Pages

Live blogging Feed

Thursday, February 23, 2012

[Infographic] 100 Million Club – Top smartphone facts and figures in 2011

[Infographic] 100 Million Club – Top smartphone facts and figures in 2011:

[The mobile market is evolving, as increasing smartphone penetration is quickly shifting the balance of power between the major players. Marketing Manager, Matos, examines the latest figures from the mobile market and determines the winners and losers of the platform and handset race for 2011. Also presenting our latest 100 Million Club report – in infographic format!]


Quick facts on the rise of Android


100 Million Club - Facts and figures of the smartphone market in 2011Android is the undisputed king of smartphone platforms, at least in terms of shipments. While this was true even at the end of 2010, Android grew even further in 2011, grabbing a highly impressive 49% share in the smartphone market – this can easily be translated as follows: 1 in 2 smartphones sold in 2011 was an Android device.


Moreover, Android’s share keeps growing, rising from 42% share in the first half of 2011 to a crushing 54% share in H2 2011. This level of pervasiveness has not been seen since Symbian’s heyday, but let’s not forget that Symbian didn’t have to face such stifling competition back then.


In terms of ecosystems, while Android’s 350K apps are still lagging behind Apple’s 540+K available apps, there’s been an upset in the volume of downloads, bringing Android to the pole position. Due to a much larger installed base, Android’s downloads are growing exponentially and the Market will catch up to Apple’s number of cumulative downloads within a couple of years. Granted, a lot of these apps are Viber, Shazam and Angry Birds, but in any case Google’s business model is all about ads and an addressable audience, not device sales and downloads.


Furthermore, the Android brand name is being bolstered by large marketing budgets that provide numerous ads, news items and mentions across all printed and digital media. Android has now become a household name, mainly thanks to the support and promotion of telcos and handset OEMs, who have managed to position the platform as the new and exciting operating system for users.


Rivals to the smartphone throne


Android’s number one rival right now, iOS, also enjoyed a very good year. In 2011, Apple climbed to the second position as a smartphone vendor behind Samsung with 19% share, although it’s a very close call between the two companies. In the fourth quarter, Apple exceeded all expectations and sold 37 million iPhones, claiming nearly 24% share in that quarter. It’s quite telling that in Q4, Apple sold 80% more handsets than its previous record of 20 million, in the second quarter of 2011.


Although they’re still behind Samsung as a smartphone vendor, Apple is the clear winner in terms of both revenues and profits. Aided by the high sales of all iOS devices, including iPods and iPads, Apple raked in a 32 billion USD profit during 2011 – a figure comparable to the GDP of a small country. The question remains whether Apple will be able to repeat such a feat and continue this trend, taking market share away from platforms leaking market share, like Symbian and BlackBerry.


The third mobile platform in terms of shipments for 2011 was Symbian. There’s not much to discuss on Symbian – its expiration date is coming soon and Nokia has to convert as many Symbian sales as possible to Windows Phone sales, as quickly as possible. However, Nokia had announced four new Symbian models in 2012, but they’re only releasing one.


BlackBerry also finds itself in a quagmire, with declining market share, a decrease in share value from around $60 in Jan 2011 to as low as $16 in early 2012 underwhelming revenues and an underused ecosystem. Although RIM’s co-CEOs have stepped down and the company is under new leadership, this is a difficult boat to turn around and RIM is going to have to follow the simplest rule of all in mobile: innovate or die.


Bada snatched the 5th position of the smartphone platform market away from Windows Phone, outselling Microsoft’s platform by nearly two to one. Samsung’s platform for low-end smartphone continues to turn heads and the company seems to have even bigger plans for bada. However, both bada and Tizen (Samsung’s new open source project) are unable to compete in terms of developer mindshare. But that’s fine, as the primary use for bada or Tizen to Samsung is as a negotiating leverage against Google’s Android.


Last, but not least, we have Windows Phone as the sixth smartphone platform, with approximately 2% market share. Despite the fact that Windows Phone has been out for over a year now, Microsoft’s new mobile OS has so far met with lukewarm results – a fact commented upon by Microsoft’s Stephen Ballmer himself. Nokia’s new Lumia line has the potential to install Windows Phone in the upper echelons of the platform market, tapping the vibrant developer community that has sprung up around the platform, but there are still many risks and difficulties ahead. The fact of the matter is that WP’s chief rivals, Android and iOS, have the high ground in this battle of ecosystems and it’s never easy fighting uphill.


