Should Amazon Buy Palm?

Amazon is rumored to be in “serious negotiations to buy Palm assets from HP. Some will question whether this makes sense for Amazon. Palm's webOS has been highly regarded, but has failed to get market traction.

Whether Amazon could do better, or whether it should not simply continue to use Android, are legitimate questions. But some might argue most of the value is in Palm's intellectual property portfolio.

And that could be important if Amazon believes it will, in the future, be competing with Apple, not with Barnes & Noble or eBay. As recent events have shown, IP ownership is crucial in the new mobile business.

Amazon's interest in Palm

Android the Only Smartphone OS Gaining Market Share?

In the U.S. market, at least, Android devices seem to be the only class of devices, sorted by operating system, that has gained market share over the last six months, Nielsen reports.

Android. iPhone, BlackBerry: Growth is Not the Same As Installed Base

NPD Group has found Research in Motion remains the smartphone leader, at 36 percent market share for the second quarter of 3010. Android devices had 28 percent share of quarterly sales, and the iPhone OS was third at 21 percent.

Quarterly share reports, though, do not describe the installed base, equally important. Looked at that way, RIM, the iPhone and even Windows Mobile and Palm had higher installed base percentages in December 2009, for example.

http://www.npd.com/press/releases/press_100804.html

WebOS Coming to Slates and Printers - HP CEO

Hewlett-Packard has said it would leverage Palm's WebOS for additional devices such as tablet devices and printers, and HP CEO Mark Hurd has confirmed exactly that. HP “expects to leverage WebOS into a variety of form factors, including slates and Web-connected printers."

WebOS Coming to Slates and Printers - HP CEO

HP Cancels Windows 7 Slate

In a move that quite likely is related to its purchase of Palm, Hewlett Packard says it is dropping development of a Windows 7 tablet device. Microsoft itself recently decided to cancel its own tablet project based on Windows 7. link

HP may also be abandoning Intel-based hardware for its slate lineup simply because it’s too power hungry. That would also rule out Windows 7 as an operating system.

HP has been looking at  Google-powered devices, but the Palm WebOS has been cited as an important tool for HP as it looks to compete in the smartphone market, and WebOS also has been talked about as suitable for slates as well.

link

Smartphones Have Outsize Impact on Mobility Business

Despite the fact that smartphones have only about 19 percent share of the U.S. handset market, they have outsize importance simply because smartphone use is growing so fast, implies growth of mobile broadband revenue and is key to the hopes new suppliers have for cracking the handset market.

Browsers were used by 29.4 percent of U.S. mobile subscribers (up 2.4 percentage points), while subscribers who used downloaded applications made up 27.5 percent (up 1.8 percentage points).

Some 18 percent used social networking sites or blogs, up 2.9 percentage points to 18 percent of mobile subscribers. About 13 percent report they listened to music on a mobile device. About 22 percent say they played games on their mobiles., up about half a percentage point.

Some 234 million Americans age 13 and older were mobile subscribers, while 45.4 million people owned smartphones in an average month during the December to February period, up 21 percent from the three months ending November 2009.

In an average month during the December through February 2010 time period, 64 percent of U.S. mobile subscribers used text messaging on their mobile device, up 1.9 percentage points from November 2009 levels, says comScore.

Those differences also are reflected in market share of feature and smartphones. In the broader feature phone market, Motorola has 22 percent share, LG 22 percent, Samsung 21 percent, Nokia nine percent and Research in Motion eight percent.

In the smartphone market RIM has 42 percent share, Apple 25 percent, Microsoft 15 percent, Google nine percent and Palm five percent. Google grew the most over the quarter ending in February, gaining five share points. Apple's share was flat and Microsoft lost five points.

RIM, Apple, Google Grow in Smartphones, Microsoft and Palm Drop

Over the last three months, Research in Motion, Apple and Google have gained smartphone market share, while Microsoft and Palm have lost share, comScore says.

