Apps or Mobile Web? It is Going to be a Toss Up

Today most mobile applications for smartphones are downloaded from “app stores.” According to ABI Research data, in 2009 consumers downloaded some 2.4 billion applications from such stores, and the download rate will accelerate over the next few years until in 2013 smartphone downloads are expected to peak at just below seven billion.

So you might be wondering whether this implies a decline of interest in mobile apps. Not really. What the forecast implies is that there will be other ways to get and use applications, namely using a mobile Web browser.

After 2013, smartphone download rates from app stores will start a slow decline, although total downloads from all sources will probably continue to grow, ABI Research believes.

ABI argues that more and more people will start visiting mobile websites authored using HTML5, which will mean applications can be run natively from inside Web pages where today external apps might be required.

Moreover, handset makers and service providers will pre-install apps on their products, such as social networking apps and some mobile office suites, removing the need for downloading those kinds of applications.

“App stores aren’t going away," says ABI Research Senior Analyst Mark Beccue."Following the 2013 peak in demand, the number of downloads in 2015 will have decreased only seven or eight percent."

But users will be able to gain the value of apps using their browsers.

Also, it is conceivable that mobile network operators will host their own app stores. Many observers think such efforts will enjoy only modest success, but there is one notable area where huge success could be possible.

If operators concentrate on providing downloadable apps to feature phones, that could be a big factor in newer and developing markets where smartphone penetration is lower.

80% U.S. Smartphone Penetration by End of 2012?

Is it possible 80 percent of U.S. mobile phones in use by the end of 2012 could be smartphones? The answer is "yes."

To get there, one would only have to assume that current use rates of mobile browsers are a solid indication of current smartphone use, that current rates of usage will grow at current rates of nine percent every quarter through 2011, and then will increase one percentage point faster during each quarter of 2012.


U.S. mobile users increased their use of browsers, downloaded applications and social networking at about a nine percent rate each during the first quarter of 2010, according to comScore. At that rate, by the end of 2010, 39 percent of mobile subscribers will use browsers, 38 percent will be using downloaded applications and 25 percent will be using social media.

If that rate continues throughout 2011, by the end of that year 55 percent of mobile subscribers will be using browsers, 53 percent will be using downloaded applications and 35 percent will be using social networking.

In an average month during the January through March 2010 time period, 64 percent of U.S. mobile subscribers used text messaging on their mobile device, up 0.6 percentage points compared to the fourth quarter of 2009.

Browsers were used by 30 percent of U.S. mobile subscribers, up three percentage points over the fourth quarter of 2009. About 29 percent of mobile users downloaded applications, up three percent from the fourth quarter of 2009.

Some 19 percent of mobile users used social networking sites and blogs in the first quarter of 2010, up three percent over the fourth quarter of 2009.

So the issue is what would be different about your life or your business if 80 percent of mobile users are on smartphones by the end of 2012, and those smartphones can download at speeds between 3 Mbps and perhaps 12 Mbps, and can upload at speeds from 1 Mbps to perhaps 5 Mbps.

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Algorithmic Trading Broke, Then Fixed, the Market

Yesterday the stock market dropped almost 1,000 points intraday before rebounding almost as quickly. Algorithmic (computer-to-computer) trading is blamed, but it might be worth pointing out that algo trading also fixed the market, just about as fast as it "broke" the market in an anamoly.

Right now, securities exchanges are looking at particular equities that might have been affected by the abrupt drop and are going to cancel the trades. The other thing is that few actual human traders actually were able to react quickly enough, one way or ther other. It appears execution platforms became overloaded and wouldn't place buy or sell orders in any case.

There also were liquidity issues. For every seller, there must be a buyer. It appears that in many cases there were no buyers to be had, so abrupt was the plunge. Liquidity, in other words, evaporated.

But algo traders apparently were able both to execute "sell" and then "buy" orders fast enough to clear about 600 points of movement within about five minutes. The conventional wisdom was that a misplaced large order triggered the abrupt declines, which triggered the other trading algorithms.

It might also be fair to note that those same automated trade programs also erased the anamoly within 30 minutes, which shell-shocked humand mostly gaped in awe at something most likely had never seen.

