A Mobile Market Analysis for Q3-2010

Summary

The third quarter proved to be a quiet one with continuation of some important trends, as compared to the second quarter. The quarter began with many new launches and announcements by the key players of the industry and has ended with many expectations from the next quarter.

The following sections highlight the happening of the Q3, followed by what to expect from the Q4.

Android built its already impressive momentum at the expense of iOS and Blackberry OS, further fueling the raging battle between Apple & Google. Research in Motion maintained its lead in the U.S., while its new Torch device — which sports the new BlackBerry 6.0 OS — received tepid reviews. Apple while facing a lot of issues in its new mobile advertising business in competition to Google and other players, has achieved huge success from iPAD launch by tapping a market that simply did not exist just a few months ago.

What happened in Q3?

Blackberry launched new Torch device, the new OS 6.0 and the Playbook

Though the users now have many options of robust platforms for their mobile phones, Blackberry OS has remained the choice of many business users since ages. Blackberry launched their new handset Torch which runs on the Blackberry OS 6.0, the latest OS version, with a vision to overhaul the complete platform. While RIM has staked its distant future to the QNX operating system, it will need to bring in supported handsets to market.

RIM finally revealed their iPAD rival, the Playbook, after months of speculation, rumors and hype. RIM’s Mike Lazardis was quoted saying “Playbook is going to be the first professional tablet.” The Playbook is being seen as a serious challenge to iPAD; with a dual core 1 GHz unit CPU, based on ARM Cortex A9 Architecture with a 7 inch screen. The PlayBook is supported by "BlackBerry Tablet OS" with symmetric multiprocessing and "true multitasking"—posing a serious challenge to "completeness" of the iPad.

Launch of the Playbook is being categorized as the comeback for RIM into the smartphone market.

Microsoft Launches Windows Phone 7

Microsoft launched their Windows Phone 7 in early Q3, though the phone is not expected to be available in the market until next month. The industry is already filled with expectations that WP7 is strong enough to the dominating operating systems in wireless, Android & iOS. Microsoft has played this one very carefully and has mandated specific futures (such as three hardware buttons). Moreover, it has maintained the role of quality assurance enforcer for all the supporting handsets expected to be launched in the market.

Apple launched iOS 4.0 in June 2010, iPad turned out to be an unqualified hit

Apple launched iPhone 4 in late June while already enjoying the success with iPad. Apple is expected to ship 12 million units by end of the year and has planned to sell 28 million iPads in 2011. The most remarkable aspect of the iPad’s success is the fact that a market for tablets among mainstream consumers simply didn’t exist just a few months ago. Approximately 80 new tablets are expected to be launched in the next six months. Among those expected to produce Android tablets are Archos, Acer, Cisco, Dell, LG, Motorola and Samsung; other likely entrants include Hewlett-Packard (for webOS), RIM (for BlackBerry OS) and Nokia (for MeeGo). We expect to see a few successful launches in the space over the next several months, particularly among tablets priced at $300 or less.

The Market Shares

Android sales overtook iPhone in the US and it captured nearly one-third of all new smartphone sales in the U.S. till August. Android is the only one amongst its competitors which grew its market share by 5 % and was at 17 % by end of July. Though Blackberry still retained its leadership in U.S, but still it observed a drop from 41 % to 39.3 % during the period. Apple observed a drastic drop from 25.1 % on April to 11.8 % in July though Apple did surpass RIM in Global Smartphones Share.

Android has not only been successful just in the U.S market but across the world surging to No. 1 in recent sales. Google grabbed the most market share and overtook iOS during the second quarter of 2010, taking a leap from a mere 1.8% to 17.2% in just one year. Though Apple saw its share grows nominally from 13% to 14.2 %, while it was still better than the rest of the platforms which lost ground. The important fact to note is that the market share gains from Android and iOS occurred as the Smartphone space expands by more than 50 percent year-over-year.

So thereby implying that these platforms are quickly capturing the new users and increasing their market shares by manifolds. The windows mobile’s was missed ant it was obvious as Microsoft was busy launching the new OS. The new OS is expected to turn numbers in favour of Microsoft as compared to its competitors.

Android’s ample handsets and presence with multiple carriers across the world might impact Apple’s growth in the coming quarter. But iPhone and primarily iPad should keep the numbers positive in Apple’s court. While Android will continue its breakneck pace, Apple will continue to be seen as the elite manufacturer in the space.

Mobile Advertising

Mobile marketing took more of a local twist during the third quarter. The traditional Internet companies are vying for a piece a U.S. mobile local ad industry that BIA/Kelsey predicts will explode from $213 million in 2009 to $2.02 billion in 2014.

Apple will likely have a 21 percent share of the mobile ad market by the end of 2010, according to IDC, as it eats into the market share of Google and Microsoft.

