Earlier this year Opus Research held the first conference dedicated to indoor location and its marketing implications: The Place Conference. The theme of that event was how indoor location technology and mapping would change online and mobile marketing across the board, bringing the digital and offline worlds closer together.
At the event we explored the technology, marketing scenarios, privacy considerations, analytics and customer experience improvements that flowed from use of indoor location technology. Three months later we're starting to see increasing momentum in the segment, with new deployments, announcements and some acquisitions (which will increase next year).
Indoor analytics provider RetailNext, one of the speakers at the Place Conference, recently announced the acquisition of Nearbuy Systems. And earlier today AP reported that Apple was now rolling out Bluetooth Low Energy (BLE) beacons to all of its 254 retail stores. That will pressure and/or embolden other retailers to follow Apple's lead.
Under the radar, most US retailers (and others) have to varying degrees been experimenting with indoor analytics and location. However they've been hush-hush about it, for fear of being criticized as Nordstrom was when it disclosed it was using indoor analytics. But greater public discussion and education around indoor location will change the tone of coverage from "spying" to focus on consumer and B2B benefits.
Apple's March 2013 acquisition of WiFiSlam helped raise the profile of indoor location. The company's new rollout of iBeacons across its retail network will further legitimize the segment.
Indoor location is one element of a larger "ecosystem" of proximity marketing that includes geotargeted mobile advertising, notifications, analytics and online to offline ROI tracking. Mobile payments are also in this mix (see PayPal Beacon). Next year will be an eventful and exciting one for indoor location and place-based marketing.
Place 2014 is coming soon.
It makes sense that traditional retailers would handily beat their online only counterparts (save Amazon) this past weekend. That's according to data from Adobe.
We now live in a multi-platform, multi-device world. People move between PCs, tablets and smartphones just as they move from online to stores and back. They also generally prefer the tactile and social experience of shopping offline. Roughly 95% of retail spending happens in physical stores according to the US Census Bureau.
According to Adobe's data, "Traditional brick-and-click retailers are outselling their online-only competitors so far this year at nearly a 3-to-1 ratio." That's because they offer more trusted brands, and online shopping experience and a way to physically examine and immediately buy products and gifts offline.
Location analytics company Placed offered the following data on the most-visited offline stores on Black Friday:
Consistent with others, Adobe reported that 24% of online sales this past weekend took place on mobile devices. The iPad was the preferred "shopping companion device, representing nearly half a billion dollars ($417 million) in sales during these past two days, followed by the iPhone and Android phones at $126 million and $106 million, respectively."
Adobe estimated that Thanksgiving and Black Friday saw just under $3 billion in online spending, which was an increase of 30% over last year. The company projects that e-commerce sales today, "Cyber Monday," will exceed $2 billion ($2.27 billion).
Consistent with pre-Thanksgiving weekend surveys, mobile devices (at home and in the store) played a big role on "Black Friday" and will continue to do so throughout the holiday season. Among others, IBM released a trove of US e-commerce and traffic data for Thanksgiving and Black Friday weekend shopping.
Here's a snapshot of some of the IBM data:
Separately, e-commerce analytics provider Custora reported that "almost 40%" of online buying on Black Friday came through mobile devices. I'm quite skeptical about the accuracy of this figure; it seems inflated or drawn from too small a sample. IBM's mobile commerce figure is 22%, which is more plausible.
Below is the Custora breakdown of overall US Black Friday e-commerce sales by device category:
While comScore has argued in the past that smartphones are outpacing tablets in terms of mobile commerce -- which makes logical sense because there are many more smartphones -- I'm doubtful of such claims. IBM's figures seem more (directionally) accurate: tablets: 14.4%, smartphones: 7.2%.
Custora said the following about the distribution of mobile commerce by platform:
We could look at a bunch of other reports and try to determine a consensus about how much e-commerce actually took place via smartphones and tablets. What's more important is the recognition that mobile devices are being widely used by US consumers for shopping and product research, and that serious "m-commerce" is now starting to happen (especially on tablets).