42.7 million people in the U.S. owned smartphones in an average month during the November 2009 to January 2010 period, up 18 percent from the August through October period.

RIM was the leading mobile smartphone platform in the U.S. with 43percent share of U.S. smartphone subscribers, rising 1.7 percentage points versus three months earlier. Apple ranked second with 25.1 percent share (up 0.3 percentage points), followed by Microsoft at 15.7 percent, Google at 7.1 percent (up 4.3 percentage points), and Palm at 5.7 percent.

Google’s Android platform continues to see rapid gains in market share.

In an average month during the November through January 2010 time period, 63.5 percent of U.S. mobile subscribers used text messaging on their mobile device, up 1.5 percentage points versus three months prior.
Browsers were used by 28.6 percent of U.S. mobile subscribers (up 1.8 percentage points), while subscribers who played games made up 21.7 percent (up 0.4 percentage points). Access of social networking sites or blogs experienced strong gains in the past three months, growing 3.3 percentage points to 17.1 percent of mobile subscribers.

Social networking now is more popular than listening ot music, at least where it comes to mobile device activities.

Palm in "Death Spiral"?

"Death spiral" is not a word any company executive ever hopes to see or hear in the same sentence as the firm name. But that's what Barron writer Eric Savitz now does. "I fear Palm has begun sliding into a death spiral," he says. "Palm is simply too small, too poor and too weak to compete in a market where some of the world's most powerful companies are vying for supremacy."

Though its competitors will not lament the potential loss of one contestant in the market, the webOS software Palm developed also is described by Savitz as "brilliant." Walt Mossberg at The Wall Street Journal in a review last summer called the Pre "potentially the strongest rival to the iPhone to date."

"There's just one problem: No one is buying the phones," he says. Palm now says revenue for its fiscal year, ending in May, will be well below its previous forecast of $1.6 billion to $1.8 billion. The problem, Palm said, is "slower than expected consumer adoption of the company's products." In other words, the Pixi and the Pre aren't selling.

Whether Palm somehow can pull off a turn-around is not clear, nor is it clear whether the company will wind up being sold to another firm. But webOS is yet another illustration of the fact that in the technology business, the "best" product does not always win.

Apple and RIM Are Winners in Handset Market, Profit-Wise

The Apple iPhone might not be the only reason the mobile handset market has changed over the past several years, but it is a major influence, according to a new analysis by analysts at Deutsche Bank.

In 2006, before the iPhone was available, Nokia had nearly half--47 percent--of industry profits. By the end of 2010, it will have 25 percent.

In 2006, Sony Ericsson had 11 percent share. By the end of 2010 it will have a negative one percent operating profit.

Motorola had 18 percent share in 2006 and will have declined to about a negative one percent by the end of 2010.

By the end of 2010 Apple will have an estimated 37 percent share, while Research in Motion, which had four percent share in 2006, will have grown to 16 percent.

Most of the other suppliers will have remained about where they were in 2006, except for Lucky Goldstar, which will have grown from one percent to six percent.

Keep in mind, these figures reflect profits, not handset share.

Is Nexus One A Particular Threat to Service Providers?

Does Google's Nexus One launch mean anything in particular for mobile service providers? That might be a matter of some debate at the moment. Some observers were expecting something "more disruptive." Perhaps an ad-supported voice service; maybe a completely unlocked device able to work on any carrier's network; maybe a business model that clearly delineates a new role for the handset provider.

That didn't happen. Some observers think the bigger innovation is the way Google is selling from a
Web site. Some might see too much difference there, either. Selling from a Web site isn't too unusual these days, and Apple's retail stores and existing carrier Web sites.already provide models for handset distribution aside from the branded mobile carrier stores.

To be sure, an "unlocked handset" strategy always will be tough in the U.S. market until such time as most carriers are using one single air interface and handsets are equipped with enough frequency agility to adapt to whatever network si providing access. An unlocked handset today means a choice of no more than one or two major carriers (one WiMAX, two CDMA and two GSM).