The sheer snapback of the price in such a short amount of time was not driven by fundamental traders (humans) who all of a sudden found “value” in the market with a trailing P/E. The only sort of quick analysis that provides that kind of price action are done by non-humans at quantitative firms, and they saved the market from something much, much worse.

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Sprint HTC Evo on June 6?

The latest rumor about availability of the Sprint HTC Evo is "around June 6, 2010." Reportedly the device will reail for about $200 on a two-year contract, and as much as $600 if you want to buy it without a contract.

Some policy advocates think such contracts impair consumer welfare because they make it hard for consumers to switch whenever they feel like it. One simply should note that any consumer can buy a device at full retail price if that is what they prefer.

Most consumers keep demonstrating, though, that they prefer $200 devices and contracts, compared to $600 devices without contracts. If you don't want a contract, don't buy one. Most consumers can figure out that a $200 subsidized phone provides real value.

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What Gets Cannibalized by iPad and Other Tablets?

As you might have expected, though lots of people think the Apple iPad is a gorgeous device, lots of people also think it is a bit pricey.

So far, iPad buyers are heavily skewed to 30-somethings and 40-somethings who presumably are well along in their careers and have both the appetite and the means to splurge on one.


Some technology observers have been predicting the demise of the netbook for some months, and with the launch of the Apple iPad, we get our first chance to see whether cannibalization is happening.

The basic line of thinking is that netbooks get squeezed between more powerful smartphones and tablet devices such as the iPad.

A new study from Morgan Stanley concludes that tablets in general will be a big threat to netbooks, as some have suggested.

Netbook sales growth has been significantly flatter lately. Sales still are increasing, just not at the rate they were before. Last July, growth was at 641 percent. In December, growth was 179 percent, and in January it dropped to 68 percent.

According to Morgan Stanley/Alphawise, the biggest product category likely to be cannibalized by potential iPad customers is netbooks and laptops. About 44 percent of potential iPad customers say they'll get it instead of a notebook or, presumably, netbook.

About 27 percent said they'd buy an iPad over a desktop.

To be sure, netbook sales were slowing before the iPad launch, so the slowing netbook growth rate can't be blamed completely on the iPad.

Still, it seems inevitable that netbooks and other cheap ultraportables will face competition from the iPad.

Product cannibalization potential

In Case You Missed the Market Craziness Today

It was a crazy day today, with a violent, sudden drop in U.S. equities, a swift 700-point retrace, and worries that what is happening in Greece will be happening in the United States in the future.

Consumers Spent More on Consumer Electronics Over the Last Year

The average U.S. household spent $1,380 on consumer electronics products in the past 12 months, an increase of $151 from last year, according to a new study released by the Consumer Electronics Association.

The average household spent 12 percent more on consumer electronics devices in the past year, which might be especially surprising considering a dip in most other consumer spending over that same period. Of course, sales took a dip in 2008 as well.

Individual consumer spending, as opposed to household spending, also was up 10 percent from the previous 12 month period, CEA says. The average adult spent $794 on consumer electronics in the past 12 months, up from $725 in 2009.

Women spent more on consumer electronics products than they did the year before but still trail men in overall spending. Women spent, on average, $631 on consumer electronics, up $73 from 2009. Men report personally spending $969 in the past 12 months, up $67 from the year before. The average household reports owning 25 consumer electronics products, up from 23 products last year.

CEA’s study also shows that video products continue to be the top devices consumers own, with HDTV ownership continuing to increase. About 65 percent of U.S. homes now own at least one HDTV, an increase of 13 percentage points from last year, making it the top industry growth driver of the past 12 months.

Consumers also are buying HDTVs as secondary sets. The average household now owns 1.8 HDTVs, up from 1.5 in 2009. HDTVs also are also the top product consumers say they want to purchase. About 23 percent of households say they plan to buy a new high-definition set in the coming 12 months.

Ownership of computers also continues to increase. Currently, 86 percent of U.S. households own at least one computer, making it the third most owned CE product category behind televisions and DVD players.

The popularity of netbooks, owned by 12 percent of U.S. households, and laptops, now owned by most households (58 percent), is helping drive the computer category.