Another interesting fact from the IBM data: "on average, retailers sent 37% more push notifications . . . during the two day period over Thanksgiving Day and Black Friday when compared to daily averages over the past two months." The company also said that retail app installs grew by 23% compared with daily averages over the preceding months.
Earlier this afternoon comScore reported its September US smartphone market share numbers. Nielsen has said that 64% of US adults now carry smartphones; however comScore asserts the number is 62%.
Android continues to be the dominant operating system, followed by the iPhone. However Android lost some ground this month though Samsung gained share. All the other Android OEMs are basically a diminishing sideshow to Samsung.
Microsoft also saw a small bump for Windows Phones. It has had considerable success in Europe because of the continuing strength of the Nokia brand but little success to date in the US market. Perhaps that will improve as BlackBerry users are forced to change platforms as they upgrade.
The numbers above probably still do not reflect sales of the iPhone 5s and 5c, which went on sale on September 20 in the US. The October figures should better reflect the iPhone 5s/c impact on the market.
Perhaps most interesting is the data about leading mobile apps and web properties. Overall Google has the greatest mobile reach, although Facebook continues to have the single most popular app. This is very analogous to the iPhone and Android, where Facebook is like the iPhone in this example.
Google Maps saw some unexpected loss of usage and reach vs. last month, dropping from the fifth most popular app to eighth position.
Yesterday comScore released data about in-store smartphone usage from the EU 5: UK, France, Germany, Spain and Italy. The top in-store shopping activities across the region were:
This compares with our survey of US in-store shopping activities:
Source: Opus Research n=1,050 US smartphone owners (9/13)
There are several US surveys regarding showrooming and what consumers do in stores with smartphones. They show slightly different things. Basically, however, the top three activities are: compare prices, get product reviews, find coupons.
We can't assume the comScore data are the final word on European in-store behavior but it's interesting to note that the top activities all involve asking for input or advice regarding what to buy. That behavior is evident among US smartphone owners but further down on the list. There may be a cultural explanation or it may be a function of the framing of survey questions.
There are roughly 150 million smartphones in the US and between 140 and 150 million in Europe. Penetration rates are comparable. In Europe the leading handsets are Android based, whereas the iPhone is the top smartphone in the US.
Recently xAd and Telmetrics released more data from their UK "Mobile Path to Purchase" study conducted by Nielsen. This time the focus was on consumer behavior in the automotive vertical (car purchases and servicing). The big takeaway, once again, is how mobile devices now play a critical role in the pre-purchase research process.
The UK study is something of a mirror of the earlier US version, with some differences.
Perhaps the most important finding, the UK study discovered that 30% of UK automotive researchers used mobile devices exclusively. Tablet owners were more likely to be at home when conducting research vs. smartphone users (82% vs. 41%). In addition to price comparisons (popular with with both smartphone and tablet owners), smartphone owners are more often seeking location and contact information for dealers and service locations whereas tablet owners were doing more review checking.
In order of popularity and volume here's what UK auto mobile users are looking for or researching:
The following are some additional data and details from this slice of the UK study:
Location was a critical factor for mobile users: 40% sought or expected business locations within 5 miles. Finally only 30% of these automotive researchers knew specifically what they were looking for. Thus there's a significant opportunity for marketers to influence these consumers' purchases though mobile marketing and advertising.
There are a number of analyst firms in the market that seem to exist to generate forecasts, many (or most) of which turn out to be inaccurate. In that context I'm quite skeptical about ABI's latest forecast regarding indoor location. The firm says the market is going to be worth $4 billion by 2018.
While it's almost certain that over time indoor location will be worth billions, it's too early to say with any precision or accuracy how much the indoor location market will be worth. Ironically ABI's numbers are probably too small (the firm is usually the source of inflated forecasts). As the market evolves there will be a number of revenue streams and indoor location will touch a wide array of of consumer purchases.
First, there's licensing revenue generated by retailers and venue owners to indoor location vendors. There's also IT-related spending for "infrastructure upgrades" to support indoor location. That includes WiFi, bluetooth low energy and a range other approaches. There's no technology standard and unlikely to be one for some time. These numbers are quite small right now, unless we consider historical spending on WiFi as part of all this.