The other angle is that U.S. consumers have not yet shown any desire to pay full retail price for a handset, when they can get a subsidized device at the price of a two-year contract. People might gripe about the existence of contracts, but they have choices. They can pay full retail for their devices and avoid the contracts. Not many make that choice.

The more interesting observation is about what various Android devices really are. A BlackBerry is an email device; an iPhone is a Web surfing device. Many feature phones are texting devices. Some models are social networking devices, or at least highly optimized for that purpose. Some devices are optimized for navigation.

Could a new niche be developing for a "search" device? Is "finding stuff" a sufficiently robust need that at least one of the Android devices becomes recognized as the single best device for finding things? That seems to me the most interesting question about what the Nexus One or broader family of Android devices might raise.

Matters always can change, but at least for the moment, it does not appear the Nexus One is especially disruptive of the existing mobile business model or standard practices, either.

http://connectedplanetonline.com/mobile-apps/news/googles-nexus-effects-0115/?imw=Y

Apple iPhone and Android Top OS Satisfaction Ratings

When it comes to satisfaction levels, the Apple iPhone continues to lead all other major cell phone manufacturers, with 74 percent of owners reporting they're "very satisfied" with their iPhone, according to ChangeWave Research.

But 72 percent of Android users also say they are "very satisfied." There's a big gap to the number-three OS, where 41 percent of Research in Motion users say they are very satisfied with the operating system.

It is worth noting that the "very satisfied" rankings for the Palm OS primarily reflect experience with the older OS, not the new  Web OS (Pre, for example). About 58 percent of Pre users say they are very satisfied, while for smart phones using the older Palm OS it was just 29 percent.

Is Android Finally at an Inflection Point?

The Android seems to have hit a sales inflection point, and is poised to take share in the smartphone market, according to ChangeWave Research.

More buyers now are indicating they will be buying Android devices, and fewer say they will be buying an iPhone. In September 2009 about six percent of respondents to 21 percent of respondents to a recent ChangeWave Research survey.

At the same time, where 32 percent of respondents said they would be buying an iPhone in September, 28 percent said they would be doing so in the December 2009 survey.

The ChangeWave Research data suggests that Android has hit an inflection point, after roughly a year on the market, a time when some observers might have wondered whether Android would emerge as a viable alternative to the iPhone.

The ChangeWave survey also suggests that the Android is taking share from other devices as well, with the possible exception of the BlackBerry. Where 17 percent of respondents said they would be buying a BlackBerry in September, about 18 percent said they would be doing so in December.

But Windows Mobile buying intentions were about nine percent in September and had dropped to six percent by December. Likewise, about six percent of respondents suggested they would be buying a Palm OS device in September; just three percent in December.

Smartphone Niches Emerging

Data from ChangeWave about smartphone preferences might suggest both the existence of clear smartphone segments as well as an evolution of those segments.

By definition, all smartphones handle voice and text. Beyond that, there seem to be distinct user niches.

One might characterize the Palm user as someone whose unique application is the "organizer."

One might characterize the BlackBerry user as oriented to email, and the iPhone owner as oriented to Web-delivered applications.

Looked at this way, the Changewave data might suggest that the value proposition for the email-focused remains steady, but that the value of "organizer" functions is receding, while mobile Web is growing. We also have seen the introduction recently of devices organized around social networking and navigation, so the number of smartphone niches addressed by particular devices seems to be growing.

The Palm Pre and Motorola Cliq are among new devices pitched at the social networking niche. Garmin's nuvifone is perhaps the best example of a navigation-focused smartphone. So the obvious big question is how the growing raft of Android-based smartphones will contribute to the proliferation of devices with a lead application mode.

How demand for the Droid will shape up is hard to say at the moment. Some fragmentary data suggests that Droid users access the Web even more than iPhone users do. But its turn-by-turn navigation features might also emerge as a key drawing point.

People Don't Buy Smartphones, They Buy the Experience and the Feeling

All engineering involves choices, and that is true of all smartphone design as well.

