Mobile Search: Digging Into Apple, Google, Microsoft Earnings Reports

by Laurie Sullivan, Jan 24, 2013, 12:49 PM

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Public company earnings reports can provide a wealth of information for search marketers, from device activation to investments in research and development. This may help to refine search desktop and mobile campaigns. Here are a few bytes.

Apple spent $3.4 billion, $2.4 billion, and $1.8 billion in 2012, 2011, and 2010, respectively, for research and development of new products, according to the company's financial statements. R&D expense rose $952 million or 39% in 2012 compared with 2011, and $647 million or 36% in 2011, compared with 2010. The growth in R&D expense was driven by headcount and support for R&D.

Compare Apple's R&D investments with Google's, which spent nearly $6.8 billion (unaudited) on R&D in 2012. Google's R&D expenses were $2.8 billion, $3.8 billion, and $5.2 billion in 2009, 2010, and 2011, respectively -- which included stock-based compensation expense of $725 million, $861 million, and $1.1 billion, respectively, according to a 10-K filing in January 2012.

Microsoft has the deep pockets to capture more market share for Bing. During fiscal years 2012, 2011, and 2010, research and development expense was $9.8 billion, $9 billion, and $8.7 billion, respectively. The figures represent 13%, 13%, and 14%, respectively, of revenue in each of those years. It's not clear how much goes into building out Bing.

This week Apple reported selling more than 1.7 million iPads weekly in Q4 2012, up from a total of 15.4 million in all of Q4 2011. A few other important stats: App Store now offers more than 775,000 apps to account holders in 155 countries, including more than 300,000 native iPad apps. Cumulative app downloads have surpassed 40 billion, of which Apple paid app developers more than 7 billion for sales.

The real question becomes how many of those iPads actually connect to the Internet through Wi-Fi and/or cellular service. This week Verizon said it activated 6.2 million iPhones in the December quarter, about 63% of its 9.8 million smartphone activations. Android devices made up the bulk of the remaining 3.6 million smartphones. 

Forbes reports that AT&T iPhone sales during the past year accounted for an average of 77% of smartphone sales and quarterly activations during the past year, rising to 80% in the December quarter. AT&T has accounted for 21%, 13%, 14%, and 18% of iPhone shipments during the last four quarters, respectively.

In January 2012, more than 250 million Android devices have been activated globally. Let's see what Google reports in the forthcoming 10-K filing. Interestingly, in the filing Google calls mobile iPhone and Android applications "competition."

Data firm Flurry estimates that 17.4 million iOS and Android devices were activated on Christmas Day, along with 328 million app downloads. During the holiday week, Flurry estimates that more than 50 million iOS and Android devices were activated, and 1.76 billion applications were downloaded. We need to take a closer look at downloads.

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