Potential Smartphone Buyers Choosing Blackberrys Despite iPhone, Droid Hype

As Research in Motion (RIMM) rallies in the wake of strong quarterly results, it is worth noting the prevalence of Blackberry devices on this list from comScore: looks like 51 percent of potential smartphone purchasers surveyed plan to buy a Blackberry device in the next three months. This compares with 20% for Apple's (AAPL) iPhones, 17 percent for Google (GOOG) Android-based devices and a puny 3 percent for Palm (PALM) devices. This helps to explain why RIM's results impressed, while...

Related News
Comments

Will Google's Android Play DOS to Apple's iPhone?

Daniel Eran Dilger Today's broad array of smartphone operating system contenders are offering lots of potential answers to a problem that only requires one. It appears the market has two options ahead: either pool generic hardware makers behind a single operating system and deliver a smartphone marketplace that resembles the Windows PC market, or watch them fall to a dominant leader and have a smartphone market that resembles Apple's iPod ecosystem. This decision isn't going to be made by a class of intellectual elite, or by government mandate. it's going to be made by the market itself. Here are the factors that will influence the outcome, either marginalizing Apple's iPhone into a niche as the company has twice experienced previously at the hands of DOS in 1981 and Windows in 1991, or positioning it as the dominant leader as Apple has achieved for itself with the iPod since 2001. The third segment in this series looks at Google's Android and the Open Handset Alliance as a possible “DOS-attack” against Apple's iPhone. Subsequent segments will look at Nokia's newly opened Symbian and other mobile contenders challenging the iPhone. Will the iPhone Meet its Match from a Modern Day DOS? Will Windows Mobile Play DOS to Apple’s iPhone? Will Google's Android Play DOS to Apple's iPhone? Will Symbian Play DOS to Apple's iPhone? Google Acquires Android. In 2005, Google purchased a startup named Android, which had been in business for nearly two years. The secretive startup was known only to be working on software for mobile phones. It was being run by a who's who of mobile industry veterans, including Andy Rubin, the founder of Danger. Rubin had earlier worked at WebTV along with Chris White and Andy McFadden, both of whom had also joined Android. Richard Miner of Orange and Nick Sears of Tmobile also brought their mobile provider experience to Android. At the time of the acquisition, Google didn't announce any plans for Android and instead only told BusinessWeek, “We acquired Android because of the talented engineers and great technology. We're thrilled to have them here.” It appeared that Google was only going to be expanding its search services for mobile phone users, along the lines of the Google SMS answer system it had recently released. Google Buys Android for Its Mobile Arsenal - BusinessWeek Windows XP Media Center Edition vs Apple TV: The Fall of WebTV The GPhone Myth. As reports began to leak out about talks between Google and hardware makers throughout 2007, rumors began to fly about “the GPhone,” a competitive offering that was supposed to take on the iPhone. Some phone enthusiasts hoped Google would jump in to rescue the struggling OpenMoko project and turn it into a viable project that could attack Apple's new smartphone. In October 2007, I printed the Great Google GPhone Myth, taking apart the idea that Google would be directly competing against the iPhone, and describing that Google was really working on a free alternative to Windows Mobile as a conduit for getting its search and related services on a broader variety of mobiles. Google's services were already on the iPhone. In November, Google played its hand: it had organized a consortium of companies called the Open Handset Alliance to develop open standards for mobiles. The first product from the group would be Android, a mobile operating system built on the Linux kernel. Google wasn't getting into the phone handset business at all; it was only making sure that its mobile search products would not risk being marginalized by the threat of Windows Mobile on phones in the same way Microsoft had been working to leverage its PC monopoly to push Google search off the Windows desktop. The Great Google gPhone Myth Introducing Android: Leader of Linux. Two weeks later, Google released an early version of the Android software. On top of a Linux kernel, Android uses a specialized version of a Java Virtual Machine that takes Java language code and turns it into what Google calls “Dalvik bytecode” rather than Java bytecode as a standard JVM would. This allows Google to leverage existing and familiar Java language tools without paying Sun for a Java license. Like Mac OS X and its fraternal iPhone OS, Android includes a variety of open source libraries, including SQLite and WebKit. On top of that, Google developed a series of frameworks that handle the tasks Cocoa Touch does on the iPhone. Android also bundles a set of applications. While Apple adapted its existing Mac OS X to work in a mobile environment to create the iPhone OS, Android is more like a customized Java environment running on a specialized mobile Linux variant: elements of maturity in an otherwise experimental new platform. What is Android? -Google Android was by no means the first mobile OS using Linux. Both Palm and its amputated ACCESS software arm have Linux-based mobile platforms. Nokia has Maemo, which it uses in its Internet Tablets, and also recently acquired Trolltech and its Qtopia mobile Linux platform. Motorola has teamed up with MontaVista Software to use its Mobilinux. Intel created the Moblin project for mobile Linux, aimed at Internet devices. Google's OHA also isn't the first consortium to attempt to standardize a mobile Linux platform. The OSDL started the Mobile Linux Initiative to define requirements for hardware; the Consumer Electronics Linux Forum (CELF) then worked to define various phone profiles aimed at the Japanese market; the Linux Phone Standard (LiPS) Forum tried to do the same thing in Europe. In 2007, LiPS was folded into the new LiMo Foundation, along with the OSDL. All of these committees have had some overlap and some complementary features. Several of Google's OHA partners are also LiMo members, including NTT DoCoMo, Wind River, and Motorola. So why didn't Google just join LiMo? “LiMo, very candidly, wasn't moving fast enough,” OHA board member John Bruggeman told CNET. Google hopes to herd the Linux cats into a progressive, structured platform that can battle against Symbian and Windows Mobile to succeed as the new DOS of smartphones. Will Google fracture or unify mobile Linux? The Presumption of the Necessity of DOS. The previous segment examining Windows Mobile pointed out how the PC industry as a whole assumed that Microsoft's desktop Windows monopoly would easily take over dominance in the MP3 player market, pushing Apple into a niche position. This was expected because DOS had pushed Apple's early computers into a reduced role starting in 1981, and Microsoft had repeated this again in 1991 when the DOS world migrated to Windows, effectively pruning Apple's Macintosh into a Bonsai platform. The inability of one company to dominate any product category has been frequently repeated by PC industry pundits as a given, despite the fact that history is full of examples of this happening. Sony dominated personal music players for two decades under the Walkman brand even while equally large competitors tried to push it from this position; Nintendo has similarly owned handheld gaming despite ill-fated efforts to grab a piece of its pie by products running a generic platform such as Microsoft's WinCE (Gizmondo), Linux (GP32), and Symbian (N-Gage). In fact, outside of the Windows/DOS PC, there are actually few examples of a generic platform taking over an industry. Nearly every other consumer-facing product uses proprietary platforms: car makers, stereo equipment, appliances and so on typically all use designs custom to their maker. The paradox of the Windows PC market has been that Microsoft's broadly licensed software supposedly saves hardware makers from investing in software development while ensuring compatibility, when in reality it adds significant costs to PC makers while limiting their ability to differentiate themselves. That explains why PC makers have been perpetually merging together and going out of business while Microosft has rolled in money over the last two decades. Parallel efforts to copy Microsoft in broadly licensing an operating system have regularly failed: IBM's OS/2, Apple's Mac OS, Palm's PDA OS, even Microsoft's own efforts to duplicate Windows dominance in other markets, from copy machines to PDAs to smartphones to SPOT watches to music players. The closest copy may be Symbian, but its customers are partners, not simply consumers of a generic third party's operating system as Windows licensees are. That indicates it is not necessary to duplicate the dominance exercised by Microsoft over the PC industry in the smartphone market. Google's Android and Symbian exist more as technology sharing pacts among manufacturers, but both aspire to take Microsoft's DOS role among smartphones. However, the idea that Apple's iPhone must be dethroned by a modern-day DOS, whether Windows Mobile, Android, or Symbian, is not just debatable, but does not sync with the reality of more recent events. Apple's recent history of the iPod further refutes the idea that a software analog to Microsoft is needed. The iPod Emergence: Apple & Pixo vs IBM & Microsoft. Apple's iPod in 2001 made no effort to clone the DOS business model; it actually did the opposite. When Apple entered the market, there were a number of existing MP3 devices using custom software, hardware designs, and DRM codecs. The iPod used off the shelf components to deliver a custom MP3 player using third party software, but Apple also added its own technologies: easy to use sync with iTunes, a fast Firewire interface that made uploading music far faster than the prevailing USB 1.0, and an attractive industrial design. With the iPod, Apple played the role of IBM in 1981, using Pixo's embedded operating system to enter the market quickly, just as IBM had used DOS. The difference was that Apple didn't direct any market attention toward Pixo and added a lot of value on top of that core embedded OS. A modern day Compaq couldn't simply clone the hardware and license Pixo to run on it in order to compete against the iPod, because the iPod was much more than just generic hardware running Pixo software. As the iPod developed, Pixo's role diminished and was eventually displaced. Just like IBM, Apple jumped into a new market just as demand was beginning to explode. Apple made MP3 players far more attractive to a general audience by delivering greater playback capacity than most entry level devices offered, along with an ease of use that encouraged buyers to jump in at the higher end of the market. That left Apple with not only the lion's share of the market, but also by far the most profitable segments of the market. Two decades prior, IBM badly fumbled its play with the early PC and ended up irrelevant in the PC world by the late 80s, sideswiped by Microsoft's DOS and the cloners who were licensing it in parallel, notably Compaq and later HP and Dell. Steve Jobs had witnessed that happen, and was determined to not let it happen again to Apple. Rather than being manipulated by a software middleware vendor as IBM had, Apple worked to incrementally develop the iPod market itself. After consuming the hard drive-based player market, Apple took on the Flash RAM-based market with a tiny hard drive system used in the iPod Mini, and followed up with Flash-based devices of its own in the Nano and Shuffle. This allowed Apple to progressively serve an increasingly wider market, incrementally growing upon an established foundation. With the iPod, Apple became, in effect, an IBM with its own internal Microsoft. Microsoft's Failure Despite Features. In contrast, Microsoft entered the music player market by promoting music player hardware reference designs around WinCE. However, it was unable to ship a finished design until the iPod had become firmly established around 2005. Later branded as PlaysForSure, the devices were sold by various hardware makers and all purported to support the same DRM and the same music subscription services while also offering a broader array of hardware that presented video before the iPod did, supported wireless before the iPod, and so on. Despite these unique features, all of those PFS designs still failed. Microsoft blamed the failure of PFS upon its music store and hardware partners and decided to take Apple on itself in 2006. It relaunched a Toshiba PFS player as its own device under the Zune brand, adding WiFi music sharing features and a larger display than the current Pods had. It failed dramatically as well. Did Microsoft's attempts to float a new DOS among music players fail because of Apple's success, or due to Microsoft's own problems? The failure of the Zune, which followed the iPod model rather than the DOS model, seems to suggest that Microsoft itself was to blame. Consider too that Microsoft's Windows Mobile phones, which use the same underlying operating system as its failed PlaysForSure music players and the Zune, had similarly flopped even before Apple could release a charismatic phone equivalent to the iPod. Of course, when the iPhone was released, it hit Windows Mobile hardest. The iPhone made Windows Mobile Smartphones look ridiculous and underpowered, and made Windows Mobile Pocket PC phones look clumsy and awkward, despite the fact that they both supported a variety of features the iPhone didn't, including the ability to edit documents, capture video, send MMS, and so on. Simply adding on features did not enable Microsoft to compete against Apple. The only conclusion that can be drawn from all this is that competing against Apple requires more than just having a feature arsenal. Microsoft's failures in themselves do not necessarily mean that Google's Android will fail in its attempts to float its own smartphone platform. Why Microsoft’s Zune is Still Failing Microsoft’s Zune, Vista, and Windows Mobile 7 Strategy vs the iPhone Will Google Succeed where Microsoft Failed? Microsoft's demonstrated inability to successfully enter consumer markets for MP3 players and smartphones has given observers little faith that the company will somehow turn things around in late 2009 when its next generation of devices are expected to be released. However, prior to that the first fruits of Google's efforts to build its own smartphone operating environment will arrive. Will Google's Android take over Microsoft's crown as the “DOS vendor” among smartphones? Supporters of Google's Android project point to some parallels between Android for smartphones and Windows on the PC: Android will allow hardware makers to differentiate in ways that can offer features Apple can't (or doesn't want to); it should allow software developers to offer features Apple does not allow on the iPhone; it embraces open, hobbyist experimentation in ways that Apple currently isn't; and it opens the potential for content providers that Apple is not interested in allowing. Openness is Android's key competitive feature. Will all this openness allow Google to unseat the iPhone to become the primary platform developers want to participate in, and subsequently soak up the market for third party hardware makers that Windows Mobile serves? While Google currently has no market share due to the fact that no Android phones have yet shipped, it does have broad vocal support from a variety of the same kinds of hardware manufacturers that supported DOS and Windows and helped to make those platforms successful in the desktop PC market. HTC and Android. The first Android phone is expected to be the HTC Dream; Taiwan's HTC (High Tech Computer) also manufactures Palm's Treo Pro phone as well as many of the most visible Windows Mobile devices. In addition to models produced under its own name, HTC also sells Windows Mobile devices under the Dopod brand, as well as no-name phones branded by providers, such as AT&T, Orange, Sprint, T-Mobile, Verizon Wireless, Vodafone, and others. HTC will also be building the XPERIA X1 Windows Mobile phone for Sony Ericsson. HTC was quick to throw its support behind Android despite its long term alliance with Windows Mobile. Why would it so enthusiastically support an unproven platform from a company that has no experience in consumer hardware platforms? One can only assume that HTC is not happy with the current state of Windows Mobile, and desperately wants another “DOS” to succeed where Microsoft's has so spectacularly failed. As an Original Design Manufacturer for Palm, HTC watched as Palm adopted Windows Mobile in place of the Palm OS and subsequently fell even deeper into crisis. Palm's only successful phone since has been its Palm OS-based Centro. HTC undoubtedly sees Android as its ticket to becoming the next Dell, but without a similar dependance upon Microsoft. Android for mobile phones is essentially playing the role of Linux for PCs, except that it has the backing of a major company behind it. Can Android Take on the iPhone with Openness as its Feature? As great as this sounds, it's important to consider that Linux on the desktop has made no significant progress in eating into Windows dominance after a decade of trying. Being open, free, flexible, and decentralized hasn't been enough of an advantage to get consumers to migrate from Windows to Linux in any fraction of significance. Similarly, in the music business, Linux-based MP3 players have had no impact on the iPod, despite offering more features, flexibility, support for additional codecs, and so on. In the mobile phone area, Linux enjoys a sizable portion of the smartphone market, but this is almost entirely due to phones sold by Motorola in China, where the advantages of Linux' openness are void. Motorola's Linux phones offer nothing to users in terms of openness or flexibility, and are really no different in terms of features than other appliance 'feature phones' based upon closed operating systems. And again, a key problem with assaulting Apple in a feature war is that neither the iPod nor the iPhone became popular by being “highly featured.” They both delivered perhaps 80% of the functionality found in all other devices in the market. Rather than trying to match every feature and cater to every niche as Microsoft had with Windows Mobile, Apple's devices did a few things very well at launch, and incrementally developed into full featured devices that still lack some of the more unique features of their competitors. Further, in terms of openness, the demographic that embraces Linux' characteristic freedoms is not the same as the demographic that buys smartphones in quantity and then pays for data service. This is a critical fact to consider because a big part of the iPhone's success stems from the fact that it is being pushed by mobile providers who want to capture the cream of the market willing to pay a premium for data services. The Frankenphone. Combining the fractured aesthetic of HTC's Windows Mobile phone hardware with Android's software, based upon Linux' perpetually unfinished DIY