Last year ended with smartphone penetration in the U.S. reaching 46%, according to the latest data from Nielsen. That’s almost at the halfway mark predicted by the media research firm before the start of 2011 and up from 30% in the fourth quarter of 2010. Among people who got a new mobile device in the last three months of 2011, 60% bought a smartphone. Helping to drive adoption in recent months has been the iPhone 4S, launched in October. The popularity of the latest Apple handset is underscored by the Nielsen research, which shows that among people who bought devices in the fourth quarter, 44.5% in December said they got an iPhone compared to only 25.1% in October. Among new iPhone acquirers, 57% got the 4S. Conversely, Android’s share among people who bought smartphones in the last three months of 2011 dropped from 61.6% to 46.9%. Struggling BlackBerry dropped from 7.7% to 4.5%. Even so, Android managed to strengthen its position as the most pervasive mobile operating system among all smartphone users in the fourth quarter. All told, 46.3%. of smartphone owners surveyed owned an Android device, up from 42.8% in the prior quarter. Apple’s iOS platform increased its overall share slightly to 30% from 28.3% in the third quarter. By contrast, BlackBerry slipped to a 14.9% share overall in the fourth quarter from 17.8% in the prior quarter, while Microsoft’s Windows Mobile and Windows Phone platforms dropped to 4.9% from 6.1%. Microsoft, of course, has launched an ambitious effort to reverse its continuing slide in the smartphone market with the new lineup of Lumia devices developed in partnership with Nokia. How well consumers respond to the Nokia/Windows Phone handsets will be unclear until sales results come in later this year. But Wal-Mart’s decision to offer the entry-level Lumia 710 for free with a two-year contract suggests that pricing will not necessarily be a barrier to Microsoft making headway in the smartphone battle in 2012.
London-based mobile start-up Qriously is entering the U.S. market with the launch of a New York office led by Joe Zahtila, former chief revenue officer and COO of Dynamic Logic. The company, which replaces regular mobile ads with short survey questions on behalf of brands and publishers, is also rolling out a pair of new ad offerings. While its flagship Pulse product gauges consumer sentiment in real-time, based on their location, the new products extend the survey approach to additional areas. The new “Censio” ad will allow developers to ask app users questions about how they use their products, while the “Tactus” will let advertisers perform copy tests by serving questions to track people’s awareness of previously viewed ads. Launched in 2010, seven-person Qriously has raised $1.6 million to date from venture investors Accel Partners and Amalfi Capital. Ad clients pay per answer for questions served on smartphones and tablets, but the company also provides developers a free SDK (software development kit) to solicit immediate feedback from users within apps. Qriously, which declined to name any advertising client Tuesday, says its platform reaches 35 million devices globally. “Using our range of products, companies can quickly and easily gain invaluable real-time insight into the opinions of mobile users worldwide,” stated company co-founder and CEO Christopher Kahler. Now Qriously wants to bring its mobile tools for quickly ascertaining public sentiment to the U.S. In addition to appointing Zahtila as general manager for North American operations, the company also named Julian Kenny, formerly head of customer services and claims at St Andrews Group plc, as EVP, finance and operations. The start-up will face a host of competitors in the U.S. from Nielsen and comScore to mobile-specific analytics firms such as Flurry and Distimo.
