Ruminating on Android Engagement

Horace Dediu has an interesting article on Android engagement considering results from web activity on differing devices. In short, though there are a lot more Android devices, their usage on the web is a lot smaller than iOS (and we also know that Android users buy fewer apps) so what are these people doing?

My theory is that they’re using them to make calls and send texts.

On Android Activations:

Increment the Activation when the unique device ID associated with the user’s Google account was different than the previous reset.

Which works great when the market is not saturated. But as soon as an Activator hands down a device to another user (Mom, Pop, Little Brother), it counts as another activation. That means that sales of devices are probably a lot lower than reported Activations.

On devices sitting in drawers:

I know when I got my Nexus 7, there was a screen with loud banners and widgets trying to get me to buy stuff, and my primary reaction was irritation.

Apple, of course, relies on device sales to make its money, and so there is no sales pressure present anywhere in the device. You can use the iTunes store and the App Store, but they are just icons on the screen; they are not given any particular prominence, and you are free to ignore them if you want.

That seems like a strange advantage when it comes to getting people to buy stuff with the device, but my working theory is that the hard sell on many of these devices causes them to be dumped in drawers and never looked at again, while Apple’s soft sell makes people more engaged and happy with their purchase.

I don’t entirely agree with this. I think that the devices he refers to in his comment (the really low-end tablets and phones) do get dumped in drawers but I don’t think it’s due to the hard sell. Certainly the advertising on these devices is tiresome but you don’t get anything for free.

On making it up with content:

But the “give away the razors and sell the blades” model they are employing relies on selling a premium blade. For example, printer makers and game consoles virtually give away their hardware and make it up from the exclusive – and high margin – sale of ink and gaming cartridges. There is nothing premium about the content or the advertising that the Nexus or the Fire are selling. Therefore the model fails.

Apple have always maintained the iTunes Store is “break even”. It’s entirely possible that the margins they get from apps and music are very low (for Apple) and therefore they consider it to be negligible. It’s entirely possible that these margins are high enough to sustain a very successful business. For example, Apple sold 1.3 million of the Apple TV in the June quarter of this year. For most, that’s a brilliant business; for Apple, it’s a hobby. And do you think the margins on the Apple TV are close to zero?

The average tablet is capable of surfing the web and other than advertising revenue, when someone surfs the web or reads email they’re not contributing a cent to the content ecosystem. Apple can take that on the chin because they make money on the device. It’s in their interest to make that experience worthwhile

On Android and the Web:

The reason there is a disparity in that Android users are not browsing the web is because they simply cant (effectively). The majority of Android users are running 2.3 [sic] which is a horrible internet experience. So though, yes, it is true that Android Popularity surged and has gone over the iOS, the main reason for this is simply just because it was an alternative

I don’t think this is the only reason, but it’s contributing to the mix. We have two Android devices in the house and both of them are “orphaned” by the manufacturers (HTC, Samsung). And being out of date means malware.

On the marketing of devices:

Apple devices seem to be marketed as devices that do something. Commercials show the device in use, doing stuff like editing a photo or drawing a picture. People who respond to this marketing do so because they too want to do these things too.

Android devices, on the other hand, seem to be marketed around other factors – you almost never see the device being used to solve some need. Instead, they seem to be marketed around emotional factors. Droid is tough. Galaxy is for folks who think Apple fans are iSheep.

I think Samsung is changing this, especially with some of the Note marketing I’ve seen this year. Their examples may not be as clear as Apple’s but they’re certainly trying to appeal to folk trying to get stuff done. Maybe they figured out that insulting customers wasn’t a way to win.

The Note commercials, while not attracting me to buy one, are interesting me. That’s a subtle difference and reflective of my demographic.

Anyone fancy going to the Southampton Boat Show in September?

The show is on from the 16-25 September in Southampton, no less. Advance tickets are very reasonable. See here.

Just interested in seeing if other travellers would like to attend as I’d love to make the trip down maybe for one of the weekend days.

Bringing this back into the realm of the day job: I went to the London Boat Show earlier this year and I was struck by one thing: how few of the traders and chandleries in the exhibition stands were prepared for taking payments other than cash. I’d see this sort of market ripe for companies like AirPOS to provide mobile points of sale turning netbooks, tablets and even phones into a point of sale for small businesses.

The first business show that I exhibited at really drilled home the concept:

Don’t give me your business card, give me your credit card.