openness and Google's Java-like development platform, will not result in a product similar to the iPhone. Instead, it will look a lot like phones that have already failed in the market. Apple's advantage comes from slick hardware designs with a close attention to detail, combined with software that purposely does less so that it can do what it does better. Even Apple's own conservative attempts to broaden its software capabilities with iPhone 2.0 have resulted in instability problems that can be blamed upon both Apple's early releases of its phone operating system and software from inexperienced third party developers new to the platform. Would the current frustrations with iPhone 2.0 be somehow mitigated by additional openness that also embraced all kinds of variables from different hardware makers with less quality control than Apple, a loose committee of additional cooks working to serve up operating system features targeted at every possible conceived need, and a wider third party software group with fewer constraints on illegal behaviors? The Failure of Open. While it is politically unpopular to criticize the well meaning efforts of open source contributors, the failure of Linux on the desktop, the failure of the vaporware Indrema game console, and the failure of the OpenMoko project to deliver a workable phone within a year of its deadline all underline the serious problems open development faces in the world of consumer oriented devices. Open has simply failed to deliver on its promises in the world of consumer hardware. OpenMoko was supposed to release its first mobile phone to consumers for $250 several months in advance of the iPhone. When the iPhone shipped, the group then announced new plans to get its phone out by the end of 2007. Instead, this spring the group announced new plans to move to an entirely different development platform, and ship its phone mid year for $400 with limited functionality and incomplete software outside of basic GSM phone features. Linux's notable successes, from Motorola's Linux phones to the Tivo DVR to Linksys Routers, have often come without any associated openness or freedom, and were instead delivered simply to provide their manufacturer with a free kernel to build upon. This indicates that while Linux may find its way into an increasing number of smartphones, it will likely not be accompanied by the glorious freedom of an open development environment Google has said it would offer with Android. Apple iPhone vs the FIC Neo1973 OpenMoko Linux Smartphone Can Google Succeed Where Open Has Previously Failed? Despite “openness” being Android's strongest competitive feature compared to Apple's iPhone, Google recently revealed that its wide-open development model is intentionally gravitating towards a closed association of top tier partners due to practical considerations. In July, Google accidentally sent out a notice that revealed that it had been seeding private SDK updates to only a subset of its contributors, angering those who believed that Android would be as open as Linux on the desktop or the OpenMoko project. Further, Google has restricted initial development to higher level APIs just as Apple did, further indicating that Google itself realizes that being wildly open to impress a minority of hobbyists will not result in the commercial success of its new platform. That serves to neuter Android's primary advantage over the iPhone. Without delivering on the premise of being wide open, Android is really just a less mature set of Java libraries used to create a specialized binary that runs on a Linux foundation. Unlike Apple's iPhone, Android phones won't have a slick user interface developed by professional artists, nor the iPhone's legacy of mature software development frameworks crafted over the last thirty years, nor the iPhone's tightly integrated hardware with award winning industrial design, nor its marketing power tied into the iPod and Apple's retail stores. Android won't be an open iPhone, it will only be a Windows Mobile phone with a better kernel that runs specialized Java software instead of Win32 or .NET code. Don't expect consumers to be impressed by that. The Biggest Missing Feature. There is one remaining factor that strangles to death any last remaining hope that Android might assassinate the iPhone and assume the crown of the “DOS of smartphones.” That is: Android delivers zero price advantage to consumers. In 1981 and 1991, consumers who wanted Apple computers faced the sticker shock of a somewhat arrogant price tag. Apple sold its computers, as it still does, at the higher end of the market, but there was simply far more range in prices available. In 1981, that meant the Apple II was $2600 and the new Apple III was $3500, even before you added a monitor. On the low end, Commodore sold its far less powerful, but “still a computer” Vic-20 for $300, while IBM entered the market with the IBM PC at $3000. Over the next few years, Apple focused on delivering additional sophistication at the same price, releasing the $10,000 Lisa and then the $2,500 Macintosh. IBM continued selling PCs in the same $3,000 to $10,000 range, but other DOS PC vendors began selling machines at prices that ranged as low as $1500. That left Apple with a roughly $1000 price premium over low end PCs. The products weren't really comparable, but consumers only saw the huge price difference. In 1991, Apple was still selling moderate to high-end Macintoshes for $3,800 to $10,000; the crippled Mac LC was $2500, and obsolete-at-birth Mac Classic ranged from $999 to $1500. Windows allowed PC makers to ship a functional $1500 PC and claim a rough approximation to Apple's $2500 entry level system, maintaining that apparent $1000 price premium. Today, pundits are lucky to find a Dell or HP system that is even a couple hundred dollars less than a comparable Mac. However, in the smartphone business, the iPhone 3G is now the same price, if not less, than generic competing phones on the market. Even more significant is the fact that the price of the phone hardware is nearly nothing compared to the cost of the service plan. This fact simply eases any price premium that could cause buyers to flock to a smartphone running a generic operating system over buying the iPhone 3G, regardless of whether it runs Windows Mobile or Android. 1990-1995: Planting Software Seeds Android Partners Have Already Failed. That same pricing principle similarly prevented buyers from considering many of the alternatives to the iPod. While Apple's original iPod models were more expensive than many of the first MP3 players on the market, they were price competitive with models offering similar features. By 2004, it was Apple who was undercutting MP3 competitors on price. Microsoft offered zero price advantage when it began selling the Zune, a major factor in its failure, but Microsoft simply couldn't out-price the iPod; it was already losing money offering the Zune at the same price as the iPod. Apple now has tremendous market power in buying RAM and other components that will prevent any competitors from being able to offer a huge discount over the iPhone's $199 price tag. Even if competitors were to give their phones away, they would only offer a $200 discount to users who would then still need to pay the same mobile fees to use the phone. Android's other partners, including Samsung and LG, have already failed to capture any significant market share in the music player market. Are they going to maintain their position as smartphone makers now that they face similar competition from Apple, its iPod ecosystem, its iTunes Music and Apps Store, Apple's retail store experience, and other factors that are pushing the iPhone? If they can, it is not obvious how partnering with Android will help. Other Problems for Android. Android was announced in early November 2007 and was followed with an early preview SDK within a couple weeks, a month ahead of Apple's initial announcement of the iPhone 2.0 SDK. However, between March and July 2008, Apple delivered nine progressive releases of its SDK, opened its App Store, and sold 60 million apps, raising $30 million to support iPhone software development in just the first month. It has since released three more SDK updates to developers related to iPhone 2.1, which is expected next month. Android just published its first open SDK beta update earlier this week, warning developers that “applications developed with it may not quite be compatible with devices running the final Android 1.0.” Additionally, Android still has no phones available. By the time the HTC Dream is expected to launch, Apple will have an installed base of around ten million iPhone (and iPod touch) users supporting software development through iTunes. The business model for selling Android apps is no better than that for selling jailbreak iPhone apps: there is no iTunes Apps Store to promote them, so users will have to track them down on their own. Android developers also have no real freedom that jailbreak iPhone developers lack. The only difference is that there are ten million iPhones to sell jailbreak apps to, and currently zero Android phones. If selling a jailbreak iPhone app sounds like more trouble than its worth, imagine trying to sell Android apps to a non-existant audience. Now add the official iPhone App Store into the mix, where publicity, promotion and profits are booming. What platform is going to have the most applications? How many users will flock to a smartphone platform with no apps? The wisdom of releasing a desirable phone and achieving a significant installed base before releasing an SDK makes a lot more sense in retrospect. Additionally, while Apple has a decade of experience in shipping regular updates to Mac OS X and its Xcode developer tools, Google has only shipped a random assortment of web-oriented SDKs (a number of which have been abandoned) as a tangent to its core business of selling advertisements. When the Android SDK 1.0 is finished later this year, developers will not only lack an installed base to sell their apps to, but will also have no high profile market for selling their apps in, and subsequently no financial incentive to develop applications that add value to the Android platform, just like Linux on the PC desktop. Around the same time, possibly within the next month, Apple will be shipping its second major OS release: iPhone 2.1. Apple will also be upgrading its entire user base to the new software so that developers will have a cohesive platform to target. This mirrors the efforts Apple has taken to upgrade its Mac OS X users to the same reference release. Mobile developers will be seeing money pouring in via iTunes while crickets chirp in the Android section of various mobile online stores. Apple’s iPhone Vs. Other Mobile Hardware Makers: 5 Revenue Engines Same Same, But Different: DOS Model Problems. Android developers will also have a series of other problems to manage. Like Windows Mobile, Android is intended to support everything, from BlackBerry-style keypad phones with a small touchscreen to the simple Windows Mobile Smartphone form factor lacking a touch screen to iPhone-like full size touch screens. Also like Windows Mobile, Android phone makers will have the option to leave off Bluetooth, WiFi, GPS location services, graphics hardware acceleration, and so on. Each Android phone will also have unique camera hardware, support for different video and audio codecs, and varied support for other differentiating proprietary services demanded by mobile operators. This will force developers to to make complex decisions regarding the lowest common denominator they choose to support. So while the iPhone will have a cohesive feature set, a managed software environment, and a functional market, Android will be a loose federation of hardware makers selling the same random features found on Windows Mobile today, with a chaotic development environment that lacks any central market for users or developers. And it will be run as an experiment by a company with no experience in consumer hardware or platform development. The Missing Tap. One specific example of the “DOS model problem” is that Android currently does not support multitouch. It's not touched on in the API, and Google quietly tap dances around its omission. Why no multitouch? Because multitouch screens are expensive, and most OHA hardware members are more interested in making a profit in a competitive phone market rather than impressing consumers as Apple did with the iPhone. Most existing smartphones, even those trying to directly rival the iPhone, use a stylus driven, pressure sensitive tap screen or a simpler, cheaper touch technology that lacks support for sensing multitouch. The iPhone's screen can actually sense up to five fingers at once, but the primary feature multitouch offers on the iPhone is the two fingered tapping and the pinching effects everyone associates with it. Android could certainly support multitouch if there were a demand for it, but that's the point: Google knows that its hardware partners are cheap and unlikely to put out hardware that actually competes with the iPhone. Instead of using expensive technologies that deliver clever yet largely invisible functionality, OHA members, just like PC makers, are far more likely to add flashy, impractical gadgety fluff that's cheap to tack on, such as slide out keyboards, neon tubes, and scratch and sniff stickers. That's how you impress gullible nerds on the cheap. Google itself is blowing smoke and erecting mirrors to distract from the reality that it being a “DOS vendor” means supporting bargain basement hardware from penny pinching duplicators. Android has been demonstrating some “wow” features such as a Street Maps app that pans around based on an internal compass in the demonstration phone. The problem is that that kind of thing only makes for a fun demo. Nobody needs to twirl around their phone in the air to see a view of the other side of the street, but everyone who has used an iPhone will wonder why they can't pinch to zoom out. Even worse, most Android phones aren't going to have a compass built into them, so Google is demonstrating features most Android users won't be able to use. That Sounds Like Microsoft… Google's design decisions are beginning to look a lot like Windows Vista; rather than actually working to make laptops boot faster, Microsoft came up with the idea of adding a small screen to the back of Vista laptops so users could check their email without having to wake the system up. But this was a stupid idea for a number of reasons, the most obvious being that most users just want a laptop that boots up quickly. Few laptops got the mini screen, but every user who tries Vista on their laptop will wonder why it doesn't boot up as fast as Mac OS X Leopard. In the same way, Google is advertising features for Android that most users won't ever see in their actual phones while ignoring things people will expect based on their exposure to the iPhone. Android is simply selecting the wrong features. Android will offer the advantages of supporting MMS, recording video, and the list of other features Windows Mobile already supplies. Those features didn't stop Apple from firing past Microsoft in the smartphone arena however, just as the Zune's highly touted WiFi and screen didn't phase iPod buyers. Incidentally, just months after the Zune, Apple had not only demonstrated a larger display but a higher definition multitouch screen, and not only WiFi, but functional WiFi that could be used to browse the web or check email. This suggests that Apple, with its faster release schedule, won't stay behind any of the leading features potentially offered by Android for very long. Android partners, however, will find it as difficult to catch up with Apple's unique features, just as Microsoft has been stymied to keep up with Mac OS X, the iPod, and the iPhone. The underlying reason: both Google and Microosft are tasked with maintaing support for a huge variety of hardware options demanded by all their partners. Apple has the unique circumstances to do only what it needs to do itself. Android in Windows Mobile's Shoes. Like Windows Mobile, Android faces a difficult market. In the US, it competes against the popular BlackBerry in corporate markets and the iPhone among consumers. Worldwide, it competes against entrenched market leader Nokia. The difference is that Google, unlike Microsoft, has no in. Windows Mobile was adopted by Windows-bound IT shops despite its weaknesses. Nobody has any preexisting reason to try an Android phone apart from hobbyists and open software enthusiasts, a demographic that has done little to move Linux on the PC desktop. Google also lacks Microsoft's installed base; it's starting from zero. The smartphone industry initially doubted Apple's chances of making much progress with the iPhone, despite the company having the Mac platform, the iPod, retail stores, platform development experience, marketing savvy, industrial design prowess, and so on. Google doesn't have any of those things. Mobile Providers vs Android. Apple also started with an exclusive partnership with AT&T, a three legged race that demanded effort from both. Google is hoping that hardware makers handle the hardware details and that mobile providers will be excited to sell its Android phones. While hardware makers such as HTC clearly appreciate having found a free alternative to Windows Mobile, it's not obvious why providers would be excited about Android, as it promises an openness that most mobile providers strongly oppose. AT&T took a big risk in getting behind the iPhone, as the phone encouraged users to use email rather than fee-based SMS and MMS, it supported WiFi for data access, and it bypassed AT&T's MEdia Net services to plug into iTunes instead. Verizon refused to parter with Apple and grant it those kinds of concessions. Is AT&T going to take a similar risk to partner with a phone that is not exclusive to it, and is Verizon now going to open its arms to support phones that do not exclusively support BREW, VCast and its other proprietary services? While Android may well eat into Microsoft's Windows Mobile business by stealing away its hardware makers, it seems unlikely that Android will ever serve as more than free alternative to Windows Mobile in a market where Windows Mobile is increasingly irrelevant. Android may have the dubious distinction of swallowing Microsoft's mobile business the same way Microsoft ate up the Palm OS, but even if it accomplishes that goal, Google will likely find itself unsustainably hungry immediately afterward. It will also find itself swimming in a shark tank of hungry rivals, including Nokia's Symbian, RIM's BlackBerry, and Apple's iPhone. Symbian is the final generic platform vying for the opportunity to play DOS in the smartphone market. The next article will examine Nokia's chances in its bid to match Microsoft's PC dominance in the mobile market while setting out in a new venture to copy Android's open software model. Did you like this article? Let me know. Comment here, in the Forum, or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast (oh wait, I have to fix that first). It's also cool to submit my articles to Digg, Reddit, or Slashdot where more people will see them. Consider making a small donation supporting this site. Thanks!
Microsoft's Zune, Vista, and Windows Mobile 7 Strategy vs the iPhone

