‘Pretty’ versus ‘design’
Google has recently got religious about ‘design’ - or what it thinks is design. All the sites have been made-over. Subtle greys and anti-aliasing are everywhere. All of Google looks easier on the eye.
For example, ‘Google Play’, the new umbrella content store that combines apps, movies, music and books, has a ‘pretty’ logo with a careful font selection:
That logo is most often seen on third-party websites (and indeed posters and print ads) for that content providers to promote their content as being available on Google Play, so Google (and Apple) need to create a ‘button’ graphic for those third parties to use.
So how have Google and Apple addressed this requirement?
Apple’s graphic is clear, readable and works well at many sizes. Google’s graphic is almost unreadable.
Clearly, Google has learnt that ‘design’ matters, but hasn’t learnt that there’s a difference between making things look pretty and good design.
Does Android fragmentation matter to Google? Not much.
Clearly, Android fragmentation affects users and developers. It makes it more expensive and less profitable to develop for Android, while users get inconsistent and unpredictable experiences and have access to fewer high-quality apps. Moreover Android devices may not even have Google services such as Maps or Gmail embedded on the device when a consumer buys it, while new versions of the software with prized new features Googlers have slaved over do not make their way to many users. Ice Cream Sandwich will not be on the majority of Android devices sold until at least the second half of 2012. All of this has been discussed to death.
However, Google’s objectives for Android are not directly affected by any of this. Google wants:
- To ensure that as many people as possible have access to the entire web on mobile devices
- To make sure there is not a dominant mobile platform (originally the fear was Microsoft, then Apple) that can block Google services on mobile
In other words, Google’s priorities for its mobile OS are not what Microsoft’s or Apple’s would be. Google wants more people using the web, because web use means web search and search advertising revenue.
All else is secondary. Even the most fragmented, forked, customised and mangled ‘Android’ device has an open web browser and data connectivity and can drive mobile use of Google Search. Indeed, saying that an Android device like the Kindle Fire ‘has no Google services’ might be true in one sense but misses the underlying point – the browser itself is by far the most important Google Service on any device.
Meanwhile iOS & Android combined now have an active base of over 500m - all with a browser and most with a reasonably generous mobile data bundle. This is 500m mobile AdSense eyeballs. It really doesn’t matter much to Google exactly what the split is: indeed given that iOS users have significantly higher mobile web use, and hence generate more mobile ad impressions, it is almost certainly the case today that an iOS user is more profitable for Google than an Android user.
If it doesn’t matter much if an Adsense impression is on iOS or Android, it certainly doesn’t matter if it is on Android 2.2 or Android 4.
Of course, if it wasn’t for the fact that we know Google isn’t evil, I could point to another reason why Google might be unconcerned by fragmentation: it has the effect of reducing app use, and app use cannibalises web use and web search. In other words, Google’s strategic objective is for there to be as few smartphone apps as possible, even on Android, and fragmentation has precisely that effect.
This discussion is taken from a report I wrote for Enders Analysis this week
iPhone, App Store and Google mobile revenue
Apple revenue from selling 4m of the iPhone 4S in 3 days: about $2.6bn (ASP is about $650).
Annual run rate gross revenue on the App Store: about $2.8bn
Google’s annual run rate mobile revenue: $2.5bn
GetJAR, Facebook and failed downloads?
GetJAR reports that it has delivered 113m downloads of Facebook mobile apps. This covers Android, Nokia and the J2ME feature phones but not (obviously) iOS, nor preloads of OEM Android apps, which are huge.
But according to Facebook those three addressable categories ‘only’ add up to around 66m active users. And GetJAR is competing with the Android Market for installs, so there should be even more than 113m Facebook downloads to reconcile with those 66m actives.
There are two three possible explanations:
- a massive failure rate for installs of downloads: 50% or more (i.e.people download the app but then can’t find it or make it work)
- a massive featurephone base not showing up in Facebook’s app-by-app stats. However, there isn’t really room in the numbers for this latter: as the charts in my previous post show, iOS, Android and RIM apps account for 210m of the solid 250m mobile users number that Facebook discloses
- GetJAR is including application updates in downloads
Overtaking speeds
This chart shows iOS and Android cumulative device sales. The installed base is slightly different (Apple only just passed 200m) but the installed base figure for Android is almost exactly the same, since almost all Android devices have been sold so recently that few will have been abandoned.
Google numbers were out yesterday - Apple numbers for the June quarter are out on Tuesday. Amusingly, Google doesn’t disclose hard tablet numbers (since they’re tiny), while Apple is now talking about iOS users (which include 80m or so iPod Touches) to distract attention from the fact that the iPhone has now almost certainly been overtaken by Android. This is driven mainly by the fact that Android phones sell for half to a third the price of the iPhone.
Of course, any new pricing structure for the iPhone (i.e. competing at the $200 price point) would change everything. Let’s see.
Apple, Android and tablet market share
This afternoon I published a report for Enders Analysis on table market share., The report itself is for subscribers, but the summary bullets give a flavour of my thinking:
- Apple has now sold 25m iPads since launch, worth $15bn, and will probably sell 40-50m in 2011. Competing tablets have sold perhaps 2-3m in total so far and will not be competitive with the iPad until 2012 at the earliest
- Android phones are now far outselling iPhones, but benefit from a narrower user experience gap and from selling at a half of the price. Android tablets must compete with the iPad at the same or higher price points, a far harder task. We believe it is possible the iPad will retain a 50%+ share
- Media companies have veered from euphoria to outrage when contemplating the iPad and its autocratic creator. Android offers them little chance of either in the near future
A revealing illustration from Google Trends of the impact of Apple’s big bang approach to features versus the continuous improvement of Android and stagnation of Nokia.
If you need a colour key you really haven’t been paying attention.
Source: google.com
Apple - superlative fatigue
I published a note for Enders subscribers at the end of last week, and I wanted to capture a few of the more striking points here.
First is a chart about Apple’s scale. There are a lot of these floating around, but this one is a favourite. I’ve taken annual (calendar year) revenue at five year intervals and adjusted for inflation (BLS data), so these are all in 2010 dollars.
Apple’s explosion is of course astonishing, but almost as surprising is the growth at Microsoft. This is, after all, a company that’s done almost nothing interesting since about 1995 - yet revenue is up 6x. This year, Apple will have both more revenues and more profits than Microsoft, and more phone revenue and profit than Nokia.
Second is a diagram that I think is useful in understanding the competitive dynamic between Apple and Android.
The point of the diagram is that it is quite possible to make a phone for substantially less than the iPhone’s ~$600 ASP and still have a pretty good experience. Indeed Vodafone is about to launch an Android phone (manufactured by Huawei) for just £90 ($140) with no contract. It isn’t as nice as an iPhone but it’s perfectly usable. In the next couple of years something like half the western European and US population will get phones like these.
Conversely for a tablet this looks very different - the iPad is about as cheap as it is possible to make a decent tablet. Tablets that are cheaper are pretty much worthless except for very limited use, and the usual suspects that try to compete directly with Apple (Samsung, HTC, Motorola et al) are actually selling their tablets at higher prices than the iPad.
In other words, Apple is bound to end up with a minority of the smartphone market unless it sells a cheaper phone (whether that matters to Apple is another question). But the iPad is both the best and the cheapest product on the market, a quite different dynamic, and that means its market share might be much larger for much longer.
