Will iPhone Buyers Wait for iPhone 6's Larger Screen?

The forthcoming iPhone 5S wil reportedly have the same screen size as the current iPhone 5. This will be a significant disappointment to some and potentially cause them to skip the update and wait for the iPhone 6, which is supposed to deliver a larger 4.8 inch screen. That could have a meaningful negative impact on iPhone 5S sales.

A recent survey from Retrevo shows that iPhone owners/buyers want a larger screen than the 5/5S has to offer:

The survey also showed that a significant percentage of would-be iPhone buyers have a "wait-and-see" attitude about buying their next iPhone. This is becoming a problem for Apple as media-fueled rumors of better hardware in the future cause people to delay purchases, unlike Android buyers apparently: 

Despite the wait-and-see approach and yearning for a larger screen iPhone buyers are paradoxically much more loyal, according to the survey, than Android owners. This has been confirmed by other, previous surveys (e.g., ChangeWave) as well.

Pew: 81 Million US Adults Own Tablets

According to telephone survey data (n=2,252) released this morning by The Pew Internet & Life Project, 34% of US adults now own tablets. What that means as a practical matter is: 81 million adults. There may also be 20 million more people in the US under 18 who own tablets. (Our house has four.) 

I think it's relatively safe to say that if the number of tablets in the US isn't yet 100 million it's extremely close.  

A large majority of tablet owners are substituting tablets for PC usage in many instances and either buying fewer PCs overall or delaying PC replacement for a much longer period. This morning Apple will open its developer conference. A upgraded iPad/Mini is not expected to be among the announcements but it's possible. 

.

As with other device categories, the story is largely the same with tablets. Penetration rates are higher among college educated (49%) and more affluent adults (56%). Affluent means at least $75,000 in income.   

The chart above reflects the growth of tablets since 2010 when only 3% reported tablet ownership. It's possible that by Q4 of 2014 half of the US adult population will have tablets (and 75% of affluents).

Global tablet shipments this year are expected to exceed those of laptop computers according to IDC. IDC also argues most of those sales will be at the lower end of the market (size, price).

Last week both Pew and Nielsen reported that 61% of mobile subscribers now own smartphones.  

It's Official: 61% of US Mobile Subscribers Have Smartphones

Earlier this week survey data from the Pew Internet Project argued that 61% of US adult mobile subscribers now own smartphones. Today Nielsen announced agreement with that number:

More than three out of five (61%) mobile subscribers in the U.S. owned a smartphone during the most recent three-month period (March-May 2013), up more than 10 percent since smartphones became the mobile majority in early 2012.

Comscore, for its part, says that the percentage of mobile users with smartphones is slightly less: 58%. Overall we're talking about 140 - 150 million people in the US now with smartphones.

In terms of OS market share, Nielsen reports that Android has 53% of the US smartphone market, while Apple controls 40%.

Aruba Networks Acquires Indoor Location Firm Meridian

Wireless equipment maker Aruba Networks is acquiring privately held Meridian Apps, developers of indoor GPS technologies. Aruba will combine its network-based Wi-Fi technology with Meridian’s software platform for smartphones and tablets to create services for use in public venues. Terms of the deal were undisclosed.

“GPS-based wayfinding solutions are extraordinarily popular, but they don’t work well indoors,” said Keerti Melkote, founder and Chief Technology Officer at Aruba Networks said in a statement. “We intend to address that gap by creating ‘indoor GPS’ using Aruba’s Wi-Fi infrastructure and Meridian’s wayfinding platform … This is a clear opportunity for Wi-Fi to become not only an enabling platform for BYOD, but now across industries, a revenue-producing, customer engagement platform for the business.”

The Meridian enterprise software platform targets large, indoor facilities -- including the Art Institute of Chicago and Macy's store in New York City -- to build custom-made mobile applications that help people get around in public places.

Meridian opened up it platform last November, introducing a pair of SDKs, Nav Kit and Blue Dotto. The company, based in Portland, Oregon, had previously announced a partnership with Aruba Networks competitor Cisco.