Free is the best way to make money in the app world, according to the IHS Screen Digest Mobile Media Intelligence Service. The market researcher’s latest projection of growth in in-app purchases sees a $970 million market in 2011 growing to $5.6 billion in 2015. IHS estimates that of the billions of apps downloaded in 2011, 96% were free. The rapid shift to freemium models puts pressure on all app developers to keep the barriers to entry in apps low to nil. “In 2012 it will become increasingly difficult for app stores and developers to justify charging an up-front fee for their products,” says IHS Senior analyst for Mobile Media Jack Kent. “Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases.” At the end of Q3 2011, “free” downloads represented 45% of the top-grossing apps in the iPhone App Store and 31% of the top-grossing Android Market apps, IHS found. More than two-thirds (68%) of the top-grossing mobile apps included some kind of in-app purchasing. The freemium model is not just for gaming anymore -- although that is the segment that pioneered the format. About 63% of in-app purchases in the iPhone App Store involved virtual currency, used almost exclusively in games. Another 22% of purchases involved additional game features or items. But there is also some purchasing activity in non-gaming apps for things like time-limited navigation, dating and premium access to social networks. Upselling additional media content remains a nascent format of in-app commerce, however, at least in the smartphone areas. IHS found that only 2% of top U.S. in-app purchases involved video or TV content, for instance. And in the UK, 5% of the top purchases involved newspapers and magazines. The IHS data are focused on smartphones in this research. On the iPad, the role of media content in purchases is much more pronounced. In the current top-20-grossing apps in Apple iTunes iPad Store, six are media properties, including New York Post, Zinio, ComiXology, NYtimes and The Daily. Kent tells Mobile Marketing Daily that for the last two quarters of 2011, “those with video content from TV companies and newspaper and magazine app as expected performed far better on the iPad than iPhone. Our initial tracking indicates that these types of app accounted for around 8% of the top-grossing iPad app in Q3 and 11% in Q4.”
Rumors of the death of Nintendo and Sony portable consoles have been greatly exaggerated, according to a new projection from International Data Corporation (IDC), which believes both companies have some game in 2012. Analyst Lewis Ward says that the torrent of mobile gaming downloads doesn’t tell the whole story of purported erosion in handheld gaming. In 2012, he expects the overall mobile gaming market, including smartphone and tablet downloads and Nintendo and Sony physical cart and disc sales, will hit $3.6 billion in North America. “Dedicated handhelds will have 59% of that total,” he tells Mobile Marketing Daily. The shift of game revenues from traditional dedicated consoles to smartphones has been dramatic -- but not quite as dire as many suggest. On a worldwide basis, IDC is forecasting growth in all mobile gaming software segments from $14.7 billion in 2012 to $20 billion in 2015. But the revenue split between dedicated handhelds and mobile phone and tablet platforms will move toward phones/tablets only 4% in those three years. The handheld gaming market peaked at just about the time the iPhone emerged on the market along with an app marketplace -- 2007-2008. At that time, handhelds earned almost three-quarters of all portable gaming revenues. “It shifted significantly” since then, Ward says. But he also argues that the demographics and business models of mobile gaming are considerably different from handhelds. If you pare the market demographically, Nintendo and Sony remain in a strong position among teens. In a worldwide survey of 1000 gamers in each of 25 countries, IDC found that among those who paid for games on smartphones, only 1.5% were in the 13- to-17-year-old demographic. For the tablet platform, only 5% of those who pay for games are in the teen segment. But among Nintendo and Sony handheld owners, 10% are 13 to 17. Add to that the millions of youngsters under 13, and out of range of the study, and you have a very large base of players who pay for games but don’t typically have smartphones or tablets. “The handhelds have a two-to-one advantage within that demographic niche,” says Ward. Price points in mobile apps -- while great for consumers -- challenge developers to make profitable models in gaming, Ward says. “With games that are only a few dollars apiece, it becomes pretty challenging to make a lot of money on most games,” he says. “You need to sell a lot of games.” Or to develop a vast range of titles in order to register the few hits that will pay for the rest. Worse, he was surprised to find that even at such low prices, piracy of games on the Android platform in particular was more common than expected. “If you develop a game that is a hit, then in short order you will get a knockoff game that is available for free.” Nevertheless, mobile gaming has forced changes to the handheld environment. The in-app purchase model that is wildly successful in smartphone and tablet gaming is certainly headed to handhelds. The big hit tentpole games on handhelds have become more sparse, and it is harder for developers to see returns on the mid-list of third-party titles that are not blockbuster successes. While mobile platforms allow for in-app advertising that can help support game maker efforts, Ward has yet to see this stream even approach the revenues from direct-to-consumer sales, however. In 2010, on a worldwide basis, about $750 million in ad revenues was generated through mobile gaming banner ads and sponsorships.
