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Wednesday, March 28, 2012

The value of the OS X monopoly

The value of the OS X monopoly:
In January I noted that there were more iPads sold by Apple than PCs from HP, the largest PC vendor in the fourth quarter. Including all tablets, this is the distribution of market shares by units shipped.

Note the different color palettes for Windows and non-Windows.
By the metric of tablets+PC’s Apple appears to be the leading vendor. However, if we consider only the Mac, Apple is still well behind. The historic unit volumes of the two is shown below:

Although Apple has nearly doubled its shipment volumes since 2008, it’s still only one third that of HP. In addition to comparing volumes, we can also measure profitability. In this case HP’s PSG (Personal Systems Group) reports operating profits and we can estimate the same from Apple based on a gross margin estimate and an operating expense estimate (as percent of sales).
The comparison looks like this:

The operating profit for Apple is 2.7 times higher from a third the units. This gap is a result of a vast difference in profitability. HP’s operating margin for PCs is 5% while Apple’s is 21%.
A few days ago I highlighted that Apple’s iPhone yields disproportionate profits because of the way it performs the jobs its hired to do by consumers and operators.
With the Mac the story is that Apple’s OS X is primarily responsible for delivering quadruple hardware margins vis-a-vis the most successful PC vendor.
Both iPhones and Macs are sold as hardware products and the entire econometric analysis of Apple depends on hardware cost structures. This is because hardware lends itself to easy measurement. However, a casual observer would be stumped by a comparison with competitors which cannot come near the profitability Apple enjoys. How can the same bundle of components (admittedly mostly off-the-shelf) be sold at triple the margins?
It comes down to software. Apple has a monopoly on iOS and OS X and charges for it through its hardware. That’s a very valuable monopoly. It’s worth at least $1 billion per quarter.

The single-atom transistor is here – the amazing evolution of microprocessors (infographic)

The single-atom transistor is here – the amazing evolution of microprocessors (infographic):

A team of researchers in Australia has managed to create a transistor that is the size of an atom. That’s the smallest transistor ever created. Considering that the single-atom transistor is only 0.1 nanometer in size, the possible applications are mind-boggling.
It will be quite some time before we see the single-atom transistor technology implemented in microprocessors that we use in computers and other devices. But this is such a thrilling development that we wanted to find out how it fits in with how microprocessors have evolved so far.

How small can a transistor be?

With the single-atom transistor now a reality, at least in research labs, we charted the evolution of microprocessor manufacturing. We think you will agree with us; it’s quite a dramatic development over just 41 years. And things get even wilder when we gaze into the future, comparing the microprocessor manufacturing processes of today and yesterday with what is waiting around the corner.

Moore’s law will hit the wall

Gordon Moore gave name to the law that has been dominating the microprocessor evolution over the last 42 years.
Moore himself declared in 2005 that the law named after him was dead, when he said: “In terms of size [of transistor] you can see that we’re approaching the size of atoms which is a fundamental barrier, but it’ll be two or three generations before we get that far.”
That may just become reality possibly sooner than even Moore thought.
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When will Android reach one billion users?

When will Android reach one billion users?:
The latest data from Google shows that the Android activation rate is increasing at a relatively steady rate (i.e. acceleration is constant). The data provided so far is in the blue circles below. The green line is the interpolation and extrapolation of that data.

As the graph is projected forward we get an activation rate of one million per day by mid August of this year. If it continues then we could see 1.5 million per day by end of 2013.
The corresponding number of cumulative activations is shown on the following log chart (with blue circles showing the actual data and the green estimates.)

The forecast is therefore that Android activations will cross one billion by November 2013.
The following chart compares the growth ramps of the various mobile operating systems indexed from the same starting points (measured in quarters after launch).

