Where to Find the Marketer Opportunities in the New iPhone 3GS

Ed: 

• $99 for old 3G
• $199 for faster, better camera, more location integration 3GS
• Repeat of 1990's ideas for mobile marketing

How Apple's New Device Changes Mobile Behavior

by Rita Chang 
Published: June 08, 2009

SAN FRANCISCO (AdAge.com) -- Apple executives didn't throw any curve balls at the Apple Worldwide Developers Conference today in San Francisco. But the iterative changes hidden within a new, faster iPhone -- and the previously announced software upgrade -- could change not just consumer but also advertiser behavior. Here's a run-down of what's new and what it means to marketers.

The iPhone 3GS is being billed by Apple as the 'fastest, most powerful iPhone.'

Photo Credit: Apple

What's new: Apple introduced the new iPhone 3GS, which includes an updated operating system. It will hit AT&T stores, its exclusive carrier, for $199 with a contract.

Why it matters for marketers: Speed (yes, that's what the "S" stands for) is the key. Billed by Apple as the "fastest, most powerful iPhone," the new handset from the Cupertino, Calif.-based company will provide faster downloads, while the phone's greater memory and processing speed will allow advertisers to dial up more rich-media ad units. The news coincides with AT&T's recent announcement that it is upgrading its 3G network to deliver data faster.

"People are already using their phones as mini-computers," said Tina Unterlaender, account director at digital agency AKQA. "But the faster speeds will change user behavior even more. It's going to change the way whole new generations access the internet, and it's going to mean that brands will have to redistribute their marketing mix if they want to reach a young group."

Krish Arvapally, chief technology officer of mobile ad platform provider Mojiva, said since Apple announced its new iPhone software in March, it has seen a 20% increase in the number of advertisers who say they want to target iPhone users.

What's new: Apple said it would lower the price of its current 3G iPhone to $99 (with a contract) to make room for the iPhone 3GS.

Why it matters for marketers: This should mean greater reach for a smartphone that has generated a lot of gadget envy but is still only used by about 5% of all U.S. wireless users. And, according to Chetan Sharma Consulting, a drop in AT&T's service plan pricing could yield the carrier an additional 20%-25% subscribers per quarter. But if AT&T doesn't budge on its service pricing, then about 5% of AT&T users would likely opt for the 3G iPhone.

Ms. Unterlaender noted if AT&T were to offer more attractive pricing, it could add younger demographic including teenagers to the mix of iPhone users, who until now have been mostly an affluent older set.

What's new: The new Safari web browser will have built-in location-based technology.

Why it matters for marketers: Until now, marketers had to count on users to enter their ZIP codes in a browser to geo-target offers via the mobile web. But this isn't optimal when a retailer wants to know when someone is within 100 feet of its front door. Now, with the Safari web browser pulling the users' location data into the browser experience, marketers could serve geo-targeted ads to any iPhone user with an open browser -- assuming the user has allowed the website operator to track his location.

On a related note, the iPhone 3GS will also sport a digital compass that tells users which direction they're facing, with integrated mapping applications to automatically orient the map in the corresponding direction. Jamie Wells, director of mobile at OMD's Ignition Factory, said he could see advertisers using the compass feature to make their creative more engaging -- for example, a vendor selling merchandise at a sporting event could serve ads that instruct users to point their iPhone at the nearest concession stand to get a coupon.

What's new: The iPhone 3GS allows users to record and edit video, then upload the clips directly to YouTube or share them via e-mail or multimedia messaging directly from the phone.

Why it matters for marketers: As advertisers wait in the wings for mobile video viewing to take off, some say Apple's introduction of video features could jump-start people's habit to view and interact with video on their phones. John SanGiovanni, VP of product design at Zumobi, an app developer and network, said the company is now talking to two brands about creating apps that lets users capture images of themselves doing green, eco-conscious things for the environment, and Michael Chang of Greystripe notes that the "better camera plus the faster network bandwidth could be the start of mobile video renaissance."

What's new: Currently, iPhone users have to punch in each character of their passwords, names, addresses, phone numbers, but a new "auto-fill" function, part of the new iPhone operating system, can remember that data.

Why it matters for marketers: For brands trying to expand their mobile-marketing database or acquire new users, the iPhone's new auto-fill feature could remove a barrier in getting users to sign on. "This means less friction to acquire users; it should lower acquisition costs for lead-gen advertisers like Netflix," noted Jason Spero, VP-general manager, North America, at mobile ad network AdMob.