The mobile sector continues to show real and rapid growth in almost every metric relevant to an emerging business -- penetration of smart phones; time spent with mobile devices and with different functions; ad revenues etc.The promise of the newest generations of mobile technology -- ranging from screen resolution and size to network speeds, connectivity etc. -- all combine to suggest that the sector itself is poised to deliver content, functionality and the kind of user experience that makes for a real uplift in the fortunes of providers and users alike.Add to this the impact of the experiences delivered by tablet devices and one would be forgiven for thinking that we are on the cusp of a bright new dawn of mobile advertising revenues.To a large extent, that seems a perfectly reasonable assumption. Enhance what can be delivered, how it can be delivered and how it can be consumed, and the money will follow. It makes intuitive sense and will turn out to be broadly true.But the technology itself will only get us so far in the pursuit of increased revenues. Perhaps the single factor that could benefit the mobile industry more than any other is not technology, but the effective leveraging of a characteristic far more fundamental to the medium -- mobility.After all, part of the promise of mobile media is the “anywhere, anytime” promise that was part of the collective mantra a few years ago. Mobile media -- probably more than any other -- gives marketers access to consumers throughout the day, wherever they are and whatever they are doing.This provides the opportunity to deliver contextually relevant messages and to reach audiences when they are most receptive to the message, be it in the hours before they are most likely to visit the shops, when they are watching TV, when they’re commuting, etc.It’s this ability to target audiences not simply on the basis of demographics and reach, that is the strongest point of difference mobile can leverage.In effect, it makes mobile a contextually-driven medium -- arguably to a greater extent than any other -- and this provides possibly its strongest point of difference in the media mix.While absolute numbers (reach and frequency) will never become irrelevant, the increase in contextually-influenced media planning practices means that mobile’s ability to reach audiences in contexts relevant to different marketers is likely to make the medium disproportionately valuable -- if properly leveraged.Perhaps for mobile media at least, we should look at a “Reach & Frequency In Context” formula to determine media value -- with the context being defined by the marketers’ objectives.
The last few days have yielded some eye-popping online video stats from research firms and companies with skin in the game. For starters, researcher Parks Associates has found in its latest studies that women are more ravenous consumers of online TV shows than men. Parks Associates found that women are 73% more likely than men to have watched a full-length TV show online in the past 30 days. What’s more, CE makers would be wise to target their messaging to women, according to this data. Parks found that women have “higher purchase intentions” than men for nearly all of the popular CE devices, such as laptops or smartphones. Not only are women interested in buying, they’re often loyal when they do make their purchase choice. "Women are frequently the product buyers -- and once she owns a CE product, she becomes a heavy user, most particularly for devices that allow sharing and uploading content and downloading TV programs," said Tricia Parks, CEO, Parks Associates in a press release. "CE manufacturers are picking up on this changed buyer, offering their products, particularly their mobile ones, in more colors and styles with more personalized accessories." Many female users of smartphones and tablets are playing games on the new devices. Parks said that women are 40% more likely than men to play games on Facebook, and they have dramatically increased their activity on gaming consoles. Shifting to online video specifically, at last week’s CES show, YouTube executive Robert Kyncl, global head of content partnerships, made a bold prediction. He expects Internet video to soon account for 90% of traffic on the Web. He also said that in the next 10 years, about 75% of all new channels will be Internet channels. (Though, I would think that number would be closer to, say, 99%. Who’s launching a channel anywhere but the Web, these days?). These stats follow YouTube’s jaw-dropping news late last month that in 2011, there had been more than 1 trillion playbacks of videos on YouTube.