Then there are a range of in-store marketing angles: in-store couponing, mobile advertising, apps, digital kiosks that interact with smartphones and so on. Though inevitable indoor marketing is generally speculative at the moment. Over time it will be worth several billion dollars. Currently brands spend billions to secure favorable positioning in stores and market to consumers at or near the point of sale. Some of that will inevitably shift to digital, indoor marketing. The question is how much?
Then there's the value of digital influence over offline purchases. A majority of US smartphone owners (and increasingly European smartphone owners) use their devices in stores to help make purchase decisions. There's a direct impact on purchases (deciding to buy or not buy) from this indoor smartphone research or "showrooming."
I've estimated in the past that the Internet's influence over offline shopping is approaching $2 trillion. Using this type of lens, smartphone "showrooming" is impacting (positively and negatively) offline buying probably to the tune of billions already. Should this be part of an indoor location forecast? Not necessarily but it should be included in the discussion to show how much is at stake for retailers and others in the ecosystem.
ABI is directionally correct that the market is worth billions -- it's already there if you consider smartphone influence over offline transactions -- but precisely how much and where the money will come from is still to speculative to predict reliably.
Digital marketing platform Monetate recently tested whether a site offering the option to buy through PayPal saw any conversion lift vs. not offering PayPal. Using A/B testing and data from a single client the company said there was a modest roughly 1% sales lift by offering PayPal:
Adding this simple reassurance to product detail pages not only lifted average order value by 1.03%, but it also reduced cart abandonment by 1.21%. Not a huge lift, but not shabby either . . .
We recently asked 1,250 US adults which entities they trusted most to handle mobile payments. The following was the order of results:
Square and Facebook were not on the list of choices. However Facebook is testing its own mobile payments service with some consumers and retailers (stored credit card and details).
As the survey data above indicate PayPal is in a very strong position to become the dominant mobile payments company (especially after its Braintree acquisition) if it can establish and reinforce its brand and user experience as being the simplest and most secure.
Apple could quickly enter the mobile payments arena; however so far it has held back. And while Amazon has a presence in mobile payments it's not particularly strong or developed.
Google, for its part, has failed to establish Wallet among consumers. Square is in a decent position but it doesn't have the reach that PayPal currently has. Facebook has massive reach but is not going to be trusted with payments by most consumers without a Herculean education and marketing effort.
So currently it's PayPal's market to lose really, as mobile payments take hold.
One still gets the sense that there are marketers who treat the rise of mobile devices as something of a novelty. The idea that mobile devices have supplanted PCs in many use cases hasn't quite sunk in for many.
There are nearly 150 million smartphones in the US today, with many of them being used as primary internet devices. Now, according to Pew Research Center data released this morning, there are nearly 103 million people in the US (over 16) who who tablets or e-readers. Eventually tablets will replace e-readers for most.
A survey of more than 6,000 people in the US (over 16) conducted between July and September found that 35% of Americans own tablets and 24% own e-book readers. Combined, a total of 43% of Americans own one or the other or both. After Q4 the tablet number will be at or above 40%.
Here's the breakdown in terms of real population numbers by category -- if the Pew data are reliable:
Apple is scheduled to announce new iPad models next Tuesday at an event in San Francisco. While Android tablet shipments (and presumably sales) have been growing the great majority of tablet traffic in North American is still from the iPad.
Ad network Chitika reported in late June that the iPad was responsible for 84% of all tablet traffic in North America. The company is currently updating its numbers and will release new data next week.
However this is what the tablet landscape looks like (until further notice) in terms of actual tablet-based traffic to websites:
Paid search marketing firm The Search Agency released its Q3 "State of Paid Search Report" for the US market. The report is based on a large volume of client data and discusses paid search trends by search engine and several industry segments. The headline is that a third of Google's paid search clicks in the US are now coming from smartphones and tablets.
