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By 2013, it will be a smartphone-majority world

Ryan Kim — Tue, 28 Aug 2012 19:25:49 +0000

Smartphones have officially crossed over the halfway point as they take over the mobile phone market in the U.S. But the world is not far behind and is expected to fly past the 50 percent mark by 2013, according to a new report by IHS iSuppli.

By the end of 2013, 54 percent of all phones globally will be smarpthones, IHS iSuppli predicted. That’s two years ahead of previous predictions by IHS iSuppli. Last year, smartphones comprised 35 percent of the global market.

The research firm said falling prices and the emergence of low-end smartphones in Asia-Pacific along with strong high-end sales in the U.S. and Europe have fueled the growth of smartphones around the world. And the momentum is not expected to slow down anytime soon.

By 2016, smartphones are expected to grab 67.4 percent of all cell phone sales. Regular feature phones will represent 28 percent of the market by 2016 while ultra-low-cost phones will hold down 4.2 percent of all sales.

If you’ve been paying attention, you’ve known that smartphones are a force to be reckoned with and were expected to eventually dominate worldwide. But the fact that we’re now becoming a majority smartphone planet by next year is still striking. That has implications for manufacturers who can sell higher-end devices but also for operators, who will need to keep investing in their networks to stay ahead of data demand. And it also means mobile developers should be thinking about the bigger opportunities in going global.

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Blaast opens cloud-based mobile app platform to global developers

David Meyer — Tue, 28 Aug 2012 15:42:51 +0000

Smartphone apps are great, but – particularly if you live in a developing market – the data they need can be quite pricey. And in those countries, chances are you won’t be opting for the latest, top-of-the-line handset model either.

That’s why the idea of cloud-based app platforms is taking off. These platforms run their apps partly on the device, but the heavy lifting is done on some remote server. You’d think this would result in more rather than less data usage, but heavy compression – not dissimilar to that used by Amazon’s SilkBrowser or Opera Mini – takes care of that problem.

One such platform, Finland’s Blaast, launched in Indonesia in January, in partnership with local operator XL. Now it’s opened up customer and developer availability to the rest of the world as well, and also has a couple of other tidbits to share: two more as-yet-unnamed South-East Asian carrier partnerships have been struck (creating a total market of 76 million potential customers), and an Android version will be coming out by the end of the year.

Blaast’s app, which is funded by investors including Skype’s founding engineers and ex-Nokian Pekka Vartiainen, can be used on more than 2,000 handset models, as all it really needs to run is Java.

However, the company does have competition in the form of the Australian biNu platform, which picked up $2m from Eric Schmidt’s Tomorrow Ventures this month, and the U.S.-based Peek.

Although all offer a similar kind of service, they diverge quite radically in their monetization strategies. Peek goes straight to the manufacturers of very low-cost phones, biNu makes money through its own virtual currency, and Blaast charges subscription fees (per day, week or month) that average out at around $1.50 per month.

For that fee you get access to more than 100 apps, including Twitter, Facebook, social games, Wikipedia, news and so on. That strategy appears to be working. Even before the fresh push announced this week, Blaast has attracted four million downloads and four thousand developers, who are writing apps tailored to the Indonesian market.

“Our approach has really struck a chord with developers as well as operators looking to extend their reach both geographically as well as to the low-end device segment,” CEO Joonas Hjelt said. “In fact, we are on course to support over 500 million Blaast-enabled feature phone by 2014.”

Now, about that Android version. Details are still sketchy – Blaast hasn’t yet said whether or not its roughly-30/70 revenue split with developers will extend into this market – but the company has an interesting pitch here.

Not only is there the data thing (a serious issue when data costs four or more times than it does in the U.S., relative to purchasing power) and the relatively low spec of the cheapest Android handsets, but Blaast reckons its subscription model has advantages over the traditional app store model.

This is an assertion that makes some sense when you consider its operator partnerships, and the fact that app stores tend to require credit cards. So developers who want to address these markets may want to take note.

As biNu suggested to Ryan recently, there’s around three to five years of play left for this kind of business, until smartphone economics even out for developing world customers.

But there’s a huge amount of money to be made in the meantime. And getting on board with the carriers, as Blaast is doing, seems a pretty smart way to make it.

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With $2M from Eric Schmidt, biNu brings smartphone apps to dumb phones

Ryan Kim — Wed, 15 Aug 2012 16:00:56 +0000

We take for granted that the smartphone is on its way to dominance, now that half of Americans have the souped up phones. But smartphone take-up is much slower in developing parts of the world due to handset prices, slower wireless networks and other considerations. The desire for a smartphone experience, however, is real no matter where you are in the world.

