if a happy user recommends it to their peers, it is so much more likely that they will give it a go. All good stuff.

Would someone from Apple please confirm this? 😉