The following are some of top-level data released in the report:
The following charts show the percentage of paid-search clicks by device category.
In the aggregate, Google saw 33% of paid clicks in Q3 coming from smartphones and tablets, with the greatest growth coming from tablets. Bing saw about 18% from mobile devices, since it has a much smaller and less visible mobile presence.
Putting aside search marketing, the overwhelming majority of mobile ad creative leaves much to be desired. However video may turn out to be the "killer" mobile ad solution in many instances. That's according to new data from video marketing provider Unruly.
Based on a review of several thousand client campaigns Unruly found that mobile video outperformed video ads on PCs:
There are clearly issues with relying primarily on mobile video as a mobile ad format. Network speeds may be slow, videos many not load and playback may be disrupted. In addition, those with more limited data plans may be inclined to avoid video on mobile devices.
Generally however mobile video consumption is growing. A recent study from the Pew Research Center found that 41% of respondents watched video on mobile phones. Indeed, consumers are increasingly watching video on smartphones and especially tablets.
Mobile (smartphone + tablet) "video starts" constitute roughly 10 percent of digital "video starts" according to Adobe. The Adobe data in the chart above reflect video viewing rates in Q4 2012. Mobile video ads also offer unique social sharing opportunities and are generally effective (or potentially effective) brand advertising vehicles.
There are plenty of data that reinforce the growth of mobile video viewing. Of course video advertising is arguably best suited for video content. But video could be incorporated into display ads of all types. I don't favor "involuntary" video that starts to play once a site loads, as sometimes happens on PC sites. That would be too annoying and have a negative impact on consumer attitudes and receptiveness.
However considerably more information can be communicated through video than the tiny text in most display ads. Video, rich media and landing pages can all be used together to create ads that showcase brand messages as well as direct response elements (e.g., maps and directions, click to call, etc.). Mobile video ads can also generate higher CPMs for publishers.
Ultimately mobile ad formats that include video are going to be much more successful from a creative and messaging standpoint than most current mobile display ads, even most rich media ads in apps.
According to a report (rumor) in Engadget, Google is preparing to build an incentive-based mobile panel to track browsing and app usage behavior. The initiative is called "mobile meter" according to the blog and it would be directed toward iPhone and Android users.
Google would offer some incentive (points, rewards, etc) to motivate users to opt-in and allow their usage to be anonymously tracked. This would be nearly identical to the system currently used by Nielsen.
In addition Placed uses a panel to track mobile and exposures and their impact on store visits. The Placed app (with opt-in consent) watches where users go in the real world and extrapolates their data to estimate the offline impact of mobile campaigns.
Google recently announced Estimated Total Conversions that will track the impact of search ads across devices and, eventually, into stores. The primary methodology relies on signed-in Chrome browser users.
A Google mobile panel would complement that approach and, like Placed's panel, provide data to advertisers -- offering a more holistic view of their campaigns, especially the impact on offline store visits.
Place 2013 brought together the entire spectrum of companies building the indoor location ecosystem. Retailers, technology vendors, mobile developers, data providers, advertisers, agencies, and investors attended this unique, one-day event at the Palace Hotel in San Francisco and was the first-of-its-kind anywhere.
8:45 AM - 9:00 AM
The Consumer Foundations of Place-Based Marketing - The majority of smartphone owners are already using their devices in stores to find product and price information, as well as coupons. Opus Research will present proprietary findings on in-store behavior, privacy attitudes and consumer receptiveness to indoor promotions.
Speaker: Greg Sterling, Senior Analyst, Opus Research
View slides from this presentation
9:00 AM - 9:45 AM
The State of Indoor Location - For the past several years online mapping giants and technology providers have been laying the groundwork for indoor location. What is the current state of the infrastructure? What technologies are already deployed and how accurate are they? What indoor consumer and advertiser scenarios are possible today and what might be possible within three years?