If Android does keep accelerating at the same rate then it will reach a billion users in five years. Of course, this total will not be a unified ecosystem in that many versions of Android will be co-existing. There will also be additional variants of Android which will not include Google services (these are not included in the totals above) which will compete to some degree with this platform.
However, it’s still an amazing story. The crucial question is whether the billion Android phones will have an effect on the opportunity for new entrants like Windows Phone and future BlackBerry variants as well as Bada and other Linux-based platforms.
The answer is that there will be well over 6 billion mobile “connections” by the end of 2013. ITU reports that “By the end of 2010, there will be an estimated 5.3 billion mobile cellular subscriptions worldwide, including 940 million subscriptions to 3G services.” It follows then that if this forecast is correct then by the end of 2013, Android will have about 17% penetration of the connections market.

Why total net profits are not conserved

Why total net profits are not conserved:
When cellular phones emerged in the 1980’s wireline phone service was excellent. Penetration was at 99 percent in the United States and prices had never been cheaper. The industry was deregulated and phone companies were competing fiercely over long distance calling plans. In contrast, the new cellular phones were not “good enough” on the basis of what was considered necessary for making critically important phone calls.
Sound quality was poor, coverage was spotty and battery life measured in minutes. But they allowed a whole new consumption model of communication to emerge. They allowed a caller to call a person not just a place. Over time, this simple value proposition caused a powerful profit formula to emerge. That formula led to extremely rapid improvement in the quality of the network and devices that connected to it.
It caused such a cataclysmic change that twenty years hence it became possible (even natural) for consumers to “cut the cord” and abandon wireline communications altogether. The “excellent quality” wireline industry was dead to be replaced by the “good enough” wireless industry.
One consequence of mobile telephony was increased consumption. Voice call minutes increased dramatically because calling could happen anytime from any place. While overall consumption increased, landline use decreased. Then came messaging of various types. Forms of communication enabled by cellular networks that simply did not exist before with landlines.
As a result there were vast pools of profits available to telcos that seemed to appear out of nowhere. SMS and data plan income was beyond anyone’s ability to forecast in the 1980s.
The same phenomenon is happening with smartphones. Consider a proxy measure: operating profits from mobile phones since the iPhone launched, illustrated below.

Although Apple went on to capture 75% of the profits, it did so from a vastly expanded profit pool. A similar picture emerges from an illustration of revenues:

Another way to visualize the evolution of the market is to look at the combined price, profit margin and volume areas for the fourth quarters of 2009, 2010 and 2011.

Scanning from top to bottom, you can see how volumes grew, revenues grew and profits both grew and were re-allocated among participants (each colored pixel in the charts above is equal to about $1 million.)
These charts illustrate that there is no “law of conservation of profits” in any market as long as there is sufficient innovation. This is because the there is no “law of conservation of value created”. If value is presented, buyers will gladly trade cash for it. Conversely, if there is no value-generating innovation, growth stops and competition reduces to a zero-sum game.
One of the most exciting aspects of disruptive growth is that although it tends to transfer profits from incumbents to entrants, it also grows the size of the overall market. Sometimes the growth is significant.

When will tablets outsell traditional PCs?

When will tablets outsell traditional PCs?:
I truly believe, and many others in the company believe, that there will come a day that the tablet market in units is larger than the PC market.
Tim Cook Discusses Q1 2012 Results – Earnings Call Transcript – Seeking Alpha
Question is when?
I began by projecting growth rates of various market participants including the leading Windows PC makers (HP, Acer, Dell, Lenovo and Asus), the combined “others” and the Mac. I also added the iPad, Samsung’s tablets, other Google sanctioned Android tablets and Amazon. I also projected a split between traditional and tablet Windows shipments.
The underlying assumptions are:
  1. Mac growth continues at 25% as it has on average for a few years
  2. Windows grows slightly in 2012 with the introduction of Windows 8 late in the year. However I anticipate Windows 8, including tablet versions, to mostly be upgrades with slow enterprise take-up within this time frame.
  3. The tablet versions of Windows begin shipping in Q4 2012 with 7% of total Windows shipped. The ratio reaches 20% by end of 2013.
  4. iPad growth will flatten for ’12 and ’13 at 100%, similar to iPhone’s historic performance.
  5. Android tablet growth will be significant in the current year and follow iPad growth pattern though settling at 80% during ’13.
  6. Amazon growth will be approximately 80%.