The Android court


The top 5 smartphone vendors in 2011, accounting for 42% of the total shipments were Samsung, Apple, Nokia, RIM and HTC – out of these, two are (mostly) Android vendors.


100MC - Top Smartphone Vendors in 2011


Although many Android vendors enjoyed a good year in 2011, it was Samsung that took the lion’s share. Samsung doubled their smartphone shipments in just six months, going from 32 million in H1 2011 to over 60 million in H2. Nearly 80% of those were Android shipments leaving Samsung as the single most important Android vendor in 2011. Samsung seems to have sold approximately one in three Android devices in 2011.


HTC did reach many milestones during 2011, such as becoming the no1 smartphone vendor in the US during Q3, but its shipments declined in Q4 and are expected to decline even further in the first quarter of 2012.


Other vendors who mainly ship Android smartphones, like Sony Ericsson, LG, Huawei and ZTE are indeed reporting an increased number of handset shipments, but they still have a lot of catching up to do. The big question for 2012 is how Google will play the Motorola card, with the deal having been green-lighted by authorities on both sides of the Atlantic. While some analysts have put forward the theory that Motorola will become a benchmark for Android handsets and will be used to keep in check other Android vendors, it’s quite likely that Google will choose a different path. Motorola’s acquisition is more closely linked to its patents, with the company’s 17 thousand patents more likely to be used as an insurance policy against Apple’s relentless legal onslaught.



Android’s expansion continues


Smartphone penetration continues to grow at an impressive pace; the smartphone market grew by 43% in 2011, from nearly 300 million shipments in 2010 to over 480 million in 2011. Penetration is expected to continue to increase and reach well into the 40% range during 2012.


It’s highly likely that, at least for the time being, Android is going to continue expanding and maintaining its current high market share. What’s more important to Google, though, is getting Android on as many screens as possible. Android is already making an impact on the tablet market, rising from 29% market share at the end of 2010 to 39% at the end of 2011. While Android has a lot of ground to cover in this particular market, it’s slowly stealing market share away from the dominant iPad, while keeping other competing platforms, like QNX and Windows, at bay. Another big bet for Google is TV; Google goal is to get as many users as possible hooked on Android, across as many screens as possible.


Feedback welcome, as always.

- Matos (@visionmobile)





Wednesday, February 22, 2012

Nokia and Symbian still on top of the mobile web, but for how long?

Nokia and Symbian still on top of the mobile web, but for how long?:

Perceptions matter, and the perception of Nokia in the news, on the web, and in the minds of many, is that things aren’t going that well. Even in the Pingdom office, we hear “Nokia is doomed,” but do the numbers support this belief?


Looking at the statistics, Symbian leads the mobile operating system race with just over 30% of web browsing traffic. That’s down slightly from late last year, when we noted that Symbian finished 2011 as the top mobile operating system, with almost 34% of the mobile OS market.


What is even more interesting, however, is that Nokia is also ahead when we look at figures for all the mobile handset vendors. In fact, Nokia is way ahead of Apple, and Android lags far behind.


Symbian still on top, but Android is growing fast


In the latest figures we looked at, covering the first three weeks of February 2012, we can see that Symbian is still the top mobile OS, with a 30.3% market share. Apple’s iOS come in just behind Symbian at 25.35%, and Android follows at 24.72%. BlackBerry OS has lost a lot of ground and lands at 6.8%, just ahead of Samsung at 5.06%. Samsung’s bada manages to gather up 0.52%, and Microsoft’s Windows Phone has a 0.4% share of the mobile OS market. What used to be HP’s webOS barely manages to score enough to get in the rankings with only 0.04%.



Nokia is top mobile handset vendor


If we instead look at the market share divided on vendor, Nokia manages to get a 36. 09% market share, ahead of Apple at 30.41%, and Samsung at 14.82%. RIM falls in at 8.19%, Sony Ericsson at 3.54%, and HTC at 3.52%.



Even if you make a rough estimate for how much of this that Android accounts for, by adding up the numbers for vendors playing in that space, like Samsung, HTC, and Motorola, Android only reaches about 25% (note the 24.72% market share for Android in the first chart). And that’s not taking into account that not all handsets from these vendors will run Android. Both Samsung and HTC, for example, also make Windows Phone handsets.


Nokia may be on top, but for how long?


