A new frontier to the mobile computing wars: tablet consumers

There’s a propaganda war between device makers, OS companies and hords of Apple/Android and other fanboys on what makes a “smartphone” or the “best smartphone.” Some fight for device sales, some fight for ecosystems, some fight for eye balls of their religious blog followers. A new research note from investment bank Rutberg suggests to me that tablets are an additional new frontier.

“Within tablets, most of our conversations over the past month focused on eCommerce activity. We believe that tablets may be a better platform for online purchases than even PCs or smartphones. Early data, for example, indicates that tablet, smartphone, and PC owners prefer to shop on tablets rather than on either of the other two devices (http://bit.ly/q1uF8y). Our conversations with eCommerce companies also corroborate the early, impressive growth of eCommerce on tablets. Although the data is early, we believe it is critical for retailers to develop a tablet storefront and strategy.”

From my conversations with Apple and Google folks from as late as 2009 both companies fight about “usage behaviour.” They constantly improve the OS/ecosystem to facilitate specific behaviours from consumers. Google, specifically, is focused on that as they aren’t planning to make much of device sales anyways.

A very small core mobile crowd in the Silicon Valley understands that, I noticed since following this angle. They check the numbers in their startups each month and once see they behavioural patterns change, they change their opinions. It’s a rational judgement on the associated controversies - and not a choice of definitions or opinions (I was surprised to see the usually rational Horace Dediu from Asymco argued for “Symbian” to be included in the list of “smartphone penetration” in a Twitter conversation this week). If a device maker builds a phone with specific behaviour patterns - they are in. Take the Samsung Galaxy family, for example. If their phone don’t display these patterns - take most of RIM’s work - they are out of favour with this group of folks.

Let’s take a brief walk down the memory lane of related milestones: the iPhone, the Droid Effect aka the superphones, Nokia’s defeat

In this light of changing user behaviour first there was the iPhone. I first reported back on it back in November 2008.

Later, in January 2010 the first startups noticed the Motorola Droid effect, according to the sources I regularly chat about this. Simply said, the Droid had better usage patterns than the iPhone at that time. Again, Admob was first to report it. Real Network’s Rob Glaser was first to discuss its significance.

Rob used the term “superphone” (initially used by Eric Schmitt) to mark the difference. Check out his “superphone” definition below.

The Next Mobile Revolution

 

To me the associated new usage patterns around “superphones” was the biggest difference maker to startups that year. Hence I titled the MobileBeat conference as “2010 - year of the superphone” and engaged to spark a debate with industry leaders around it. Not only Rob, but folks like Samsung’s Omar Khan (whose Galaxy line provied to be worth of “superphone” status) or Verizon’s Humphrey Chen chimed in if and how “superphones” change their business and relations to the Valley.

Later in the year I continued to follow the “usage behaviour” argument when I attended Nokia World. I spent considerable hours investigating the progress Nokia was doing with developers. The conclusion of my research that Nokia was able to become “average” to developers with QT back then. However, at the whole conference I did not meet one Nokia manager who was even aware of the “usage behaviour” argument which was shocking to me.I concluded that on the one hand I have even Google and Apple product managers who know that they have to produce better usage behaviour numbers each month and on the other hand I have Nokia folks who even are not aware that this is what an important part of the competition is based on. It’s in this light that I broke the news that Stephen Elop was given the right to evaluate WP7 for Nokia. I welcomed this news as my research at the conference led me to believe that Nokia had run out of time with their old strategy. Some of the members of Nokia’s Advisory Board clearly knew how bad the situation had gotten. On a sidenote, this is still a truth consulting pundits like Tomi Ahonen do not want to believe.

I am not aware of any data on WP7 and usage behaviour, so I can’t comment on WP7’s status in this fight. However I hear good things on Stephen Elop and his team.

In February 2011, when I met up with ARM at MWC, I became aware that the next quad-core chipset family to hit Q4 2011. Very simplified, this means Android phones under $100 good enough as an iPhone2 by Christmas this year. The emergence of “niche superphones” if you are fan of marketing slogans. 

Before, in another 2010 piece on Admob’s role in the emergence of Open Mobile I wrote at the end:

The future

The big question now is, how will mobile advertising need to evolve in the next few years?

In the next few months app stores will open up to new form factors beyond phones. We will not only see apps for tablets, but for TVs and in-car entertainment devices. The industry is challenged: How will it make ad units more engaging, create better results for both advertisers and consumers?

Mobile advertising has been riding the iPhone wave. Now it is starting to ride the Android wave. When and how will things shift again?

It appears a first tablet effect has now arrived now in the summer 2011. It will be interesting to see what kind of old and new startups will benefit from this new trend in usage behaviour.