Building the platforms combined growth bottom-up gives the following forecast for the next two years (and historic growth shown for perspective.)

[FF = form factor]
Given these assumptions, the day when the tablet market (by units) will exceed that of traditional PCs will come sometime in the fall of 2013.
As yesterday’s post noted, the tablet market will be additive. This can be seen in the vendor shipments forecast that accompanies the model:

The unrelenting trends in the US smartphone market

The unrelenting trends in the US smartphone market:
The latest comScore US mobile subscriber monthly data is in: comScore Reports January 2012 U.S. Mobile Subscriber Market Share – comScore, Inc.
January saw a return to trend line growth in US smartphone add rates. The 767k/week rate is within the band after November’s below- and December’s above-the-line outliers. The weekly add rates are shown (with projection of trend) below:

The pattern shows a likely 1 million new smartphone users per week being added consistently by the fourth quarter of this year.
Overall, penetration of the sampled population (above age of 13, primary phone and excluding business purchases in the US) reached 43.3% in January. The increase was 1.45 points from December.
A significant 35 million US users  switched to smartphones in the last 12 months, equivalent to 15% of the user population. My current forecast is that 50% of the user base would be smartphone users by June 28th.
The platform data shows a continuing pattern. In terms of absolute users Android has reached nearly 50 million users, iPhone 30 million, BlackBerry 15 million and Microsoft (Windows Phone and Windows Mobile combined) 4.5 million.

In terms of market share of the smartphone population, the various platforms stack up as follows:

The net gains for each platform by month are shown in the following diagram:

RIM and Microsoft have continued to lose users while Google and Apple have continued to gain.
The two trends that continue are that overall penetration is nearing saturation and that two platforms seem to be increasing their share of that base. The “comeback story” for any of the hopefuls will depend either on switching users away from their current platforms of trying to engage with late adopters. The first option is daunting due to latent network effects related to platforms and the second sounds to be symmetric to existing incumbent strategies.
Without an asymmetric approach, the challengers are unlikely to succeed.

Mobile Manufacturer Report, February 2012 Update

Mobile Manufacturer Report, February 2012 Update:

Operating System Report, February 2012 Update

Operating System Report, February 2012 Update:

The parable of Nintendo

The parable of Nintendo:
With the launch of the Wii console, Nintendo averted disaster. When the Wii launched in late 2006 Nintendo had been facing the simultaneous attack from the “seventh generation” Xbox 360 which launched a year earlier as well as the PlayStation 3, both of which set as their bases of competition 3D graphics at HD resolutions. Many wrote off the company and called the console market a two horse race.
Then, in what seemed a desperate downward leap, the Wii was launched into a different trajectory. It addressed non-consumers with a new, more intuitive controller and standard resolution rather than competing for hardcore gamers with more power and richer graphics.

Because the Wii was asymmetric and addressed non-consumption rather than trying to be a “better” console in what was becoming a horsepower race, Nintendo expanded the console market. Its innovation was interesting enough that many hard core gamers used the console in addition to a PS3 or Xbox and many non-gamers bought it as their first console.
The result is that 95 million Wii’s have been sold vs. 66 million Xbox 360′s and 62 million PS3′s.
The effect of the Wii introduction on Nintendo’s console unit sales is shown below (pink line).

The graph above shows that the growth from Wii has stopped. In fact, the console has been in decline since early 2009. Fortunately for Nintendo, the company also developed a mobile strategy. Learning from its Game Boy device, its DS series of portable game consoles allowed the company to diversify its portfolio. The graph also shows the total portable units sold in blue.
However, this strategy has not been enough to protect the company from the disruptive effect of mobile computing. As the following chart shows, each new generation of portable from Nintendo has failed to break out of a general pattern of overall decline.

