The launch of the iPhone 5 on Wednesday will shake up the smartphone industry and have broader implications for a host of companies from Google to the U.S. major wireless to Intel, according to JP Morgan analysts. Apple is expected to raise the bar for other phone makers with features including a larger screen but thinner body, 4G LTE wireless capability and longer battery life. Many 4G phones have been criticized for being “pocket hogs” or “battery hogs,” but the new iPhone will avoid those labels. The device, however, is not expected to incorporate Near Field Communication technology to power mobile transactions or other uses. “The gap widens in Apple's favor with tomorrow's launch of the iPhone 5,” said JP Morgan analyst Mark Moskowitz, who hosted the conference call and covers the U.S. IT hardware sector. He expects the better battery performance, a new internally developed Maps app and an upgraded Siri voice assistant to attract new customers. The firm anticipates the global rollout of the latest iPhone to be faster and wider than in the past and projects Apple to ship at least 45 million of the devices in the fourth quarter, with about 25 million of those being iPhone 5 handsets. The pricing should stay the same as the iPhone 4S -- starting at $199 for the subsidized 16 GB model. The arrival of the iPhone 5 will ripple across the tech landscape. For PC makers like HD and Dell, it signals trouble. Sales of the device will further curb demand for laptops and desktop computers, as consumers increasingly switch to smartphones and tablets. When it comes to software, JP Morgan Internet analyst Doug Anmuth highlighted the effect on three companies in particular: Google, Facebook and eBay. Google — With Apple replacing Google Maps as the default maps app for iOS 6, Google is expected to lose some usage-related advertising revenue. While YouTube will no longer be a default app, the new downloadable version of the app for iOS allows Google to begin running advertising in music videos and offer expanded content and a better experience. “Google may sacrifice some usage, but overall it will be free of some of those restrictions imposed by Apple and will be able to monetize better,” said Anmuth. Despite rumors that Apple would also ditch Google search, he expects Google to remain the default search option for the iPhone 5. Facebook — Deeper integration with iOS 6 will drive greater engagement by streamlining status updates and social sharing. It won't directly drive revenue for Facebook, but will improve user experience on the device. eBay — The launch of Passbook, Apple's mobile wallet solution announced in June, will not initially drive transactions but could move the company into the mobile payments business over time. If Apple were to connect Passbook with its 400 million active iTunes accounts, that could pose a challenge to PayPal, eBay's digital payments unit. As for the wireless carriers, the new iPhone is expected to bring a spike in sales. Phil Cusick, who covers the U.S. telecom market for JP Morgan, has increased his estimate of iPhone shipments for Sprint to 1.75 million from 1.35 million units in the third quarter, and for AT&T, to 4 million from 3 million units. He also upped the forecast for Verizon Wireless, assuming a Sept. 21 release date for the iPhone 5. “Depending on carrier availability, we could see some pretty big impacts on carrier numbers this quarter,” said Cusick. He added that the price of the iPhone 4S would likely be lowered, while U.S. carriers will offer the subsidized iPhone 4 free. The older 3GS will be phased out. Cusick doesn't expect the new 4G LTE capability itself to drive consumer upgrades as much as the iPhone 5's other new features. People are still confused about exactly what the difference is between 4G and 3G mobile service. But to the extent that iPhone users upgrade to the latest handset, carriers will operate 4G networks more efficiently. The new iPhone also affects various Apple suppliers. Intel and Advance Micro Devices may suffer from the ongoing erosion of PC sales because of wireless devices, but certain semiconductor makers will gain, such as Analog Devices, Fairchild and Broadcom.
