March 2011
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Month March 2011

What's a Post-PC device?

Microsoft’s Steve Ballmer argues that the tablet computers (aka slates, media tablets or iPads) are PCs. Steve Jobs argues that they are post-PC devices. There are analogies to trucks, cars and various metaphors for what these new devices symbolize. Some argue that because the iPad needs a PC, it’s not a post-PC device.

But how to define a new generation of computing? Since the PC is not the beginning of computing, it may make sense to look to the eras of computing that preceded it.

Disney (still) loves Android

We removed the malicious applications from Android Market, suspended the associated developer accounts, and contacted law enforcement about the attack.

via An Update on Android Market Security – Official Google Mobile Blog.

It’s great to see that Google is quick to call law enforcement to prosecute those who took advantage of its open(!) market. Now I wonder what Google will do about policing copyright infringement on the same market .

In September I wrote a note about how some of the top applications in the Market seemed to be infringing on copyrights (and attempting to hide the fact). Today I went back and searched for “Disney”. I was offered about 350 apps and I am pretty sure that none one of them is endorsed by Disney.[1]

iOS distribution: do operators hold the keys?

As iPad shipment volumes increase and as the iPod touch becomes the de-facto iPod, it’s time to look at the overall split between iOS devices.

I will focus the discussion between iPhone and iOS “others” because I believe the two categories differ greatly in terms of their positioning and market strategy due to the different channels.

The company does not provide iPod touch units shipment data but it can be estimated that, based on overall iOS numbers released in September, iPod touch represents approximately 50% of iPod units sold.

If we put all we know together about volumes, we have the following chart:

On Android [Updated]

Demonstrating the value of openness and broad support from partners:

In terms of openness and broad support we’ve done very well… Literally available on over 150 different handsets. It’s available from over one hundred different mobile operators around the world. We will probably license about 20 million devices this year which is really quite dramatic at least among smartphone systems. So we have great momentum. We’ve brought [a new version] to market. We’re driving forward on our future releases. We’ll have to see what [the competition] does. Right now they have a press release [...] We have many many millions of customers, great software, many hardware devices and they’re welcome in our world.

Inspired by a tweet from Charles Arthur.

[Update]

The quote is Steve Ballmer speaking in 2007 soon after the announcement of Android and in response to a question of what he thought about Android. The source video is here.

Flummoxed, again

The last time I took a snapshot of the iPad death watch it was March 9th, 2010. Almost a year ago. The now-classic quotes are reproduced here.  Last May I wrote:

Apple keeps a tight lid on new products so that competitors don’t get a head-start on copying, but in the case of the iPad, advance knowledge would not have had any impact. Competitors look at the iPad and see nothing.  They’ll only react once the market explodes and they start to feel belated pain.

I thought that would be that. As the success of the product would become self-evident, predictions of imminent demise would trail off. The pain of share loss would prompt a wave of challenger copycats. Imitation would be the the best form of flattery.

But no.

Critics were not silenced. One year, 15 million units, and $9.2 billion later I went back to the source of the quotes and found the following (published quotes dated after March 9th 2010). (Cited from aaplinvestors.net with some editing for brevity and relevance):

iTunes App Store generated $3 billion in sales

The announcement of $2 billion total for App store payments to developers did not come as a surprise. On January 22nd Apple reached 10 billion total apps downloaded. From that figure and an earlier derivation of the average selling price, I estimated $2 billion was paid out around the same time frame.

We don’t know exactly how many apps have been sold at exactly the moment when $2 billion was paid out so we don’t have the means to update the ASP of apps (currently estimated at 29c).

We do know for certain however that the app store generated $2.86 billion in sales if $2 billion was paid out.

The new data affirms existing estimates.

Android vs. Windows Phone: Which vendors benefit?

Who is Winning the U.S. Smartphone Battle? | Nielsen Wire.

This is a great chart from Nielsen showing the split in manufacturer share by OS in US installed base. What I consider significant is how the modular software platforms Windows Mobile and Android worked out for the licensees.

Whereas in the case of Windows Mobile HTC took a significant, nearly dominant share, the Android ecosystem was more balanced between HTC and Motorola. However, HP and Motorola left the Microsoft camps, Motorola going exclusively for Android and HP buying Palm. That leaves Microsoft with HTC, Samsung and Other (mainly LG I presume).

The question of how Windows Phone will shape up vs. Windows Mobile and Android remains. Motorola has signaled they are not interested in WP7 for the time being and so it’s likely that they will stick with Android. Samsung is always hedging its bets so it will probably balance its portfolio. One could conceive of Nokia stepping into the US with significant WP volumes, but there are many hurdles on the way.

One can see the challenge individual modular vendors have to edge the overall volumes of the integrated vendors. As Nielsen points out:

But an analysis by manufacturer shows RIM and Apple to be the winners compared to other device makers since they are the only ones creating and selling smartphones with their respective operating systems

Not only are the volumes higher, but so are the margins and hence profit share.

Apps are 15 times more popular than ebooks

“It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore,” he said. “Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.”

The Passion of Steve Jobs – NYTimes.com

It was almost exactly three years ago that Steve Jobs dismissed the Kindle reader as a futile attempt to change user behavior.

Yesterday, Steve Jobs announced that the iBooks store served 100 million ebooks in its first 11 months of operations.

So do we have another example of Steve’s classic misdirection where he dismisses a category only to enter and dominate it at some later time?

Let’s look at the data. The chart below shows the sales ramp of three media types served by Apple: songs, apps and books.

Lookout ZTE and Huawei: Here come NEC, Sharp and Kyocera

Sony Ericsson, NEC and Kyocera are among the other Japanese handset makers also betting on Android as their path to international sales.

via Japanese Phone Makers Look to Ride Android’s Surge – NYTimes.com.

The Japanese positioning is based on the notion that current Android phones are not good enough and that they can bring “great hardware, great R&D and great engineers” to solve the existing problems with Android portfolio phones.

That’s an interesting observation by Google’s own director of Android Global Partnerships. The idea that the market can still reward hardware innovation would also imply that Apple could benefit from that demand.

So is the message that there is still room for device innovation?

Perhaps not. Perhaps Android’s pursuit of Japanese vendors (and vice-versa) is just evidence of the rush into smartphones by those possessing excess hardware R&D and manufacturing capacity and a deficit of software assets.

It’s still striking that there are hundreds of hardware vendors and supposedly “only two” platforms.

Nokia: We depend on uninformed customers, deception preserves brand value and uncompetitive software will keep us competitive

In a previous post I asked whether Nokia’s strategy is dependent on a “built-in assumption that end users are inherently stupid.”

Nokia confirmed that this is indeed the case.