It seems like we keep hearing bad news concerning Nokia; that its financial results aren’t that good and that sales are dwindling. And we think most would agree that the Finnish mobile giant squandered the strong grip it had on the market before Apple came along with the first iPhone.


Although Nokia and Symbian still come out on top according to these numbers, the company must be looking hard and fast at how it can get back to its former glory. It’s too early to tell what effect, if any, Nokia’s launch into Windows Phone territory has had. Although Windows Phone’s part of the mobile OS market is a minuscule 0.4%, we also don’t know how much of that is Nokia. But obviously, with that small market share, that doesn’t matter much.


Nokia phone picture via Shutterstock.


This was a post from the guys at Pingdom, a site monitoring service that makes sure you're the first to know when your site is down. Check it out for free.


The opportunity cost of Windows Phone

The opportunity cost of Windows Phone:

The global mobile OS market shares for Q4 shows a continuing (but diminished) leading share.



At the end of last year Android’s unit share reached 51% which is down from about 57% during the third quarter. iOS reached 23%, followed by Symbian at 12%, RIM at 9%, Bada at 2.4%, Windows Phone at 1.6% and Other at 1%.


When seen on a year/year basis Android gained 18 points of share in Q4 while Symbian lost 18 points. iOS gained 6 points of share and RIM lost 6 points. Bada gained 2.5 points and Windows lost 1.5 points.


This symmetry can also be observed in another set of data. Published in The Guardian Kantar Worldpanel ComTech data shows the OS share changes for January on a year/year basis for a select set of countries.



Android share gains do seem to be mirrored by Symbian share losses on a country-level.


This should be most interesting to Nokia and Microsoft as both have a lot riding on Windows Phone replacing Symbian sales. If there should be a recovery in the fortunes of these companies, it would seem that their strategies should focus primarily on stemming and then reversing the losses to Android.


Microsoft’s strategy of increasing the cost structure for Android through IP licensing is certainly part of this picture but it’s a slow process to turn that disincentive for Android into a large incentive for Windows Phone.


Indeed, the speed with which Android handsets can be developed seems to be a key value of that operating system and one for which Microsoft does not have a good answer. Nokia is now one year into its commitment to the Microsoft platform and it has a very limited portfolio to show for it (and limited sales as well.) As a result, Nokia’s Symbian business evaporated very rapidly. More rapidly than the company anticipated.


The dilemma for other vendors may well be how long will it take for them to develop a replacement for their Android portfolio in Windows Phone.


The opportunity cost of this switch is subtle and insidious but may be the root of why we don’t see a stampede toward Microsoft. Conversely, Android contract-free, implement-at-will availability may be its greatest selling point.



Friday, February 17, 2012

Mobile Manufacturer Market Share Report, January 2012 Update

Mobile Manufacturer Market Share Report, January 2012 Update:

Almost 8 new Internet users added worldwide every second (infographic)

Almost 8 new Internet users added worldwide every second (infographic):

By some measures, more than 7 billion people now inhabit the world, and more than a third of us are on the Internet. But how many Internet users are added each day, each week, or each minute?


We think we have a pretty good idea.



We relied on InternetWorldStats.com as our source for how many people worldwide are online as well as the world’s population. Its latest figures are from December 31, 2011, and show that 2,267,233,742 people are on the Internet worldwide, meaning an Internet penetration of 32.7%. The previous number published by Internet World Stats, from March 2011, said 2,095,006,005 people worldwide were on the Internet.


Let’s break the number of new Internet users down. In total, 172,227,737 people started using the Internet from March to December 2011. This breaks down as follows:



  • 19,136,415 – Per month.

  • 4,784,103 – Per week.

  • 683,443 – Per day.

  • 28,476 – Per hour.

  • 474 – Per minute.

  • 7.9 – Per second.


That’s almost 8 new people coming onto the Internet every second – that’s pretty amazing.


It’s clear where the potential is


To say that this is just the beginning though is an understatement. If you look at the Internet penetration numbers for the different parts of the world, you can clearly see where the growth is going to come from. North America is probably approaching saturation with 78.5% Internet penetration, and Europe and Oceania/Australia are not too far behind. The situation in Africa and Asia, however, is different, with only 13.5% and 26.2% Internet penetration respectively.


Imagine, when a bigger percentage of the huge populations of China and India come online, for example.


This was a post from the guys at Pingdom, a site monitoring service that makes sure you're the first to know when your site is down. Check it out for free.