For its part, Cisco unveiled Wi-Fi location services and analytics last November, thanks to its acquisition of ThinkSmart Technologies. The features are included in Cisco's Mobility Services Engine built in conjunction with mobile chip maker Qualcomm and AT&T. Cisco has also partnered with IBM for its "Mobile Concierge" service, which enables integrated web applications to be displayed on mobile devices and provides analytics to deliver a customized shopping experience with coupons and promotions.

By Saying 'No' to Android Has Nokia CEO Elop Sealed His Fate?

There are some signs of progress for Windows Phones and Nokia's Lumia line of handsets that exclusively use the operating system. Especially in Italy and the UK Nokia seems to be making some headway. There were also some data showing an uptick in Windows Phones' market share in the US.

The following are two sets of survey-based market share data from comScore and Kantar. Kantar shows much greater growth in Windows Phone adoption in the US than comScore. Regardless, over the past 18 months Windows Phones have largely failed to make a dent in the smartphone dominance of Android and Apple devices. 

It's almost 100% certain that Nokia, with its well-reviewed Lumia hardware, would be selling more phones if there were an Android option. However Nokia CEO Stephen Elop has essentially refused to consider that option and is sticking to the company's Windows-only strategy. This comes amid intensifying investor pressure to adopt Android.

According to a recent WSJ article:  

Shareholders approved the dividend-suspension proposal, but appear to be losing patience as questions about Samsung and Apple loomed over Tuesday's session. One shareholder asked Mr. Elop why Samsung is achieving what the investor characterized as 10 times better results than Nokia, and another concluded a round of tough questions by saying that right now Nokia isn't displaying "the spirit and charisma" that Apple has.

Over the next 2 - 3 quarters, Nokia may see slightly better results but they won't show the kinds of growth desired by institutional investors. Unless or until Nokia adopts Android sales won't accelerate to any significant degree, to the increasing frustration of investors. 

One way or another Nokia will likely be developing Android devices by this time next year -- absent a Windows sales miracle. Either Elop will give in to investor calls for Android or, if he does not, he will be ousted by their calls for his head. And the first act of any successor CEO will be to fast-track Android handset development. 

Tablets to Dominate 'PC' Sales, Low End of Market Increasingly Cluttered

According to a new forecast by NPD, tablets and touch-screen laptops (tablet-PC hybrids) will dominate the computing landscape in the coming years. More conventional PCs will be in the minority. 

Tablets are a new device category really. But let's put aside the longer debate about whether or not tablets should be considered "PCs" at all. There will be more "mobile devices" than traditional PCs (including laptops) sold in the next five years.

At best forecasts can show the direction of the market. But in this case the market's direction is clear. 

Global Mobile PC Shipments, 2012-2017

Source: NPD

Last week Acer introduced a 7-inch tablet for $169, besting the aggressive pricing of Nexus 7 and comparable Kindle Fire devices. According to one rumor the next Nexus 7 will be priced at $149. But you can already buy a 7-inch Lenovo tablet for $129 on Amazon (quality is another question). The race is on for a "decent" Android tablet starting at $99. I suspect that will come in Q4 this year or very early next.

I was recently in Best Buy and Office Depot/Max and saw the displays of tablets; there are scores of them. It will be challenging for consumers to differentiate them -- especially at the lower end of the market. There will probably be three or four broad consumer criteria for tablets: OS/brand, price, size, specs like memory or battery life. 

With the exception of Kindle, Samsung and maybe one or two others the Android tablet universe is a sea of no-name devices. Here the battle will largely be about price. Apple iPads will stand apart because of strong brand identity. However a majority consumers will be price sensitive and likely to simply go after the cheapest "decent" (Android) tablet they find. Indeed, the devices are getting so cheap they're almost disposable. 

NPD says "Windows 8 are unlikely to be a major driver of touch adoption." I agree, as presently configured, Microsoft is unlikely to sell many stand-alone tablet devices. Surface Pro tablet-PC hybrids will sell to enterprise customers but Microsoft will struggle to sell basic tablets to consumers unless it reaches that $100 threshold first.