Contrast the DS product patterns with the iPod touch and iPad–multi-purpose products whose game functionality is “good enough” but whose communications and general-purpose app catalogs are re-defining the basis of competition yet again.
Nintendo bet on the 3DS to reboot the franchise. The 3DS product does show the characteristic initial spike in adoption but the level it launched at is far lower  than the level of the iPad. Nintendo has a big hill to climb to even recover the volumes it held in 2009. In contrast, the usurper Apple’s volumes are doubling each year.
When products are compared as “ramps” in terms of growth post-launch the story becomes even clearer.

Although the iPhone and iPod touch ramped in similar ways[1] to the gaming platforms, iPad took an entirely different path. The 3DS benefited temporarily from a price cut but it seems to be returning to a well-worn trajectory.
The data points a bleak picture for Nintendo. The Wii was a success due to its competitiveness vs. non-consumption of gaming. But another low end disruption took hold in 2007. Good enough games on phones and mobile computers are taking consumption away from dedicated consoles, both fixed and mobile.
In addition, the rate at which game experiences are improving on iOS imply that they will overtake the “quality” of consoles in the not too distant future. Differences in distribution models also guarantee lower pricing for software for end users and enabling a far larger catalog of titles.[2]
This may sound like another story of fortune gained and fortune lost. The inevitable “what goes up must come down” aphorism. We become used to this pattern and assume it to be axiomatic. But there are causes for each success and causes for each failure.
The lesson here is that a company that disrupts does not necessarily survive. Long term survival depends on the ability for serial disruption. Serial disruption is an uncomfortable state for an organization to exist in. As the story above shows, disruptions are usually enabled by “desperate” necessity. Desperation is not something management is trained to aspire for.
What management strives for is steady state satisfaction and predictability from intelligent planning.

  1. Though the iPhone ramp matched the consoles, the growth for the iPhone is persisting at 100% y/y five years into the product. This means it is outstripping all console installed bases by at least a factor of 2.
  2. The catalog is not only broad but deep in the sense that there are many new game concepts and experiments being tried. The app store is a vast testbed for game and entertainment ideas.

US Wireless Market Q4 2011 and 2011 – Addendum

US Wireless Market Q4 2011 and 2011 – Addendum:
Last week, we issued our quarterly update on the US market. Wanted to expand on and clarify a statistic we mentioned in the update. We reported that “90% of the tablets use WiFi only.” For our analysis, we looked at the overall cumulative tablet base in the US and not the specific sales numbers for a given year or quarter.
I wanted to provide some more details behind those numbers. 90% of the tablets using WiFi only doesn’t mean that 90% of the tablets SOLD are WiFi only. What we were saying was that by the end of 2011, roughly 90% of the tablets (which are a combination of WiFi only tablets like the Kindle Fire or the Samsung Galaxy or the Apple iPad and WiFi+Cellular tablets like the Samsung Galaxy, the Motorola Xoom, and the Apple iPad) were using WiFi only to connect to the network. Some of these tablets are also using MiFi and tethering capabilities of their devices to connect to the cellular network as well.
So, how does the overall tablet landscape in the US breakdown by connectivity type. As indicated in the figure below over 62% of the tablets in the US are WiFi only. Another 25% are WiFi+Cellular but are not activated by the consumer so the total WiFi tablets in use as of Q4 2011 were roughly 87% of the mix. These included tablets such as Kindle Fire and Nook Tablet along with traditional tablets such as the iPad and Samsung Galaxy. A small percentage of these users connect these users to the cellular network via MiFi and tethering options as well.
This also means that roughly one third of the tablets with cellular connections were activated as of Q4 2011. Since customers go in-and-out of the prepaid tablet contracts, the actual number of tablets that have had a cellular connection at some point in time is obviously larger. In general, the churn is low as consumers who get hooked onto the cellular connectivity outside the WiFi zone don’t want to give it up.
Another important point is that this distribution is not uniform across all operators either in the US or abroad. Overseas, some operators have launched family data plans where users can attach multiple devices to a single data plan just like they do for voice plans. Canadian operator Rogers launched family data plans wherein family can share 1-2 GB/mo across multiple devices. Orange Austria, France, and Spain offer two devices per data plan that includes unlimited WiFi and 2GB shared data across both devices. Vodafone Ireland offers shared mobile broadband for business users with 5GB limit shared across unlimited users. The cost for this plan is $10/connection/month with additional 5GB for $14.
Also, operators who offer more flexibility in their data plans by providing daily or weekly passes (like AT&T and Verizon provide for laptops and netbooks ) or even hourly data plans (more prevalent in developing countries) will see more traction with the tablet consumers.
Finally, another barrier to greater cellular tablet adoption is the cost difference between WiFi only and WiFi+Cellular tablets. Clearly, iPad rules the tablet market right now and the price difference between the two classes of devices is $129, enough to dissuade a segment of the tablet loving population. As the price of HSPA+ and LTE modules come down further, the difference in price between the two classes of devices is likely to go away.
US remains the leading nation in terms of tablet use and as the pricing plans mature across all the operators and the OEM costs go down, we will see majority of the consumers using cellular connectivity in the market.