For smaller items, you just want to buy, for larger items you want it to be shipping to your house just after you get home (or waiting in your office). Having a connected Point of Sale with an online store can make all of the difference. It pains me that so few companies take this on board.

Wonder if iCloud will bring this…

As we know, an iPhone or iPad can only be synced (usually) to one iTunes Library. And we know that Apple can contact every iOS device using Push Notifications, FaceTime, Find My iPhone and other neat network tooks. iCloud will apparently bring the ability to send any downloads to all associated devices on an Apple ID.

So, why can the Devices section not be permanent – why is it only visible when a device is physically connected?

Why can’t I choose to drag and drop media to a device in my list no matter where it is. That’s essentially the promise of iCloud but it seems counter to the “Apple Way” to just have everything download.

There are predators in the water

Apple has released another advertisement for the iPad which again takes us away from the “DUAL CORE”, “1 GB RAM” or showing people skipping (?!!!??!?!)

Apple are, of course, focusing on the apps. Apps for everything. I just read a thread on a sailing forum about whether to bring a laptop or an iPad as an onboard computing tool and the overwhelming replies were about the iPad. Only one respondent recommended a laptop and only one recommended an Android tablet. It is all about the apps.

Apple has successfully managed to avoid competitor comparisons. The closest we’ve seen has been the recent “Not an iPhone” series which divides the world into two sections: iPhone and Not iPhone.

This is essentially how the tablet market will play out. Apple will continue to buy up huge amounts of components and manufacturing for their huge shipments while competitors will be competing not only for marketshare and mindshare but for components and manufacturing – and not just against Apple but against every other manufacturer. I read today of a new Indian-sourced Honeycomb tablet on the market. The competitor for that tablet is the PlayBook, the Web OS tablet offering, the other Android tablets. Those are the predators in the water.

I don’t have a good animal kingdom simile here but it’s a bit like a Great White Shark in the water with a few hundred Piranhas. The Piranhas would love to eat the Shark but they can’t. They can only eat the scraps the Shark leaves and if one of their number gets hurt or shows weakness, they eat him too.

Lest we forget, Apple’s “old” iPod has still yet to be unseated as the music player of choice. Maybe music is old hat now but you have to imagine that it’s still a money maker for the Cupertino giant. Apple wasn’t a giant in 2001 when the iPod was released and all of their hungry, predatory competitors failed to destroy them. Instead they let them build an ecosystem, an entire new OS branch, a software store and still, ten years later, nothing has managed to destroy the iPod. Except maybe the iPod touch.

So what makes the pundits think that the now, after Apple reporting unprecedented growth for umpteen quarters, they’re going to just disappear?

iOS4.3.3 to break neat location recording feature

IPodNN:

Apple’s promised short-term iOS security update is known as iOS 4.3.3, and should arrive in two weeks or less, a source with the company says. The person notes that as expected, it should reduce the size of the location cache, and prevent the file from being backed up to iTunes. The cache should be deleted entirely when Location Services are off.

So we only have a few weeks for someone to make an app to start recording and making time-sensitive maps of our locations.

FaceTime for Mac and the Mac App Store

Apple released new iLife, new FaceTime Beta for Mac, new MacBook Air models in 13″ and 11.6″ and they gave tantalising glimpses of Mac OS X 10.7 “Lion”. The latter contained a lot of new features regarding app management and should please switchers to the Mac because it makes the ‘green’ pastille work ‘properly’.

But the things I want to talk about most are the FaceTime client and the Mac App Store.

FaceTime Beta for Mac
Simply put, it adds FaceTime to the Mac so you can easily video-conference with iPhone 4 and iPod touch 4 users (and presumably iPad 2 users in 2011). I use iChat AV on Mac a lot more than FaceTime on iPhone 4 but that’s likely because I know a lot more people with iChat. The FaceTime interface on Mac is startlingly minimal and consists of a very simple Mac client and a background daemon (which receives incoming calls so the application itself doesn’t need to be launched). It works. And that’s all there is to it. It means I can videoconference with my wife using FaceTime from my iPhone 4 to her Mac and that suits me very well.

FaceTime. Picture rifled from Apple without permission.

The Mac App Store
The first thing that developers did was scour through the terms and conditions to find everything unacceptable – though Steve said that the App Store would be the best way to find new apps, he added it would not be the only place. Some developers reckon it will only be a matter of time before the Mac App Store became the only place. And I think they’re wrong.