Apple sold more iOS devices in 2011 than all the Macs it sold in 28 years

Apple sold more iOS devices in 2011 than all the Macs it sold in 28 years:

Tim Cook on the 55 million iPads sold to date:


This 55 is something no one would have guessed. Including us. To put it in context, it took us 22 years to sell 55 million Macs. It took us about 5 years to sell 22 million iPods, and it took us about 3 years to sell that many iPhones. And so, this thing is, as you said, it’s on a trajectory that’s off the charts.


via Transcript: Apple CEO Tim Cook at Goldman Sachs – Apple 2.0 – Fortune Tech.


That gave me an idea. Here is a plot of each major computing product Apple sold throughout its history shown as a cumulative total since product launch.



The iOS platform as a whole reached 316 million cumulative units at the end of last year. The iOS platform overtook the OS X platform in under four years and more iOS devices were sold in 2011 (156 million) than all the Macs ever sold (122 million).


Thursday, February 16, 2012

The iPhone opportunity: a visual update

The iPhone opportunity: a visual update:

In yesterday’s talk Tim Cook described the opportunity he felt Apple faced. To readers of this blog this opportunity has been regularly illustrated, at least on a quarterly basis. Here is the iPhone opportunity relative to other platforms:



In absolute units by vendor, separated by smart and non-smart phones, the data looks like this:



The pattern of smartphone growth remains consistent even though there was a temporary dip in Q3 for the iPhone (and hence for the green-shaded proprietary OS phones.)


The Dead Platform Graveyard: Lessons Learned

The Dead Platform Graveyard: Lessons Learned:

[Besides the iOS and Android platforms grabbing the industry headlines, there is an abundance of (over 25) platforms that didn't make it. Managing Director Andreas Constantinou recounts the graveyard of dead platforms and exactly what it takes to build a successful platform today.]


VisionMobile - Dead mobile platforms


2011 turned out to be open hunting season for mobile platforms, with the MeeGo, webOS and LiMo projects coming to an end.


MeeGo, webOS and LiMo, together with Windows Mobile and Symbian are just the tip of the dead OS iceberg. The last 10 years have seen numerous companies launch operating systems or platforms for mobile devices, most of which have been fallen under the media radar.


A brief history of dead platforms


The table below lists all known mobile platforms that have died or are a ‘zombie’ (semi-dead) state – that’s all 26 of them, from Access Linux Platform to Windows Mobile. We‘ve also researched the birth and death date of each platform.



Most of these platforms have been designed as software platforms, that is, aimed at reducing costs and time-to-market for handset makers, aka OEMs. Most of the platforms were provided under a software licensing model were monetized via add-on services (e.g. IXI and Danger) or kept for in-house use (e.g. Nokia GEOS). Only post-2007 did we see applications platforms, i.e. those designed to target primarily developers and offered under a zero-royalty model. For the differences between software and applications platform see our earlier post on Platforms 101 and why not all mobile platforms are created equal.


Why are 25+ platforms dead?


In the last decade, software platforms have failed for a combination of reasons.


Cost of ownership. The cost of creating a mobile software platform should not be underestimated. Symbian was quoted as having cost over $700 million of development cost. Even for lighter platforms, a vendor is looking at a ballpark of $100 million cost over 2-3 years of initial development, plus the incremental integration cost with each new hardware platform and the long-term R&D cost to maintain the platform to a competitive level.


Conflicting revenue model. Prior to the zero-royalty model introduced by Android, all software platforms were monetized through per-unit licensing in the order of $5 to $15 per unit. This obviously represented significant costs for the OEM and also competed with bundled (free) software stacks from chipset vendors like Texas Instruments’ BMI, Qualcomm BREW, Mediatek (HOpen) and Infineon RedArrow. That was of course before the mass arrival of smartphones and the abandonment of the royalty model.


Lack of network effects. Even though Microsoft had pioneered the two-sided software platform strategy with Windows since 1995, the benefits of network effects in mobile platforms were not properly understood until the launch of the Apple App Store in 2008. It was Apple that proved how network effects – the positive feedback loop between app developers and users – can lead to enormous demand-side economies of scale. It was the power of well-oiled network effects that made Nokia realize that “it had to go to developers” (and not wait for developers to go to Nokia) before eventually losing the Symbian battle against Android and iOS.