Tablets 'Shipment' Numbers Inconsistent with Traffic Reality

I'm a big opponent of using "shipments" as an indicator of market share. It may be a directional indicator of market share in some cases. But there are times when "shipments" is simply the wrong metric. IDC's latest tablet numbers offer a case-in-point.

The firm reported the following tablet shipment figures globally for Q1: 

• Android -- 56.5%
• iOS -- 39.6%
• Windows -- 3.3%
• Windows RT -- 0.4%
• Others -- 0.2%

Basically the positions of Android and iOS tablets have reversed since last year. Shipments are put forward as a proxy for market share by IDC. However that's a dubious proposition at best. Shipments do not equal sales, let alone usage.

The following chart reflects North American tablet traffic share as of March, according to Chitika. After the iPad's 82%, Kindle Fire has a 7% share of traffic. Samsung Galaxy tablets come in at 4.3%. Needless to say these actual traffic data show a massive discrepancy vs. IDC's shipments estimates.

Below is StatCounter data from 2012 (via Royal Pingdom) -- I was unable to find more recent global traffic data. These data reflect something very consistent with the Chitika data above.

In these various geographic markets the iPad is generating around 80% or more of tablet traffic. Even if we assume iPad share has fallen by 10 points since last year, these data are still a radical departure from the IDC figures. 

Undoubtedly lower-priced tablets and the sheer proliferation of devices will necessarily diminish the iPad's "shipments share" over time. But it remains to be seen how actual usage is impacted. For the moment market share (as measured by consumer usage and traffic data) looks nothing at all like IDC's projections.

Is Apple's Resistance to Larger Screens 'Making the Perfect the Enemy of the Good'?

The iPhone 5 introduced a 4-inch (diagonal) screen that in my view distorted the proportions of the handset. (I wanted it to be slightly wider as well.) That was an upgrade from what was essentially a 3.5-inch screen on the 4S. Yet at the time of launch the 5's new larger screen already appeared small next to some competitive devices.

Samsung's Galaxy S3 and others were at 4.8-inches or beyond. The newly released Galaxy S4 has a 5-inch screen and the Galaxy Note 2 offers a 5.5-inch screen. Samsung has also made an 8-inch tablet that works as a phone. 

Earlier this week during Apple's earnings call CEO Tim Cook was asked about a potentially larger iPhone screen, which several surveys indicate iPhone buyers want. Here's the exchange:

Analyst: [D]o you think there is a long-term case for a larger screen size or at least the larger variety of screen sizes for iPhones and for the smartphone category in general?

Tim Cook: The iPhone 5 offers as you know a new 4-inch Retina display, which is the most advanced display in the industry and no one comes close to matching the level of quality as the Retina display. It also provides a larger screen size for iPhone customers without sacrificing the one handed ease-of-use that our customers love. So, we put a lot of thinking into screen size and believe we’ve picked the right one.

Tim Cook acknowledged that “some customers” value screen size. He explained that larger displays require trade-offs (technically speaking). He added that the company won’t ship a larger iPhone display “while these trade-offs exist.” That implies the company has larger screen iPhones on its roadmap somewhere in the future.  

However Apple is indeed putting itself at a disadvantage by not offering a larger-screen iPhone. Perhaps not everyone wants it but lots of people (including me) do. An ideal device would marry the LG Nexus 4 (4.7-inch screen) form factor with iOS as its operating system. 

Apple and Tim Cook seem to be nearly alone in their belief that the iPhone's screen is vastly superior to competitor-device screens. Third party analysis shows that this is not the case. However it does come out on top in some areas. Yet the public may not be noticing these relatively subtle differences. And Samsung's display has been found to have superior resolution and better blacks. 

What consumers probably notice more is that the iPhone's screen looks small and by some measures inadequate vs. other devices. One-handed operation of the iPhone is great in a few instances but not entirely necessary. Indeed, it may not be an important feature for most people (though that's an "empirical question").