That’s where biNu, an Australian startup has been making its mark. The company launched a mobile app 18 months ago that allows Java feature phone owners and low-end Android users to access more than a 100 apps including Facebook, Twitter, Wikipedia, YouTube, Google Search and others, on their phone. The biNu app not only delivers a host of smartphone apps to feature phones, it also compresses the data, using 10 times less bandwidth than normal, which is also helpful in countries with rickety mobile networks.

The startup has gotten the attention of Eric Schmidt’s Tomorrow Ventures, which is leading a $2 million Series A round along with other American and Australian investors. The company will use the money to build out the services and apps it provides, grow its user base and focus more on developers, who can also build directly on biNu.

BiNu has attracted more than 4 million monthly active users, most of whom are based in Asia and Africa and the number of users is growing by 10 to 20 percent a month. It is also generating more than 800 million page views a month. In addition to popular apps like Facebook and Twitter, biNu also offers a range of content like the Bible, the Quran and access to news, sports, weather and book reading services. More recently, biNu has been evolving into its own social network for users, who can message each other, create profiles and share content.

BiNu isn’t the only one trying to tap this opportunity. Peek in the U.S. and Blaast, a Finnish startup launched by a former Nokian, have also introduced platforms that bring smartphone capabilities to feature phones. It’s a big opportunity considering feature phone still outnumber smartphones by 5 to 1 globally. As Schmidt talked about earlier this year, there’s still another 5 billion people that have yet to get online and mobile will be how many of them do it for the first time.

BiNu co-founder and CEO Gour Lentell told me biNu’s current offering will be relevant for at least three to five years. But he said the larger goal is to build a cloud platform for delivering apps. The company, which has previously raised more than $5 million, monetizes through its own virtual currency and is also exploring advertising.

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Who needs data? Google launches Gmail SMS in Africa

Kevin C. Tofel — Wed, 18 Jul 2012 15:36:45 +0000

Text messaging. It’s one of the functions of a feature phone that graduated to today’s smartphones and continues to be used heavily by people all around the world – even more than voice in many countries. And messaging has long been leveraged for many new services, such as for mobile payments. Now, in three African countries, it can even be used for Gmail.

Google introduced the service, called Gmail SMS, on Wednesday in Ghana, Nigeria and Kenya. Users will first have to register their phone with Google, similar to how one enables Google Voice on a handset, to link the email messaging service. Mail will be forwarded directly to the phone through SMS after that, and the forwarding can be disabled at any time. By texting commands, users can take action on their Inbox and reply to emails through their text message client.

The process to communicate by email through SMS may sound unweildy to those of using full-featured email clients on the web, a smartphone or a tablet. And it likely is. But Gmail SMS can help feature phone owners expand their communications and contacts who are already using email. Think of farmers or vendors in remote areas that can now communicate with clients who rely on the richer experience that email brings, for example.

Perhaps more important though, is the idea of using legacy cellular infrastructure to take the place of high-speed broadband, which may not be available or may be too costly in some areas. Just this morning we noted that the country of Norway has more broadband capacity than the entire African continent. With Google’s unique solution, SMS fills the gap and does so at no extra charges to the consumer, outside of any current operator messaging rates. Long live the feature phone!

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Twitter targets the feature phone with MediaTek deal

Kevin Fitchard — Wed, 11 Jul 2012 20:31:26 +0000

Twitter wants a taste of the success Facebook is experiencing globally. For that to happen it needs to embed itself firmly in the feature phone; still the primary device used in developing markets to access the mobile internet. So Twitter is following in Facebook’s footsteps by partnering up with MediaTek.

The Taiwanese silicon vendor has agreed to include Twitter’s mobile application into the run-time environment software it ships with every chipset, just as it did for Facebook and the Opera Mini browser. That means the handset makers designing devices around MediaTek’s chipset can make Twitter a pre-installed app optimized for the minimal memory and processing capabilities of a feature phone.

Currently Twitter runs on OS-less phones, but not as a native app. It has tweaked its mobile Web site to work on less sophisticated browsers and any user can send and receive tweets via SMS. By offering a more readily accessible app – as well as brokering preferential treatment deals for its data traffic with carriers – it can tap into a huge potential market. In the developing world, far fewer people have access to PCs, and smartphones (and their requisite data plans) are an unaffordable luxury. Even in North America and Europe, big percentages of the populace haven’t yet made the move to smartphones. If Twitter is going to get at those customers, it needs to do it through the feature phone.