High adoption barriers. For a handset maker, adopting a new platform is a painstaking, multi-year process. HTC is rumored to have been working with Android since 2005 and with Windows Mobile since 2000, 2-3 years before it produced the first G1 and SPV models, respectively. In addition, handset makers are very risk-averse (they have tough customer commitments to keep up to) and so have in most cases preferred to stick with their internal spaghetti platforms rather than take the risk of adopting a new one.


The ingredients of a successful platform


There are a handful of remaining software platforms today. Besides the usual suspects Android, iOS, Windows Phone and Bada, we should also consider BREW MP (still surviving), Trolltech’s Qt (an API framework acquired by Nokia in 2008 and rumoured to be soon reappearing on Nokia’s Series 40 handsets) and Smarterphone, a niche ‘smart’ operating system for feature phones recently acquired by Nokia.



The chart above makes it clear what is the success factor of modern platforms. Firstly, software DNA, that is a company with resources, processes and values routed in the PC or Internet world where developers, not OEMs are the platform’s primary customer. Secondly, a successful platform vendor needs to have large pockets due to the billions of dollars in investment needed to build a stable and advanced software foundation, while attracting developers to the platform. Note that the bubble size in the chart shows last relative size of 4 quarters of vendor revenues.


But the secret sauce is neither in DNA or money; it’s hidden in Stephen Elop’s famous burning platform memo: ”Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem”


The secret sauce behind the success of iOS and Android is how thanks to network effects (the closed loop driving users to developers and developers to users) platforms have managed to generate billions of external investment, both in the form of developer investments (time/effort) and operator investments (subsidies).


It’s network effects that have created near-insurmountable barriers to entry for Microsoft who despite boasting 75,000 WP7 developers achieved only one million sales of its flagship Lumia model from its strategic partner Nokia.


And whatever Bada, Tizen or any other alphabet-soup-chef tries to conjure up, they should never forget that you can’t buy developer love. You can only plant the seeds. That’s why Facebook Platform is following exactly the right strategy: take a vibrant developer community and offer it a new addressable market.


- Andreas

follow me on Twitter for more: @andreascon





Tuesday, February 14, 2012

First: Apple’s rank in mobile phone profitability and revenues

First: Apple’s rank in mobile phone profitability and revenues:

Apple retained its top rank in profitability and regained the top spot in mobile phone revenues.




The relative shares of revenues and profits are shown below:




Individually, Apple’s share of units, revenues and profits is chronicled below:



Apple reached 75% of profit share, nearly 40% of revenue share and 9% of units share.


Apple and Samsung combined for about 91% of profits with RIM third at 3.7%, HTC fourth at 3.0% and Nokia last at 1.8% of a $15 billion total for the quarter.


In terms of revenues, Apple had 39% to Samsung’s 25%. Third was Nokia with 12.6% and fourth RIM at 8%. HTC only managed 5.5%, Motorola 4%, LG 3.3% and Sony Ericsson 2.7%.



The US temporarily regains relevance for Apple’s iPhone

The US temporarily regains relevance for Apple’s iPhone:

Sprint reported its first iPhone quarter sales at 1.8 million. You may recall my analysis of Sprint’s “gamble” where I estimated that Sprint will easily sell the 31 million iPhone which they committed to buy from Apple. I had estimated that they could sell an average of 7 million units a year but perhaps conservatively they could ramp at 4, 6, 9 and 12 over the four year period rumored to be in the contract.


Given the pent-up demand I also estimated that the first quarter could reach 2 million units. They managed 1.8 and that’s a solid start. Overall the US carriers activated 13.7 million iPhones. Here are the iPhone activations by US Operator:



That’s 37% of the total market in Q4, shown in area and bar charts below:





Note that the percent of total activations outside the US has dropped but that is due to the limited distribution of the iPhone 4S outside the US in the launch quarter. The long-term trend is for the US to decrease as a percent of total iPhones even with the additional US distribution.


By comparing the net adds to US install base from comScore survey data, we can estimate that about 63% of US purchases of iPhones were replacements and that 8.7 million iPhones were put out of use in the US last quarter.



Google Chrome could exceed 50% market share by end of 2012 (study)

Google Chrome could exceed 50% market share by end of 2012 (study):

There’s no denying that Google Chrome continues to be the darling of the web browser market. And as we predicted in July last year, Chrome overtook Firefox around November 2011.


So now the question is, when will Google also wrestle down Internet Explorer, and become the undisputed king of the browser world? In December 2011, Chrome 15 became the most popular browser in the world, beating Internet Explorer 8, but if you combine all IE versions, Microsoft still holds the number 1 spot.