It does seem to me that screen size is one case of Apple (if it's to be taken at face value so to speak) "making the perfect the enemy of the good." And I think a "5S" without a larger screen option will be a significant disappointment to many.  

What Retail Can Learn from the Hotel Industry about Using Technology

The challenge of "showrooming" has been met by traditional retailers with either indifference and inaction or its opposite: aggressive price matching. Best Buy and Target are examples of the latter approach. They decided in February to match any price on Amazon year round.

However this strategy lacks "depth."

Price matching alone will not successfully address showrooming; it will in fact encourage it as more smartphone shoppers check Amazon and other sources to see if in-store prices are the best they can do -- and to demand a lower price in store if they find one online. 

Signs like the one below invite someone to go to Amazon (if they weren't thinking about it already) and compare prices. 

It may be necessary to price match in selected categories such as electronics. But price matching is not a panacea. Instead the retail industry can take a lesson from the hotel industry, which is doing some very creative things with technology. 

The New York Times ran a story today about how hotels are using technology to improve the customer experience (including personalization) and lower costs in many instances: 

Hotels around the world are using technology in new ways, with the goal of speeding up or personalizing more services for guests.

David-Michel Davies, president of the Webby Media Group, said he visited Internet companies around the world each year for the Webby Awards, which honor excellence on the Internet. He said he had found that hotels were using technology as a substitute for human hospitality.

Instead of the staff at the front desk offering advice on where to go for dinner, guests may be lent an iPad loaded with maps and suggestions for local restaurants and sightseeing. A hand-held device in the room might control the television, blinds and temperature, replacing the role of the bellman who would describe how the features in the room work when he dropped off a guest’s luggage. “Hotels are transforming service into a digital concept,” Mr. Davies said.

There are an enormous number of ways that technology, and mobile technology (apps) in particular, could improve the in-store retail experience. Personalization, notifications, offers, product information and reviews, loyalty, payments and other use cases, if creatively implemented, could make the in-store experience richer, more fun and more rewarding for shoppers.

This creative, "diversified" approach to mobile and the in-store experience holds great promise against showrooming. Retailer size and resources would affect the scope of what might be pursued -- but every brick and mortar retailer could do something more interesting and creative than simple price matching. And the hospitality industry points the way. 

Apple Sells More iPhones, iPads than Wall Street Expected

Apple has just released earnings. The company reported quarterly revenues of $43.6 billion. Second quarter revenues in 2012 were $39.2 billion. Total 1H 2013 revenues were $98 billion. 

There were better-than-expected iPhone and iPad sales in the quarter. Gross margins came in at 37.5%. This compared to 47.4% last year.

Now the device numbers:

• iPhone: 37.4 million (vs. 35.1 million a year ago)
• iPad: 19.5 million (vs. 11.8 million a year ago)
• Macs: "Just under 4 million" sold last year (vs. 4 million a year ago)
• iPods: (5.6 million; iPod Touch represents 50%+ of sales)
• iTunes: $4 billion (new sales record) 

On cheaper devices: There were lots of questions during the earnings call about Apple's competitive position and ability to compete in markets around the world. CEO Tim Cook repeated several times that an aggressively priced iPhone 4 is the crux of Apple's strategy to attract first time smartphone buyers in developing markets. 

This is a product, however, that's two generations old. While Apple says it won't make "cheap products" it's very likely that Apple will develop a less expensive iPhone to compete in those markets where "first time buyers" can't afford the state-of-the-art iPhone. 

On mobile payments: Tim Cook was asked about getting into mobile payments. Cook responded that the market was in its infancy, implying that Apple would be waiting to enter it in earnest (if at all). 

On the prospect of a larger iPhone screen: One of the financial analysts asked about a larger iPhone display. Cook respondend, " The iPhone 5 has the absolute best display in the industry." However he acknowledges that "some customers" value screen size. He explained that larger displays require trade-offs in quality. He then said that the company won't ship a larger iPhone display "while these trade-offs exist." That in turn implies that a larger display may be on the iPhone 6 or a later model. 