Daniel Eran Dilger What secret partner has Microsoft discovered to bail water from the deck of Zune and its Zune Marketplace music store in a last ditch attempt to take on Apple's iTunes, the iPod, and iPhone? Microsoft's own Windows Mobile, of course, with some help from Windows Vista! Who Else Will Help Zune? Certainly not Nokia, as one Zune fansite tried to suggest last week. Nokia has nothing to gain by promoting the Zune. A more credible sounding rumor, as long as we're inventing stuff, would be to instead suggest that it could be Sony Ericsson that is interested in putting the Zune software on its new phones. At least Sony has already demonstrated its complete failure at selling music on its own, and actually has a Windows Mobile phone in the works. The simpler reality is that Sony Ericsson may have no choice in the matter. Microsoft is clearly out to wed the Zune with Windows Mobile in a effort to get the two failures to prop each other up in its “I'm not dead yet!” fight against the iPhone. Microsoft is likely to make inclusion of its Zune Marketplace a mandatory feature that its Windows Mobile partners will have to swallow, just as it forced its PC licensees to bundle its Internet Explorer browser and later Windows Media Player, while prohibiting them from seeking their own bundling deals with other companies. Microsoft took quick steps to block Compaq's licensing of QuickTime, for example. Those deals were bad for HP, Compaq, Dell, and the other PC makers, bad for competition within the tech industry, and subsequently bad for consumers. However, they did enable Microsoft to use its powerful Windows monopoly position to push proprietary standards and or anti-interoperable technologies designed to expand its monopolized control, while making big money selling Windows in a market that lacked any alternatives. Will Nokia Rescue Microsoft’s Zune? Haha No. Apple in the Web Browser Wars: Netscape vs Internet Explorer Microsoft's Plot to Kill QuickTime A Lot Has Changed. This time around however, all Microsoft has to leverage is Windows Mobile, a struggling platform with little respect in the industry, now in a distant third place. Further, the technology Microsoft is trying to push is essentially its Windows Media DRM, which has already been swept up and trashed by Apple's iTunes, QuickTime, and the iPod. The dismal fate of Windows Media was sealed with the failure of PlaysForSure. The Zune's new, albeit incompatible, reincarnation of Windows Media DRM never stood any chance of making any headway. However, the most problematic part of Microsoft's strategy of pushing its Zune Marketplace store on its Windows Mobile partners is that music stores don't make money. Apple's iTunes Store is the biggest online music store on Earth, and does tremendous volumes of sales. Still, Apple reports minimal profits from the store. It recently warned its investors that it's now selling so much through iTunes that the low profit, high volume venture may have a negative impact on the company's overall profit margins. As problems go, that's certainly a nice one to have. Apple is not at all worried about turning a big profit with iTunes because it runs the store exclusively with the intent of ensuring new content for the iPod, iPhone, and Mac. That in turn sells its hardware. However, Microsoft doesn't have hardware sales to nurture. It has barely sold two million Zune units, many at fire sale prices (compared to 150 million iPods, 93 million of which have been sold since the Zune's release). It now faces impossible odds in tilting against the momentum of iTunes' rapidly spinning windmills, with no possible upside in terms of eventual music store profitability. There's simply no way that any amount of investment in the Zune Marketplace could deliver profits, because Microsoft is competing against Apple's non-profit motivation behind iTunes. Further, Windows Mobile is similarly a big loser with no potential because Microsoft has little ability to profitably license its mobile software. It's competition is the iPhone OS, which Apple develops for free to sell iPhone hardware (Microsoft does not sell its own phone hardware); RIM's mobile OS, which is also free for BlackBerry hardware; the Symbian OS, a partnership between hardware makers; and various mobile distributions of Linux, including Google's Android, all of which are also run as profitless ventures to support hardware sales (or in Google's case, service sales). The Great Google gPhone Myth Why Microsoft’s Zune is Still Failing 10 FAS: 7 - Apple’s Hardware and Dvorak’s Microsoft Branded PC Good Money After Bad. All that unpleasant reality hasn't phased Microsoft. Its executives haven't found a way to make money in consumer electronics yet, and the company's attempts just keep getting more and more expensive. Barron's recently featured the speculation of one Microsoft investor who hoped the company would spin off its hemorrhaging online services division as well as its profitless entertainment and devices unit, which includes the Zune, Xbox, and Windows Mobile. The investor calculated the value of Microsoft's other businesses (its high profit Office, Windows, and server divisions) and decided that the market wasn't assigning any value at all to Microsoft's consumer electronics and services products divisions. No wonder; they're nothing but a huge drain on Microsoft! Even so, the investor seemed to think there must be some value to obtain from selling off the black holes, citing the market value of the highly profitable Nintendo. The investor's real intent seemed to be finding a way to “discourage the company from overinvesting in the business.” Microsoft's stock has only appreciated by 6.3% over the last decade. Apple has appreciated 1,822.6% in the same period. Microsoft is trying to develop new markets as Apple has, it's just failing to do so. Microsoft’s Outrageous Office Profits Strength in Bundles. Microsoft has always been interested in promoting its products by using strong ones to prop up weak ones. From the start, it bound its strong Mac apps to the rather weak Windows offering to invent the PC platform, and has since tied Word and Excel to a suite of otherwise fair to marginal apps under the Office banner. Once Windows became established, the company tied in an unfinished, third-rate web browser and was able to rapidly build it into a strong competitor through market inertia. On the server side, Microsoft similarly ties in tragic products into package deals that often (but not always) enable the weak bits to gain some traction. So Microsoft is again working to stitch together its various properties to support each other, but now most all of its recent products are in flames and desperately need reinforcement. There's only so much one failure can do to support another. Even worse, Microsoft's historic strengths are no longer working. The Windows monopoly was supposed to brace up Windows Media Players, Windows Media Center, Windows Mobile, Windows Live Search, Windows Live Soapbox, and a series of other cobranded products that haven't gone anywhere. Office Wars 3 - How Microsoft Got Its Office Monopoly Office Wars 4 - Microsoft’s Assault on Lotus and IBM Why Does Microsoft Really Want Yahoo? Certifiable Failure. Windows itself is now in the throes of crisis, as the failed launch of Vista nearly two years ago has signaled the undoing of Microsoft's ability to rely on its desktop monopoly to advance failures into strength. Is Vista going to put out the Zune's flames by beating with its own flame-engulfed wings? That's part of Microsoft's current strategy, which included rebranding PlaysForSure as 'Certified for Windows Vista.' The Zune is also Certified for Windows Vista, despite not being compatible with the Certified for Windows Vista PlaysForSure. Confused? You needn't be for long, as the remnants of Microsoft's one-time strategy for creating an 'ecosystem of hardware, service, and software partners' to provide choice and freedom in the music industry is pretty much dead now. All of Microsoft's significant PlaysForSure store partners, including AOL MusicNow, MTV URGE, Musicmatch Jukebox, Wal-Mart Music, Yahoo Music, and Microsoft's own MSN Music have now unplugged their PlaysForSure stores, ironically making the brand among the least accurate names for a service ever. The remaining stores making use of PlaysForSure music, principally Rhapsody and Napster, are now on death's door. PlaysForSure video stores such as CinemaNow, which once worked with Microsoft's PlaysForSure-certified Portable Media Players no longer do. Even Amazon's UnBox service, which is supposed to sync with some devices that are PlaysForSure-certified, has not bothered to get certified under Microsoft's program. Incidentally, the failure of Yahoo Music and Microsoft's MSN Music (and the company's outrageous plan to simply unplug its customers from DRM authentication) caused CNET to wonder if Apple might be next in line to make users' music purchases unplayable, echoing the poorly conceived idea that Microsoft's Vista failure, its mobile platform incompetence, and desktop viral malware security crisis all somehow also predict a similar certain doom for Apple at some point in the future. For some reason, CNET saw no connection between the failure of Yahoo and MSN (hint: PlaysForSure), and no reason to speculate about the future of other media stores facing actual failure and likely disbanding in the near future, including Rhapsody, Napster, UnBox and Microsoft's own Zune. Nearly all of the recent DRM deactivation controversies, including Major League Baseball's, have been related to Microsoft's software, although Google decided to similarly to dump users of its paid video when it pulled the plug on Google Video last fall. Rise of the iTunes Killers Myth Forrester Research: Epic Terror of iTunes and Apple TV But Wait, What About This Ecosystem Failure Sounds Familiar? The complete failure of Microsoft's PlaysForSure hardware and software licensing program paints a damning prophetic picture foreshadowing the fate of Windows Mobile. Pundits often dance around this fact by spewing Microsoft's talking points: Window Mobile has lined up scores of hardware partners! Windows Mobile has lots of software partners! Choice is good! Oh wait, that's the same stuff they said about PlaysForSure in explaining why the iPod couldn't stand a chance once Microsoft could deliver its Windows Media Player reference designs and the Windows Media DRM that would enable PlaysForSure stores to open their doors. The only real difference between PlaysForSure and Windows Mobile is that the former was expected to prove that the Windows licensing model would work well among mobile devices, while the latter has already proven for some time now that it can't. Windows Mobile has been a snowball of failure ever since it launched a half decade ago with clumsy-looking phones running buggy, poorly architected software with abysmal battery life that makes the iPhone 3G look exceptional in comparison. Windows Mobile simply shares too much in common with the PlaysForSure failure to escape the event horizon if its blackhole. Pairing software from one vendor to hardware from another is problematic in the PC market, but completely untenable among highly integrated mobile devices. Microsoft tried to blame PlaysForSure incompatibilities on its music store and hardware partners, but the real problem was the model. Microsoft's own software problems didn't help either of course. The issue on Windows Mobile is even more significant because having functional mobile phone service is far more critical than being passively entertained by an MP3 player. Unchecked diversity among the devices of a platform is a bug, not a feature. The mantra of choice and freedom, hailed among Windows enthusiasts and homebrew hackers alike, makes for a great mission statement but in reality delivers products that just don't work. It's great to be able to compile your own servers from free and open source software, but most consumers don't want the accountability that comes along with that freedom when trying to dial 911 from their phone. For that matter they don't even want to troubleshoot the installation of a firmware update, or deal with why software designed for a tall screen looks awful on a square screen. With an integrated product like the iPhone, they can complain to Apple for a fix. With Windows Mobile, you get passed around by Microsoft from the mobile operator to the hardware maker to the third party software developer. Everyone is responsible but nobody is accountable. The Spectacular Failure of WinCE and Windows Mobile Count the Flames of Windows Mobile. And so, in terms of failing platforms, Windows Mobile is closer to PlaysForSure on the flames meter than it is to the only smoldering Vista, which is a moderate success by comparison. If attaching the Zune, Microsoft's phoenix on fire, to Vista's train wreck didn't have any impact on the relative salvageability of either, what will Windows Mobile 7 do for Zune 3 a year and a few months from now in late 2009 at the earliest? That's Microsoft's current schedule, barring any customary delays. By then, Apple will have had the iPhone in international distribution for more than a year, the App Store will be a year and a half old, and the WiFi iTunes Store will be more than two years old. What in Windows Mobile 7 will make a difference for smartphone buyers? According to Microsoft: copycat touch controls hobbled by an interface trying to look like Vista (below, and yes they did spell Internet Explorer wrong, as well as putting a space in ActiveSync), and no doubt a major new push to force Zune Marketplace media sales down the throats of Windows Mobile users in imitation of Apple. Microsoft is no Apple. The problem of course, is that the market for Windows Mobile phones is almost exclusively among corporate IT users, who don't give a rats ass about downloading music from the Zune store. So there's really little potential for cross pollination between Windows Mobile and the Zune. In contrast, Apple originally marketed the iPod and iPhone to consumers, who do buy up music to the tune of billions of tracks every year. Apple now has success to build upon, and has targeted its year-old iPhone platform toward the enterprise, with development tools, a software deployment infrastructure, and management utilities that in most cases meet or exceed what Microsoft has delivered over past decade on WinCE and Windows Mobile. On top of that, the iPhone platform has a far superior, standards-based web browser, development frameworks recognized to be easier to use than Microsoft's mobile .NET, and a core OS that is simply more stable, not to mention a user interface that's designed to look good and be simple to use rather than to match the flashy branding of a failed desktop OS. WWDC 2007: Kevin Hoffman Presents .Net vs. Cocoa The Other Problem: Windows Mobile is Going Down. Anyone banking on Microsoft's promises to deliver Windows Mobile 7 on time by the end of 2009 should also consider the company's track record in delivering Windows Mobile updates. The company initially intended to get Windows Mobile 5 out next to Longhorn [Vista] in mid to late 2004. Windows Mobile 5 was actually released in May 2005, and Vista finally popped out “officially” at the end of 2006, although one couldn't actually buy it until it was relaunched to consumers in early 2007. Even after Microsoft “released” its subsequent Windows Mobile 6 nearly a year later (based upon the same underlying WinCE 5), it took six months or more for many of Microsoft's partners to approve it and set up distribution so that users could actually get the software on their phones. In contrast, Apple releases regular iPhone updates every month or two that are always available to users immediately after their release, directly from Apple. Microsoft doesn't exactly have years of leisure at its disposal. Windows Mobile has already been hit hard by competition from the iPhone and from other rivals, including RIM in the enterprise market and Symbian internationally. That competition has resulted in Microsoft's mobile market share slipping year over year. This year, Microsoft failed to meet its frequently repeated goal of selling “more than 20 million units” through all of its various hardware partners, and instead only sold 18 million. Microsoft senior vice president Andy Lees blew off the missed goal as a “rounding error.” He cited numbers from IDC that indicated Windows Mobile had grown from 11% to just under 13% of the worldwide market for smartphones, growing faster than the overall market, and that unit sales of Windows Mobile phones have both outpaced sales of BlackBerry phones and outsold the iPhone by a factor of two. Windows Mobile misses target Oops, Microsoft Fibbed a Bit There. Canalys reports that Microsoft actually started out with a 23% share of the smartphone market in Q1 2004, which fell to 18% in Q1 2005, then down to 12% in Q1 2006, where it remained in its Q4 2007 figures. Apple ranked at 7% worldwide in Q4 2007, but that was based on sales in one market, of one model, and on one mobile provider, after only being on the market for six months. Smart mobile device shipments hit 118 million in 2007, up 53% on 2006 (Canalys press release: r2008021) If the best Microsoft can do is to claim victory for selling twice as many phones as Apple, worldwide across all of its partners despite having a many years long head start and that great ecosystem of manufacturers behind it, then it should probably just not say anything. Incidentally, with the release of the iPhone 3G, AT&T is reporting having doubled its sales volumes, not to mention all of the other new markets the iPhone 3G is now being sold in worldwide, at half the price of the original model. Within just the US smartphone market, which was Apple's only market last year and is also Microsoft's strongest market for Windows Mobile, the iPhone grabbed a 27% share in its debut third quarter of 2007, and maintained a 28% share in the fourth quarter 2007, behind RIM with 41%, but ahead of Palm at 9%. Adding up all of the Windows Mobile manufacturers selling in the US, Microsoft could only claim to have its software on 21% of the phones sold, a significant step behind Apple. Canalys, Symbian: Apple iPhone Already Leads Windows Mobile in US Market Share, Q3 2007 iPhone Grabs 27% of US Smartphone Market Also, all of these figures bundle in all of the “convergence” Pocket PC mobile devices sold by Microsoft's partners, but none of the iPod touch units Apple sells, which are likely to be in well in excess of its iPhone sales. So Apple's mobile WiFi platform is actually far larger and growing much faster than market statistics companies report under their smartphone category. Anyone hoping that Windows Mobile 7 to going to reverse that trend when it arrives over a year from now is seriously delusional. Did you like this article? Let me know. Comment here, in the Forum, or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast (oh wait, I have to fix that first). It's also cool to submit my articles to Digg, Reddit, or Slashdot where more people will see them. Consider making a small donation supporting this site. Thanks!
App Store Anniversary: One Year Later