Equipped with the latest web browser statistics from StatCounter, we set out to see when Chrome is likely to achieve more than 50% market share.


Chrome is still growing, IE is still shrinking


The web browser market, spanning January 2011 to January 2012, looked like this:



The clear trend during 2011 was that IE was shedding users, as was Firefox. Chrome was gaining users, as was Safari. But with the very small market shares for Safari and Opera, the changes for those browsers aren’t really visible in the chart.


Chrome already passed Firefox in November last year, just as our prediction from July 2011 said it would.


When will Chrome topple IE?


Then there are two interesting questions we face:



  1. When will Chrome overtake IE to be the number 1 used web browser worldwide? Our prediction made in July 2011 was that it would happen in June 2012.

  2. When will Chrome rise above 50% usage worldwide?


To answer these questions we look a year into the future, to January 2013, and predict how each of the browsers will fare. We based this prediction on the average monthly change in market share each browser had during January 2011 to January 2012, which was:



  • +5.08% – Chrome

  • +2.27% – Safari

  • -0.13% – Opera

  • -1.69% – IE

  • -1.75% – Firefox


As you can see, this means IE, Firefox, and Opera will keep slipping, and Chrome and Safari will keep increasing. As with any similar prediction, there is a big element of uncertainty here, especially given how fast moving the web browser market is. Also, we don’t take into consideration whether the usage for each month equals 100%, because the change is calculated for each browser separately.


When we add our prediction to the actual numbers up until this point, we get this chart:



If our prediction comes true, Chrome will by May 2012 be neck and neck with IE, and by June, it will have taken the lead. Note that this would be right on track with our prediction from last year.


Even more interesting, by the end of the year, Chrome will be approaching the 50% mark and by early next year, it will have passed it. It’s very likely that, at some point, the increase for Chrome will level off, but we think this will not affect it reaching over 50% market share. At worst (for Google), a leveling off in the popularity will only delay what is all but inevitable at this point.


The web browser war continues


Any which way you turn this, it’s clear that Google Chrome is on a roll and that it’s set to overtake IE after just having conquered Firefox. When it will happen is just a matter of time, and we look forward to seeing how the web browser war will develop. Obviously the progression for the browsers we have predicted cannot continue forever, as it’s consistent each month. There will be events happening and new products introduced – both hardware and software – that will affect the usage.


But nonetheless, we’re of course chuffed that our prediction from last year about when Chrome would pass Firefox turned out to be correct. Now we’ll just have to wait and see how our predictions about Chrome’s total dominance, reaching 50%, will turn out.


This was a post from the guys at Pingdom, a site monitoring service that makes sure you're the first to know when your site is down. Check it out for free.


Windows Phone 7 Marketplace Overtakes BlackBerry App World in Terms of Available Applications

Windows Phone 7 Marketplace Overtakes BlackBerry App World in Terms of Available Applications:

Last weekend, Windows Phone 7 Marketplace surpassed the 60K active applications milestone worldwide. Main contributor to this fact is the strong growth of new applications in January, where around 3000 new applications were added per week.


Another notable fact is that Windows Phone 7 Marketplace overtook BlackBerry App World in terms of available applications globally. This happened because in December and January, the number of applications in Windows Phone 7 Marketplace grew with 1750 more than BlackBerry App World did per week.


However, it does not seems that the winner of the two-horse race between BlackBerry App World and Windows Phone 7 Marketplace is announced yet. Both stores have different strategies in this battle. On the one hand, Microsoft quickly expands Windows Phone 7 Marketplace to more countries in order to gain market-power. On the other hand, RIM tries to attract Android developers by offering PlayBooks for those who submit Android applications for PlayBook OS 2.0 before February 13. The effects of this action is already noticed in the data, because BlackBerry added more new application to App World than Windows Phone 7 Marketplace did last week.

iOS passes Mac OS in Share of Web Traffic Propelled by Sales for Mobile and Tablet Devices

iOS passes Mac OS in Share of Web Traffic Propelled by Sales for Mobile and Tablet Devices:

Apple sold a historic number of mobile devices in 2011. IDC reports that in 2011, Apple shipped 93.2 iPhone units and sold an impressive 40 million+ iPad units. In Q4 alone, Apple sold 17.07 million iPhones, 11.12 million iPads, 6.62 million iPods but only 4.89 million Macs.


