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Ballmer thinks the iPad is a PC; analysts who measure market shares don't.

8:50 am: Walt circles back, notes that Ballmer uses the term PC to include things that most people don’t think of as PCs. Is the iPad a PC?

Ballmer: Of course it is. What do you do on it? Answer email….A guy tried to take notes on it at a meeting I was at yesterday–that was interesting [chuckles from the audience]. He suggests that the positioning of devices like the iPad as something beyond the PC is just a marketing tactic.

via Steve Ballmer and Ray Ozzie at D8 Conference: on Competitors, Tablets, Future of Computing and much more | Microsoft | ithinkdifferent.

If only the analysts would add the 2+ million iPads shipped this quarter to Apple’s Mac units and declare that Apple’s market share doubled(*).  If only things were so simple.

At least on this I agree with Ballmer.

(*) The iPad is already outselling the Mac on a weekly run-rate.

20% of American subs have a smartphone with 1.2 million switching every month

According to The State of Mobile Apps | Nielsen Wire 21% of American wireless subscribers have a smartphone at Q4 2009, up from 19% in the previous quarter and significantly higher than the 14% at the end of 2008.

A previous Comscore survey showed US smartphone penetration at about 17%.

If we were to blend the data to a rough estimate, I would say it’s fair to assume 20% penetration.  The total number of subscribers in the US is about 234 million, which makes for 46.8 million smartphone users.

This still leaves 80% or 187.2 million non-smartphone users.

The share gain of 6%/yr. means another 1.2 million Americans are switching into a smartphone every month.  Another decade and the non-smartphone market will simply be gone.

With AT&T lowering the barriers of entry with data plan pricing and with other operators matching, don’t be surprised if it happens sooner.

As saturation begins around 50% to 60% penetration, price competition will intensify.  That takes the tipping point to about 2013.

Smartphones forecast to grow 46% in 2010

Gartner sees smartphone market volume growing a whopping 46 percent from 172.4 million sold last year, boosted by cheaper models. The most affordable now cost just over $100 excluding operator subsidies.

link: Handset market rebounding in 2010: report – Yahoo! News

Anyone modeling iPhone growth this year below 50% is implying Apple will lose share.

If Apple maintains market share (about 15%) it would sell about 37 million iPhones in 2010. Apple grew iPhone unit sales about 84% from 2008 to 2009.


Headroom

On a planet with around 6.8 billion people, we’re likely to see 5 billion cell phone subscriptions this year.

http://www.itu.int/net/pressoffice/press_releases/2010/06.aspx

ITU expects to see the number of mobile broadband subscriptions exceed one billion globally during 2010, having topped 600 million by the end of 2009. With current growth rates, web access by people on the move — via laptops and smart mobile devices – is likely to exceed web access from desktop computers within the next five years.

Mobile broadband is a good proxy for mobile computing so it’s very likely that these 1 billion subs will use advanced devices if not smartphones per se.


One Million Americans Switching to Smartphones Every Month

Comscore revealed their latest survey resultsfor the US mobile subscriber market. From the latest data and the data previously released in October we can put together a few insights.

The number of smartphone users increased by 3.2 million, growing at over 1 million new users per month.

Apple and Android added about 1 million users each. RIM added 1.4 million with Symbian adding about 200k users. Palm lost 441k users and Microsoft lost about 44k users.

Non-smartphones lost 2.1 million users and 1 million subscribers were added to the top line.

The non-smartphones lost 1% share in the quarter and 6% since February. Smartphones make up 17% of all users.

Google has overtaken Symbian to rise from last place in the platform installed base and is closing on Palm.

At 5% share erosion per year, the non-smartphone market will completely disappear in about 14 years, though I feel 10 years is a more likely target with 5 years until the market is 50% penetrated.


Is Mobile Computing Good Enough?

This new “mobile computing” use case that smartphones try to serve is not going to be satisfied with solutions that are built from modular components.

The reason is simple: as the solutions are not good enough (because it’s early days), they need to be improved. If they are to be improved, competitive pressure will compel those who try to do so as rapidly as possible. The fastest climb up the trajectory of performance will get the bulk of the benefits. Modular implementations are simply not fast enough in cycle time of iteration in comparison to the integrated approaches.

This is why Apple will grow faster than Google, Nokia and Windows Mobile.

How does this relate to the ecosystem?

Many have been commenting that Google’s (or Nokia’s or Microsoft’s) ecosystems are more “open” or “flexible” with respect to Apple’s. And that in the long run that is the right architecture. That may be, however implementing loose ecosystems coupled loosely to modular devices and operating systems and services as a whole will not be competitive. They will be too late, too slow and too hard to use. They will be awkward to position and the benefits will be impossible to explain to end users. They will be sold through a distribution channel that is too long and with poor information feedback. Too many “vested” interests will dilute the product’s reason for being. The pricing of the integrated player will cause poor economies for the modular cohort. I could go on but it suffices to say that the modular approach will fail to be competitive.

Footnote: the arguments for the imminent explosion of Android are all based on a forecast from Ken Dulaney at Gartner. It was also Ken who in 2004 forecast that Windows Mobile will dominate business devices and that RIM would never gain share leadership. Here is why he is wrong now as he was wrong then:

Ken and his peer group are implicitly and explicitly owned by the customers he tries to serve. What I mean is that Ken is hired by those who have the money but not the competence to think by themselves. His clients are the incumbent device vendors who are signaling to him that they will increasingly license Android (as they signaled that they will license WinMo before). He adds up all the signals he gets and multiples by random numbers to get a forecast. It’s a supply-side forecast assuming “Porter’s five forces” is still at work. In that sense, he is selling back to his clients what they’ve already told him. He is hired to validate their assumptions and that’s what he delivers. Rinse, repeat.