This past Saturday, July 11, marked the 1-year anniversary of the opening of the iPhone App Store. In that time Apple has simultaneously redefined the expectations of what a mobile phone can do, and fundamentally changed the way that software for smartphones is delivered to consumers. There are now about 58,000 applications available through the App Store, providing everything from bird-watching reference guides, to live video of baseball games, to first-person shooters like Doom Resurrection, to Koi ponds. Just like the commercials say, whatever it is you want to do with your iPhone, you are likely to find an app for that. The Good In April, Apple announced that as of the end of its second fiscal quarter, it had sold a total of 21 million iPhones and 16 million units of the iPod touch. Also in April, Apple announced that one billion apps had been downloaded by consumers, representing about 27 downloads per device at the time. Three months later, at the end of this quarter, we should expect something like 1.3 billion downloads for 45 million devices, if the trends hold up. The App Store has been such a success that all the other major smartphone makers are launching their own app stores, for the BlackBerry, Windows Mobile, Palm Pre, and Google Android devices. This new model for selling software, pioneered by Apple, is a significant shift for the industry. Previously applications for smartphones were either available from the carrier directly, or involved finding software to purchase from independent software companies or in specialty online marketplaces. These models suffered from significant hurdles. The carrier model held back a large amount — sometimes over 50 percent — of the revenue from sales for the carrier itself. The independent distribution model lagged because of a lack of awareness among consumers, and even marketplaces like PocketGear have taken years to develop a catalog that Apple enjoyed within nine months of launch. The appeal to developers was an important factor in this growth. Apple has put together some decent tools in Xcode since the transition to Mac OS X in 2001. The Mac developers that were already familiar with the tools and the Cocoa frameworks were eager to develop for the iPhone. Coders outside of the Mac circle were also quick to jump on board because at a fundamental level, writing Objective-C code against Cocoa libraries is not that different from writing C++ code for any other framework. This distribution model for the finished software is, I believe, the key factor to Apple's success. Combined with the ability to access the store directly on the device and a dead simple install process, the iPhone model has encouraged customers to try out software. A low price point, of 99 cents, and many free apps have driven download numbers. Now the iPhone is far more than just a great phone with email and web. It can be almost anything. It is no surprise that Apple's marketing features the App Store by reminding everyone that whatever you want the iPhone to be, “there's an app for that.” The Bad And while I am still blown away by the fact that you can purchase an app for $10 that lets you watch live baseball games on your phone, there is a bunch of junk out there, too. While there was a big stink made about farting apps a couple months ago as the leading title of that genre generated some not-so-insignificant revenues for its creator, the interest in fart apps has (predictably?) fallen off in recent weeks. There is frankly a lot of bad software among those 58,000 apps that doesn't do much or offer much value to anyone and threatens to choke out small quality titles. And while other fads will continue to come and go in the App Store, this leads to a crowded marketplace where it becomes difficult to find any software of real interest. One can either use the search field, which isn't particularly clever and easily gamed with keyword stuffing the app description, or one can browse the categories and Top 100 lists. Either approach is somewhat lacking. The Ugly The ease with which consumers can try software has also led to some problems for the App Store. There is a significant trend to price apps at the minimum 99 cents in order to try and reach the Top 100 lists, which convey a significant boost in sales as they are featured to everyone browsing for software. To a certain degree, this price floor limits the potential for developers to push the limits of the platform. It makes sense for many shops to try making several small, 99-cent apps that might enjoy a few weeks or months of glory rather than shoot for a more substantial project whose price may keep it off the top sellers list. It remains to be seen what patience the market will have for casual titles and software toys as the novelty wears off in this second year of the App Store. I hope we will see some significant titles get the attention that they deserve. I cannot tell you how impressed I was when I first saw Super Monkey Ball at the iPhone Developer Preview event. That title completely changed my perspective on what iPhone gaming could be. Titles like Real Racing, Star Defense and Tiger Woods PGA Tour have continued to advance what is possible. I want to see developers push the envelope to bring us amazing apps that will blow our minds. But there needs to be the right financial incentive in place so that developers can fund larger teams to bring us this software. Market research you can use: Keep informed about Cloud Computing and IT Infrastructure. Learn more��
Why Dan Frommer and Scott Moritz Are Wrong on iPhone Sales