Perhaps one of the background pressures is the desire to create devices that perform reasonably across a range of functions.

But that might not be a formula for success. A recent study by Interpret might suggest that instead of balancing features, it might be better to "unbalance" and produce a device that is demonstrably better at one thing.

Though one can argue we are early in the adoption cycle, a panel of consumers indicated that the Palm Pre made them feel "smart," "trendy, hop or cool," and "productive" within some range of acceptance for a smartphone device.

The problem would seem to be that Pre scores highest on the emotional attribute that users say is least important of the top three. The Pre produces emotions on the "hip" and "productive" scale that make it analogous to the BlackBerry Storm.

The bigger problem is that the Pre does not produce unusually high key emotions on any of the top three most important measures smartphone buyers say are important to them. BlackBerry and iPhone probably are the best models. Each of them scores unusually high on at least one of the three key emotional drivers smartphone buyers say motivate them.

So maybe designers should forget "balance." So far, no single smartphone unit scores unusually high on the "it makes me feel smart" measure. The iPhone owns the "hip, cool, trendy" space. The BlackBerry owns the "it makes me feel productive" niche.

Smartphones are bought because of the "feelings" they produce, not the features they provide. As the saying goes, smartphones "sell an experience."

Palm Pre, iPhone, MyTouch, Droid Compared

Here's one way of comparing some of the latest smartphones, put together by BillShrink.com. One thought comes to mind, when looking at "unsubsidized" cost of these devices.

(Click image for larger view.)

Some users do not apparently like contracts, even if those contracts provide lower handset prices. They should be able to buy their handsets "unlocked" if they choose.

But lots of users, contemplating smartphone prices almost the same as notebooks and PCs, might well prefer the contracts, to get lower handset prices, just as most people say they "hate" commercials but will put up with a certain amount of commercials if it means "free" content access.

In a world that is "one size fits none" rather than "one size fits all," it seems to run counter to consumer preferences to ban any lawful commercial offer. Let people make their own decisions.

On the other hand, if you want to see a dramatic deceleration in smartphone adoption, with all the application innovation that is coming along with those devices, watch what happens if contracts that subsidize handset costs are outlawed.

Palm Centro: Major Shift to Smart Phones, Data

Smart phones do indeed drive consumer purchases of data plans, new data from Palm suggests. Palm reports that 95 percent of new Centro buyers signed up for a data plan.

More than 70 percent of Centro buyers also appear to be upgrading to a smart phone for the first time, Palm says.

Keep that up for a long enough period of time and mobile providers will discover that most users have data plans and smart phones.

Which is just what they plan.

Windows Vs. BlackBerry in Enterprise?

A recent poll of enterprise wireless subscribers found 84 percent of respondents who do use smart phones, use a BlackBerry, according to InfoTech. Palm Treo and HTC devices trail and Microsoft OS devices, though growing fast, appear to fare no better than fourth.

But Windows Mobile finally is making inroads. "As such, the world essentially will come down to RIM vs. Microsoft in the enterprise market," says InfoTech.

More than 70 percent of respondents say email is the most important function of a smartphone, followed by Internet Wi-Fi access at 12 percent, the survey found.

More than 80 percent of respondents indicated they also use text messaging.

About 49 percent of survey respondents across all enterprise sizes said they were using wireless data card, with nearly 38 percent reporting a preference for the Verizon Wireless network.

Sprint the second-largest base at 24 percent. And speed apparently matters. Some 81 percent of respondents would switch operators to get faster speeds.

BlackBerry Still Owns Enterprise Smart Phone Market

Research in Motion's Blackberry (73 percent share, up two points) continues to control the lion's share of the corporate smart phone market, according to a recent ChangeWave Alliance survey. In contrast, second place Palm lost about four points of share (19 percent). Motorola has 11 percent share, down one percent since the last ChangeWave survey.

Apple's iPhone has five percent share, up three points since the last survey, but has presence primarily among small to very small companies, the ChangeWave survey shows.