Powerful Smartphones with fast mobile connections to great web services


Android struggling outside the U.S.

, posted: 31-Mar-2010 12:26

In the United States (US) the total Smartphone market is growing very quickly and is predicted to reach 50% of all mobile users by Q3 next year. Total Smartphones shipped in 2009 was 27% up on 2008 with 2010 forecast to be up 38% again over 2009 – all during a major recession!

Clearly customers want devices that give them a great mobile internet experience for a wide range of on-line activities. Many of the so called ‘Featurephones’ have simply not been able to deliver this and leave users frustrated when they try web browsing or email or downloading applications.

According to the Canalys figures all the main vendors in the US are growing their shipment volumes except Microsoft which is forecast to be static given their build-up to the impressive looking Windows Phone 7 at the end of the year. Presumably they accepted taking the hit over 2010 to build towards a fresh assault from Xmas 2010 onwards – a big call and the right one.

But the real mover in the US is Android which is forecast to increase market share from 9.7% of total Smartphone sales in 2009 to 12.3% of the rapidly growing market in 2010 – meaning a 170% increase in shipment volume. This Android momentum is also reflected in US gadget and business web sites. There are two main reasons for this rapid Android growth in the US over 2010.

Firstly, Android momentum in the US has been established with a very large amount of recent activity driven by non-iPhone mobile operators trying to compete:
- T-mobile launched the first Android device (G1) in September 2008 and promoted it aggressively.
- Motorola and Verizon conducted a US$100m launch campaign around the Motorola Droid handset in Sep-Nov 2009.
- Google released spoken word turn-by-turn navigation in the US only for free to coincide with the Droid launch – the ‘killer app’ that no other SP has.
- Google launched their own Nexus One (built by HTC) in early January 2010 via on-line store and promoted this via links on various Google web assets.
- A number of new very high-spec devices from HTC, Samsung and Sony Ericsson have been announced across all the main networks and each device + network launch again drives up Android awareness.

Secondly, OEM’s (like Samsung, HTC, Motorola, LG etc.) will use Android to bring out progressively cheaper Smartphones to drive adoption into new customer segments.

But the situation in the rest of the world is very different. As Aaron posted recently Smartphone adoption varies greatly in different regions. While these Admob figures refer to actual ad serving (into web pages and applications) rather than sales, they do reflect the relative momentum between the Smartphone platforms. In NZ (Oceania) the iPhone is absolutely dominant with Android barely registering. The most recent Admob figures for the US show again how Android is taking off there.

So far in NZ we have had only one Android device (HTC Magic) launched by Vodafone in June 2009 with a low level of marketing activity despite being a great device. As long as Vodafone is the only operator officially with the iPhone it does not make sense for them to spend heavily to promote anything else. So far there have been no Androids from Telecom. Apple has built strong operator relationships all over the world but Google has been relying on their OEM partners. There is a limit to what the OEM’s can achieve without strong buy in from the mobile operators and they in turn want Google involved to help drive uptake – Catch-22.

For Telecom + OEM to make a big play with Android will require a huge investment to raise awareness about it in the mass market. Most non-techy people I talk with don’t understand how Google can be making mobile phones - there is a disconnect. None of the OEM’s has yet staked out their Android presence in NZ. Samsung and Motorola are the two most recognized consumer brands in NZ with HTC having the widest range of devices and of course the only device yet launched.

Further complicating any Android play is the hype around the new Apple products – the iPad and probable new iPhone. Despite these devices not being available in NZ until mid-year the buzz is already building from overseas. 

Telecom of course knows that they need a Smartphone play to restore XT faith and overall Brand credibility not to mention impact on revenues. Assuming they don’t have the iPhone coming anytime soon the good news is that the US is showing that Android is certainly attractive to the mass market.

The bad news is that a very large investment is required to move the NZ market to that point from where it is now, and would they get the necessary OEM + Google support to do this?

Other related posts:
Brands producing apps only for iPhone
Steve Jobs: Rock Star!
The features Kiwis miss out on with Android 1.6








Comment by Ramesha Murthy, on 31-Mar-2010 13:45

It is true. I have been trying to get one of the latest Android 2.0 phones in Australia, but get mute response even from salespeople. What is available is Android 1.5.

I even looked at option of upgrading a Samsung android 1.5 to higher version, but there is hardly any documentation/support for it.

I think this time lag will disappear in a few months. Till then, Android developers outside of US, have this constraint.

Ramesha


Comment by ald, on 31-Mar-2010 13:49

Great post Tim.  Agree that the Android wave has yet to impact on NZ shores to any real extent.  We are doing a lot of Android work but it is mostly for NZ companies targeting the US or other markets.


Comment by kiwipixter, on 31-Mar-2010 14:37

Tim, your ex-colleague here. Its quite shocking there aren't more Android devices available in NZ, even more so why Telecom hasn't taken advantage and showcase their XT network, even after the outages fiasco they should you Android and OEM brands to take away emphasis on XT.