Daniel Eran DilgerSilicon Alley Insider's Dan Frommer says Apple's announcement of reaching its million mark goal in iPhone sales three weeks early is actually bad news for Apple and is convolutedly "below plan." He also says the announcement only props up the speculative conjecture by Scott Moritz of the Street that Apple's iPhones sales are somehow woefully below expectations. They're wrong, here's why.The PremiseFrommer wrote that Apple isn't selling iPhones as fast as planned and is set to only sell around half of its 2008 goal.His premise revolves around the idea that if Apple were selling iPhones at "a constant rate," a million phones in 74 days would be five million per year. However, because it sold over a quarter of those in the opening day and a half at the end of June, Frommer calculates that sales of the remainder in the 72 days since the first of July mean that Apple is only hitting a "3.6 million annual run rate."By the end of 2008, that would only result in 5.8 million units instead of the ten million goal Apple. [Silicon Alley Insider: Apple's iPhone: 1 Million Is Below Plan]Strike One: The Run Rate Myth.The most obvious problem with that idea is the fact that devices don't sell at a constant “run rate." Apple's iPhone sales took off at launch much faster than the original iPod due to the fact that a swell of early adopters were ready to buy it after being convinced over six months of anticipation. At the same time, many potential buyers held off on plans to buy the iPhone until they could read reviews and get a real sense of how it worked. Many were also locked into contracts with Verizon or Sprint. With only six months of advanced notice, it will still be a few more months before the majority of buyers who want an iPhone even get the chance to buy one without having to pay outrageous fees to cancel their existing mobile contract. iPhone sales are also now taking on the network effect of the iPod, as early adopters show their friends. All these factors have difficult to estimate impacts upon sales that make trying to figure a static “run rate�? a very simplistic and pointless exercise.However, there is another factor that simply blows the entire idea of a static “run rate�? out of the water. Last November, I predicted that sales of the Zune would bomb that winter because Microsoft had failed to critically examine Apple's historical sales patterns. Sure enough, the Zune was thrown against the rocks by Apple's riptide. Frommer's idea ignores that same reality by imagining that iPhone sales will schlep along at a linear pace. Had Frommer tried to calculate an "annual run rate" for the iPod based on a portion of third quarter sales at any point over the last half decade, he would never have been close to accurate. That’s because Apple’s iPod sales roughly triple every winter quarter.In 2002, it sold nearly as many iPods in its winter quarter as it did the first three quarters combined: 219,000In 2003, it actually sold more iPods in its winter quarter than in the first three combined: 733,000In 2004, it again sold more iPods in its winter quarter than in the first three: 4,580,000In 2005, it sold more than 4 million units every quarter, but still sold nearly three times as many in the winter: 14,480,000.In 2006, it sold more than 8 million units every quarter, and then sold over 21 million in the winter quarter.In 2007, it has maintained quarterly sales between 10.5 and 9.8 million per quarter.[Strike 3: Why Zune will Bomb this Winter]Strike Two: The Have it Both Ways Myth.One particularly annoying bit of analysts' talk about Apple's expectations is that they can't seem to decide if Apple's projections are bad because they are conservative lowballs, or if they are bad for being overly enthusiastic figures the company won't be able to reach. They often try to describe them as both, loading contempt on both sides of the scale. This makes them look very foolish. Do they think we have no memory, or are they just changing their stories back and forth in sheer desperation?Frommer tried to argue both sides at once in the same article. Recall that Apple only ever gave two iPhone sales goals: one million by the end of the first quarter of sales, and ten million by the end of 2008. In his piece, Frommer suggests Apple will only be able to sell 5.8 million iPhones by the end of 2008, based on that fallacious "run rate." That would be just over half of Apple's ten million goal. However, he then says that Apple's immediate short term goal was an unimpressive low ball, no doubt because Apple reached it three weeks early.Apple's stated goals must be a greatly frustrating logical conundrum for Frommer, because even at a “run rate" of one million in a quarter, Apple could only ever hope to sell six million iPhones by the end of 2008, another five quarters later. No wonder he's faced with trying to say that the immediate goal was too low and the longer term one is too high! Frommer needs to stop trying to pound round facts into square holes just so they can be stacked up like bricks the way he would like them to be.Strike Three: The Market Bearing Price Myth.While Frommer and Moritz are enamored with the idea that iPhone prices could only be cut if sales were in crisis, a variety of obvious market realities don't support that simpleton idea. Between now and the end of 2008, Apple has just two holiday seasons. If it wants to dramatically exploit its historical potential for selling roughly three times as many gadgets during the winter season, it makes sense to trade off unit pricing for volume sales, even if it could perhaps sell fewer at a higher price and make more short term profits doing so.Such a strategy isn't unique. Microsoft and Sony currently lose money on their new game consoles in desperate bids to establish their gaming and HD video playing platforms. Even so, this year they both cut prices again to accelerate volume demand. Nintendo purposely aimed low to capture volume sales using a more attractive price point. Given high demand for the Wii and extremely constrained availability, Nintendo "should" seemingly raise its console price and profiteer. It hasn't. While prices are clearly linked to demand, it is a common fallacy to think that the "right price" is always the highest the market will bear. Jobs' 99 cent pricing in the iTunes store is clearly not the top price consumers will pay for downloads. Music labels are fuming that other licensees such as Verizon will collect $2.50 or more for portions of a song sold as a ringtone. Jobs wants media prices low to induce volume sales and attract buyers to the legitimate market for music and movie downloads. Labels and studios want "market pricing," in part so they can jack up the price of popular music to exploit consumers, and in part so they can exploit artists by threatening to release their work at lower tiered prices and signal to the market that their careers are over.[Universal vs Apple in the iTunes Store Contracts][Nintendo Wii vs Microsoft Xbox 360 and Sony PS3]This All Happened Before.Dial back the clock twenty years, and you'll discover that Steve Jobs also fought with Apple CEO John Sculley over the price of the original Macintosh. The desire to use an expensive but pioneering amount of RAM and a futuristic new processor had inflated the price of the Mac, but the design team was still able to deliver it at a fairly attractive price point of $1,995. Scully determined that the Mac would still sell at $2495, delivering high profits to fund splashy advertising. Nothing on the market was really similar to the Mac apart from Apple's $9,995 Lisa. VisiOn for the PC similarly cost nearly $10,000 and did far less. Sculley thought that the market would bear anything Apple might charge. Andy Hertzfeld recalled on Folklore.org that in October 1983, "Steve Jobs strode into the software area one evening, looking angry. 'You're not going to like this,' he told us, 'but Sculley is insisting that we charge $2495 for the Mac instead of $1995, and use the extra money for a bigger marketing budget. He figures that the early adopters will buy it no matter what the price. He also wants more of a cushion to protect Apple II sales. But don't worry, I'm not going to let him get away with it!'"Jobs fought Sculley over the price increase, but Sculley prevailed. Sure enough, Macs did sell well out of the gate to early adopters at the higher price, but sales then began to stall. While Jobs couldn't cut the price for the original Mac to induce wider adoption in the mid 80s, he could choose to cut the price of the iPhone early and use interest in the iPod Touch to ramp users toward the iPhone. That price cut will dramatically boost sales this winter, just as iPod price cuts and feature refreshes do every year.Apple will earn less profit on individual hardware sales of the iPhone, and may even earn slightly less money overall this quarter than it might have selling the iPhone at $599. However, a $399 iPhone will dramatically boost the company's sustainable subscriber revenues and devastatingly cut into stationary rivals like Palm and the Windows Mobile licensees, giving them little opportunity retool and strike back with copycat products. [Price Fight - Folklore.org][Office Wars 3 - How Microsoft Got Its Office Monopoly]Strike Four: The Myth of Unlimited Availability.Another problem with idea that iPhone sales were in crisis--and that a price cut is a conspiracy to hide the truth--is that Apple sold out of iPhones in many of its retail stores throughout the first three weeks on sale.Carl Howe of Blackfriar's Communications tracked iPhone availability every day through July, and then animated the results in a movie that depicts just how constrained iPhone inventories in Apple's retail stores were. So not only did Apple meet its 94 day goal 20 days early, but it did so despite having no or few iPhones to sell in many of its stores during the first 21 days. Price isn't just related to demand, but also to supply.That also demonstrates the fallacy of Scott Moritz' assertion that Apple secretly planned to sell a million iPhones in a day and a half, and was sorely disappointed after failing to do so. How could Apple have planned on selling a million units in one day when it didn't even have a million units on the shelves of its stores during the first month? Remember, Moritz wasn't saying Apple had a delivery problem in getting enough units to stores as Nintendo is experiencing with its constrained supplies of the Wii. Instead, he tried to suggest that interest in the iPhone was far below Apple's estimates, and buyers were leaving it on the shelf like Windows Vista. The result, he claimed, was that "rivals were rejoicing."The only real rejoicing by rivals was that Moritz was volunteering to repeat the talking points handed to him by Verizon shill Roger Entner of IAG Research. Just hours before Apple announced it had sold a million units, Moritz tried to get some traction out of the idea that Apple had dropped the price in desperation to find another half million or so customers over the next three weeks. Apple isn't the typical tech company being run by visionless bean counters. It it were, it would have continued selling $600 iPhones at least through the end of September and then announced that it had sold its million. Apple had to push out new iPods in early September and fit the iPhone into the price range because next month it will be rolling out Leopard and a series of new software updates. Apple feeds the press in small, consistent, and regular feedings so reporters know what to write. If Apple were a big stupid company such as, say HP, it would parade out a mix of dozens of consumer and business products all together in one big event, and nobody would ever hear about any of it. HP did.[Why a million iPhones in 74 days is better than you think- Blackfriars][HP's marketing this week: fashionable but ineffective - Blackfriars][Unraveling Anti-Apple Panic: the iPhone Launch Success] [More on Scott Moritz and the Jim Cramer Misinformation Engine]Strike Five: It's Too Late to Deny the iPhone.The most comical part of Frommers’ analysis is that he’s trying to stuff a cat back into a bag and explain that there was never really any cat, long after everyone in the room heard the purr and pet the thing. Sorry, but the windows of opportunity to doubt the iPhone have long since closed.Real Windows Enthusiasts were aware of the need to deny the iPhone well before its release. They all chimed in with reasons why the iPhone wouldn't work, wouldn't offer what consumers want, and wouldn't sell well, all hoping that their non-stop misinformation campaigns would act as a self-fulfilling prophesy. They failed miserably.John Dvorak began his smear campaign immediately, appearing on CNBC to say that the iPhone was "trending against what people are really liking in phones nowadays, which are those little keypads.�? He explained, “The BlackJack, the Samsung, the BlackBerry obviously pushes this kind of thing. The Palm, all of these. I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong. But I think Apple can do wrong, and I think this is it." Reader Jim Barrow sent in a link to a MarketWatch article from March, where Dvorak scribed a rambling diatribe entitled "Apple should pull the plug on the iPhone." He offered no factual basis for worrying that the iPhone might not work out apart from the offhanded comment that "there is no likelihood that Apple can be successful in a business this competitive," words which echoed Dvorak's 1984 observation that "the Macintosh uses an experimental pointing device called a 'mouse.' There is no evidence that people want to use these things."In April, Dvorak inflamed his 'pull the plug' rhetoric further in a TWiT podcast, where he reported to an audience of hundreds of thousands that the iPhone only delivered "40 minutes of talk time" and "the interface fouls up constantly.�? Dvorak said that his inside information on the iPhone came from a "guy at Cingular who’s testing the product," adding, "he’s telling me confidentially and I shouldn’t be telling anybody."[John Dvorak: How Wrong Can One Guy Be?][Readers Write: Don't Write About John Dvorak Anymore]It'll Be the Death of You.Dvorak was joined by Rob Enderle, who called the iPhone “damned�? and “not a very good phone�? at every opportunity in the months before its launch, despite not really knowing anything about it, or even ever offering any rational criticism. Instead, Enderle appealed to fantasy fears of sexual assault, murder, and the violent death of children, all of which he suggested might somehow be related to the iPhone. Unaware that a password protected iPhone--or even a unauthorized unit without a configured service plan--can still be used to make emergency phone calls, Enderle wrote about, "an emergency situation where, say, a woman was being raped and couldn’t call for help because she didn’t remember her iPhone password." As I understand, with a Windows Mobile phone, even if the unit crashed while trying to place the call, at least the victim could use it like a brick as a blunt weapon. Enderle also feared that being unable to take out the battery would somehow making recharging it impossible, resulting an a scenario where one might end up on “the wrong side of town�? with a dead iPhone and be murdered because of it. Being on the wrong side of town was apparently the source of most murders prior to the arrival of the cell phone, which somehow made it safe to be in bad neighborhoods. For those who unfazed by the prospect of one's own own grizzly death in relation to the iPhone, Enderle appealed to his readers to please think of the children, particularly the potential for their brutal decapitation in an iPhone-related collision. "If you are buying this phone for a child or another member of your family," Enderle warned, "please emphasize that entering data on this phone while driving is dangerous." In contrast, operating the slide out keyboards of an HTC brick phone, or using both hands to thumb type on a BlackBerry may or may not save your children as they drive off an embankment, but at least you'll know they didn't die at the hands of Apple's "damned" iPhone.[SCO, Linux, and Microsoft in the History of OS: 1970s][Mac OS X vs Linux: Third Party Software and Security]Pure Concentrated Evil with a Multitouch Screen.Brian Lam of Gizmodo published an impassioned plea to boycott the iPhone shortly before its launch, due to the fact that Cingular had purchased the AT&T name, a brand Gizmodo's writer correlated with "monopoly tactics" in the late 70s. Gizmodo hasn't ever called for the boycotting of Verizon Wireless, which is well known for its anti-consumer tactics and which shares just as much blood with the old AT&T as its Baby Bell sibling Cingular, nor has it ever urged the boycott Microsoft products due to "monopoly tactics." Gizmodo also failed to boycott any other GSM phones that are tied to AT&T.Gizmodo's Lam and Enderle then teamed up with Slate's David Sessions in an article purporting to expose Apple's rated battery life for the iPhone. Sessions complained about the attention the iPhone was getting, and tried to dismiss Apple's announcement of a two fold increase in battery life over what was originally advertised. Unbelievably, Sessions and friends could only explain away the iPhone's jump in talk time by crediting its glass screen, saying that "glass transmits light more efficiently than plastic." That and some witchcraft.However, all of these individuals sharply reduced their squirt rate of false information after the iPhone's successful launch. In day and a half, Apple sold 270,000 iPhones compared to the 500,000 Palm OS Treos, 1.03 million RIM BlackBerrys, and 1.51 million Windows Mobile phones that were sold worldwide in the first 90 days of 2007.Apple has since nearly matched highflying RIM in sales during July, despite being limited to a single carrier and only offered for sale in the US. At this point, denying the iPhone is like saying the Earth is flat. It might be fun to do at a Renaissance Faire, but pretending to seriously doubt reality is not a good career move unless you work for the Street--or perhaps Rupert Murdoch, as Dvorak does.[Secret iPhone Details Lost in a Sea of Hype and Hate][iPhone Sales vs Zune, Palm, RIM, Symbian, Windows Mobile]And Now: a Warning.Let it be known that anyone who publishes further misinformation or blows out similar inanity will risk being instantly awarded a Zoon on the spot. No complicated voting, no tedious application process. New Zoon nominees will be rubber stamped with the same effortless fast tracking as the ECMA declaring Microsoft technology as an international standard.In fact, I’m going to totally Zoon Dan Frommer and Scott Moritz right now, as well as John Dvorak, Rob Enderle, Brian Lam, David Sessions, and even Roger Entner. And John Sculley. And while I’m handing out an intellectual property construct that costs me nothing to distribute, I will also award Steve Jobs with a Zoon for the whole two month “just kidding�? iPhone pricing situation, although I might take half of it back if I get a $100 coupon that doesn’t force me to spend $500 to actually use it. So let that be a warning to you out there on the Tubes thinking about how to linkbait an article at the expense of the progress of technology. I have a rapid firing gun full of Zoons and I’m not shy about cranking them out. Be sure to post any nominees.What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast! Submit to Reddit or Slashdot, or consider making a small donation supporting this site. Thanks!
iPhone Passes Windows Mobile in Smartphone OS Market Share

Windows Mobile, Microsoft's increasingly embarrassing single entrant in the smartphone OS field, can't seem to hold on to the attention of the world's consumers. A new survey by market research firm comScore sees Windows Mobile dropping one place in the overall rankings, and Apple's iPhone gaining one, which puts it ahead of Microsoft. The iPhone climbs to number two in terms of general smartphone OS market share in the U.S., while Windows Mobile drops to third. Research in Motion's Blackberry OS still tops the list, and in fact does so with an impressive gain in customers over the course of 2009, according to a breakdown of the report by DailyTech. comScore compiles its results for the smartphone survey every three months, collecting data from thousands of U.S. consumers. The latest three month period, the one which is detailed in this latest report, ended in October of this year. RIM, as mentioned, saw pretty significant growth throughout the year. At the beginning of 2009, it had just under 10 million customers, and according to the comScore report, it now boasts 14.96 million in the U.S. RIM has been employing aggressive pricing strategies to compete with the iPhone's success, including handset giveaways and deep discounts, and it looks like the Blackberry maker's efforts have paid off nicely. Windows Mobile actually showed negative growth, and is the only smartphone company that can make this unfortunate claim, and now has around 7.13 million users. Buyers could be shy of committing to a device that runs Windows Mobile 6.5 when version 7 is set to launch sometime early in 2010. Everyone else, including Palm's WebOS, Google's Android, and Symbian all experienced modest gains. Android still tails all others, but during the most recent period it broke the 1 million mark, and I'd expect to see it surge even further on the strength of the Droid in upcoming surveys. As for the iPhone, it grew to 8.97 million users over the period ending in October. That's a pretty impressive lead over Windows Mobile, though it means Apple still has a lot of ground to make it up before it can snatch the crown from powerhouse RIM. It's even more impressive when you consider that at the beginning of the year, the iPhone only had around 5 million users, meaning that it experienced about 70 percent growth over the course of 2009, a performance that likely has a lot to do with the release of the 3GS and the significant price drop and continued sales of the 3G model. Overall, the smartphone market continues to do well. Roughly 11.8 percent of the American population claims to now own one, according to this most recent poll.
Gear of the Year 2009