Android Catches Up To Palm In Mobile Ad Market Share. IPhone Still Blows It Away.

from TechCrunch by Erick Schonfeld

Android is making steady gains in mobile ad market share, accounting for 6 percent of all mobile ad requests measured by AdMob in its latest March metrics (full report embedded below). That puts it neck and neck with the Palm OS, compared to a 5 percent /7 percent share split in favor of Palm just one month before.. Windows Mobile Devices also saw a share decline from 13 percent to 11 percent, while Blackberry’s RIM OS gained a point to 22 percent, and the iPhone stayed the same at 50 percent.

AdMob measures ad requests from both mobile browsers and mobile apps, thus its numbers are a good proxy for mobile Web usage (minus paid apps which don’t serve ads, of course). On a device level, the Android G1 (HTC Dream) actually overtook the Palm Centro, becoming the No. 4 smartphone in terms of Web usage in the U.S. (after the iPhone, the Blackberry 8300, and Blackberry 8100).

But the iPhone still dwarfs Android. As a point of comparison, AdMob measured 72 million ad requests for Android in March, 2009 versus 607 million for the iPhone in the U.S. Wordlwide, the iPhone had 995 million ad requests, and if you combine it with the iPod touch the total grows to 1.66 billion.

But is this even a fair comparison? The number of iPhones out there outnumber Android phones by nearly 20 to one (21 million iPhones have been sold to date, compared to estimates of about one million for the G1). Given these ratios, the disparity in Web usage measured by Admob makes sense. As more Android phones are introduced, that should help its numbers.

One major driver of ad requests on both platforms has been the proliferation of standalone apps. Admob measured the growth in ad requests following the launch of each app store on Android and on the iPhone, and found that the growth rate for the iPhone was 88 percent a month versus 47 percent for the Android. But both outgrew other platforms by a wide margin.

Once the Palm Pre comes out and the Blackberry App Store gains more traction, it will be interesting to see whether the relative strength of the iPhone and Android continue.

iPhone Overwhelms Mobile Web Access

In a separate report, Net Applications reported spikes in usage share of Windows 7--the follow-on to Windows Vista due later this year--after Microsoft released the public beta of the operating system in January.

Similar to Windows Vista, Windows 7 usage share is showing a pattern of being much higher on weekends than on weekdays. In contrast, Windows XP has an inverse trendline. XP's share is higher on weekdays due to Microsoft's relatively high business vs. residential share of Windows XP.

This is an indication of strong interest in Windows 7, since it does not come pre-installed on a computer like Vista. Beta users are taking the time and effort to install it on their home computers, since corporations generally prohibit beta operating systems to be used in production environments.

February figures from Net Applications on mobile browsing market share.

(Credit: Net Applications)

In the mobile browsing arena, Net Applications reported that it had taken its first detailed look at market share and pronounced Apple's iPhone has having a "commanding lead" with 66.61 percent of the market. But, Net Applications noted, "Android and BlackBerry are rapidly gaining market share. This does not mean that iPhone web browsing is shrinking, because the overall market is growing rapidly."

Upstart Android, which Google released in October 2008, came in fourth with 6.15 percent, following No. 2 Java ME's 9.06 percent and No. 3 Windows Mobile's 6.91 percent.

CLIP Flickit: Gracefully Add iPhone Photos to Flickr

On any given day, there are thousands of people snapping iPhone photos and uploading them to Flickr. So many in fact, that the iPhone is one of the top five cameras. That's amazing - but not for the reasons you'd think. It's amazing because the default process of getting a photo from the iPhone to Flickr should be easier. And while any number of apps have attempted to solve that problem, Flickit handles the task in a way that is arguably the most graceful - and iPhone appropriate - of them all.

We've had excellent ways to view photos on Flickr from the iPhone - Flickr's iPhone-optimized mobile site is great and we're fans of the Cooliris iPhone app. Getting them to Flickr however - either by emailing them to a Flickr dropbox or using an existing app - always seemed to lack that certain je ne sais quoi.

Flickit is different. It's a beautiful little app that offers a simple - yet rich - Flickr uploading experience. Or as Lifehacker puts it, "the free Flickit application is [Flickr's] truest friend on an iPhone or iPod touch." We couldn't agree more.

While Flickit's functionality can be found in other apps, the look, feel, and usability give it something special. It has an aesthetic that matches the iPhone, with big chunky buttons and stylish animations. Long story short, Flickit just feels like an iPhone app.

And like the iPhone, it's easy to use. How easy? The IKEA-like instructions should provide a clue.

Once you've installed Flickit and logged into Flickr, you'll start with Flickit instead of your camera. Shoot photos directly from the app or grab pictures from your existing camera roll. Select a photo with which to work and you can edit title, description, and tags, add it to a set, choose its visibility, and geotag it with your current location. Press upload and you're done - fast. And it's all thanks to Flickit's streamlined uploading engine.

Downside? Flickit is an upload-only utility. So you're not going to be browsing your photos from it. That's unfortunate because given how they handle the upload process, we'd love to see how they handle viewing.

