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Author: Horace Dediu

The Android SKU paradox

Next month will be the 24th since the first Android device launched in October 2008. The G1 was followed by another HTC device in February of 2010 and a few others in the spring. The summer of ’09 showed a steady release of up to four new phones every month. Since then the number of Android phone stock keeping units (SKUs, uniquely identifiable stockable products) increased dramatically, with the release rate increasing to 26 per month during July of this year (source: pdadb.net).

Altogether, there are have been Continue reading “The Android SKU paradox”

Mobile devices overtaking PCs

Smartphones, or Mobile devices, will soon become the dominant computing platform for humanity and supplant the PC which has reigned since Apple ignited the Personal Computer revolution in the late 1970’s.

via The numbers don’t lie: Mobile devices overtaking PCs – Google 24/7 – Fortune Tech.

I guess Gartner didn’t get the memo. By keeping the two categories separate, it implies no overlap in consumption and hence no need to worry if you’re in the PC business.

Motorola's Android 2.2 Rollout: What a Mess – PCWorld

From a comment in the article below:

I installed HTC’s leaked version of 2.2 on my incredible last month. It has been noticeably faster, has better battery life, and the extra features are nice. As expected, Verizon put a lock down on the wifi tethering feature, and if I want to use it I have to pay an ADDITIONAL $25/month, which is completely ridiculous. Luckily, my phone has been rooted (it was the only way to get froyo on there) and I can use a number of FREE wifi tethering applications that don’t cost anything extra per month either.

It’s pretty sad that the only way to enjoy an android phone is to hack the crap out of it, and doing so requires relative technical expertise.

via Motorola’s Android 2.2 Rollout: What a Mess – PCWorld.

Reminds me of Windows Mobile in another way: the only real fans were those who could play with cooked ROMs. Conversely, imagine if the only iPhone fans were those who jailbroke/unlocked iPhones.

See also: The Android abdication

Microsoft CIO on Android vs. iPhone: Windows Phone will dominate

The OS market in the mobile space is dominated by other players. Is that a cause of worry?

I think it’s a temporary issue. I don’t put a lot of face and snapshot and time into what is going on. On a global basis, I see what is growing and what is shrinking. Text messaging is the fastest-growing on simple phones part of the mobile market. That’s where growth is. The smart phone part of the market, or the premium market, is in the downward part of the market. It will not be there for a long time in the future.

People want something that’s simple. The design goal for the Windows Phone 7 is that with rich experience you get simple stuff easily. Great keyboard or touch or both – so you can have that. It is too early to talk about dominating, but I’m excited about it. Android coming into the market says there is room for more innovation and we see ourselves playing a role in that space. People talked about the iPhone and thought that was the end of the world for OS. Windows Phone 7 will prove there is more room for innovation.

via Q&A: Tony Scott, Chief Information Officer, Microsoft.

In other words, Android’s entry in the market and remarkable growth, there is room for Windows Phone. And because Windows Phone is easy to use and has a keyboard and touch it will have a chance at dominating.

Microsoft’s enthusiasm for yet another mobile platform joining the fray (along with iOS, Android, RIM, Symbian, Windows Mobile, Meego, various sundry Linux and Bada) is not just delusion. I’m sure that they gathered positive feedback from operators. By this time next year there will be dozens of Windows Phone devices on the market. After all, Windows Mobile attracted 1700 licenses.

The Android abdication

When I wrote about Android’s pursuit of the biggest losers, I made the explicit claim, backed by data, that Android was most attractive to device vendors who were in financial distress. Android is a lifeline to sustain failing business models. But underlying that claim was the more sinister implication that Android is sustaining to the incumbent operator business models. That means that Android is subject to operator manipulation and its market access as well as those of competing platforms will be throttled to maintain control.

The article below makes an even stronger case.

As a result, we now have a situation where the U.S. telecoms are reconsolidating their power and putting customers at a disadvantage. And, their empowering factor is Android. The carriers and handset makers can do anything they want with it. Unfortunately, that now includes loading lots of their own crapware onto these Android devices, using marketing schemes that confuse buyers (see the Samsung Galaxy S), and nickle-and-diming customers with added fees to run certain apps such as tethering, GPS navigation, and mobile video.

The dirty little secret about Google Android | Tech Sanity Check | TechRepublic.com.

I would not say that Android is enabling the consolidation of operator power. I would say that operator power never wavered.

The article concludes:

Despite the ugly truth that Android is enabling the U.S. wireless carriers to exert too much control over the devices and keep the U.S. mobile market in a balkanized state of affairs, Android remains the antithesis of the closed Apple ecosystem that drives the iPhone and so it’s still very attractive to a lot of technologists and business professionals.

