Tablets Will Win Because Pain of Resisting is Higher than Pain of Adopting

Tablets aren’t the most powerful computing gadgets, but are convenient, "cool," and work because many of the core "computing" requirements people have today are related to content consumption and some light communications, rather than heavy content creation. 


They’re portable, easy to use and suitable for content sharing and working in groups. Screens are large enough to display content, and the disadvantages of computing power if balanced by better battery life. 


Tablets will gain wider user because much of our "computing requirements" now consist of content consumption, not content creation. 


Some of us would also argue that something else is at work. When looking at adoption of any new technology, a good rule of thumb is that the "pain of changing" has to be less than the "pain of not changing." 


But part of the "pain of not changing" has nothing to do with technology, as such. "Pain" can be social. The pain of not buying a tablet occurs when all your friends have one, and you don't. Don't  discount that sort of "pain." It happens with all important consumer technologies. There simply is a point where a person feels they must have something "most other people have," so long as the innovation is useful.

Microsoft Smart Phone Market Share Keeps Falling

Apple is the clear winner in the smart phone business so far, though Samsung has made important strides. And though nobody should count them out, Microsoft, Research in Motion and Nokia are struggling. 


But it is in the area of smart phone profits that Apple is unusual. 


Profitability, more than anything else, now is shaping the global smart phone business, one might argue after considering an estimate by Strategy Analytics of market share in the global handset business.

Globally, Apple and Samsung have, over the last 12 months or so, surged to the top of the charts in terms of smart phone sales volume. In the past, the “smart phone” category has not been significant, as all devices were feature phones or basic phones.

As the market begins to shift to a smart phone buyer pattern, differences in firm strategy and execution have lead to a rapid change in market leadership.

Global smart phone shipments grew 54 percent annually to reach a record 155 million units in the fourth quarter of  2011, according to Alex Spektor, Strategy Analytics associate director. That apparently has proven to be a decisive change.

In the past, Nokia has been the global share leader, but Nokia has not been able to translate that prior success into smart phone success, where Apple has changed the game and Samsung apparently has been able to keep pace.

Apple overtook Samsung to become the world’s largest smartphone vendor by volume with 24 percent market share. Apple’s global smartphone shipments surged 128 percent annually to 37.0 million units, as distribution of the iPhone family expanded across numerous countries, dozens of operators and multiple price points.”

Apple took the top spot for share on a quarterly basis, but Samsung became the market leader in annual terms for the first time with 20 percent global share during 2011. With global smartphone shipments nearing half a billion units in 2011, Samsung is now well positioned alongside Apple in a two-horse race at the forefront of one of the world’s largest and most valuable consumer electronics markets, Strategy Analytics says.

In contrast, Nokia’s smart phone market share was cut in half from 2011 to 2011, dropping from 33 percent in 2010 to 16 percent in 2011.

That is one reason there has been so much focus on the Nokia partnership with Microsoft, as many would argue the Windows Mobile operating system represents the best shot Nokia will have to avoid collapse.

The other observation of note would be that profitability might now be emerging as the key differentiator, even though design and consumer demand clearly are driving the market overall.

Samsung’s most-recent quarterly earnings also set records. Samsung Electronics Co declared $4.7 billion in quarterly operating profit. jumping 76 percent year over year.

Between them, Apple and Samsung earned fully 81 percent of all profits in the mobile handset business.

Work Keeps You From Being "Creative," Adobe Study Suggests

Our biggest barrier to creativity might be at work, a new study by Adobe suggests. In the survey, 75 percent of respondents said they have been experiencing more and more pressure from superiors to be productive rather than creative in the workplace, even though their jobs require at least some measure of creativity, the study suggests. 

Facebook Revenue Per User is $1.21

Facebook says it earns $1.21 per user. Keep in mind that Facebook also has 901 million monthly users. 


Worldwide mobile monthly active users increased by 69 percent from 288 million as of March 31, 2011 to 488 million as of March 31, 2012.


In all regions, an increasing number of our MAUs are accessing Facebook through mobile devices, with users in the United States, India, Indonesia, and Brazil representing key sources of mobile growth over this period. 


About 83 million mobile MAUs accessed Facebook solely through mobile apps or our mobile website during the month ended March 31, 2012.


Some 405 million mobile MAUs accessed Facebook from both personal computers and mobile devices during that month. 

Zynga Drives Content Sales (or Virtual Currency) at Facebook

Advertising still drives the overwhelming portion of Facebook revenue, but growth of digital content sales is faster, according to Facebook. Much of that activity was driven by users of Zynga games. 


In 2011 and the first quarter of 2012, Zynga directly accounted for approximately 12 percent and 11 percent, respectively, of total Facebook revenue, mostly from virtual goods payments. 