More so now than ever, mobile devices are playing a key role in the lives of consumers – and the new found industry shows no signs of slowing down. The mobile device industry is growing so fast, that it will likely become the predominant method for consumers to access and interact with the web in the near future. This poses the questions: When will we see mobile traffic overtake traditional desktop traffic, and what does this mean for the computing industry?


Given the record breaking mobile device sales reported by Apple in 2011 compared to their relatively low volume of PC units shipped, is Apple on the edge of cannibalizing its potential desktop market by focusing on its mobile device product mix? To investigate this trend, Chitika Insights compared overall web traffic market share of iOS and Mac OS.


To quantify this study, Chitika Insights analyzed several data sets composed of a series of US traffic taken from August 2011 to February 2012 out of the Chitika Ad Network (covering hundreds of millions of ad impressions). The user agents of individual impressions were then aggregated to determine relative overall share of the different operating systems. Our theory proved true as seen in the graph below:



The data shows that the web market shares of iOS and OS X have been converging steadily since August. iOS has been posting regular gains, and has experienced an overall growth of nearly 50%, whereas OS X has seen its market share decline by 25% since a high point in September. February marks the first point where a reversal in position can be seen in the respective operating systems. iOS passes Mac OS with 8.15% of all web traffic, whereas Mac OS only sees 7.96%.


Apple is renowned for its customer loyalty, so why is Mac OS experiencing a loss in web market share? Perhaps, Apples habit of launching cutting edge gadgets year after year is driving consumers to newer products. Combining this aspect with the similar functionality of iOS devices and a lower price point, it may be that consumers are choosing to go mobile, instead of purchasing more expensive Apple computers. Alternatively, the shift towards an on-the-go lifestyle could be driving mobile device purchases by the consumer, and thereby driving the corresponding increasing in mobile web usage.


Stay tuned to Chitika Insights for future studies focusing on Apple and web usage.

The world’s biggest startup

The world’s biggest startup:

Last year we began offering revenue and operating income comparisons between Apple and Microsoft. It was becoming evident that the iOS franchise was beginning to overtake both in revenue and profitability the Windows franchise. To offer more dimensions of comparison this time I am adding Google’s top and bottom lines for comparison (click image for detail):



Note that the graphs have the same scales when read horizontally. I’ve broken out the sub-divisions of revenues as the companies report them. Here are some observations:



  1. The time spanned is 4.5 years (September 2007 to December 2011)

  2. If we compare the fourth quarter 2007 to fourth quarter 2011 the ratio of Google : Microsoft : Apple went from 1: 3.39:2:16 to 1:1.97: 4.38. In other words, Microsoft was 3.4 times bigger than Google but today it’s only about twice. Apple was twice and is now about 4.4 times bigger.

  3. In terms of operating income (i.e. before R&D, SG&A and OI&E) the ratios were 1:4.48:1.53 and are now 1:2.28:4.82. Microsoft’s income gap to Google halved while Apple’s more than tripled.

  4. Google and Microsoft have grown but not by adding new sources of revenue. Apple grew its base but, more importantly, added new businesses for spectacularly more growth.

  5. Compared to Microsoft and Apple, Google’s revenue is distinctly single-source: advertising. Though divided between own sites and those of affiliates, advertising is today 96.1% of revenue and was 98.6% four years earlier.


If we compare the individual product/business operating incomes individually we see some interesting patterns:




  1. Google’s advertising profits have overtaken Windows as has the iPhone and the iPad may do so quite soon.

  2. Microsoft’s Business (Office) and Server businesses are growing more quickly than Windows

  3. The hardware oriented Apple’ operating margin is now 37% and exceeds Google’s 33% while being nearly equal to Microsoft’s 38% (see chart below)



I presented a subset of this material January 30th at a TechMeetups event titled “Apple – world’s biggest startup.” A presentation by Adam Lashinsky focused on the cultural and procedural aspects which highlight Apple’s “startup” nature. My presentation showed, using these graphs, Apple’s growth characterizes it as a “startup”. The growth did not come from a broadening of its core products markets. It came from the creation of new product categories. Google, a much younger company does not exhibit this non-secular growth any more than Microsoft which is about as old as Apple is.


The lesson is perhaps that rapid growth is not the right of small companies alone. Apple has used disruptive innovation to transform itself and offers a stunning contrast to two other companies which are also seen as innovative leaders.