Thursday, March 22, 2012

What is disruption and how can it be harnessed?[1]

What is disruption and how can it be harnessed?[1]:
The phenomenon we call business disruption could benefit from a different name. Although it signifies a disturbance or an interruption in an industry, it’s much more than that.
The nominal definition I work with is that disruption is the “transfer of wealth in an industry from dominant incumbents to disadvantaged entrants.” It’s a convenient definition because it’s brief, it puts the emphasis on economic value and because it alludes to a reversal of fortune and the implied extraordinariness.
However, there are several nuances lost and contradictions ignored in this definition. I want to enumerate them here and now:
  1. Although in a disruption there is a transfer of wealth, that wealth is not necessarily conserved. An industry that undergoes a disruption often emerges larger, more productive or more influential. Disruption typically creates net growth.
  2. Although extraordinary and spectacular it is also very commonplace. Disruption is not rare. In fact, it rarely fails to happen. One could even say that if it does fail to happen, it’s a symptom of an industry in crisis.
  3. Being so common, it can be seen as a regular occurrence. But if the regularity of disruption can be considered to have a clock cycle, its frequency is increasing.
  4. Disruption in the literal sense implies discomfort, displacement and even destruction. But it’s necessary to the health of any economy. The analogy to biology is that death is the most important thing in life.
  5. Although only recently characterized and studied in cases set in the past century, the pattern is evident throughout history.
I’ve offered examples of these consequences or side-effects of disruption but I’ll emphasize once more the example I’m most familiar with. To illustrate the primary definition, the AMP index is a measure of the success of one company relative to a set of peers in the mobile phone industry. It’s the average of four market shares: mobile phone units, smartphone units, revenues and operating profits.
This chart shows the shift in AMP index values for the competitors whose data is public and which make up the vast majority of units sold:

The reversal of fortunes, though not complete, is clearly evident. Motorola and Sony-Ericsson, two of the brands that were a significant part of the mobile phone landscape for more than a decade, have ceased to exist as independent companies. A third, LG, is likely to follow. Nokia, the most successful phone vendor for the decade of the 2000′s is in severe distress at this time, valued barely above book. RIM, a pioneer, is priced below book value and HTC, another pioneer is also looking for a way to remain relevant.
But we have to appreciate that as these valuations evaporated, the market grew both in value and in volume. The overall spending on phones has never been higher. The total profits captured is also growing. By any standard, smartphones are a booming business. Queues form for the latest versions, there are supply constraints and media coverage is almost universal.
We also have to appreciate that the Nokia that is faltering today was itself disruptive when it gained its prominence. In the 1990s the mobile phone market was dominated by Motorola, then by Ericsson. Nokia was a relative latecomer and succeeded by being better in some regards (e.g. the ease of use of text messaging on its phones) but also by being asymmetric. Using logistics and a portfolio approach to the market allowed it to build scale while maintaining margins. Process innovation led to component shortages for competitors and allowed Nokia to build massive distribution. It also allowed it to invest in software which gave it a unique selling point for several years.
Looking into the even more distant past, the mobile phone market has seen several waves of disruption. Going from analog to digital was such a turnover. The companies which were successful with analog (mainly Motorola which supplied not just handsets but infrastructure) were sidelined when global digital standards took root. Integrated European vendors dominated a period when 2G GSM was becoming predominant. Isolated pockets of integrated innovation like iMode in Japan also had mini-booms but were swamped by standardization and the Galapagos syndrome.
And let’s not forget that mobile itself has been disruptive to fixed line telephony. Looking at all telecom, the transitions from fixed to mobile, analog to digital and most recently feature-based to computing-based platforms have all been disruptive, bringing a new set of companies to lead while incumbents fretted.
It should also be noted that these changes are happening more rapidly. The chart above has a five year period. The change from analog to digital took longer. Over 10 years since its inception analog was still dominant. If we look how long it took for mobile to take consumption away from fixed, that process is still ongoing, several decades later. The speed is so slow that some countries have skipped over fixed networks altogether.
With software-defined devices and cloud-based distributed computing the changes will become even more rapid. Even though the user base is expanding to cover nearly the entire global population, the replacement rate of devices means that change in the tools and services people use are limited by supply rather than demand. Supply-based innovation or “the new manufacturing” will probably be the dominance-defining asymmetry of the next decade.
The disruption of mobile phones that Apple has foisted on the world through iOS has caused it to reach a point where it dwarves the values of other companies, not just in the sectors it competes, but in all sectors. Some suggest that Apple is an anomaly and does not reflect the economy. To truly understand the state of the economy, they say, means to subtract Apple from it. But I feel this is exactly wrong. Apple is, through the iPhone and iOS ecosystems, defining this era. Just like Microsoft defined an era of increased productivity through the creation of the “knowledge worker”, or like GM re-defined transportation and the notion of the brand in the 50′s, or like IBM re-defined business process efficiency with automation in the 60′s and 70′s, these companies were not anomalies of their era. They were the eras. They were the locomotives of growth that taught other companies how to operate and the contemporary managers how to manage.
Companies that study Apple today will benefit by understanding how it re-wrote the rules. The anomaly is the norm. The exception is the rule. The times they are indeed a-changin’.
Finally, to put disruption in a historical perspective. I wrote a retrospective on the history of the telegraph as a parable of how disruption could be interpreted to have happened even a century ago. What I hope to do now is to show how, given this set of spectacles, we can see how the fate of nations was determined, in part at least, by the ability of leadership to accommodate disruption.
The case of growth or limits to that growth, the question of integration vs. modularity and the evolution of value chains all have application for regulators, policy makers and political leaders.
The dialogue on this topic will begin in Amsterdam on April 13th 2012, at Asymconf. I look forward to seeing you there.

  1. This is the material accompanying the first case discussion at Asymconf. Participants are encouraged to read it before the show.

