What should be noted by both the makers and buyers of all kinds of mobile phones is just how hard it is to make a smartphone that people enjoy owning, as compared to basic calling and texting devices.

The ACSI gets its results from calling consumers at home and asking them a variety of questions about any mobile phone they’ve purchased in the last two years. The main points the survey covers are customization — how well does a product suit the owner’s individual needs — and reliability — how often something goes wrong while using the product.

David Van Amburg, managing director of the ACSI, said adding smartphones to the mix this year revealed that customers who just buy plain old feature phones for calling and texting are generally happier with the product than their smartphone-owning counterparts. He said in an interview:

On one hand, smartphones have more features and have more to them, so you’d think that would be a better experience. But that’s as along as everything’s working correctly. When you add more layers of complexity, you create more opportunities for things to go wrong. For a basic phone for calling, the only thing [that generally goes wrong] is dropped calls or lack of signal. You add texting, there’s another layer, but … When you add in data you add in how fast is the download and upload speed. There are many more issues.

While smartphones score better in the ACSI in terms of customization, their reliability marks can drag them down. Many more things can go awry with a smartphone compared to a feature phone besides data or signal issues common to all phones: apps can be wonky, syncing content can be confusing, mapping or navigation can be hard to use, etc.

That is why smartphones overall score somewhat lower than basic phones, according to Van Amburg. “So when you look at our data, it makes Apple’s ability to be as high as they are that much more impressive,” he said.

After Apple, the leader among all mobile phones with 83, comes HTC, LG and Nokia tied with a score of 75, Motorola and “others” both coming in with 73, Samsung with 71 and RIM with 69.

The comparisons are not entirely parallel: Apple and RIM only make smartphones. The rest dabble in a mix of both feature and smartphones. But as smartphones continue to outgrow feature phones in popularity, the need to continually improve and upgrade the product and customer experience for these almost indispensible devices should be very apparent to these manufacturers.

And how do they improve their customer satisfaction rating? The obvious ways: make more reliable products that are easy to use and that people feel are representative of their needs. But that’s harder to do for some than others, says Van Amburg.

“It’s easier to move the needle from 65 to 70 than 85 to 90,” he said. “If you’re RIM, the ability to move from 69 to 74, that shouldn’t be that difficult for them with product improvements and so on. But it’s more challenging for Apple.”

Image courtesy of Flickr user Ron Bennetts

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The Chinese smartphone market is huge — as of November there were 118 million 3G smartphone owners counted  — and this study, which surveyed 600 people, is admittedly a small but telling portion of that.

From Guohe’s findings we’ve compiled some instructive tips for app makers interested in making money in the world’s fastest growing mobile market. What’s interesting is how similarly useful they are for app makers targeting buyers in established markets, like the U.S. and Europe too:

• Don’t believe the current conventional wisdom. Though there’s an impression that Chinese consumers just don’t like to pay for apps, that’s changing. The study found that almost two-thirds of iPhone users, or 62 percent, have purchased at least one app for their device. Seventeen percent have purchased more than 11 apps. A big part of this shift in buying behavior has to do with Apple’s decision to start taking local currency payments last fall through the iTunes store instead of requiring credit cards that processed U.S. dollars, says Guohe.
• Target iOS devices for paid apps. If you’re looking to make money on paid apps and weighing Android over iPhone, iPhone owners in China are more likely to buy apps. Guohe found that just 23 percent of Android device owners had purchased at least one app, compared to iPhone’s 62 percent. This is similar to the dynamics the larger mobile market. Piper Jaffray calculated in November that of the 6.8 billion Android apps downloaded, just 1.3 percent, or 90 million, were paid for.
• Target Android for ad-supported apps. Android growth in China has been huge and it is a good platform to reach the largest group of people. In fact, more than half (54 percent) of those surveyed for this study carried an Android smartphone. So, even if you want to distribute your app for free, an ad-based model will work in this market. “The opportunities sit on a data-driven approach to target the right audience from millions,” Guohe says. Of the Android owners polled, 63 percent said they’d prefer free apps with embedded ads, versus 13 percent who said they’d prefer ad-free apps they’d have to pay for. Again, this is very similar to download patterns in the U.S. and the larger Android market as a whole.
• Plan ahead to make tablet apps too. Research firm Canalys ranks China as the second-largest market for tablets. The iPad in particular is doing well among the affluent in China, and for current iPhone app makers thinking about also marketing iPad apps, this is a great demographic to target, since members are more likely to purchase apps. According to Guohe:

“In our own research, we found that iPhone users are almost 2 times more likely than Android users to buy an iPad. The synergy of using the same system cross mobile phone and tablet is truly valuable for some of the heavy users. In that sense, the emergence of well-designed and reasonably priced Android tablets (e.g. Kindle fire in US market) could motivate these Android phone users to jump on the tablet bandwagon too.”