Joseph Leigh, Head of Venue Maps, Nokia
Leslie Presutti, Mobile, Location and Computing Business Unit, Qualcomm Atheros
Zack Sterngold, VP of Americas, Boingo Wireless
Avinash Joshi, Chief Technologist, Wireless LAN Group, Motorola Solutions
9:45 AM - 10:25 AM
Keynote: Why Indoor Location Will Be Bigger than GPS or Maps - The explosion of smartphones with built-in sensors, accelerometers, GPS and WiFi is making indoor positioning not only possible but also inevitable. The emerging indoor opportunity for venue owners, retailers and technology providers is potentially massive. Google’s Don Dodge, an investor and close observer of the space, will explain why he believes indoor location and marketing is going to be huge and potentially larger than GPS and maps.
Speaker: Don Dodge, Developer Advocate, Google
10:45 AM - 11:05 AM
Case Study: Point Inside - Point Inside was one of the early consumer-facing apps in the indoor location space. The company has since shifted its focus to enterprises and enabling retailers to take advantage of indoor location. The company will present a new case study featuring a major home-improvement retailer.
Speaker:Todd Sherman, Chief Marketing Officer, Point Inside
View slides from this presentation
11:05 AM - 11:30 AM
Featured Case Study: Forest City and Path Intelligence - Forest City Enterprises are many years into using mobile device monitoring and advanced indoor analytics to help create a better environment for their shoppers and their retailers. Hear from the project sponsor and partner Path Intelligence on how they have transformed asset management, leasing, and marketing.
Stephanie Shriver-Engdahl, VP, Digital Strategy, Forest City
Cyrus Gilbert-Rolfe, VP, Path Intelligence
View slides from this presentation
11:30 AM - 12:15 PM
Digital Analytics for the Real World - Using a variety of technologies to identify when and where smartphone shoppers are in stores, retailers can now leverage "big data" previously reserved for Internet companies alone. These "real world analytics" hold profound implications for everything from in-store merchandising and staffing to consumer marketing. Leaders in the segment will offer views on opportunities and potential pitfalls for indoor analytics.
Jon Rosen, Executive Vice President, iInside
Will Smith, CEO, Euclid
Alexei Agratchev, Co-Founder, RetailNext
Michael Healander, General Manager, GISi Indoors
1:15 PM - 1:55 PM
Retail Spotlight: Aisle411 & Dick's Sporting Goods - Aisle411 will discuss current retail deployments and their impact on operations, consumer loyalty and marketing. Dick’s Sporting Goods will share how it’s thinking about indoor location, privacy issues and the overall opportunity. And Bob Rosenblatt, former COO of Tommy Hilfiger Group, will outline the intriguing business opportunities for retailers in develop- ing indoor marketing strategies.
Nathan Pettyjohn, Founder & CEO, aisle411
Rafeh Massod, VP, Customer Innovation Technology, Dick's Sporting Goods
Bob Rosenblatt, CEO, Rosenblatt Consulting
View slides from this session
1:55 PM - 2:15 PM
Using Store Visits and Data for Advanced Retail Intelligence - Online to offline has been the dominant but largely invisible paradigm of Internet-driven spending. Using mobile to better target and influence store visits is only the beginning. PlaceIQ CEO Duncan McCall will offer a major retail case study fo- cused on measuring store visits after mobile ad exposures. He will also discuss how to connect online, nearby and indoors for a more complete picture of the customer journey.
Speaker:Duncan McCall, Co-Founder & CEO, PlaceIQ
View slides from this presentation
2:15 PM - 3:00 PM
Ad-Tracking to the Point of Sale - Panelists will discuss the current and future use of indoor location as a way to demonstrate ROI and sales lift on a per- campaign basis. What is the current state of the art in matching store visits to ad exposures? And what are the broader implications of connecting online ads and offline data?
Monica Ho, Vice President of Marketing, xAd
David Shim, Founder & CEO, Placed
Ameet Ranadive, Director of Product, Twitter Ads Team
Michael Shevach, SVP Ad Solutions, Retailigence
Duncan McCall, Co-Founder & CEO, PlaceIQ (moderator)
3:20 PM - 3:50 PM
Opt-in or Opt-out: Indoor Location & Consumer Privacy - Indoor location has already gained the attention of members of Congress and been called "troubling." While not everyone agrees about the level of concern, there are obvious consumer privacy issues raised by in-venue smartphone tracking. How should the companies be addressing these issues today and what might regulation require tomorrow?