Macs are not iOS devices. The main and most important difference is that Macs are the multifunction, powerful devices used to create apps for iOS devices. As no proper programming languages are permitted on iOS devices, you have to use a Mac to create the apps which power the App Store. Therefore Macs will always be able to do more stuff.

Some developers are dismayed because their apps (which install kexts or input managers) will not be permitted on the Mac App Store. And yes, that’s going to be tough but then your applications are not ‘simple’ apps. But the Mac App Store is about applications. It’s about games, utilities, tools, productivity applications and it wants them to be able to install simply and easily “OTA”. Applications which require kexts and whatnot are not the same class of application at all.

I see this as an advantage. In my experience, Mac users spend more than Windows users on software. But a lot of Mac users never buy any software. Adding the Mac App store will mean there is a net increase in the amount of software purchased. This link will actually become useful.

As Mac users get more comfortable with buying software, they’ll be more interested in buying complex software. We all know that our needs for technology increase as time goes on.

iPhone vs Android: software lock-in and halo effect

From CNNMoney.com

77% of iPhone owners say they’ll buy another iPhone, compared to 20% of Android customers who say they’ll buy another Android phone.

I’ll address these as the result of two separate things.

SOFTWARE LOCK-IN
Software lock-in on the iPhone is high for most people. Once you’re in there with Angry Birds, Plants vs Zombies and any of the other paid-for iPhone apps, you’re going to suffer from an unconscious lock-in. This hasn’t really occurred on Android initially because of it’s slow adoption but more recently because it’s still not possible to actually be paid in many countries if you’re a developer which is slowing adoption as well. And because the good paid apps aren’t there, normal people aren’t buying them which is again reducing the lock-in.

Software lock-in (essentially meaning the ability to transfer your software to other similar devices but not other platforms) is working well for iPhone but is currently worthless on Android. Software lock-in is not a bad thing in itself – it can’t be used as an argument for or against any mobile platforms because all of them practise lock-in – but it has an effect.

For example, this is my page of folders on iOS:

Lock-in

Every one of those folders is an incentive to stay with iPhone. Primarily because there’s some good fun in there but also because my kids are really happy to be distracted by lots of different colourful games when we’re waiting in the car or during a long journey. Therefore I get additional lock-in pressure from my kids.

HALO EFFECT
In the office where I’m based there are six people. When I started there, one had an iPhone (me!). The others had a variety of Blackberry and Windows Mobile devices. Now, two years later there are five iPhones and one Android device in use. (One of the individuals went to HTC Magic running Android from Blackberry and since then has had a iPhone 3GS and is now on an iPhone 4.) The one Android device left here in the office is a HTC Hero still running Android 1.5. I would describe this as a Halo effect. Different to the common Halo effect (easily described as the effect of buying one device with an Apple logo meaning you buy a lot more), this is showing that experiences with the device are leading to others buying the device. This is partially related to software lock-in; people are interested in getting the same software as you.

For the record, the one Android device will apparently disappear from this office when the contract ends. This is not a good trend for Android.

I, myself, have bought each iPhone as it has been released (I’m still waiting for my iPhone 4 to arrive) but despite my interest in Android, I’ve yet to buy any hardware. This is entirely because the hardware churn in Android is extremely rapid which means there never seems to be a good time to buy. With the iPhone, you know there’ll be a new model every June but with Android, there’s a new model with slightly tweaked specifications coming out every month or so. And some of them have Android 2.1 and some have earlier versions of the OS but I’m expecting Android 2.2 – hence my reticence to buy now. The minimum specifications for Android seem to be rising and some features (such as the ballyhooed Flash) do not run on sub 1 GHz devices so this is again putting me off – 1 GHz has become the new minimum and currently shipping devices don’t seem to be exceeding this. Where’s the high end device?

All of this contributes to a ecology where Android is selling briskly (helped by Buy One, Get One Free tricks – also used by RIM but never by Apple) but that people are not returning to Android as a whole. It’s something that Google needs to resolve. And Nokia needs to respond as well – though they may have sold 10x the number of handsets as Apple, Apple is making more than 10x the amount of profit (creating a factor of nearly 100 difference between the companies). iPhone with it’s singular presentations (ignoring the current ‘legacy’ iPhone 3GS still being sold) is a clear marketing position. Nokia still produces dozens and dozens of different models. This is why iPhones in cafés are so recognisable but it’s so hard to identify the market share for any other individual model of phone. This contributes to the Halo effect I mention above. You can easily spot people using iPhones (and due to the dearth of ringtones, hear them). How about the frequency of spotting any other model or brand of phone?