Apple and its partners released hundreds upon hundreds of compelling products this year. We scoured the hardware universe, tested the heck out of the most intriguing gear we found, and now share our exclusive list of the 15 very best.Apple doesn’t make product design easy for its third-party partners and the rest of the hardware-manufacturing universe. Jonathan Ive and his design team craft the most emotionally inspiring gear in all of computing and gadgetdom, which only sets the bar higher for those companies aspiring to make products that work with Apple gear. Add in the fact that Steve Jobs keeps many of Apple’s development plans private, and you have third-party vendors essentially “designing blind,” as they anticipate products that complement the Apple oeuvre.But, oh well, such is the price we pay for gear that moves the soul. Apple’s design process creates the coolest family of products on the market, and the best third-party manufacturers always find a way to create gear and accessories that match Apple’s hallmarks of slick design, simple operation, and clever, cutting-edge features. On the following pages, we present the very best of the hardware we tested this year, as well as the iPhone and iPod touch apps that made profound impacts on the screens of our handhelds.�Notebook: 13" MacBook Pro�Pretend it’s January 1, 2009, and you’re in the market for a 13-inch Mac laptop. Your choices are few: Either a plastic MacBook starting at $999 (for which you’d get 1GB of RAM, a 120GB hard drive, and a 2.1GHz Intel Core 2 Duo “Penryn” chip), or the svelte aluminum MacBook Air starting at $1,799 (2GB of non-upgradeable RAM, the same 120GB hard drive, and a 1.6GHz Intel Core 2 Duo “Penryn” chip).The gulf between their prices: significant. The difference in their specs: yawn-inducing.The 13-inch MacBook Pro does a happy dance every time we sing its deserved praises.Thankfully, Apple introduced the 13-inch MacBook Pro in June, giving mobilistas the same features as the 15- and 17-inch MacBook Pros in a smaller, more portable package. Compared to the Air, it’s got more ports, a faster chip, upgradeable RAM, and a bigger and faster hard drive--and starting at $1,199, the 13-inch MBP is a few ducats cheaper too (the Air now starts at $1,499). From its all-day battery life to its oh-so-convenient SD card slot, the 13-inch Pro quickly became the favorite new Mac in our offices and a hands-down shoo-in for Gear of the Year honors.COMPANY: AppleCONTACT: www.apple.comPRICE: $1,199 and up��Display: LED Cinema Display�Apple’s LED Cinema Display isn’t necessarily perfect. It’s kinda expensive and only works with Mini DisplayPort–equipped Mac models (unibody MacBook Pros, the now-defunct unibody MacBook, the MacBook Air, and the latest Mac Pro and iMac). If your machine sports a DVI or mini-DVI port instead of a Mini DisplayPort, you can’t use this display, even with Apple’s adapters. Yes, at press time, Atlona was releasing an adapter that purports to connect any DVI Mac to this display, but we haven’t yet been able to test it yet.Behold: 24 inches of wow.So, yes, it may present problems for the budget- and DisplayPort-challenged, but none are serious enough to rob this incredible display of GOTY recognition. The 24-inch LED-backlit screen is sublime, even without a matte option, and the $899 price tag doesn’t seem so steep considering that the monitor can also power your laptop with its built-in MagSafe power cord. It’s like having a second power adapter, which typically would cost you $129. The LED Cinema Display also reflects the environmental strides Apple made in 2009: The glass is arsenic free, the cables are PVC free, it meets Energy Star requirements, it’s free of BFR and mercury, and the glass and aluminum enclosure are highly recyclable. OK, OK, and it’s great looking too. We’re just shallow like that.COMPANY: AppleCONTACT: www.apple.comPRICE: $899 ��Camcorder: Zi8 Pocket Video Camera�Kodak’s pocket-size Zi8 edges out the Flip MinoHD (4 out of 5 stars, Mar/09), thanks to its uncanny versatility. Nearly the same size as the Flip, the Zi8 can shoot in full 1080p at 30 frames per second, 720p at both 30 and 60 frames per second, widescreen VGA (848x480), and also take 5-megapixel stills. Removable SDHC cards let you swap in new memory, and the rechargeable Lithium-Ion battery is also removable, so you can pack extra cards and batteries and keep shooting all day, weekend, vacation, or bender long. A tripod mount, macro mode, 2.5-inch display, and stereo microphone input round out the package.Removable memory and batteries keep you shooting all day.Oh, and it’s $20 cheaper than the Flip MinoHD too (though you will need to shell out for an SDHC card; an 8GB one goes for about $25). Even the PC-only software doesn’t rain on the Zi8’s parade too much--the MOV files play in QuickTime and can be imported into iMovie for further editing. We hear ArcSoft Media Impressions, the included software, is no picnic anyhow, although we really wouldn’t know, as we’re all Mac Lifers. (Mac Lifers who are now videotaping each others’ every move.)COMPANY: KodakCONTACT: www.kodak.comPRICE: $179.95��Printer: Epson Stylus Photo R2880�With multifunction printers like the Epson Artisan 810 running about $300 for quite impressive photo reproduction, some might think us decadent for choosing a photo-only printer that costs twice as much. Well, price isn’t a major consideration in Gear of the Year voting, and when we consider the Stylus Photo R2880’s special talents for black-and-white printing and fine-art reproduction in general, we can’t help but turn to Epson’s most prosumer-oriented wide-format printer.An eight-cartridge ink system includes special magenta pigments for breathtaking tonal range in color prints. But where the R2880 really excels is in the grayscale reproduction of black-and-white prints. Three levels of black pigments and a special Black-and-White Photo Mode eliminate all of the unfortunate colorcasting that occurs in black-and-white prints from lesser photo printers.Only the fancy blue lighting in our photo studio casts impure color on the R2880's neutral B&W reproduction.The R2880 also supports a huge array of paper sizes and types. Formats range from 4x6 inches to 13x19 inches and 13-inch panoramic rolls. Supported paper types include Epson’s own velvet, watercolor, and canvas mattes, each of which feature its own unique fine-art texture. You can even feed in 1.3mm-thick art boards! The R2880 is the artist’s choice. We love it.COMPANY: EpsonCONTACT: www.epson.comPRICE: $599.99��Camera: EOS 5D Mark II�Pro photographers would likely give the stink eye to anyone who even suggested using one of those toy digi-cams that shoots both still images and video. But the Canon 5DMII isn’t a toy--it’s a game-changing digital SLR that adds the ability to shoot 1080p video to an already unbelievable package. That’s right, kids: This thing shoots HD video out of the box.The 5DMII takes insanely detailed still images with its 21.1 megapixel, 35mm CMOS sensor, which is 60 percent larger than the sensor in most other DSLRs. This translates into crisper images all around and low-light photos with zero to little grain or noise. And thanks to an enormous 3-inch LCD screen, you’ll be able to preview your shots with amazing detail, all in real time.Doesn't look like a video camera--but it is.When you get tired of still photos, you can shoot up to 12 minutes of HD 1080p video per each 4GB of flash memory. Video quality is good, and if you eschew the stock lens for a manually operated Canon lens, you can achieve superb video quality that rivals that of pro-level HD video cameras. Will the 5DMII replace those expensive HD video cameras? No. But it does take one step closer to leveling the playing field.COMPANY: CanonCONTACT: www.usa.canon.comPRICE: $2,699 (Body Only)��Desktop: 24-inch 3.06GHz iMac�There was a time not so long ago that when a pro content-creator needed a new Mac, we would emphatically point him or her to the fastest Mac Pro. You need to edit video? Get a Mac Pro. You got some huge photo files that need retouching? Get a Mac Pro. Mixing your latest album? Well, you get the point.The granddaddy of all iMacs is a winning mix of everything we care about in Apple computers.But now we’re not so sure, considering the sheer raw power and screen size of the 24-inch, 3.06GHz iMac. The biggest iMac in the Apple corral, this machine screams, thanks to its Intel Core 2 Duo processor, Nvidia GeForce GT 130 videocard, and cutting-edge DDR3 RAM. Throw in a 1TB of drive space and that huge beautiful display, and you have a desktop rig that’s gloriously well appointed for consumer enthusiasts and pretty damn zippy for professionals. The 24-inch iMac doesn’t beat the Mac Pro in terms of sheer processor power and expandability, but it’s perfection in terms of its price-to-performance-to-convenience ratios.COMPANY: AppleCONTACT: www.apple.comPRICE: $2,199��iPhone Case: Feather�The Feather case is less than a millimeter thick. That’s thin, y’all. Made of a light but strong polymer, it snaps around your iPhone with a satisfying click, providing a layer of scratch-n-bump protection and a splash of color without adding any bulk whatsoever. The Feather comes in more than a dozen colors, including eye-catching, limited-edition fluorescents. Incipio even includes two surface protectors (removable film for your iPhone’s touchscreen) and a soft cleaning cloth.The NBC peacock would be so proud.The bottom is open so you can dock your device in nearly any accessory without having to pull the case off first. Not every case can do that, which is why the Feather quickly became the iPhone case of choice in the Mac|Life offices. Our iPhones are nearly as busy as we are, in and out of docks, speakers, and other accessories all day long. Stylish, rugged, and thin. That’s the hat trick for an iPhone case, and the Feather scores big on all three points.COMPANY: IncipioCONTACT: www.myincipio.comPRICE: $19.99��Networking Device: Verizon MiFi 2200�At first glance, the MiFi doesn’t look impressive--it’s just a shard of shiny black plastic and a few LEDs. But once you charge it up and slip it in your pocket, it becomes a tool of furious networking utility.The MiFi achieves the seemingly impossible: making networking hardware sexy.MiFi uses Wi-Fi to form a bridge between your computer and Verizon’s 3G data network, allowing you to access the Internet from anywhere Verizon has 3G coverage. That means you can take your MacBook to the beach and iChat with your pals with your toes in the sand--or grab online copies of the dreaded quarterly TPS report. You can also work from your favorite café, park bench, or even a moving vehicle (as a passenger), all without having to worry about finding an open Wi-Fi network. Better still, unlike USB or ExpressCard devices that only work with a single computer, you can share your MiFi connection with up to four additional computers.Oh, sure, there are probably a bunch of Wi-Fi home network routers that did a bang-up job in 2009. Yay for them. Give them all cake and ice cream. We’ll still take the MiFi, a networking product that actually does something new.COMPANY: VerizonCONTACT: www.verizonwireless.comPRICE: $149.99 with two-year service contract��Set-Top Media Player: Western Digital WD TV�Sorry Apple TV, but the WD TV gets the nod for being the best device to deliver content from your Mac’s multimedia collection directly to your TV. In April, we gave the WD TV a tepid 3-star rating for some awkward interface issues, but since then WD has issued firmware updates addressing some of the nits and adding support for more video formats. Yes, we’re still waiting for network connectivity directly from Western Digital, but an active hacking community has been expanding the WD TV’s feature set, including getting it to play nice on Wi-Fi networks.Firmware updates and community hacks elevated the WD TV to greatness. Nine months and several different set-top boxes later, we still find ourselves skipping more complicated competitors and using the WD TV to play media files on our HDTVs. This box seems to support every file format one can throw at it. And unlike Apple and other set-top box competitors, Western Digital takes a very hacker-friendly stance with the WD TV, which we applaud, as great developments often flow from a passionate hacker community. It may not be the highest-tech device in our entertainment center, but for ease-of-use and rock-steady reliability, it’s the media box we love most.COMPANY: Western DigitalCONTACT: www.wdc.comPRICE: $99.99��Gadget: Pulse Smartpen�This überhandy pen records audio, all while a teeny infrared camera in the tip links the sound to whatever you’re writing at the time. This lets you sit back and really listen to a lecture, meeting, or presentation without frantically scribbling notes. Instead, you can just jot the quickest of notes (even a single number or letter--whatever you like) on Livescribe’s special dot paper and then easily find the associated audio clip later. To do this, just tap a note with your pen as you’re playing back the audio, and the recording instantly jumps to the portion that was recorded when you wrote that note. Docking the pen uploads your recordings and a digitized version of your notes to the Livescribe Desktop app, which lets you archive, search, organize, and share your notes and audio.The notebook in this photo isn't a random prop. It's a volume of Livescribe's special dot paper.It’s difficult to explain how useful the Pulse and Livescribe Desktop are (and they do more than we’ve outlined here), but the genius behind the idea, the pen’s classy design, and the “it just works” simplicity dropped the jaws of every single Mac|Life staffer when we got our paws on it earlier this year. It’s our Gadget of the Year--take a note.COMPANY: LivescribeCONTACT: www.livescribe.comPRICE: $169.99 and up��iPods: Fifth-Gen iPod nano�The fifth-gen iPod nano is the first iteration of the nano since the original to not receive a perfect 5-star score from Mac|Life, but it’s still undoubtedly the iPod of the Year. Its 2.2-inch screen is the biggest for a nano ever, it plays FM radio--something we’ve requested for years--and, oh yeah, did you notice that it shoots video? (Apple might have mentioned something about that in the commercials, but we just wanted to make sure.)The video camera interface includes a generous collection of 15 special visual effects, including ones that mimic thermal heat maps, creepy X-rays, old-timey sepia tones, and trippy motion blurs--just like when the vampires speed up in True Blood! This latest nano also includes a pedometer function that shows you how many steps you’ve taken on your latest hike. All in all, the fifth-gen nano has a cunning array of talents and is our iPod of choice, especially if price is a consideration.An honorable mention should go to the third-gen iPod touch, now at a lower price to bring App Store goodness to more people (cue the zombies: “One of us! One of us!”) without subjecting them to the slings and arrows of an AT&T contract.COMPANY: AppleCONTACT: www.apple.comPRICE: $149 (8GB), $179 (16GB)��Earbuds: Future Sonics Atrio�Two bills for a set of earbuds isn’t exactly an impulse buy, but certain things in life warrant dropping a bit of extra coin. World-class computers, fine bourbon, and audiophile-caliber earbuds all make our short list of entirely justifiable splurges. Future Sonics manufactures “in-ear monitors” for professional musicians, and the Atrio earbuds reflect that professional pedigree. They’ve outlasted several other pairs of comparably priced ’buds, which is no small feat, considering the daily abuse we put them through. But it’s really their impressive bass response--even at low volumes--that kept us coming back to them during Gear of the Year deliberations.Comfort and excellent bass response are worth $200.True to their roots in performance gear, the Atrios are comfortable for extended wear, and their treble is crisp and clean, without becoming fatiguing after listening for long periods. We’ve used the Atrios in a wide range of playback scenarios, from listening to the latest Kid Cudi record on the train, to the new Beatles box set at home, all with stellar results. In fact, we like them so much, we’ve been tempted to spring for optional custom-fit sleeves--but that would require a trip to an audiologist to take molds of our ear canals. Oh well, the included tips still sound mighty sweet.COMPANY: Future SonicsCONTACT: www.futuresonics.comPRICE: $199��Speaker Dock: SYD 5�After testing a lab full of iPod speaker docks this year, we’ve determined an incontestable truth: Either go big or go home. Indeed, after being bombarded with flimsy, tiny, tinny docks festooned with clocks, radios, cute graphics, and other distracting “features,” we found audio excellence in the Kanto SYD 5. It’s large, it bumps deep, deep base, and its only “feature” is the color you choose for its smooth, shiny shell. At 22 lbs, the SYD 5 feels like speakers of days gone by--and when a speaker has heft, it usually also has the audio to back up the extra weight.The SYD 5 system comes in black, green, and blue--and a curious note on the Kanto website reads, "other Pantone colors possible." Someone out there please order Flame Orange, 15-1157 TPX!The SYD 5 accomplishes its feats of strength with four speakers hidden behind a removable front cover. Two 5.25-inch drivers and a bunch of reflex ports push deep, rich bass for your hip-hop mixes, while two 3-inch drivers deliver the high end for all the wailing guitars you can handle. Weeeee!The SYD 5 includes an audio auxiliary input and AC power outlet for Hessian-caliber iTunes rocking with an AirPort Extreme. RCA and S Video outputs allow you to watch videos from your iPod on your TV. The weight lifter’s belt for your lower back? That one’s on you.COMPANY: KantoCONTACT: www.kantospeakers.comPRICE: $359��iPhone Headset: Griffin TuneBuds Mobile�Apple has a headset problem. The one it bundles with the iPhone is, well…the dictionary definition is “craptacular.” And we’re pretty sure that cramming hard plastic into one’s ears doesn’t meet anyone’s definition of comfortable. And don’t even get us started on the sound quality. Bottom line: We’re now on the third iteration of the iPhone, and Apple still hasn’t managed to include a set of ’buds that is comfy, stays in place, sounds good, and includes a good mic.Griffin Technology’s TuneBuds Mobile succeeds on all four points, and we dig its reasonable price. We don’t have anything against expensive, audiophile-level gear, but we absolutely love affordable accessories that do a really good job, and that describes the TuneBuds quite succinctly.No more tangles! Thank you, Griffin.The TuneBuds will work with your iPhone or any recent iPod that sports VoiceOver or Voice Control. The cable is covered in braided nylon and feels sturdier than most headset or earbud cables. And when you wind up the TuneBuds and stuff them in your pocket, the cables don’t tangle quite as much as other headsets. A small detail for sure, but that’s the kind of quality that helps a product transcend from great to awesome.COMPANY: GriffinCONTACT: www.griffintechnology.comPRICE: $39.99��Smartphone: iPhone 3GS�Internet fanboys will hurl slander that we’re secretly on Apple’s payroll. Mac computer enthusiasts will say we’ve drunk the Kool-Aid for a silly little pocket toy. And iPod touch owners will cry that we just don’t get it--that the iPhone is considerably more expensive than the similarly featured touch and isn’t even a very good device for voice calls, which is a bit of a problem for any gadget with the word “phone” in its name.To our critics, we say bah! We’ll see your cynicism and raise you 100 chips of we don’t care. Ever since June 2007 when we all bought our first-gen models, we have been using, loving, and hourly depending on some version of the iPhone, and the improvements in this year’s 3GS only reaffirm what most of our readers already know: Apple’s smartphone is the coolest, most useful piece of technology to hit the market since the personal computer itself.Let us reiterate the key improvements introduced in the 3GS:» Significantly faster app load times and better graphics performance in games.» Higher-res, better-looking photos thanks to a new 3-megapixel camera, now with automatic focus, exposure, and white-balance control.» Video support care of the fancy new camera.» Voice Control, which lets you find contacts, call phone numbers, and play music simply by talking into the iPhone's microphone.» A compass function that orients maps correctly, among other sweet benefits.Six Mac|Life editors, but only five new iPhones. Who's the 3GS holdout!?Did you really think any other mobile phone could knock the iPhone from our top spot? Of course not. But because the iPhone 3GS is so incredibly handy and has become so thoroughly integrated into the flow of our daily lifestyles, we are also compelled to name it Mac|Life Product of the Year. The apps we use entertain us, inform us, and have disruptively replaced a slew of other products and tools that we used by rote only a few years ago. And the new wave of augmented reality apps bring a certain Minority Report fantasy function to a device that is already firmly sci-fi.So don’t come crying to us with protests of “AT&T sucks!” and “there’s no physical keyboard!” We acknowledge those shortcomings, but remain resolute in our conviction that the iPhone 3GS is quite simply the finest, most innovative piece of personal technology by a wide, wide margin.COMPANY: AppleCONTACT: www.apple.comPRICE: $199 (16GB), $299 (32GB) (Pricing for both capacities is for new AT&T customers and eligible current customers) �
Will Windows Mobile Play DOS to Apple's iPhone?