Jennifer King, School of Information, UC Berkeley
Jules Polonetsky, Executive Director & Co-chairman, Future of Privacy Forum
3:50 PM - 4:10 PM
Case Study: Meridian/Aruba Networks - Meridian, who was recently acquired by Aruba Networks, will offer two indoor case studies, one involving a small business (Powell’s Books in Portland) and another involving a major U.S. apparel and housewares retailer.
Speaker: Jeff Hardison, Vice President, Meridian
View slides from this presentation
4:10 PM - 4:55 PM
Microfencing: Targeting In-Aisle Shoppers - Billions of dollars are spent each year by brands and manufacturers trying to influence consumer buying in stores. A percentage of that money will migrate to indoor digital marketing. What conditions must first exist and what will those brand-consumer interactions look like? The panel will explore these questions as well as the contours of the broader indoor marketing experience.
Neg Norton, President, Local Search Association Ben Smith, CEO, Wanderful Media
Melissa Tait, VP of Technology, Primacy
Erik McMillan, CEO, BrickTrends
Asif Khan, Founder, Location Based Marketing Association (moderator)
4:55 PM - 5:30 PM
Reality Check: Assessing the Indoor Opportunity - The other sessions explored major opportunities (and challenges) of indoor location and marketing. Now it’s time for a fun, yet sober assessment of whether and how soon these scenarios will come to pass. Is there real demand and who will own the “indoor channel”? Where will the "place-based market" be next year, in three years?
Jeremy Lockhorn,VP, Emerging Media, Razorfish
John Gardner, Partner, Nokia Growth Partners
Chandu Thota, Engineering, Google
Wibe Wagemans, IndoorAtlas
This morning the IAB released Q2 and 1H 2013 mobile ad revenue figures for the US market. Total revenues were $20.1 billion compared with $17 billion a year ago. Mobile ad revenues were just over $3 billion vs. $1.2 billion during the same period in 2012.
That represented growth of 145%. Mobile was 15% of overall digital ad revenue in the first half.
Total mobile advertising in 2012 was just under $3.4 billion. This year mobile advertising should come in at over $6 billion. The holidays should give mobile advertising a substantial boost however it's likely to remain about 15% of total online advertising for 2013.
The IAB has stopped trying to estimate subcategories of mobile as it did in 2011. Mobile search is the largest ad sub-category of mobile spending and probably exceeds 50% of the total. Display is second followed by video and other ad categories (SMS based advertising or marketing continues to fade). Search and mobile display represent the mobile ad spending.
While consumers spend 80% of their time in apps, apps don't represent 80% of the mobile ad spend -- given the dominance of mobile search, which mostly happens via a mobile browser.
The top three overall online advertiser categories were Retail (20%), Financial Services (14%) and Automotive (12%).
Yesterday comScore released its US smartphone market share report for August. The interesting thing is that these data do not reflect the release of the iPhone 5s and 5c. Apple was the single most popular handset maker, with just under 41 percent of the market. Samsung was second with 23 percent.
In terms of operating system share, Microsoft gained 0.2 points while Android lost 0.8 points. The iPhone saw a 1.5 percent gain. It certainly will be interesting to see what the September numbers are, post iPhone 5s.
In the aggregate Android devices represent just over half the smartphone market in the US (now 64% of mobile users). However it appears that may be the ceiling for Android -- at least for the time being.
Depsite this it appears from comScore's data that Google has achieved nearly 100% (92%) smartphone reach in the US through a combination of apps and mobile search usage, though Facebook remains the top individual mobile app:
According to research conducted by investment bank Canaccord Genuity the iPhone 5s was the top selling mobile handset at each of the four major US carriers in September, with the 5c taking second place at AT&T and Sprint and third place at Verizon.