These statistics should be encouraging for app makers interested in selling apps in the China market. And while clearly the above chart shows that far more smartphones owners’ incomes lay on the lower end of the scale, that’s changing pretty rapidly. As the middle class there continues to grow, more people’s ability or desire to pay for things like apps will too.

Thumbnail courtesy of Tracy O/Flickr

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This is not a ticket — yet.

Our nation’s rail system is about to take a big step forward by placing less emphasis on paper tickets and introducing the iPhone as an important tool for conductors.

The New York Times has a story on Monday about the ongoing trials in which Amtrak is using the iPhone as a ticket scanner and a more efficient way of boarding passengers and filling in empty seats. The report says Amtrak has been training conductors since November 2011 to scan tickets with the iPhone. It’s only been active on a few routes — between Boston and Portland, Me., and from Sacramento to San Jose, Calif. — but they’re planning to expand.

This might sound simple and not totally novel; there are local metro systems like Boston’s MBTA that are about to start using smartphones as tickets. But as I’ve recently learned, this is a welcome improvement for the tens of thousands of people that commute daily or often travel by rail.

Amtrak isn’t a factor in people’s daily lives in places I’ve lived like San Francisco or Los Angeles to the same degree it seems to be in the Northeastern Corridor. Since moving east I’ve become acquainted with Amtrak commuting between Philadelphia, New York City and Washington, D.C. What has most surprised me about rail travel has been how truly old-school it still is. Yes, it’s a transportation technology first invented almost 200 years ago, but it seems little progress has been made in terms of administration and passenger logistics.

Retraining conductors and passengers

I can buy an Amtrak ticket online, sure. But when I get a ticket confirmation email with a bar code, I can’t just walk up to a kiosk at the train station and scan the code from my iPhone’s screen — I either have to print the bar code or swipe a credit card. But the thing that needs the most improvement is what happens once on board: conductors still physically punch your ticket once you’re seated. He or she then pockets your ticket stub before you get off the train and sends them to a central location.

As you might imagine, passenger information and seating charts might be something useful to have in real time, especially when people change what stop they get off at or take an alternate train at the last minute. The NYT report includes how iPhone-scanning and real-time info will be a change from the current process:

With the new iPhone-powered system, conductors can monitor passenger check-ins in real time. That will help them manage seating: if there are passengers who don’t show up, for example, it will be easier to fill empty seats with other passengers.

“When it was all a manual system there was a lot of guesswork involved,” said Patricia Quinn, executive director of the Northern New England Passenger Rail Authority, which contracts with Amtrak to operate the train service from Boston to Portland.

This is great news for Amtrak — though it will cost the agency $7.5 million for the hardware and software to institute the new process. But it should also make life easier for passengers, which is why I’m so eager for late summer: that’s when Amtrak says the devices will be rolled out across the country, to more than 1,700 conductors.

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The report, issued Thursday, looks at sales information reported by the largest U.S. carriers and determined that during the first three months of 2012, Verizon, AT&T and Sprint collectively sold 9 million iPhones. Altogether, those same three carriers sold 13.5 million smartphones, which means that for every three smartphones they sold, two of them were iPhones.

These figures don’t match up with a recent survey done by NPD that shows Android smartphones account for about 61 percent of all smartphones in the U.S while iPhones account for 29 percent.

But they do match up with what carriers reported earlier this quarter. AT&T is riding the iPhone wave specifically when it comes to smartphones sales — 4.3 million of the 5.5 million smartphones it sold during the first quarter of the year were made by Apple. Verizon reported somewhat lower numbers: 3.2 million iPhones, but that was about half of all of its smartphone sales for the quarter. Sprint, the newest iPhone carrier in the U.S. sold 1.5 million iPhones, which was about 76 percent of all smartphones during the quarter, according to Wireless Intelligence.

For all three of these operators, their number of iPhone sales are lower in the first three months of 2012 than they were in the last three months of 2011. The fourth quarter of 2011 was notable though because it included both the launch of the iPhone 4S as well as the holiday shopping period.

So while overall numbers of iPhones weren’t as high for the first quarter as they were for the last, these numbers show that the iPhone is still the most important device that these carriers are selling when it comes to retaining and recruiting customers.

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The semi-odd thing is that the app is iOS only, meaning you need an existing iPhone on a carrier to figure out if you have the “right” carrier. Regardless, CarrierCompare is a sound approach. It first performs a speed test on your current iPhone to see what service your carrier is providing at your location. The app then uses speedtests and data from other iPhones in your area to compare the three major carriers: Verizon, AT&T and Sprint.