Daniel Eran Dilger Today's broad array of smartphone operating system contenders are offering lots of potential answers to a problem that only requires one. It appears the market has two options ahead: either pool generic hardware makers behind a single operating system and deliver a smartphone marketplace that resembles the Windows PC market, or watch them fall to a dominant leader and have a smartphone market that resembles Apple's iPod ecosystem. This decision isn't going to be made by a class of intellectual elite, or by government mandate. it's going to be made by the market itself. Here are the factors that will influence the outcome, either marginalizing Apple's iPhone into a niche as the company has twice experienced previously at the hands of DOS in 1981 and Windows in 1991, or positioning it as the dominant leader as Apple has achieved for itself with the iPod since 2001. The first segment in this series will look at Windows Mobile as a possible “DOS-attack” against Apple's iPhone. Subsequent segments will look at Google's Android, Nokia's newly opened Symbian, and other mobile contenders challenging the iPhone. Will the iPhone Meet its Match from a Modern Day DOS? This All Happened Before… But Things Have Changed. It's easy to try to predict the future with the help of hindsight. However, while we know history keeps repeating, events always do so in slightly different ways that keep us surprised, as anyone who has tried to salvage fashion and wear it again a generation later has found. In this case, we have two historical events serving as potential foreshadowing events. Which will win out: a DOS model or the iPod model? Windows Enthusiasts had been confidently praying for Microsoft's Windows Media platform to save them from the iPod ever since Apple released its music player. When the PlaysForSure world came crashing down, they rushed to support Microsoft's own solo attempt to compete against the iPod with Zune. Things really got ugly when the iPhone arrived. Meditative prayers for deliverance from the iPod turned into incessant voodoo chanting against the iPhone, accompanied by spirited dancing around the truth and needling attacks. Philip Solis of ABI Research shifted his attention from conducting interviews that suggested a mass Zune migration to issuing reports denying that the iPhone was a smartphone at all by his own definition. Rob Enderle jumped from hopeful optimism for the Zune (“Microsoft is trying to encompass Apple and turn them into a bit player. The strategy is brilliant, but the question is can they execute?”) to angry condemnation of the iPhone, calling it “damned” and “not a good phone” months before he had ever even touched one. Enderle is now serving as a consultant to Dell's plans to resurrect its failed “DJ Ditty,” and offering up opinions on how to compete with the iPod, despite having no experience in guiding companies into competition apart from a long career of cheerleading Microsoft's monopoly position, which was devoid of any functional competitors. Mike Elgan initially wrote that the Zune “scares Apple to the core,” and was confident that Microsoft would “leverage the collective power of Windows XP, Windows Vista, Soapbox (Microsoft’s new ”YouTube killer“) and the Xbox 360” to kill Apple's iPod business. After the Zune failed and the iPhone took off, Elgan complained that Apple was “arrogant” and “the new Microsoft” and needed to be stopped. Since then, Microsoft has canceled XP, Vista has floundered, Soapbox went nowhere, an the Xbox 360 has done nothing to advance Zune sales. Paul Thurrott similarly called iTunes a dangerous monopoly despite the wide open market for iPod alternatives, and warned “Apple should be stopped before the abuses get too great and harm too many consumers.” However, Thurrott himself has chosen to bravely negotiate those dangers and use iTunes, iPods, the iPhone, and pays for MobileMe. He celebrates his use of Apple products in front of Mac users, and then bad mouths them in his Windows-oriented blogs. Lately he has been increasingly unable to find anything good to say about the Zune or Windows Mobile either, however. More Absurd iPhone Myths: Third Party Software Panic Mac OS X vs Linux: Third Party Software and Security Arrogance Unleashed: The Foul Stench of Computerworld’s Mike Elgan Forrester Research: Epic Terror of iTunes and Apple TV Windows Mobile is Not the DOS You're Looking For. Even the most devoted, hardcore fans of the Zune and Windows Mobile are having a hard time praising their current incarnations. The next version of each, both of which promise to address their huge gap in functionality compared to the iPhone and iPod touch, is scheduled for late 2009 or 2010. That is an eternity away, particularly considering that the iPhone went from rumor to 2.0 over the same period of time. A year and a half from now, the iPhone will be splitting atoms and curing cancer (so to speak). While Apple has received some appropriate criticism for releasing iPhone 2.0 with considerably less stability and polish than the original iPhone 1.x software, updates improving the situation have been released regularly, with two just in the last month. Windows Mobile users are lucky if they get a minor bug fix once a year, and many users have to wait months after an update is released before their hardware manufacture or mobile provider approves the update for download. The original iPhone also had some teething problems that were quickly addressed in a series of regular updates over its first six months on the market. In comparison, Windows Mobile has been out for over half a decade. It has not only rarely received updates, but has never performed admirably. It is known for poor battery life, rampant instability, and a poor development architecture that is well behind the iPhone's Cocoa Touch frameworks. Over the last two years, Apple delivered eleven updates to the iPhone OS compared to two from Microsoft, despite the fact that Apple only sold the iPhone over three fourths of that period. Over the next two years, Apple will likely ship another dozen updates while Microsoft only plans to ship one: Windows Mobile 7 DOS Model Problems. In addition to the faults of Windows Mobile that can be directly blamed upon Microsoft, there are also serious flaws within the model for selling a universal operating system across a number of hardware devices. The “DOS model” has demonstrated problems for PC makers, but in a mobile device, those problems have even greater significance. Microsoft is troubled with having to support a wide range of Windows Mobile phones that all support different features. PDA-style “Pocket PC” Windows Mobile devices use a larger stylus tap screen, while “Windows Mobile Smartphones” such as the Motorola Q, only provide a tiny screen with no touchscreen capacity. Also, only a few Windows Mobile phones have an accelerometer, or WiFi, or GPS, and the camera in each is unique. These hardware differences complicate developers' ability to release software that takes advantage of the features of each phone appropriately. Should a game provide accelerometer controls that only work on a few Windows Mobile phones? Should a document viewer application attempt to take advantage of a larger, interactive tap screen or try to cram into a tiny screen driven only by hardware buttons? The iPhone has one screen interface and a single set of hardware features for developers to target. While new iPhone models will eventually broaden those features, Apple will be managing the transition, and has the power to deliver software that abstracts different abilities seamlessly, just as it has on the Mac. For example, location services on the iPhone 3G works identically to those on the original iPhone apart from lacking GPS, and the iPod touch works the same way despite only being able to use WiFi to find its location. Developers don't have write to a specific profile, they simply ask the device for a location and the software uses the hardware available. Supporting devices from different manufactures all trying to differentiate themselves is simply far more difficult. Wait, Stop, Come Back. Microsoft's core inability to deliver a decent mobile operating system after a decade of trying, on top of the fact that supporting a wide variety of hardware is simply more difficult to pull off compared to Apple's integrated model, makes it simply hard to make the case that Microsoft will float out a third generic platform to overtake the smartphone industry following its DOS and Windows for the PC, both of which were actually more the product of fortunate positioning and existing market power. In reality, while Microsoft talks up its plans to take over the smartphone market, Windows Mobile has been dramatically losing market share among smartphones despite having taken over the software reigns at Palm and snuffing out the Palm OS to take its position as heir to the Treo dynasty. The Windows desktop monopoly has done nothing to shore up Windows Mobile's declining market share, which according to Canalys has slipped from 23% in 2004 to around 12% today. Instead, Apple rose to match and then exceed Microsoft's market share among smartphones in the US within just three months of sales. It not only maintained its lead in the US, but with the release of the iPhone 3G appears to have caught up to Microsoft's entire worldwide shipments across all of its providers in its first weeks on going on sale. Microsoft’s Zune, Vista, and Windows Mobile 7 Strategy vs the iPhone DOS and Windows Then… When Apple released its Macintosh in 1984, the IBM DOS PC had already captivated the market and was widely established. The majority of PCs being sold had already migrated away from CP/M and other DOS competitors, leaving Apple to compete against a strongly entrenched platform led by the much larger IBM, which had monopolized business machines for decades prior to entering the new personal computing market. Apple also had a severe price premium to overcome when selling against DOS PCs (most of which were sold with a fraction of the RAM or graphics capabilities of the Mac), and Apple itself was doing a poor job of marketing the Mac, with CEO John Sculley choosing to promote “Apple II forever” while Jean-Luis Gassée pulled plans to push Macs in business and targeted the high end desktop publishing niche instead. When Microsoft began successfully promoting Windows in 1991, it was selling to that same DOS PC audience, which had only become further entrenched over the last eight years. The Mac was already hammered into a tight niche and Apple had done little to advance its technological lead over the PC. On top of all that, Apple had handed Microsoft a wide open license to use its Mac interface conventions, and then embroiled itself in unsuccessful litigation to undo the damage. By the time Windows began shipping broadly, Sculley was focused on his political career while Gassée was getting ready to start his own company. Mac Office, $150 Million, and the Story Nobody Covered Jean-Louis Gassée Returns from Obscurity… to Talk About MobileMe … and the iPhone Now. Today, the circumstances are wildly different. Windows Mobile does not enjoy any dominant position in the US (where RIM is far ahead) or worldwide (where Nokia is leading by a dramatic margin). Competition between Windows Mobile and other alternatives has left Microsoft's product looking unattractive outside of a few niche markets among Microsoft IT shops, many of whom are now considering the iPhone instead. The iPhone has broad appeal leveraging Apple's iPod, Mac, and retail store successes. Apple is actually marketing its products effectively now through its own retail stores. AT&T and other mobile partners are also working to sell the iPhone because it generates more money for them; ten years ago, Apple could barely get retailers to stock its products, let alone market them. Not only are Apple's sales outpacing those of Windows Mobile devices, but users are now browsing the web four times more frequently from the iPhone than from Windows Mobile. Apple not only has a huge mindshare and technical lead, but has a co-development platform spanning the Mac desktop and the iPod touch handheld that shares technology with the iPhone. While Microsoft sells some Pocket PC PDAs lacking mobile service that are not counted in its smartphone market share, Apple sells a vast number of iPod touch devices that likely outnumber sales of the iPhone by a wide margin, and those are similarly not counted in Apple's smartphone market share. Considering the entire WinCE platform, which includes Windows Mobile Smartphones, Pocket PC (mobile and non-mobile), Zune, and other PlaysForSure licensed Portable Media Center devices, Microsoft's influence over handheld devices is insignificant compared to Apple's with the iPod and iPhone, despite the fact that the iPhone and the iPod touch are barely a year old. In the US, where Apple sold the majority of its iPhones in 2007, it outflanked all Windows Mobile sales in its first quarter of sales. A Better DOS than MS-DOS. Who will pick up the torch Microsoft has dropped? The most likely contender may be Google's Android. Microsoft's leading Windows Mobile partner HTC certainly thinks so, as it is hedging its bets to become a member of Android's Open Handset Alliance. Can Android play DOS to the iPhone for commodity smartphone hardware manufacturers, and will Google end up with a Microsoft-like role among phone makers? The next article will take a look. Did you like this article? Let me know. Comment here, in the Forum, or email me with your ideas. Like reading RoughlyDrafted? Share articles with your friends, link from your blog, and subscribe to my podcast (oh wait, I have to fix that first). It's also cool to submit my articles to Digg, Reddit, or Slashdot where more people will see them. Consider making a small donation supporting this site. Thanks!
Apple Grabs a Quarter of U.S. Smartphone Market