Report: Samsung Sees Almost 70% of Android Ad Impressions

Samsung is the undisputed ruler of the Android roost. On a global basis it's the dominant handset OEM and there's no real challenge in sight -- other than the iPhone. Samsung continues to eclipse fellow Android manufacturers LG, HTC and Google's own Motorola in terms of sales and market share. 

In that context one might expect Samsung to dominate Android-based advertising. Indeed it does. Mobile ad platform Velti has released data that show that Samsung mobile devices see nearly 70% of all Android ad impressions in the US market. This refers to display advertising but it probably extends to search impressions as well.

However on the tablet side, Samsung is second behind Amazon in the US market. There Samsung has had much less success and has yet to product a breakthrough device -- although its Note "phablet" has done well.

The following chart shows Android market share by ad impressions. 

Yet when it comes to ad impressions on tablets the iPad and iPad Mini control more than 95% of the market according to Velti's network data. Chitika, another mobile ad network, puts the iPad's traffic share at about 82%, significantly lower though still dominant.

There has been some "cannibalization" of the iPad by its younger and smaller sibling. The Mini is less expensive and has lower margins than the iPad. Indications that the larger iPad's sales have declined in favor of the Mini have, to some degree, contributed to investor anxiety about today's Apple earnings (coming up shortly) .

Nokia Q1: Lumia Sales Up though Brand Dead in US Market

Nokia released Q1 earnings this morning. They were mixed. The company said that it sold 5.6 million Lumia handsets, which is up from 4.4 million in Q4 2012. Overall shipments of Nokia handsets were down more than 20% however. Sales also fell 20% YoY, to 5.9 billion EUR ($7.7 billion). As a consequence Nokia shares were down 12% this morning.

The roughly 25% improvement in Lumia sales was encouraging but far from a turnaround. Nokia's lower-end device sales were down, offsetting the Lumia gains and depressing overall sales figures. 

Since turning to Windows Phone in 2011, Nokia has sold 19.9 million total units. While this isn't outright failure -- and there's growth projected -- Windows isn't going to save Nokia or make it competitive with Android and iOS (enough time has passed to draw that conclusion). Nokia will have to turn to Android to diversify in the near term.

Nokia reported Lumia sales increases in all geographic regions except the US/North America. That's largely because Nokia's brand remains relatively strong in Europe and other places. However its brand is effectively dead in the North American market. Qarterly shipments of Lumia devices were down 33% vs. Q4 (400K vs. 700K) in North America. 

This not only reflects the weakness of the Nokia brand but equally the indifference of much of the US public to Windows Phones. Not only will Nokia have to aggressively discount it will need to develop new devices for the US market and may still fail (absent an Android strategy). 

During its Q1 earnings call Nokia was dismissive of Android. However if the company hopes to compete again in North America and indeed globally in the top tier of OEMs it will have to develop Android handsets beside Windows. In the US Windows Phones are driving less than 2% of mobile internet traffic; their US market share is roughly 3%. 

Low Awareness, Lack of Interest Plague BlackBerry, Nokia

It turns out that despite lots of media coverage and celebrity personality Alicia Keys as "creative director" most North Americans don't know about the launch of BB10. That's according to a survey commissioned by MKM Partners. The poll of 1,500 adult consumers (conducted during the past three weeks) asked about device adoption and future purchase intentions. It found, consistent with other data, much higher recognition and interest in Apple and Samsung. Others generally fared poorly.

The survey found that 51% of respondents owned smartphones, with 39% saying they bought their in the last six months.