Still Screaming for Ice Cream: Android’s Latest OS Running on 1.54% of Devices

Still Screaming for Ice Cream: Android’s Latest OS Running on 1.54% of Devices:
On November 12th, 2011 the latest Android OS, Ice Cream Sandwich (Android 4.0) became officially available as an open source download, and on December 15th, 2011, it made its public debut. Three months later, the Nexus S (the earlier flagship Google Phone) is the only device which has received official over-the-air updates to Ice Cream Sandwich. One might blame Google for lacking an effective distribution plan or failing to provide manufacturers’ early access to the OS – however, the problem may be deeper seeded than that.
Almost across the board, mobile manufacturers have been adamant on implementing their own software tweaks (known as skins) on top of the factory version of Android OS provided by Google. This has led to significant delays across the market in terms of software rollouts. Given the historic tendency of Android releases to first debut on a small number of devices, and then make it out to the overall market, Chitika Insights sought to investigate the current level of Ice Cream Sandwich penetration across all Android powered devices.
To quantify this study, Chitika Insights analyzed a sample of tens of millions of mobile ad impressions all running some version of Android OS, spanning a one week time frame, from February 24th to March 1st, 2012. Web market share is composed by calculating the proportion of Android impressions represented by each version of the operating system. The resulting distribution shows the current levels of market fragmentation within the Android market.
As shown in the graph above, after three months on the market, Ice Cream Sandwich is currently generating only 1.54% of all Android web traffic. This poses a stark contrast to Apple’s mobile operating system, iOS (Android’s biggest competitor), where over 90% of iOS users are on the latest two versions (only about 4.5% of users are on Android 3.0 and 4.0 combined). Apple’s lower OS fragmentation is likely due in part to the fact that they maintain control over their entire supply chain from manufacturing to distribution.
Android market fragmentation continues to be a significant problem for the platform, as reported in this prior Chitika Insights study. First, the current levels of fragmentation can act as significant barriers for developers who become forced to create applications running across all versions of the OS. Mobile developer Mika Mobile stated that they stopped work on Android as it requires too much support and expense compared to other mobile platforms. The necessary legacy support for Android app developers (and the extra work it produces) may reduce the number of apps available going forward, which could certainly have an adverse effect of product sales.
What’s next for Ice Cream Sandwich? The next phone scheduled to come to market with ICS preinstalled in the Samsung Galaxy S3, which became available internationally on March 13th, with no word of when the update will make it to the U.S. markets. If your cellphone provider is Verizon, they have listed a slate of devices which will get the update as 2012 progresses. HTC and Motorola have also stated that they plan to roll out ICS updates to a select list of devices, which could drive increases to the Ice Cream Sandwich share of the Android OS, and encourage further manufacturer support.

Happy birthday IE 8 – you are remarkably tough to kill

Happy birthday IE 8 – you are remarkably tough to kill:
It was three years ago today (March 19, 2009) that Microsoft unleashed Internet Explorer (IE) 8. According to Microsoft, the priorities for IE 8 were security, compatibility, ease of use, web development improvements, as well as adhering to CSS specifications and other web standards.
Three years on, IE 8 is still the second most used web browser version in the world.
Is that impressive or just simply sad? You tell us!

IE 8 still has over 16% market share

Microsoft released Internet Explorer 8 about two and a half years after IE 7 hit computers around the world. That’s half the time it took Microsoft to move from IE 6 to IE 7.
To put that in perspective, Google Chrome was at version 1.0.154 in March 2009. The current stable release of Chrome is 17.0.963.
But for a three-year old browser, IE 8 is really hanging in there. If we look at the latest statistics, IE 8 is still the second most used web browser version, with 16.29% market share, only behind Chrome 17 with 27.52%.

Other sources are in line with this, giving IE 8 a 17.53% share of the web browser market.
If we combine browser versions, IE is still number one with almost 35% market share, followed by Chrome close behind at almost 30%, and Firefox at around 25%.

Finally, IE 10 will get auto update

IE 10 is already out in a preview release and is expected in a final version together with Windows 8 later this year.
Of course the new browser will bring a slew of news and improvements, but most interesting is that it appears that IE 10 will get auto update functionality in the style of Google Chrome.
We’ve studied what effect the auto update feature of Chrome and Firefox have had on those browsers, and it’ll be interesting to see what happens with IE. Did you notice that there is no Chrome 16 or older in the chart above?
In fact, all the other versions of Chrome are bundles in that “other” category, each with a market share below 1%.
So as we say happy birthday (and good riddance!) to IE 8, we’re eager to say welcome to IE 10, and look forward to the continuing browser wars.
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