Notwithstanding its second place finish, the 5c is quite a bit less popular than the 5s. Hitwise (Experian) reported that search queries for the iPhone 5s were 4X more than the 5c in early September.
This basically mirrors our survey finding correctly predicting the enormous popularity of the 5s and lesser interest in the 5c:
Source: Opus Research, n=1,508 US adults (Sept 16 - 19 2013)
Elecontrics retailer Best Buy is offering a $50 instant discount on the 5c, which effectively cuts its contract-subsidized price to $50 for the entry level device. Wal-Mart by the same token has cut the 5c's price to $45 "permanently." This should help boost sales of the 5c considerably in the short term.
As you're aware Twitter filed its public S-1 statement this afternoon. There's a great deal of interesting material in it. The company said that in 2010 revenue was roughly $28 million. Last year it was $317 million. This year it could well exceed $500 million, reflecting triple-digit ad revenue growth.
The following are the important mobile-related stats disclosed in the S-1 filing (mostly verbatim statements):
In 2010 74% of Twitter's revenue came from data licensing and the remainder from ads. In 2012 85% of revenue came from ads and 15% from data licensing, reflecting a huge shift in the sources of revenue for the company.
Given that Twitter has a still relatively small number of users in the US and internationally there's plenty of room for growth -- domestically and abroad.
Kantar Worldpanel ComTech has released new smartphone market share data showing significant gains for Windows Phone in Europe. The research firm says that Windows Phone is now within a point of the iPhone in Germany and that its growth is outpacing Android across the Continent:
Android remains the top operating system across Europe with a 70.1% market share, but its dominant position is increasingly threatened as growth trails behind both Windows and iOS. Windows Phone has hit double digit sales share figures in France and Great Britain with 10.8% and 12% respectively – the first time it has recorded double digits in two major markets.
Kantar also says that Apple is continuing to show momentum in the US: "Apple continues to grow strongly year on year and now makes up 39.3% of sales." These data do not include the recent 9 million handsets sold by Apple upon the debut of the iPhone 5s and 5c.
Windows Phone's strongest markets are France, UK, Germany and Italy, where Nokia's brand is still relatively strong. It continues to lag in the US and China, however.
There was an initial surprise yesterday that Apple had sold 9 million iPhones over the weekend. Since the smoke cleared, however, there has been considerable "day two" analysis of those sales. Mobile analytics firm Localytics, for example, has done a geographic breakdown of global activations and traffic iPhone 5s and 5c devices in the past 72 hours.
According to the company's analysis, the majority of overall new iPhone sales have been in the US, followed by Japan and the UK.
Though a still small market for the iPhone in absolute sales, China is significant in that the Chinese seem to be buying the 5s in much higher numbers than the 5c. This is something of a suprise considering that the price of the 5s in China exceeds $800. The now sold out gold version is selling on the grey market, according to several reports, for more than double that.
In the US, roughly 3 out of every 4 iPhones sold is a 5s. Internationally, Localytics says that more than 80% of new iPhones sold are 5s devices.
Our survey, conducted a week ago among 1,500 US adults, correctly predicted high demand for the 5s as well as the 5s to 5c ratios.
What's interesting is that even in the face of massive weekend sales, the perceived weakness of the 5c is keeping Apple's stock down and fuelling the bearish Apple-investor narrative that the company has lost its old magic.
Perhaps surprising was that of the eight countries where the most iPhone 5s’ or 5c’s were sold, the highest ratio of preference for the 5s wasn’t in the United States or Japan; leading the pack is actually China.
One possible explanation: there was a lot of hoopla around the addition of the gold-colored iPhone 5s as a very attractive addition in particular for Asian markets so this hypothesis may hold true. Keep in mind the gold-colored version is only available on the 5s, not the 5c.
Other major markets also had a very high ratio of the 5s vs. the 5c. In fact, the only country that didn’t have at least a 3 to 1 ratio of the 5s vs. the 5c was the United Kingdom. With the economy in the UK still in recovery, a slightly less strong affinity for the 5s could be the result of a more cost-conscious buyer. Subsidies also play less of a role in the UK’s phone market than in the US, making the upfront cost of phones higher for consumers. Globally the iPhone 5s represented 78% of all of the new iPhone 5s and 5c devices; 76% in the U.S. and 82% in the rest of the world.