Perhaps it has to do with Apple positioning itself as a mobile devices company, but the iPhone is on a serious upswing in the U.S. smartphone market, even while all of its competitors seem to be losing ground. Except for one, that is, and the rate at which that company is building up steam should give the Mac maker cause for some concern. For the moment, though, Apple is doing much better than anyone in the space, really. The latest comScore report, which covers a three month period from September to December of 2009, shows Apple as having 25.3 percent of the total smartphone market share, up 1.2 points from 24.1 percent at the beginning of the period measured. Research In Motion (RIM) came in first place overall once again, with 41.6 percent of U.S. smartphone subscribers opting for a BlackBerry device. But that number represented a slide, ultimately, as RIM began the measurement period with 42.6 percent. Microsoft and Palm likewise slipped, with MS dropping from 19 to 18 percent, and Palm losing 2.2 points, down to 6.1 percent. Google had the lowest market share of the bunch, with 5.2 percent of subscribers. But that number was up from only 2.5 percent in September, suggesting that it was probably helped along considerably with the introduction of the Motorola Droid. 2.7 points also represents the largest market share grab made by any smartphone manufacturer over the period of the report, so Google is indeed the company Apple needs to be most worried about. Palm is probably the company everyone needs to be least worried about. The Pre and Pixi maker lost almost as much market share as Google gained, and was the only company on the list to post such a significant loss of ground. The Pre Plus and Pixi Plus could alter its fortunes, but I honestly can't see customers who were disappointed with the originals going back for more at this point. Going forward, Apple's main concern is going to be with Google and how it fares now that it's begun taking more control over its own smartphone future. The Nexus One drastically undersold the iPhone both in the first week and in the first month, so that's got to be good news for Apple. That said, Google is doing something pretty much unprecented with regards to smartphone sales in the U.S., and it's only selling the device in the U.S. as of yet. Apple had the advantage of selling its device through AT&T when it launched, which was an established sales and marketing channel for such devices already. Apple's growth over the period measured in the comScore report remains impressive, though, given that it had not introduced a new smartphone model since much, much earlier in the year. Google's rise can be almost entirely attributed to the initially strong sales of the Motorola Droid, which was arguably the “it” device of the pre-Christmas season. Related GigaOm Pro Research: As Windows Mobile Stumbles, Which Smartphone OS Will Seize the Lead?
App Store Anniversary: By the Numbers

The iTunes App Store has reached its first birthday. This event deserves a moment of reflection on what Apple has achieved in its first 12 months of operating the App Store. Tens of Thousands of Apps, Billions of Downloads Apple celebrated the download of 1 billion applications from the iTunes App Store just this April. Anytime you have a one followed by nine zeroes, it certainly looks impressive, but the remarkable speed with which Apple reached this milestone makes the achievement even more noteworthy. It took just over nine months for the App Store to hit 1 billion downloads; there were also over 35,000 apps available at this time. Not quite three months later, and there are 58,000 apps available in the App Store and downloads are over 1.5 billion. Love Me Some Apps iPhone apps are a certified hit. According to a recent report from Compete, the App Store generates surprising engagement with customers. Twenty-seven percent of smartphone users have never installed any apps on their phones, compared with only 2 percent of iPhone users who have managed to avoid the App Store. Of those who have paid for apps, 86 percent have never paid more than $9.99, but 83 percent of iPhone users have downloaded at least six apps. Seventy-nine percent of iPhone users have downloaded games for their device. Other popular app categories are Entertainment (78 percent), Weather (57 percent), and Music (55 percent). If we count all 21 million iPhones and 16 million iPod touch units worldwide at the time this report was released, these percentages mean that four out of five, or about 16.6 million iPhone users, have at least tried playing a game on their iPhone. If we assume a similar percentage for iPod touch users, then there are about 12.6 million more people downloading content for their device, or about 29.2 million users total who have downloaded at least one game from the App Store. What should be even more exciting for iPhone developers is that the total installed base of iPhone and iPod touch units is set to nearly double within a year. At 7 million units a quarter, the market for the App Store will increase to 58 million devices by the end of 2009, or 65 million devices by April 2010, maybe 72 million to 75 million by the three-year anniversary of the iPhone and the two-year anniversary of the App Store. The iPhone Marketplace is Huge To get a sense of the scale and importance of the iPhone App Store, I went to Electronic Arts, a publisher with two titles on the all-time most popular paid apps leaderboard (Tetris and Monopoly: Here and Now). While it was reluctant to share specific numbers across platforms, it did have the following comment. EA doesn't share specific sales results, but the success of Spore Origins and SimCity being a No. 1 Top Paid App worldwide within a day of its launch speaks to the excitement around EA games on the iPhone and iPod touch. In looking at Apple's game sales on the App Store in general, there are a few cases where Apple's monthly sales have surpassed certain carrier sales for the same period. It is clear that the consumer is reacting favorably to the shopping, download and game-play experience that Apple and the publishing partners have brought to market. With over 60 percent of Top Paid Apps being games, EA is in an exciting category and we intend to apply our passion for gaming and our leading IP to this platform. I think it is fascinating that the App Store has exceeded some carrier sales for EA. Of course, EA has games on other platforms, too. EA continues to evaluate all current and emerging platforms and will launch on platforms that deliver great purchase and gaming experiences. EA has launched three games for the G1 on the Android platform, over 50 games in support of BlackBerry, and over 30 games in support of Windows Mobile. I was a little surprised to learn there were so many titles on the BlackBerry. I have been a BlackBerry user for several years, but I don't recall ever seeing an ad for software on the BlackBerry. The game market appears to be a leading indicator of the platform's success. There are just 12 EA titles on the iPhone right now, but some big names are set to launch this year. If anyone had doubts about the viability of the app market, and more specifically the game market, those doubts should be gone. Comparisons There are not any clear apples-to-apples comparisons (pun intended) of mobile phone application marketplaces for the App Store yet, although that will change this year as Microsoft, RIM, Google and Palm all have launched or will launch marketplaces in 2009, but we can look at the existing online stores for the video game market to get a small sense of the scale of the iPhone market. Xbox If we compare the iPhone download numbers with Xbox Live, a successful online gaming marketplace for Xbox 360 owners, we begin to see how quickly the App Store has grown. Microsoft has sold about 28 million Xbox 360 systems (compared with 35 million Nintendo Wii systems, and 20 million Sony PS3 systems). Of those 28 million, there are about 17 million active Xbox Live accounts (about 56 percent of which are paid Xbox Live Gold memberships). A dedicated gaming system, with the best online marketplace in the gaming console business, that has been in use for four years, has only 58 percent of the active accounts of the App Store. [source: Gamasutra & Gamasutra] Nintendo DS The iPhone platform is a formidable competitor to portable game devices, too. Nintendo announced just earlier this year that the Nintendo DS has now sold 100 million units. It took 3.5 years to reach this milestone. They are now selling about 8 million units per quarter, or slightly more than the combined 7 million iPhone and iPod touch units sold this last quarter. If Apple continues on its 7 million units per quarter pace, it will reach 100 million units about nine quarters from now, or almost exactly four years after the launch of the first iPhone. In comparison, the Sony PSP reached 50 million units after its first four years on the market. [Source: Kotaku] Razr The Motorola Razr, the hottest-selling mobile phone of the previous generation, took 1.5 years to reach 50 million units and had reached 110 million units after four years. The iPhone (by itself, without the iPod touch) will take about five more years (or 7.5 total) to reach 100 million at the current pace. Of course, the Motorola Razr benefited from being available on multiple carriers and having a subsidized price in the range of $50 to $100. If Apple can successfully move to multiple carriers in the U.S. and then worldwide, and lower the cost, then iPhone growth should accelerate. [Source: Wikipedia] iPod If we look a little closer to home, the iPod (across the entire product line) took 5.5 years to sell 100 million units and three years to reach 1 billion songs downloaded. Why Comparisons are Never Fair These comparisons are always unfair because of the amount of free content for the iPhone when you try to size that up against the predominantly paid content of the iTunes Music Store, Xbox Live and Nintendo DS titles. Still, the exercise gives a small indication of the sheer scale that the iPhone market has achieved in just 12 months. So What Have We Got Here? The iPhone and the App Store have created an enormous market. By the next anniversary, we should see 180,000+ apps available in the App Store, 72+ million iPhone OS devices, and 3.5+ billion downloads. The installed base of iPhone OS devices will quickly leap far beyond the installed base of Mac OS computers, meaning that there will be more Objective-C and Cocoa code running on non-Mac devices than Macs — a strange thought for sure. This next year will be interesting to see if the App Store continues its breakneck growth. I, for one, expect that the next 12 months will only see this trend accelerate. What do you expect to see in the next 12 months from the App Store? More growth? Will the curve start to level out? Market research you can use: Keep informed about Cloud Computing and IT Infrastructure. Learn more��
iPhone Increases Marketshare Again

For Q3 2009, Apple's iPhone accounted for 17.1 percent of worldwide smartphone marketshare, a new high for the company. That's the good news from Gartner, and there's more where that came from. While overall mobile phone sales were flat for the quarter, smartphone sales were up 12.8 percent, some 41 million units. Carolina Milanesi, research director at Gartner, notes that smartphones “represent the fastest-growing segment of the mobile-devices market and we remain confident about the potential for smartphones in the fourth quarter of 2009 and in 2010.” How convenient for Apple. 3.4, 12.9, and 17.1 percent…that's Apple's market share for each third quarter from 2007 through 2009, the growth rate easily besting even RIM's doubling of its own market share over the same period of time. For the current quarter, Apple also outpaced RIM, the two companies growing by 49.2 and 46.9 percent, respectively. While that surge could be attributed to the launch of the iPhone 3GS, it should be noted that the iPhone 3GS was supply constrained during the quarter. Further, Gartner believes the fourth quarter “should be even stronger as Apple starts selling in China, through one additional carrier in the UK, and in an additional 16 countries.” While Nokia did manage growth, it picked up only 4.4 percent in units sold, putting the company at 39.3 percent market share, down from 42.3 percent for the same period last year. The big losers for the quarter appears to have been manufacturers saddled with Windows Mobile 6. According to Gartner, Windows Mobile 6.5 came “too late to have an impact on the third quarter, so sales of Windows-based smartphones saw another decline.” Apparently, HTC must be gaining strength based upon Android. Google's mobile OS “picked up momentum but with only a handful of Android devices available, its share remained modest at 3.5 per cent” of the mobile operating systems. No doubt phones like Verizon's Droid will help to increase Android's share of the market, but arguably not at Apple's expense. The problem with Android is that each carrier is free to create its own mind-numbing implementation, resulting in a lack of consistency for the users of different phones. A case in point is the Droid, which currently lacks multi-touch, even though Android 2.0 supports it. For the most consistent and elegant mobile experience, the only choice remains the iPhone.

The Comments Go Here

MacDiner -- All You Can Eat Apple and Macintosh News and Information

Potential Smartphone Buyers Choosing Blackberrys Despite iPhone, Droid Hype

Will Google's Android Play DOS to Apple's iPhone?

Microsoft's Zune, Vista, and Windows Mobile 7 Strategy vs the iPhone

App Store Anniversary: One Year Later

Why Dan Frommer and Scott Moritz Are Wrong on iPhone Sales

iPhone Passes Windows Mobile in Smartphone OS Market Share

Gear of the Year 2009

Will Windows Mobile Play DOS to Apple's iPhone?

Apple Grabs a Quarter of U.S. Smartphone Market

App Store Anniversary: By the Numbers

iPhone Increases Marketshare Again

Software Releases

Site design and software engineering by August Trometer

FoggyNoggin Software -- Cool Mac Apps