Facebook CEO Mark Zuckerberg acknowledged disappointment with the company's stock performance since going public in May, but voiced optimism about its nascent mobile business as a long-term growth engine. Speaking publicly on Tuesday for the first time since Facebook's botched IPO, Zuckerberg addressed a wide range of topics about the company before a packed hall at the TechCrunch: Disrupt 2012 conference in San Francisco. The most immediate issue is the social network's plummeting stock price, which has been nearly halved from its $38-a-share offering price. Some analysts have suggested that Zuckerberg is overly focused on building products with little regard for Wall Street's focus on quarterly profits and growth. But the CEO suggested the company mission to “make the world more open and connected” doesn't conflict with achieving financial success. "Building a mission and building a business go hand-in-hand,” he said. “We need to do both.” Asked about the impact of the depressed stock price on employee morale and retention, Zuckerberg admitted the steep decline “doesn't help.” But he said the company is not a stranger to controversy and outside criticism and will be able to weather the current difficulties it faces as a newly public company. What's more, he argued that the drop in Facebook's stock price makes it a great time for new employees to join the company and existing ones to “double-down” and benefit from an eventual upswing in the value of their shares. One of the biggest questions feeding investor uncertainty is about Facebook's ability to monetize its mobile audience of more than 500 million and growing. The company only began running mobile ads in March, but Zuckerberg emphasized the huge potential that mobile offers for revenue growth. "Over the next three to five years, I think the biggest question on everyone's mind, that will determine our performance over that period, is really how well we do with mobile,” he said. One of the key steps Facebook has taken in recent months was to ditch HTML5 in favor of building native apps for iOS and Android devices. Zuckerberg called the company's bet on HTML5 its biggest mistake to date, acknowledging that the programming technology in the near future wouldn't be able to deliver the same capabilities as native apps. Facebook's recently updated iOS app has been well received and Zuckerberg said a new Android app is coming soon, without being more specific. The CEO also reiterated that Sponsored Story ads running in the mobile news feed are performing better than the standard display ads that run on the right side of Facebook pages and generate the bulk of its revenue. Early results from outside ad firms this summer indicated that mobile ads were earning 2.5 times more than traditional ads. "We're going to make more money [in mobile] than on the desktop," said Zuckerberg on Tuesday. A forecast released by eMarketer last week projected that Facebook will make just 72.7 million in U.S. mobile advertising, but ramp up to $629 million by 2014. A far more bullish outlook from Doug Anmuth, an analyst at JP Morgan, one of Facebook's IPO underwriters, predicts the company will earn 200 million from mobile ads this year, and 900 million in 2013. One mobile project Facebook won't pursue is a branded mobile phone. Zuckerberg denied repeated suggestions from interlocutor Michael Arrington that Facebook is building its own phone to compete directly with the iPhone and Android. Rather, he said it makes more sense for Facebook to work across multiple platforms to reach the widest mobile audience possible. However, Zuckerberg didn't rule out competing more directly with Google at some point in search. “That's one obvious thing we could do in the future if we were excited about it,” he said, noting that Facebook already generates 1 billion queries a day. The company last month did introduce search advertising, allowing marketers to run Sponsored Results that direct users to a specific Facebook app, group, event, or brand page. Did Zuck's talk do anything to reassure investors? In after-hours trading, Facebook shares were up 3.3% to $19.43. Not a strong vote of confidence, but better than hitting a new low.
Looks like retailers are placing their bets on happier holidays this year. But you wouldn’t know it by their modest investments in mobile shopping. A new study from the Hay Group, a management consultancy that measured the seasonal hiring plans of 14 of the country’s largest retailers, reports that 36% plan to be hiring more sales elves than last year. In last year’s survey, only 10% planned increases. And 75% believe sales will gain this year. “Retailers are betting that 2012 is going to be a great holiday season,” writes Craig Rowley, VP/global practice leader, in the analysis. “After four years of economic turbulence, they have figured out how to operate in an uncertain business environment and are calm and cool, knowing that they are ready, as they head into the holidays.” Importantly, the study found that 43% are shifting toward permanent -- rather than seasonal -- hires, indicating they expect the merriment to extend into 2013. The study also found that stores are shifting their e-commerce strategies, fueled by a successful 2011, which saw 10 days with online sales topping $1 billion. Expect holiday sales to start earlier: While the majority (58%) say they will hold off on holiday promotions until November, 42% intend to start next month. But a smaller percentage of stores (just 18%, according to the study) say they feel under pressure to match online-only prices, and overall, 50% say they intend to cut back on overall discounting. Nor are they heaping spending on mobile channels, despite steady growth in m-commerce. A new report by Shop.org, the e-commerce arm of the National Retail Federation, says that on average, retailers plan to invest just $207,000 on mobile objectives this year, compared to an average of $55,000 spent in 2011. Despite limited spending, more retailers are jumping into the mobile game: Only 9% of the companies surveyed had not made any mobile or tablet investments this year, compared with 18% in 2011. And 60% say they have a mobile site that they’ve optimized for Web browsers. In addition to consumer-facing smartphone innovations, retailers say they are also beefing up in-store mobile efforts, with 45% already or planning to offer e-receipts in the next two years, and 57% saying the same about mobile point-of-sale options. But within retail organizations, there are hurdles, with 60% saying business objectives for mobile are unclear, 40% citing lack of experience in designing for smartphone and tablet formats, and 36% expressing concerns about inadequate budgets, including staff. “While consumers are rapidly adopting smartphones and tablets, and there is no shortage of companies eager to provide mobile offerings to retailers,” writes Sucharita Mulpuru, Forrester Research VP/principal analyst in the report, “retail executives are taking a measured view of the immediate benefits of these efforts -- in part because of myriad challenges that must be considered when investing in mobile for their company.”