Replying to John Battelle

I replied to John Battelle’s question “Is Apple’s iWorld the Web”

If everyone at FOOcamp managed to mix up the AppStore and Apple’s congtibution to the open web so badly, it has me questioning who are these smart, eclectic people and who pays their salaries.

I am an ‘Apple person’. I have drunk of Windows (in about 8 flavours), Solaris, HP-UX, Ultrix, IRIX, Linux and BSD (and about a dozen of their popular WMs) and time and time again the only solutions which slake my thirst for both power and experience are ‘Designed in California by Apple’. This happened with the Mac, with Newton, with Mac OS X and most lately with iOS.

Be very clear, John, iOS is most definitely the best way to experience mobile and, with the iPad, I am committed to the hype that it is the best way to experience the web as a whole.

What your peers at FOOcamp seem to be conflating is the development and hosting platform (which will forever remain the domain of Mac, Windows, Linux etc) and the consumption platform. The needs of a developer cannot be met by these lovely lustworthy devices which pave the way for the industry to copy. But equally, we cannot forever expect our tech-illiterate cousins and grandparents to forever maintain a machine capable of advanced software development and multiple-core computation when they only want to surf the web for last minute holiday deals and funny pictures of turtles.

What I find most startling hover is how much power and credit you have given Apple. There are billions of devices out there. About a billion iPods and 100 million iOS devices. This is a tiny percentage of the market at large yet the media and your smart and eclectic peers waste so much breath on the underdog – and Apple still is the underdog – with so much unreasoning hatred.

You are giving Apple mindshare and heartshare where it lacks marketshare.

Sent from my iPad off the coast of Algiers (037.3127N, 002.4932E)

Why the iPhone still is #1 for business

At DevDays last week, Dermot Daly replied to a question about ‘other mobile platforms’ by saying that the amount of money changing hands on iPhone is enough for most people to consider but the important point is that the falloff in money when you go to other platforms is so severe that they’re not work considering yet unless you already have a customer who’s willing to pay for the effort i.e. if there’s not enough money in iPhone then there’s definitely not enough money in any other platform.

But you also have to look at the engagement. Hyper-local review site Yelp state they have 32 million unique visitors from all sources and only 1.4 million of them were iPhone users which sounds tiny. But those 1.4 million users were responsible for 27% of Yelp searches, they make calls to businesses once every 5 seconds and nearly a million people used Yelp’s iPhone app to find directions to businesses in May.

So aim for deep engagement, aim for people to carry you around in their pocket, make it easy for people to use you and they will use you.

No pr0n

David Goldman at CNNMoney writes:

Apple (AAPL, Fortune 500) has either lost touch with its customer base or just has a bug lodged up its data port.

Evidently David is not talking about Apple’s real customer base who have recently snapped up a million iPads in the first 28 days and who have, two weeks before the release of the iPad in the UK on May 28th, completely bought up all available stock pushing shipping back to June for further orders.

That sounds more like a company which is entirely in tune with what it’s customers want.

What David is complaining about is:

In late February, Apple purged 6,000 apps it deemed “too sexy.”

…and we seem the same echoed by Ryan Tate of Gawker who vociferously argued that he and his wife want porn on their iPhones and iPads.

I can’t really see the point of the argument. The lack of ‘accounts’ on iPhone and iPad means that these devices are very personal. As a parent, I think it’s perfectly laudable to exclude these kinds of apps from the App Store. It’s not as if there’s a lack of opportunity to view porn online with Safari.

I do find it curious that we have multiple journalists from very disparate sources hounding Apple for not including porn on the App Store. Frankly they’d be the first to complain if Apple permitted this sort of content on the store. I have no idea if there are extensive laws and regulations regarding the creation and distribution of porn but I imagine there are. Apple evidently doesn’t want to get involved in that sort of debate, attempting to police ‘legal’ porn on their handheld devices – the risk is simply too great.

The journalistic position just sounds so sleazy it’s hard to sympathise.