One of the key metrics the app initially provided — signal strength — is no longer available, although speed test data and network latency is still there. The signal strength data was pulled from the app at Apple’s request. SwayMarkets, the developers of Carrier Compare note on their site that they’re working with Apple:

“We had to remove signal strength from CarrierCompare to remain in compliance with our developer agreement with Apple and avoid having our apps pulled from the App Store entirely. Apple has been very cooperative through this process, and we are pursuing ways of bringing signal strength back in the future.

As mentioned in the CarrierCompare update description, signal strength has the smallest impact on the quality of your data experience, so the rankings we present will continue to focus on that. We recognize signal strength is an important metric for comparing voice quality, and we encourage you to mention it in your reviews and emails to us if it’s particularly important to you.”

CarrierCompare is available in a free, ad-supported version and also for $1.99 without ads. Hopefully, the signal strength data will be added back as every metric is important when comparing carrier coverage.

In the meantime, if you don’t yet have an iPhone or simply want to check carrier coverage in general, I highly recommend hitting the Root Metrics site: The company has been aggregating crowdsourced data on mobile network performance for several years across all handsets and platforms. It provides highly detailed maps based on the data.

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Some of the latest Android phones are thinner than the iPhone 4S, which is 9.8 millimeters in thickness. The HTC One S, for example, is a slim 7.8 millimeters and the difference in hand is noticeable. However, Apple typically doesn’t design its hardware based on what competing hardware makers are doing; the iPhone’s 3.5-inch display is a perfect example as Android phones have quickly moved up to display sizes of more than 4 and even 5 inches.

It makes more sense for Apple to use the space savings not to make the next iPhone thinner, but instead to offer more room for the battery. A thicker battery in the same overall iPhone size would offset any additional power usage for an LTE radio in the next handset. Apple was able to slightly redesign its most recent iPad to create more room internally and much of that space, if not all of it, was used for a battery with 70 percent more capacity. As a result, the new iPad with LTE and the high-resolution Retina Display, which also uses more power, still offers about the same run time as prior models.

A thinner iPhone might appeal to some, but an iPhone with faster mobile broadband capabilities and no sacrifice in battery life is likely appealing to a wider audience. And it’s more in line with the way Apple matures its products; you don’t see new devices that get less run time than the prior model.

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In an interview with Bloomberg Businessweek Wednesday, Page says that with Apple the “Android differences were actually for show” and that Steve Jobs and company created the feud between the two companies for their own benefit. Page said:

I think that served their interests. For a lot of companies, it’s useful for them to feel like they have an obvious competitor and to rally around that. I personally believe that it’s better to shoot higher. You don’t want to be looking at your competitors. You want to be looking at what’s possible and how to make the world better.

History shows that Google is not at all above exploiting the perceived battle between Apple and itself over iOS and Android for its own gain. The most obvious example is VP of Engineering Vic Gundotra’s speech at Google I/O in May 2010. At the time, Android was not yet the hit it is today, and Apple’s iPhone, iPad and mobile OS were runaway successes. Here’s what Gundotra said to the gathering of developers that day about why Google made Android:

If we did not act, we faced a draconian future. Where one man, one company, one carrier was the future.

That was Google using the idea of a philosophical battle over the future of mobile technology with Apple and Jobs — and AT&T, which at the time had a monopoly on the iPhone in the U.S. — to motivate developers. When Eric Schmidt was Google’s CEO, he answered numerous questions about Android’s approach by emphasizing the “open” nature of Android as opposed to the “closed” approach favored by Apple: clearly presenting Android as “not Apple.”  This all served Google’s interests pretty well: Android now runs on more than half of smartphones.

Jobs was certainly not above the same tactics. In early 2010, Jobs spoke about Google and Android to Apple employees, reportedly saying:

“We did not enter the search business. They entered the phone business,” Mr. Jobs told Apple employees during an all-hands meeting shortly after the public introduction of the iPad in January, according to two employees who were there and heard the presentation. “Make no mistake: Google wants to kill the iPhone. We won’t let them.”

So, yes, Page is correct that Apple did use the feud to fire up its own troops and to rally its own developers — but it’s disingenuous to say Apple is the only one that got mileage out of  it.

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The study shows that in the U.S. 71 percent of iPhones and 32 percent of Android phones connect to Wi-Fi and cell networks. In the U.K., the divide was a little narrower: 87 percent of iPhones and 57 percent of Android phones connect to both types of networks.