Perhaps the biggest news in the space, though, was Apple’s move to allow third-party ad networks such as Google’s AdMob to fully leverage its iAd platform. Apple revised its iPhone Developer Program License in September, enabling other ad networks to access analytics and other information considered crucial for deploying and tracking mobile ad campaigns. The move ended a standoff between Apple and Google; the latter (like many other companies) had previously been barred from accessing such data in iAd.

Takeaways of Q3

ü  Android has taken over the market from all the other mobile platforms and has become the dominant mobile OS, giving direct competition to iOS. The Android OS has many advantages, being an open source platform; it is bound to cause problems to the other platforms, mobile phone manufacturers and OEMs.

ü  iPad has succeeded in creating a demand for tablets in the market, this has also given rise to a number of companies launching their own tablets to compete with Apple. This might lead to supply outweighing the demand, which might lead to more failures than successes.

ü  With the surge of mobile platforms and launch of smartphones, thereby exploding the market with huge choices, has led to the advertisers capturing this mode of advertising. The location based advertisements is bound to increase with expansion of the mobile phones market and thereby giving the mobile advertising a boost. The location based advertising is going to be a success while this includes a consumer’s concern about security and privacy.

The ad networks will have to provide some transparency to the current system which lacks any visibility to bring in the location based advertising and make it a success.

ü  The technology is also advancing faster with 4G’s presence; it is bound to provide faster networks. But the onus also lies on the carriers to provide the services on large family of devices to enhance their reach to customers and hence the market shares. The congestion in the networks is going to be the challenge in the coming years, adding worries to the telephone operators.

What to expect from Q4?

Launch of Windows Phone

After windows Phone 7 OS unveiling in Barcelona, finally the phones will be launched in the market in October & November. Microsoft has announced ten Windows Phone 7 handsets for 30 countries, some available from late October in select European & Asian Markets while others from early November in US.

The phones will find their way to over 60 cell phone operators in more than 30 countries this year. Microsoft tapped Dell, HTC, LG, and Samsung to deliver the handsets with a carrier list that includes AT&T, T-Mobile USA, Vodafone, TELUS, América Móvil, Deutsche Telekom AG, Movistar, O2, Orange, SFR, SingTel, and Telstra. This is just for the initial launch -- Microsoft has even more handsets coming in 2011 including the first one for Sprint and Verizon in the US.

Launch of iOS 4.2 with unified support for iPad & iPhone alike
The iOS 4.2 for iPad is going to bring together the iPhone & iPad under unified support. This OS upgrade includes a number of features already built, optimized & released for the iPhone including multi-tasking, folders support and unified mail inboxes.

Airprint wireless printing for Apple devices

Apple will be launching the Airprint wireless printing for iPad, iPhone and iPod Touch devices in November with the iOS 4.2 launch.

The key feature of AirPrint would be that it can automatically finds printers on local networks and print text, photos and graphics to them wirelessly over Wi-Fi without the need to install drivers or download software. HP’s existing and upcoming ePrint enabled printers will be the first to support printing direct from iOS devices.

The iPhone CDMA will come on Verizon network early next year

Verizon Wireless will be selling Apple's iPad in its stores starting Oct. 28, which hints that the rumors in the Smartphone industry about Apple launching a iPhone CDMA with the Verizon Network might be true.

If this is true then it should not be a long wait for the Verizon wireless customers who had been longing for an iPhone. This will probably end AT&T’s exclusive contract for iPhone in US. The Verizon network is building & testing the 4G network which is based on a technology called Long Term Evolution.  But it is speculated that the iPhone that uses the 4G network will likely not be available with the Verizon Network until at least the second half of 2011.

The Android gingerbread aka 3.0 will be out in Beta phase soon

With each platform launching a new OS, Android is also not lagging behind. Everyone is awaiting Android’s gingerbread’s launch which will be the next level Android OS. The Gingerbread, or Android 3.0, is intended to represent the high-end smartphones whereas lower end devices will stick with its brother the Android 2.2/2.1. 

There are going to be many new features of the Android 3.0, including a completely new user interface. It will have animated transitions between mobile applications and screens. The Android 3.0 will support displays with 1280 x 760 resolution, which is bound to drastically increase the HD quality of the display. 

Blackberry Playbook development SDK is out in Beta and being used for Adobe AIR (action script) based application

RIM is promoting their Playbook by a plan to provide one free BlackBerry PlayBook to every registered vendor with a BlackBerry App World, with an approved AIR application that is available for the BlackBerry PlayBook prior to launch.

Adobe’s AIR software developer kit (SDK) apparently has some inbuilt relationship with the PlayBook’s operating system, which would allow developers to easily create some powerful applications.

The Q3 has ended with announcements for new launches by the pioneer players in the smartphone industry, thereby raising hopes of the consumers in the Q4.