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Author: Horace Dediu

Is Android more efficient than iOS at generating search revenue?

Thanks to David Chu for forwarding the data that made this possible and reader Narajanan for spotting the divergence in platform efficiency.

iOS and Android are both growing rapidly. According to Gartner, during the first three quarters of 2010, about 44 million iOS devices and 36 million Android devices were put into use. That’s 80 million devices. An amazing achievement for two platforms that did not exist 3 years earlier.

But obviously not all devices are used the same way. Devices which have unused capabilities limit network effects for a platform and for the category of product in general. Question is: how can we measure the “smartness” of a device; how much more likely is a device to be used as a mobile computer vs. being a regular phone?

The best proxy I can think of is a measurement of browsing use. Continue reading “Is Android more efficient than iOS at generating search revenue?”

Big in Denmark: iPhone captures 36% of phone market value

Thanks for Rob Marsh for forwarding the following snapshot of data from Denmark:

Salget af smartphones eksploderer i Danmark.

According to GfK data in Denmark, during the first quarter of 2010 29% of phones sold were smartphones. In the second quarter, the share grew to 37%. In the third quarter, 51% of units and 71% of sales value was captured by smartphones.

Looking at September alone, Apple’s share of the smartphone market was 34%. In terms of value share, 51% of all the dollars that consumers spent for smartphones, was spent on the iPhone.

In other words, Continue reading “Big in Denmark: iPhone captures 36% of phone market value”

Remembering January 14, 2008: The day the market lost faith in Apple

In a recent but recurring lament I asked why Apple shareholders are not being rewarded for the company’s growth. I pointed out that there is no fundamental reason why the company should receive such a low P/E multiple (about 18 ex-cash trailing and 10x forward while maintaining 70% earnings growth for over a year).

There were many objections in the comments. Most of them dealt with recent reasons why doubts might have arisen among investors: Android hegemony or some perceived lack of competitiveness leading to margin compression or some macro hangover from the recession.

In this article I argue that none of these objections hold water. My argument hinges on the fact that there is a precise date when Apple ceased being seen as an exceptionally valuable company and that date precedes any of the causes being suggested.

The day of disillusionment was almost exactly three years ago: January 14th, 2008.

Continue reading “Remembering January 14, 2008: The day the market lost faith in Apple”

Verizon back at bat: Revisiting the last inning

A month ago I wrote an exposé on the problems I felt Verizon was facing with their smartphone strategy: Verizon Strikes Out in Smartphones [Updated]

Given new information on subscriber growth and the relationship between Verizon and Apple, it’s time to look back and assess how the conclusions are standing up.

The conclusions I drew were that Verizon had three strikes against them:

  1. The iPhone has stolen their growth
  2. They are facing the prospect of a single OS platform supplier
  3. Android is not competitive vs. iOS

Did iPhone really hurt Verizon?

Continue reading “Verizon back at bat: Revisiting the last inning”

For every AT&T Android user there are 15 iPhone users: What will be the ratio at Verizon?

The following chart uses comScore data to show the relative consumption of Android vs. iOS by the subscribers of the four major US operators. I modified an original chart published by Silicon Alley Insider.

A few observations: Continue reading “For every AT&T Android user there are 15 iPhone users: What will be the ratio at Verizon?”

Who killed the Intel microprocessor?

The recently announced move by Microsoft to support the ARM architecture with their Windows product, indicates something profound is happening in the market for microprocessors.

Dr. Hermann Hauser puts in bluntly:

“The reason why ARM is going to kill the microprocessor is not because Intel will not eventually produce an Atom [Intel’s low-power microprocessor] that might be as good as an ARM, but because Intel has the wrong business model,” said Dr. Hauser. “People in the mobile phone architecture do not buy microprocessors. So if you sell microprocessors you have the wrong model. They license them. So it’s not Intel vs. ARM, it is Intel vs. every single semiconductor company in the world.”

via Intel Microprocessor Business ‘Doomed,’ Claims ARM Co-Founder – Tech Europe – WSJ.

To make sense of that you have to step back and look at what’s been happening in microprocessors and how mobile computing is affecting the whole processor value chain. Continue reading “Who killed the Intel microprocessor?”

Nearly 75% of iPhones are in use outside the US

comScore reported that 15.4 million iPhones were in use in the US as of November. (25% share of 61.5 million total smartphones.)

We also know that about 75 million iPhones were sold by November since the product launched. With about 17 million units older than two years, and assuming that half of those might still be in use and that all the iPhones less than 2 years old are still in use, we get an upper bound of 66.5 million iPhones in use globally.

That means 23% of all iPhones are in use in the US and that 77% are in use outside the US.

Can this be verified? Continue reading “Nearly 75% of iPhones are in use outside the US”

Will T-Mobile's hundred dollar smartphone with ten dollar data plan win subs?

Chief Executive Philipp Humm said in an interview that many of his smartphones will eventually be made up of Google-powered phones costing less than $100, half as much as the smartphones typically available at U.S. carriers. In October, to lower the cost of monthly bills, Mr. Humm introduced a limited data plan that costs $10.

via T-Mobile Smartphones to Head Down Market – WSJ.com.

T-Mobile seems to be attempting to differentiate on price. In a regular market reaching saturation that might be a viable strategy. However the market is neither regular not saturated. T-Mobile’s chances of gaining large share are limited. Continue reading “Will T-Mobile's hundred dollar smartphone with ten dollar data plan win subs?”

Half of US population to use smartphones by end of 2011: Update

Half of US population to use smartphones by end of 2011 | asymco.

A month ago ComScore reported that in October 2010 25% of Americans above the age of 13 used smartphones. The latest report shows that share to have risen to 26.3%.

That means there are 24 percentage points of penetration to go until the majority of Americans are smartphone users. In absolute numbers this implies about 56 million additional users (and hence units sold).

The rate of penetration growth was 1.3 percentage points per month. Assuming no acceleration in this figure and assuming we rely on ComScore (vs. Nielsen which reports higher figures) then majority share is 18 months away, or mid-2012.

However, assuming some acceleration and a different sampling method, I still believe that we could see this figure by end of this year.

In either case the tipping point is near.