With Apple set to roll out a new iPhone on Wednesday, one question is whether the move will help the company's iOS gain back ground on Android. Last year, the Google mobile operating system surpassed iOS as the top smartphone platform globally and in the U.S. If nothing else, the iPhone 5 could help Apple steal back the spotlight from the hot-selling Samsung Galaxy S III, the latest Android flagship phone.The new monthly metrics report from Millennial Media released today shows that iOS gained back a bit of market share in August, with its share of ad impressions on the mobile network increasing to 34% from 33% in the first quarter. Android, meanwhile, slipped to 46% from 49%. Struggling BlackBerry, like iOS, picked up a point to reach 15%.Among individual smartphones, the iPhone easily remains the No. 1 device, with almost 16% share. The BlackBerry Curve is a distant second, with about 5%, followed by the Samsung Galaxy S (3.5%), the BlackBerry Torch (3%) and the BlackBerry Bold (3%). Still, 14 of the top 20 smartphones on the Millennial ad network were Android devices, which collectively help give the platform its hefty market share.On the strength of the iPhone and iPad, Apple was also the top device manufacturer on the network, accounting for nearly a third (31.3%) of impressions. Samsung was second with 22% share, up from 18% in the first quarter, trailed by Research in Motion (13.5%), HTC (8.8%) and Motorola (7%). Google-owned Motorola, which slipped from 10.6% share in Q1, is hoping to rebound with last week's launch of the Droid Razr M.Another big gadget-related announcement last week was Amazon's unveiling of new Kindle Fire devices, including a larger, 8.9-inch model, as well as the new Paperwhite e-reader with an illuminated screen. As of Q2, the Kindle Fire was the No. 3 tablet on Millennial's network behind the Galaxy Tab and the iPad. While male users outnumber female users on the iPad and Android tablets on the network, the Kindle Fire users skew toward women (57% versus 43% men).Non-smartphone devices overall account for 19% of impressions compared to 17% a year ago. Feature phones have dropped from 17% to just 7% of impressions, while smartphones have risen from 66% to 74%. Smartphone penetration in the U.S. is estimated at about 50% on the whole.Games were again the most popular type of mobile application on Millennial's network, followed by music and entertainment, science and technology, social media and communications. The company suggested students prepping for year-end exams helped push science/tech apps into the top three categories.In a mobile advertising report released last week, eMarketer ranked Millennial as the fourth-largest mobile ad company, with estimated revenue of $84.1 million this year. Google was No. 1, with projected 2012 revenue of $1.42 billion, followed by Pandora ($226.4 million) and Twitter ($130 million).
Comcast said it is launching a Hispanic-targeted triple-play package, offering international calling and programming. The Xfinity Triple Play MultiLatino offers 300 minutes a month for calls to landlines in Mexico or other areas in Latin America, while there are discount options for calling mobile phones.With cable and satellite operators struggling to hold on to video subscribers, there has been an increased focus on looking to Hispanic customers to regain some momentum.The triple-play package at Comcast comes with the current MultiLatino TV offering. Comcast also said it will offer programming in honor of Hispanic Heritage Month, which can be accessed via Xfinity.com/LatinoTV.The video-on-demand offerings include free films from Lionsgate, IFC and CineLatino, as well as other programming in the music and kids’ genres.Another move to attract Hispanic customers comes from Time Warner with its new Spanish-language sports network launching in Southern California this fall. Time Warner Cable Deportes will feature a slew of Los Angeles Lakers games. Also, Dish Network has a deal with Univision providing it with an exclusive Spanish-language sports network. It has launched a separate 24/7 sports channel open to all carriers, which will compete with Fox Sports and ESPN networks, along with others.