If you consider sales of digital goods to be a "content sales" operation, you'd be right. But since Facebook also requires use of its captive Facebook Credits mechanism to do so, those revenues might be considered "virtual currency" operations. You can take your pick which description is more accurate. 


Zynga also generated about five percent of Facebook ad revenue from third parties in 2011, and about eight percent of first quarter 2012 third party display ad revenue. 


 According to a 2010  In-Stat report, the worldwide revenue generated from the sale of virtual goods on social networking sites, online worlds, and casual games increased from $2 billion in 2007 to $7 billion in 2010, and is forecasted to increase to $15 billion by 2014. 


Still, the advertising opportunity is an order of magnitude bigger than that. 


Revenue from Facebook's payments division nearly doubled between the first quarter of 2011 and the first quarter of 2012, though. 

Facebook advertising of 37 percent occurred on a far-bigger base. 

Facebook brought in $186 million in revenue from its payments division in the first quarter of  2012, up from $94 million in the first quarter of  2011. But Facebook had total revenue of about $3.7 billion. 

Most U.K. Users Seem to Overestimate Their Mobile Data Consumption

New research from billmonitor.com, the Ofcom-approved mobile price comparison site based on analysis of customers' actual bills, shows that smart phone data use has more than doubled since late 2010.

The average U.K. smart phone user now uses 154 MBytes per month, compared to 71 MBytes in late 2010. Nearly 30 percent of smart phone users now use more than 250 MBytes per month.

The study by billmonitor of 215,507 bills from U.K. customers suggests the flip side of growing data consumption: many users are on plans that are more expensive than needed.

In fact, “bill shock” when users exceed their usage caps is surprisingly limited, the study suggests.

The billmonitor.com’s analysis of customer bills shows that in any given month, only around two percent of analyzed bills include out-of-bundle data charges of more than £10. Also, it appears that out-of-bundle spending on mobile data is actually decreasing, even as data usage increases overall.

The real problem facing most UK smartphone users is that they are overcompensating for the amount of data they use by having a much too large data allowance, and overpaying.

Half of all smart phone users still aer using less than 154 MBytes worth of data a month. But 88 percent of smart phone users have opted for a monthly data allowance of at least 500 MBytes, of which most goes unused.

Mobile Payments Will be "Hybrid" for Some Time

The founding of a new industry, such as mobile commerce, always will threaten the leaders of the industry that risks being replaced, at the same time it offers brand-new opportunities for attackers of all sorts. 


That perhaps especially is true when an existing way of doing things necessarily involves a collision between several large existing industries. In the case of mobile commerce that might reasonably include banks, payment processors, retail software and hardware, mobile services, retailing, marketing and advertising. 


At least early on, successes often have taken a line of least resistance. Starbucks did not focus on anything "fancy," in technology terms. But it gained huge traction, fast, by essentially linking a smart phone with bar code readers and prepaid cards. 


Google Wallet likewise essentially has taken the tack of linking a mobile phone with a prepaid instrument as well. Square, Intuit and PayPal have used dongles to turn smart phones or tablets into retailer point of sale terminals. 


The main point is that early successes have happened where innovators built something new that works with a huge installed base of supporting infrastructure and common user behaviors. 


It might not have seemed so logical, at first, to unite an established behavior and payment instrument--the prepaid card--with smart phones to create a "mobile payment" system. 


Nor might it have seemed so logical to use a simple dongle to turn a smart phone or tablet into a retailer payment terminal. But taking the line of least resistance has proven successful. Rather than attempting to change behavior, or create huge new ecosystems, some have adapted existing behaviors and ecosystems in new ways. 


Along the way, suppliers will find themselves working in fields in which they have little experience. Problems will arise.  Security will remain an issue, for example. Sometimes the obvious answer will be to marry expertise in one field with capabilities of another. 


That sometimes will take the form of "mashing up" a mature technology and set of processes, such as "prepaid cards," with a technologically-emerging set of hardware and software, such as smart phone devices and apps. 


In the history of technology disruptions, that is a common pattern. Hybrid approaches often work, early on, because they are practical, and build on what is already accepted practice. Think of steam engines on sailing ships. Initially, it was not practical to drive a ship solely using steam engines. So shipbuilders grafted steam engines onto sailing ships. 


The full replacement of an older technology might take much longer. Consider that the first mobile phones went into service in 1946, but it wasn't until the mid-1990s that "most" people used them.


The first video games were played in 1961. But video gaming did not first become a mass behavior until the early 1980s. The first personal computer was created in 1964, but significant adoption did not happen until the mid-1980s. 


That is why the "prepaid account plus mobile phone" will be a successful early approach to mobile payments. It is a hybrid of existing behaviors and processes. Only later will mobile payments emerge in a more "finished" mode.