ComScore points to increasingly scarce spectrum and, of course, carriers moving away from unlimited data plans as reasons for this behavior:

“The scarcity of unlimited data plans and higher incidence of smartphone pre-paid contracts with a pay-as-you-go data model likely contributes to data offloading among users wanting to economize their mobile usage. In addition, the current lack of high-speed data networks in the U.K. might also lead users to seek out higher bandwidth capacity on Wi-Fi networks. In the U.S., the increased availability of LTE, 4G and other high-speed data networks currently make it less necessary for smartphone users to offload, but it’s also possible that the diminishing availability of unlimited cellular data plans will eventually push more usage to Wi-Fi.”

Wi-Fi’s popularity among mobile devices isn’t limited to iPhones: Tablet users are overwhelmingly in favor of Wi-Fi use too. Two weeks ago mobile analyst Chetan Sharma released a report noting that in 2011, more than 90 percent of tablets in the U.S. connected to Wi-Fi instead of mobile broadband. While sales of tablets shot up last year, the percentage of 3G- and 4G-capable tablets stayed relatively low. And it’s safe to assume that the iPad is what we’re talking about when it comes to tablets: It accounted for roughly two-thirds of all tablets sold in the U.S. in 2011.

So while iPhone users are relying heavily on Wi-Fi, so are iPad users. It’s not clear what exactly accounts for the difference in behavior between iOS and Android users — it could be something as simple as that Wi-Fi is just easier to set up on iOS devices.

But it also may have something to do with the amount of content users are downloading. And with the new iPad, it’s likely that this reliance on Wi-Fi will only increase. Its shiny new high-definition display makes watching videos on it easier on the eyes than ever — and that can eat through monthly data plans pretty quickly.

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GottaBeMobile found the new app earlier today and says the $0.99 is a launch promotion. The iOS software is slated to sell for $1.99 at some future point. Even at two bucks, I think it’s well worth it, provided you still subscribe to Netflix for the physical discs.

The convenience really comes from wandering around the movie aisles at Target, WalMart, Best Buy or wherever DVDs and Blu-Ray discs are sold. Instead of trying to remember the interesting looking titles, taking photos of them or writing them down for later input to a Netflix queue, a simple barcode scan in ScanFLX does trick. You get a brief summary of the movie, the number of stars earned by reviewers and the option to add to a Netflix queue. Brilliant!

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In a report about the state of the handset industry issued Thursday morning, UBS noted that Apple and Samsung together are taking over 50 percent of the profits in the handset industry:

Smart-phones continue to grow strongly, now accounting for over 30% of total volumes and over 75% of total industry revenues. However, the performance disparity between the stronger players – Apple and Samsung – vs. the others remains stark and these two now account for over 50% of industry revenues and over 90% of total EBIT.

If it’s not clear by now, the Android-versus-Apple battle isn’t the most interesting or important story when it comes to the handset business. As we’ve written before, Samsung is the true force Apple has to reckon with when it comes to phones — and mobile devices, period. Because not only is Samsung capable of keeping up with or slightly surpassing Apple in terms of total phone shipments, as it did in 2011, Samsung has stepped up its non-smartphone game too.

Though mocked by some for its inclusion of a stylus, the Galaxy Note did much better than analysts expected, selling 1 million units in the fourth quarter of 2011. Now, UBS says it expects Samsung to ship 4 million to 5 million Notes in the first quarter of 2012. So, even though the Galaxy S3 isn’t expected to ship until next quarter, UBS is betting this one is going to be good for Samsung, thanks to momentum in their mobile devices on the market now, as well as the brand’s momentum in China and emerging markets.

Huawei Ascend P1 S

UBS continues to feel confident in Apple too — both in the demand for the iPhone and in the company supply chain’s ability to churn out a lot of new devices really fast. Last year’s iPhone 4S launch and the new iPad launched last week show that Apple is getting a lot better at keeping up with demand than, say, a year ago, when the iPad 2 was notoriously hard to get thanks to supply issues. According to UBS:

Apple has been consistently accelerating the pace of each successive iPhone launch, expanding both country and carrier rollouts within a shorter timeframe.

For the iPhone 4S Apple launched in 29 countries within 2 weeks of the initial launch, the iPhone 4 was launched in 22 countries within 6 weeks of launch, and the iPhone 3GS was launched in 14 countries within 1 week of its initial launch.

And with the new iPad expanding from 10 countries in the first two weeks with no major supply shortages to 25 new countries starting Friday, Apple is demonstrating its ability to keep up with demand now.

But the future is not just going to be about Apple and Samsung. As we’ve written before, China’s Huawei has been making a run over the past few months to become a household name worldwide. Its less-expensive Android-based phones are selling well in emerging markets and in its home country of China — also the most important international market for both Apple and Samsung. According to UBS, for both Apple and Samsung, it is the one “to watch out for.”

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