Comment by freitasm, on 31-Mar-2010 17:30

So you think semi-naked body painted girls is "low level of marketing?"


Comment by freitasm, on 31-Mar-2010 17:31

Sorry, should've given some linkification to justify my previous post: http://www.ben.geek.nz/2009/07/learning-from-the-vodafone-htc-magic-debacle/


Author's note by timmyh, on 31-Mar-2010 17:41

Well - that was the whole shebang right there...there wasn't any more marketing after that.


Comment by pengo, on 1-Apr-2010 06:30

I imported my Android phone from the US, and most people who see it want one; even iPhone users. The product's great; as your article rightly points out, the issue is availability.

The Nexus One appeared to be targeted at the prevailing mobile business model where hardware is sold by and for networks. Google's new model - buy your phone from the manufacturer and use whatever network you like - didn't succeed to the degree hoped, but the company hasn't abandoned it completely. Personally it' a model I like, and the model I've followed with three of my last four phones.

I have to reluctantly agree that without a local network pushing the Android barrow it's not likely to achieve substantial share in the marketplace, at least not immediately. But I wouldn't write off the viral effect of experiences like mine: if you get a few thousand of these units out there interest and uptake will snowball.

Here's hoping, anyway. It's a great operating system and I now have a great phone.

::Leigh


Author's note by timmyh, on 1-Apr-2010 10:25

@Pengo/Leigh:

There is no doubt that Android devices are very very good and in the U.S. you are spoilt for choice. But that has happened due to saturation activity from all the carriers other than AT&T.

Yes the viral approach will slowly work but I would guess that Google is more ambitious than that and would like to have much more market share outside the US more quickly.

There needs to be some sort of circuit breaker - e.g. a massive Telecom Android campaign featuring 2 - 3 great devices from different vendors with the vendors and Google contributing a lot.


Comment by lotech, on 1-Apr-2010 14:38

Good write up - I was about to write something similar regarding Telecom and its phone selection. For those interested (you know you are) check Telecoms Post-Pay Phones Page and see if theres a single phone other than maybe the Blackberries on there you would want to own. Wheres the Palm Pre, Motoralla Droid/Milestone, NexusOne, Sony Experia X10, hell even a Nokia N97 or N900? Not there thats where.

Instead Telecom offer a couple of adequite Blackberries (as do Voda) or  a bunch of crappy feature phones that sound good on paper but are horrible to operate thanks to half assed OSes.

Telecom need to realise that one of the reasons the iPhone is so popular is that people actually desire to have one. Unfortunately this is also possibly Androids next biggest issue, just like the iPod and every other MP3 player - people know they're getting a good mp3 player in an iPod - so why even care about the alternatives?


Author's note by timmyh, on 2-Apr-2010 09:15

I agree that is a somewhat lacklustre lineup of devices. But the problem for Telecom is which Android device do you choose? Any vendor probably has quite a high Minimum Order Quantity (MOQ) but new Android devices are coming out so quickly as are new versions of the OS. 

There is a risk in choosing any Android device to make a play around only to find out it is superseded very soon afterwards.


Comment by Steve Anglin, Sc.M., on 16-Apr-2010 09:28

Hello,

I think there's only room for Nokia, BlackBerry and Apple overseas. That small piece of the pie left overseas is a real bloody battle 4th but that 4th could be big when you add emerging countries. Android in China and India should have advantage and potential. We'll see.

Here in the U.S., it's between Apple, BlackBerry and then Android/everyone else. Forget Nokia, unless they acquire Palm.

Speaking of Palm, Android's growth against iPhone can really only happen if Android had a device with gravitas... What better than Google Android acquiring Palm. Outside of Apple and BlackBerry, Palm device brand is the only one with real gravitas... Forget Droid and Nexus One. Sony X10 has promise, but Palm I think would secure Google Android and gives it legit shot at Apple iPhone, imho.

Also, Palm webOS could be merged with Chrome for future Android Palm and other phones running Android and a Chrome Web OS.

Thank you!
Steve


Comment by 2degrees, on 28-Apr-2010 15:31

Hey Tim - How many smartphone users do you think are in the NZ market at the moment?

Cheers
Bryony


Author's note by timmyh, on 28-Apr-2010 16:09

Well Bryony, that isn't a simple question. It depends on how you define a 'Smartphone', and requires a lot of industry knowledge. 

I am available to come and do a piece of market sizing work for you
8-) 


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Tim Hayward
Auckland
New Zealand


Former 'Head of Smartphones' at Vodafone New Zealand Marketing from 2006 to 2009. Looked after all key Smartphone platforms, mobile pricing plans, marketing and sales GTM activity.

Now working on mobile application development consulting and delivery especially on projects requiring support across multiple mobile platforms (iPhone, Android, BlackBerry, Symbian). Please contact me if you have any projects you'd like us to consult or quote on: tim@hayward.net.nz