Mobile Update for March 9, 2012

Here are some of the interesting things that happened this week in the mobile industry with my usual witty commentary.

“the new iPad”

Its not the “iPad 3”, “iPad HD”, or “iPad 2S”. Its just “the new iPad”. Introduced on March 7, the new iPad has numerous hardware improvements including the “retina display”, faster A5X CPU, a much better camera, and an optional 4G LTE radio. All of this comes in the same form factor as the iPad 2 (okay, it is slightly thicker and a little heavier but they otherwise look identical). More importantly it offers the same battery life as the previous model, even with LTE which is famous for sucking batteries dry. The new iPad ships on March 16 for the same price as iPad 2.

The 16GB iPad 2 remains for sale with a $100 price cut, so now the lowest priced iPad will be $399.

My Take: Apple will sell another bazillion of them and other tablet makers will have to try to figure out if they can make any money in the tablet business. Competing with the iPad 2 at $499 was hard but now it is $399 and the $499 model is a substantial upgrade. Apple’s mastery at managing manufacturing costs is making it very hard to compete in this space.

US Smartphone population grows

According to comScore, about 50% of US subscriber base use smartphones which comes to about 101MM users.

Almost 50% of those phones run Android and about 30% are iPhones. The remaining 20% are all others (BlackBerry, Windows Phone, etc.)

My Take: At sometime in the next few years the vast majority of mobile users will carry a smartphone but the platforms that will dominate are still in play. It certainly seems that Google and Apple have the market locked up but things can change very rapidly in this industry. If RIM can fall from 35% to 19% in one year, why can’t Apple or Google?

Android Marketplace becomes “Google Play”

Google rebranded the Android Marketplace as “Google Play.” Google Play is a centralized place for Google to sell digital content such as music, movies, books, and apps much like iTunes.

My Take: Two interesting things here.

First is that Google is branding their market with their name and not as Android. Google must feel that the Android name is does not have the same importance that Google’s does.

Second, this indicates that Google realized that the content ecosystem is a big part of the value of a device, more so than just GMail and GCalendar, and must make content easy to find and buy. iTunes and Amazon’s ecosystems are a big reason why people use iOS or Kindle devices. Bringing all of their digital content together in one place should make it easier to market Android devices.

Google forcing developers to use Wallet?

According to Reuters, Google is telling Android developers that they must use Google Wallet for in-app payments. Those using other payment services (e.g. PayPal) can get their app be kicked out of Google Play (formerly Android Marketplace).

My Take: Android has always been about providing a platform that will allow more people to do more Google searches which display more ads to generate more revenue. Forcing apps to use Google’s payment system indicates a change in Google’s Android strategy. It appears that Google is trying to make money on the selling of content. This strategy is certainly working for Apple, but it will make Google’s ecosystem less open than it used to be.

A Cheap Google Tablet?

Rumors are that Google has tapped ASUS to create an inexpensive 7″ tablet to run Android 4 (aka Ice Cream Sandwich) to compete with Amazon’s Kindle Fire. Amazon’s tablet runs a custom fork of Android and does not provide the Google services (Play, Calendar, GMail, etc.) and is therefore a competitor to Google’s ecosystem. The tablet’s specs are rumored to be a 7″ 1280×800 display, Tegra3 quad core CPU, running Android 4.0. To meet Amazon’s $199 price, Google will likely have to sell the device at a loss.

My Take: If the specs and price of the rumors are right, Google and Asus cannot sell this tablet and make any money on the hardware. They are likely taking a loss on it and I’m not sure why Google and ASUS would want to do that. Even if Google is willing to take the loss to build marketshare, why would Asus? Or, is Google looking to make money selling content and offering Asus part of the profits? That would be new for Google as Android was supposed to be about getting people to do more searches to help their advertising business.

I think they’ll have a hard time competing against Amazon as Amazon has a stronger ecosystem and the Fire’s user interface is tailored for content purchases and management. Stock ICS is not.

Another factor here is that if they do release a 7″ tablet for $199 it will drive every other OEM out of the market. OEMs, like Samsung, profit only on the hardware and cannot compete at these prices. Is that something Google wants to do?

Another interesting question is, why isn’t Google tapping their own Android device maker, Motorola, for this?

Nokia Lumia 900 Delayed to April?

Bad news Windows Phone fans. It sounds like the release of Nokia’s flagship phone for he US, the Lumia 900, is pushed out from March 18 to April 22. The price is rumored to be $99 with a two year commitment which would make this a very good deal.

My Take: This is bad news for Nokia and Microsoft as they try to get a foothold in the US market. New HTC and Samsung devices will be released this spring and will provide tough competition.

Mobile wallet news

Mobile wallet company Isis has been quiet for some time, but they are suddenly showing up in the news again this week.

First, several makers of retail terminals are committing to support Isis. This is important as Isis won’t work without the terminals at retailers.

Second is that Isis has made a big display at SXSW. Isis is showing off what the experience of using Isis will be. They stress that they don’t want to change the way that you pay, but the way that you shop.

Some good news for Google, the other big player in mobile wallets, as Sprint has claimed they will ship 10 phones this year capable of running Google Wallet. That means an Android phones with NFC.

My Take: Its good to hear some news from Isis who have been pretty silent for a while. They seem to have backing from the right players (carriers, banks, credit cards) but they still have to execute.

Sprint is the only carrier committed to Google Wallet and getting more NFC enabled phones out is crucial but Google really needs to get the other carriers on board to gain a substantial number of users.

And that’s the news! Until next time…

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About Lee J.

Mobile Guy!
This entry was posted in Analysis, ThisWeek and tagged , , , , , , , . Bookmark the permalink.

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