But, the consequence of not putting any walls around your product is that both the good guys and the bad guys can do anything they want with it. And for Android, that means that it’s being manipulated, modified, and maimed by companies that care more about preserving their old business models than empowering people with the next great wave of computing devices.

That sounds about right.

Analysts' categorical failure

Gartner explicitly explained so in its press release: “Gartner’s PC group does not track media tablet sales in this PC shipment data, so iPad sales are not included in these results

via Is Apple the real U.S. PC market share leader — or soon will be? | Betanews.

The reluctance of  industry analysts to measure the iPad as a computer is a fascinating and vivid symptom of how analysts conspire with their customers to smother visibility of impending failure.

Before we dive into the motivation to ignore iPads, we need to understand how analysts in general and companies in particular group products into comparable piles. This process of grouping is called categorization. It should be distinguished from segmentation which groups buyers in a market. Categorization is essential for competitive analysis and measurement of the performance of a product (relative to other products).

Categorization is a challenging problem for most companies. To illustrate why, consider four possible methods for categorizing products:

Continue reading “Analysts' categorical failure”

Dell's running

Once the pride and joy of the world’s largest computer systems builder, consumer products now make up just 18% of Dell’s total sales. That’s probably a good thing in the long run, because this segment is notoriously margin-poor when compared to the less price-sensitive corporate computing market. I can’t blame IBM for giving up on consumers years ago, and I think Dell should follow suit.

via Make a Hard Left, Dell! (AAPL, CTXS, DELL, HPQ, IBM, MSFT, VMW).

That’s right. Flee upmarket Dell. Run, run.

Quoting from the gospel:

Step 2: Entrants grow and improve; incumbents choose flight. As disruptive attackers follow their own sustaining trajectories, they make inroads into the low end of the market or begin pulling less demanding customers into a new context of use. What happens when the disruptive entrant begins to make inroads? […]

Incumbents naturally choose flight. What looks highly attractive to the entrant continues to look relatively unattractive to the incumbent. The asymmetric motivation leads to incumbents naturally fleeing the low end. They cede that market to the entrant. […]

Remember, incumbents focus on delivering up-market sustaining innovations that allow them to earn premium prices by reaching undershot customers. They view flight as a positive development.

Revisiting the App Forecast

From a forecast I made on March 21st: 300k Apps Approved by August:

My initial estimate in February for the 200k milestone was by May 1st. I was clearly off by nearly 40 days. If the add rate is maintained at 20k/mo 300k will come around in August although I’m not as confident in this forecast. The rate of app addition seems to be accelerating.

As of today the Approved app counts are as follows:

AppShopper: 297,165

148apps.com: 296,662

148apps.biz: 296,157

The monthly rate of addition is shown in the following graph:

The 20k/month has been steady during the last 7 months so I think the last 4k apps will be added in the next week, making the 300k roll-over in August, as forecast. The approval rate did not accelerate however but stayed pretty steady. There was a similar plateau in the middle of last year around 10k apps/month.

Life's (Not So) Good

Follow-up to LG dreams of smartphones.

LG Doesn’t See Return To Operating Profit Until Early Next Year

By Roger Cheng and Jung-Ah Lee  Of DOW JONES NEWSWIRES

SEOUL (Dow Jones)–LG Electronics (066570.SE), which readily concedes it is late to the smartphone game, said it plans to launch 10 more smartphones and sell 5 million devices by the end of the year as it scrambles to catch up with the rest of the industry.

But the aggressive move, which includes increasing the research and development budget by a third and ramping up its spending on marketing, means the company’s once-flagship mobile devices unit won’t likely return to an operating profit until early next year, said Chang Ma, vice president of marketing for the division.

“We have to just bear it,” Ma told Dow Jones Newswires on Wednesday, adding that he hopes to see a turnaround after the fourth quarter.

It takes R&D to make an Android phone?

(Thanks to MfH for link.)

Android and the philosopher's pencil

Does it not strike everyone as odd that a company whose business is in the cloud also needs to peddle systems software…even devices?

It’s like a philosopher at a conference trying to convince the audience of his idea requiring that they use a certain type of pencil to take notes. And only he can give you that pencil.

This should lead to serious questions: Firstly, maybe you don’t need to take notes, secondly perhaps you don’t use a pencil and thirdly why his pencil?

Analogously: Firstly, Google services don’t need specific devices to be used because they’re designed around web standards. Secondly, they don’t need specific client software or APIs either and, thirdly, they certainly should not need specific systems software. Like the philosopher, Google does not charge for their pencil, but that’s beside the point.

You can only conclude that either the philosopher’s is a scoundrel or his idea is not that good.

So which is it?