One possible reason why more iPhone 5s’ were sold was because of the tendency of hardcore apple users wanting to buy the top of the line iPhone on the weekend it was released. It will be interesting to see if the 5c can pick up a bit of momentum in the next few weeks.
iPhone 5s & 5c Adoption by Country
Overall, the United States accounts for 68% of all active iPhone 5s and 5c devices worldwide, with Japan in second place with 13% of 5s and 5c’s.
- See more at: http://www.localytics.com/blog/2013/china-leads-the-pack-in-preference-for-iphone-5s-over-5c/#sthash.tVuxOsR6.dpuf
Apple announced this morning that it had sold more than 9 million iPhone 5s and 5c devices this past weekend. It did not indicate how many of the 9 million were 5c devices vs. 5s devices. Most of the demand globally is likely to have been for the 5s. That's what our survey showed (see below).
The market became very nervous after the 5c went on sale for pre-orders a week ago and Apple didn't issue a press release last Monday. Many institutional investors sold Apple shares. Then the very postive 5s reviews came out stoking consumer demand.
Here's what Apple said in its release this morning:
Apple today announced it has sold a record-breaking nine million new iPhone 5s and iPhone 5c models, just three days after the launch of the new iPhones on September 20. In addition, more than 200 million iOS devices are now running the completely redesigned iOS 7, making it the fastest software upgrade in history.
Essentially the 5s sold out of its initial supply.
Source: Opus Research, n=1,508 US adults (Sept 16 – 19 2013)
Last year Apple said it had sold 5 million iPhones during its first weekend. That was a record at the time. This nearly doubles it. The company also announced this morning that since iOS7 became available late last week, 200 million devices around the world have been upgraded.
I was concerned that I would dislike or be ambivalent about the new OS. However I actually like it quite a bit.
The iPhone 5s sellout will only fuel further demand for the device. Supplies of the 5c remain available. But the public seems to recognize the 5c as "last year's model" with a new coat of paint. While that's not entirely true (there are some upgrades) demand for the 5c has been much less than the 5s as our survey last week predicted.
Update: Localytics now answers the 5s vs. 5c sales question, saying that the 5s outsold the other device by a factor of more than 3X in the US and an even larger margin outside the US:
Today 91% of American adults own mobile phones according to new data from The Pew Research Center. More than 61% (64% per Nielsen) own smartphones. In this latest survey Pew takes a look at common activities on mobile devices (including non-smartphones).
Pew found that 81% of mobile phone owners text, the most common activity, while 60% access the internet. Just under half (49%) use maps or access location-based information on their handsets. All these percentages are higher if non-smartphones are excluded.
There are approximately 250 million US adults today. If 91% own mobile phones that means about 228 million adults in real numbers. Of that group about 146 million own smartphones (per Nielsen's 64%). If kids and teens are added in we easily have in excess of 150 million smartphones in the US market.
If 60% of adult mobile phone owners in the US access the internet that would be roughly 137 million people (not counting teens and kids).
Among the 60% going online from their mobile handsets (not including tablets) Pew says the following:
African-Americans and Hispanics are more likely to do so than whites. Younger adults, those with at least some college education, and those with an annual household income of over $75,000 a year are particularly likely to access the internet via cell phone. Those who live in rural areas are less likely than urban or suburbanites to have mobile internet access. Among those who use the internet or email on their phones, more than a third (34%) say that they mostly access the internet from their phone.
A recent Nielsen study found that 46% of US survey respondents relied exclusively on smartphones or tablets in conducting online research across a range of categories (i.e., retail, banking, gas and convenience). That same study found that, in the banking category, more than 50% of smartphone and tablet users did not use a PC to make purchase decisions (e.g., about credit cards).
What we're thus seeing is the emergence of a "mobile first" population in the US, which may be 50 million people on the low end and 75 million on the high end.