Photo courtesy of Shutterstock user Julien Tromeur

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Smartphone customer satisfaction is hard to get right

Erica Ogg — Tue, 15 May 2012 04:00:08 +0000

The annual ratings of customer satisfaction with mobile phone manufacturers will be released by the American Customer Satisfaction Index Tuesday morning, and for the first time, feature phone makers will be judged right alongside smartphone makers, who are newcomers to the list. It’s not totally surprising, but Apple makes its debut on the list at the top with a score of 83 out of 100, while languishing RIM sits in the cellar with a rating of 69 out of 100. The average for the industry is 74.

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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New challenges for the IT organization

Dow Brook Advisory Services — Mon, 26 Mar 2012 15:38:23 +0000

Cloud computing, mobile computing and the consumerization of IT are combining to create another force that is overwhelming many IT departments: complexity. This report, the second in a three-part series, examines several types of complexity in the business IT environment, including complexity of devices and applications, physical and virtual computing environments, and the related challenges for IT staff.

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The new IT manager, part 1

Dow Brook Advisory Services — Tue, 20 Mar 2012 06:55:53 +0000

The days of IT departments dictating which computing assets would be used and how are numbered, in large part because of three trends that are converging on organizations and their IT departments: cloud computing, mobile computing and the consumerization of IT. This first section of our three-part report describes and quantifies each of these trends, demonstrating that they are real now, growing rapidly and perilous to ignore.

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U.S. smartphone ownership eclipses feature phones

Ryan Kim — Thu, 01 Mar 2012 15:40:13 +0000

The U.S. is now officially a smartphone nation, with 53 percent of all adult cell phone owners claiming ownership of a smartphone, according to a new report by the Pew Internet & American Life Project. It’s the first time that smartphone penetration has been reported to eclipse feature phones in the U.S. though the milestone has been predicted for some time.

Pew found that smartphone ownership in February 2012 has jumped to 46 percent of all adults from 35 percent in May of 2011 while feature phone ownership has slipped from 48 percent to 41 percent over the same period. A slim 12 percent of adults said they still don’t own any phone at all.

Pew reported that 45 percent of cell phone owners said their phone is a smartphone while 49 percent said their phone runs on a common smartphone operating system. When combined, Pew said that 53 percent of all cell phone users claim to own smartphones.

Nielsen previously predicted in 2010 that smartphone penetration would move past feature phones by the end of last year but in its latest report, it pegged smartphone penetration in January at 48 percent of all subscribers. The new milestone marks an important turning point in showing how U.S. consumers are increasingly relying on sophisticated mobile computers in their pockets. This has big implications for developers, operators and companies looking to cash-in on always-connected consumers. And it puts more pressure on makers of traditional computers who are seeing their sales slow in the face of rising smartphone and tablet sales.

Pew said 20 percent of cell phone owners said they owned an Android device, 19 percent said they had an iPhone and 6 percent said their phone was a BlackBerry. Windows devices were claimed by just 2 percent of cell phone owners, the same rate compared to May of last year. For its latest results, Pew interviewed 2,253 adults in January and February.

Pew found that smartphone ownership has increased across the board, but is still most represented among college graduates, adults 18-35 and people with an annual household income of $75,000 or more. Among people aged 25-34, 71 percent own a smartphone and 66 percent of young adults age 18-29 are also smartphone owners. 68 percent of people with income over $75,000 own a smartphone along with 60 percent of adults with a college degree. African Americans and Latinos adopted smartphones at a rate of 49 percent each, ahead of whites at 45 percent.

The results still leave a little room for doubt because consumers are not all completely clear on what the term smartphone means. Eight percent of cell owners said they are are still not sure if their phone is a smartphone, down from 14 percent in May of 2011.

Again, the rise of smartphones is not a surprise if you’ve been charting their growth. But it highlights the rise of post PC devices and shows that our computing methods are shifting. Canalys reported last month that annual global smartphone shipments eclipsed shipments of PCs for the first time in 2011. As PC sales slow and tablets continue to grow, we’re increasingly shifting to a mobile-first world. That means more and more people will be accessing their information from smaller screens and will come to expect that the Internet and all the services it enables will be ultimately optimized for smartphones and tablets.

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Opportunities and challenges for mobile deals

Wed, 29 Feb 2012 07:55:17 +0000

The trend “mobile deals” combines location-aware discounts with mobile marketing campaigns and often incorporates purchases made on the phone at brick-and-mortar retailers. This report sizes up the mobile deals space with an aim to present a comprehensive view of the influential companies and technologies. Heavyweights like Google, PayPal and American Express are moving aggressively forward with new offerings, and it will be worth watching their different strategies (e.g., deploying QR codes vs. NFC technology) to see which dominates and sets the overall bar for the market.

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