Ownership breakdown by handset OEM: 

1. 33% Apple
2. 28.3% Samsung
3. 9.9% LG
4. 9.3% HTC
5. 9.3% Motorola
6. 4.4% other
7. 3.4% BlackBerry
8. 1.6% Nokia 

Current mobile OS:

1. 55.1% Android
2. 31.3% iOS
3. 6.4% Windows Phone (higher than other surveys)
4. 3.4% not sure
5. 3.1% BlackBerry

Future purchase intentions:

1. 44.5% “not sure” of next phone
2. 19.6% said Samsung (Android)
3. 17.7% iPhone
4. 5.9% BlackBerry
5. 4.4% Motorola
6. 3.7% HTC
7. 3.1% LG
8. 0.7% Nokia

Asked about BlackBerry 10, 83% of respondents indicated they weren't aware of the launch. Asked about Windows Phones, 61% lacked awareness of the OS. When asked about interest in BB10/BlackBerry or Windows Phones the majority of respondents indicated indifference.

Not interested:

• 68% not interested in BlackBerry
• 63.9% not interested in Windows Phone

Separately investment firm Piper Jaffray conducted another wave of its research among US teens about device ownership and future intentions.

Notable findings include the following: 

• 51% of surveyed teens owned a tablet
• 50% owned smartphones

In both cases iOS was dominant. However Android has made slight gains in both smartphone and tablet categories since the previous survey was conducted last fall. And aggressive pricing, especially in the tablet category, may drive Android penetration up vs. iOS among younger users.

Low-Cost Tablets to Accelerate Decline of PC Market

Last week there was a Reuters report asserting the next Google-ASUS Nexus 7 will have an improved screen and may cost as little as $149. The current entry level Nexus 7 is $199. Reuters also said that if it's not the new Nexus 7 than the existing tablet's price may be reduced. The current entry level Kindle Fire from Amazon (with ads) costs $159.

As this all indicates there's a kind of "race to the bottom" going on that may radically depress margins on Android tablets. Furthermore we're likely to see a decent $99 7-inch Android tablet in the next year.

The growth of smartphones and the emergence of these reasonable-quality low-cost tablets such as the Nexus 7 are accelerating a trend toward mobile device adoption at the expense of PCs and further extending PC replacement cycles. In developing countries PCs will likely never reach penetration levels seen in North America or Europe.

In its latest device forecast Gartner joins the party, affirming what we already know about PC erosion in favor of smartphones and tablets on a global basis. In its projection Gartner sees Android as the big winner, effectively replacing Microsoft as the dominant OS on tablets and smartphones.  

The particulars and timing of this forecast will undoubtedly turn out to be wrong. However the direction of the forecast is probably accurate. With its resistance to matching price competition (probably wisely) Apple iPads will not reach tablet penetration levels of low-cost Android based tablets (though the company is considering a lower-cost iPhone).

So far, Microsoft's "2.0" efforts in mobile, Windows Phone and Surface tablets, have only made modest gains in selected markets. However Microsoft still makes money from Android OEMs via patent licensing fees. If it has to rely on licensing the company's future will be pretty grim.

If these figures are anywhere near accurate tablets are poised to become the primary computing (and advertising) platform. Yet we're likely to see quasi-converged devices (i.e., tablets with keyboards like the Surface Pro) become laptop replacements in the near term.  

Device Forecast Sees Longer PC Replacement Cycles

Earlier this week IDC issued its new projections regarding hardware "shipments" through 2017. The bottom line is: continued growth for smartphones and especially tablets ("connected devices") but negative growth for PCs.

IDC said that in 2012 tablet shipments "surpassed 128 million" and sees increasing demand across markets. While "shipments" is often an inaccurate and misleading metric for market-share purposes, it does indicate the "directional" trend in the market. 

Even in emerging, immature markets PCs will only see "moderate single-digit growth" according to the forecast.

The company said that replacement cycles are getting much longer for PCs as tablets and smartphones make more frequent replacement unnecessary. However IDC does continue to forecast laptop growth. I suspect that projection may turn out to be optimistic at least in non-emerging markets. 

Device penetration drives internet usage patterns. And while online publishers and marketers "intellectually" understand what's happening they have been generally slow to adapt their strategies and tactics to match the radical changes taking place in the market. 

Would People Buy a 'Facebook Phone'?