The widely anticipated launch of the iPhone 5 on Wednesday could help turn millions more Americans into smartphone owners. Already, 45% of U.S. adults have made the switch to smartphones, according to the latest data from Pew Research Center's Internet & American Life project. That's up from 35% in May 2011. Some 34% own feature phones, 15% have no cell phone at all, and 5% say they're not sure if they have a smartphone or not. The report comes on the heels of an estimate yesterday from Nielsen indicating that more than half (55.5%) of U.S. mobile users own smartphones. The Pew study shows that smartphone users tend to be younger and more affluent than the general population. For example, two-thirds of those ages 18-29 have high-end phones, as do 68% of those living in households earning $75,000 or more. In terms of gender, about the same proportion of men and women have smartphones, at 46% and 45%, respectively. Blacks and Hispanics are more likely to own smartphones than whites -- at 47% and 49%, respectively, compared to 42% of whites. People who use smartphones may not be smarter, but they are more likely to be better educated: 61% with college or higher degrees and urban or suburban dwellers, 48% and 49%, respectively, compared to 29% who describe themselves as rural residents. The results come from a Pew survey of 3,014 adults conducted from Aug. 7-Sept. 6. The survey has a margin of error of plus or minus two percentage points. A separate study released by the research organization last week suggested that smartphone users have also become more sophisticated about protecting their privacy on devices. Half have erased their phones' search or browsing history, while 30% have turned off location tracking. More than half (57%) of mobile app users overall have removed particular apps or decided not to install because of privacy concerns.
Using 2D barcodes only to send someone to a Web site is finally becoming a thing of the past. More interestingly, the follow-on actions after a scan are starting to provide more value with measurable results. Another way to look at this is that there are two distinct occurrences with scans: the action with the phone that activates and then the activity following the activation. The early use of QR codes typically led to a Web site, which tended to give codes a bad name, since anyone could just as easily type in a Web address and get the same result. No big benefit. The current use of many of the newer QR codes is no longer about routing a consumer to a Web site but rather to an activity or experience. The activation is what the consumer does with the phone. This could be the scanning of traditional barcodes, such as using ShopSavvy or Amazon PriceCheck to compare prices elsewhere while shopping. While the action of scanning a QR code is somewhat obvious, there are numerous activations involving mobile motion:
The very first online advertisers -- the pioneers of interactive advertising -- did a lot to advance the industry, from providing tracking, targeting and metrics to bringing a new sense of reach and scale to the digital advertising world. But when it comes to ad execution and how consumers learned to react to banner advertising, they messed up. Flashy, intrusive banner ads -- several of them to a page -- interrupted the user experience. Landing pages with complicated calls to action confused people and pushed them into sales funnels. It ruined the way that consumers think about advertising on the Internet. Why would you click on an ad on your favorite blog or Web site when you know it’s just going to take you away from your current experience? With mobile, we have a chance to start fresh. We have an opportunity to reinvent the ad experience and essentially "retrain" how people think about brands and their messages as they use apps and the mobile Web. Rather than being an interruption, an advertisement on a mobile device should be something that the user can engage with and then return to what they were doing previously, whether it is reading medical news or playing a challenging game of Words with Friends. This is particularly important because mobile devices by their very nature are more personal than PCs: from traffic patterns we can see that consumers use their smartphones and tablets in the mornings, evenings and weekends to check email, listen to music, pay bills and plan family trips. These are highly personal digital experiences that users do not want to have interrupted. But how can mobile advertising provide engaging experiences with branded content without landing pages? The answer is already out there. When Steve Jobs launched the iAd platform in April 2010, he noted that clicking on a mobile ad “yanks you out of your app” and as a result, people learn not to click on them. By placing the interactive and video content within an expandable ad unit, however, and allowing users to close the experience and go right back to where they were, they are offering a level of freedom and politeness that mobile users require. No landing pages, no navigation away from content. So hats off to Apple for creating such a large stage for that kind of user experience: advertising as an invitation, not an interruption. Now, as smartphone and tablet use reaches that of PCs -- and is on track to surpass it -- advertisers are getting hungry. And rightly so, because mobile users haven’t tuned them out yet, as they’ve done online. As of the end of July, the majority (61%) of smartphone users prefer free, ad-supported apps, and 43% said they were open to receiving in-app promotional messages from their favorite brands once a week. Particularly among the 18-24 and 25- to-34-year-old segments, the mobile equivalent of “banner blindness” hasn’t come into effect yet. Mobile users are increasing in number, and they have fresh eyes, ready to engage with brands on their devices. With ads that click away, or rather, “tap” away, to another destination, we’re getting frighteningly close to messing up...again. Let’s do this right this time. Expandable ad units are really the only solution that is good for all three constituents: Advertisers, Publishers, and Users. Advertisers will get better results; in fact, with A/B testing we’ve seen post-tap response and engagement rates up to 10X higher on ads that expand versus those that launch a new page. Publishers will see higher engagement rates as users return to their content immediately after engaging with an advertisement. And users will get the polite, non-intrusive experience that they deserve on their devices, like shopping for a new car on a quiet Saturday morning…with their iPad.