Facebook is the leading app on the iPhone. But does that popularity as an app mean that Facebook would have success with its own branded handset? 

Next week on April 4 Facebook seems poised to introduce some version of the long-rumored "Facebook phone." The speculation is that it will be an HTC-made handset carrying a "forked" version of Android. We'll see. But I'm extremely skeptical that anything like can succeed at scale.

HTC previously made two Android handsets in 2011 with deeper Facebook integration: the ChaCha and the Salsa. They both flopped. INQ has also made social-media-centric handsets since 2009, which have not done especially well. 

Let's assume that everything on the hypothetical HTC handset is deeply integrated with Facebook: contacts, dialer, camera, maps, apps, messaging and so on. Let's also assume that everything works elegantly. It's highly unlikely that there will be mass-market demand for this phone. 

Most people are not so involved with Facebook that they would turn over this most important piece of personal technology to the company. There will also be the inevitable privacy questions and concerns ("Is Facebook tracking me?"). Most people I know are quite content to use a Facebook app on their smartphones. The notion of an entire handset devoted to Facebook seems excessive and unnecessary. 

Perhaps the phone will offer some unique and impressive functionality or be priced extremely aggressively. Perhaps "younger people" will be interested. I remain very doubtful, however, that the majority of users will want to buy a smartphone so closely aligned with a single social network. 

BlackBerry Z10 Is Merely a 'Stop the Bleeding' Phone -- if That

BlackBerry CEO Thorsten Heins recently got a lot of coverage, in anticipation of the BlackBerry Z10 launch, for the remark that the iPhone was now outdated.

The much-hyped Z10 is now available in the US from AT&T (soon from Verizon) and a range of carriers in international markets. I went into an AT&T store this weekend to take a look at and get a "hands on" sense of the device. Unimpressive. 

It was immediately clear that this handset may keep some number of BlackBerry customers from "defecting" to the iPhone or Android. However it's not sufficiently exciting to lure existing iPhone and Android users to the BlackBerry platform. The UI and software are not entirely intuitive for iPhone and Android users. In addition, the collection of apps is limited.

The phone resembles an HTC device and is generally unremarkable otherwise. Indeed it has a "generic smartphone" quality.

Much has been made that AT&T employees haven't been trained to promote the phone. That seemed evident in my visit. In the store I entered there was not only a lack of promotional signage but the phone was placed in a far corner almost as an afterthought. It was simply there among a row of competing smartphones -- not highlighted in any way. I had to ask store salespeople multiple times where it was to locate the phone.

It's almost 100% certain this device will not be the engine of new growth for BlackBerry and that the device maker will continue to fall out of favor in the US market. 

iPhone Tops in Satisfaction Again, Nokia Beats Samsung

As Apple reportedly prepares to release a less expensive, plastic version of the iPhone to boost sales in the developing world, it's trying to strike a balance between cost and quality. It will simultaneously have to make the phone appealing (perhaps with a slightly different design and color) while not cannibalizing its flagship.

The perception of higher quality is one of the few remaining advantages that the device has over Android rivals, who over the past three years have dramatically closed the quality and features gap. Despite these gains, the iPhone has consistently beaten its smartphone competitors in customer service ratings from JD Power. The latest survey is no exception. 

JD Power surveyed nearly 10,000 US smartphone owners. The satisfaction criteria, in order of importance, were the following:

1. Performance
2. Physical design
3. Features
4. Ease of operation

This is the ninth consecutive time that the iPhone has ranked #1. JD Power said the Apple device did particularly well in the areas of design and ease of operation.

In a bit of a surprise, Nokia edged Samsung in the survey. However Nokia has many fewer users (by an order of magnitude) than Samsung, whose Galaxy smartphone line is the best-selling Android handset in many markets around the world.

It's interesting that LG performed so poorly given the success of the LG-made Nexus 4, which repeatedly sold out and to date remains overall best Android handset on the market. In contrast, among feature phone OEMs, LG performed best, which is somewhat curious.