Want to give it a try? Download Flickit for free.

CLIP: Animoto’s iPhone app makes instant slideshows from your junky pictures

iPhone fart app pulls in nearly $10,000 a day

Apple’s App Store is currently experiencing a plague of fart applications. Last week, I detailed one day in which at least 14 new fart apps were accepted into the store. And now, just in a quick search, it looks like there are about 50 apps all dedicated to making fart noises on your iPhone or iPod touch. Classy, I know, but why are there so many?

Because apparently there’s big money in fart apps — nearly $10,000 a day for the most popular ones.

Developer InfoMedia (Joel Comm), which makes iFart Mobile [iTunes link], has been releasing download statistics for the app each day since it launched. The $0.99 app has been in the top 100 paid apps every day since its launch, and has seen great growth. In fact, yesterday it hit thenumber one overall position with over 13,000 downloads. MacRumors ran the numbers, factoring out the 30 percent cut Apple takes from each sale, and determined that, yesterday alone, iFart Mobile made its developers $9,198.

Certainly, a part of this onslaught of fart apps is that Apple, which had previously rejected all crude apps, changed its policy to let them in. But now that they glimpse the potential for big business in fart apps, expect even more to come.

Of course, not all fart apps are going to make it to the number one paid app position, but a number of them are selling well. Personally, I prefer Pull My Finger [iTunes link], but it’s hard to argue with iFart Mobile’s icon, which simply reads “Best Fart App!”

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Animoto’s iPhone app makes instant slideshows from your junky pictures

Everyone loves slideshows. You sit back and watch as the images before you help you reminisce about a past event. But why wait? Now you can make a slideshow minutes after taking photos thanks to Animoto’s new iPhone app.

You simply select between eight and 16 pictures, arrange the order you want them to show up in, pick a song and let Animoto encode a video pulling it all together. Once you’re done, you can watch the video on your iPhone (in Quicktime format), edit it or share it via email with anyone. By far the longest step in the process is the encoding, and that only takes a few minutes.

But it’s not perfect. First of all, a maximum of 16 photos is a bit low. That’s not going to cut it for say, a wedding. But then again anyone who is expecting a professional wedding slideshow made on the iPhone probably deserves some 16-shot, blurry (thanks to the iPhone’s 2 megapixel camera with no flash or autofocus) footage set to music by some band no one has ever heard of.

And that’s the second problem — despite one of the iPhone’s key features being that it holds your music, Animoto won’t let you use any of it in your slideshow. Instead, it has a collection of songs from artists I’ve never heard of. Some of the stuff isn’t bad, but for sentimental slideshows, isn’t it a requirement to at least have Green Day’s “Good Riddance (Time of Your Life)”?...

AOL: Now Our Ad Network Business Is Seizing Up, Too (TWX)

AOL: Now Our Ad Network Business Is Seizing Up, Too (TWX)

This is going to make it harder for Jeff Bewkes to get the price he wants for his wobbling AOL unit: An admission by CFO John Martin that the Web company's ad revenue is sputtering. Bloomberg:

``It had been growing like a weed,'' Chief Financial Officer John Martin said today at a Merrill Lynch & Co. investor conference in Marina del Rey, California. ``We have seen some cancellations. It gives us pause in terms of our confidence to ramp advertising in the back half of the year.''

Martin's spin, spelled out in the WSJ's coverage of the talk (which non-subscribers can get free on their BlackBerrys), is that the slowdown is worst at AOL's third-party ad network business (Platform A), so the effect on margins won't be as bad as it could be. What he apparently didn't spell out is that the ad network has been the one growth engine AOL has been able to count on in recent quarters -- its owned and operated ad business, which is indeed much more profitable, has been in free-fall. So the next quarter could indeed be grim.

Of course, this is also bad news for the rest of the Web business, especially the one-million-and-counting ad networks that have sprung up in the last year. Ad networks were supposed to be particularly resilient to an overall ad slowdown. In theory, advertisers looking for bargain space were supposed to come flooding to the networks, which link them up with publishers' less desirable inventory. And if a top-tier player like AOL can't make it work, look out below.

AdMob: iPhone Internet Use Sees Major Growth Spurt in August

According to the latest data from mobile advertising company AdMob, traffic from Apple's iPhone on AdMob's advertising network almost doubled in August. Apple's iPhone saw the fastest growth of all smartphones worldwide, closely followed by the Samsung Instinct. It is also noteworthy that the top 5 smartphones in the U.S. generated 54% of all smartphone traffic.

The iPhone is now responsible for 7.8% of all smart phone traffic in the U.S., up from 5.2% last month. It's important to note that this does not necessarily reflect the actual market share of the iPhone, as iPhone users, thanks to the ease of use of the iPhone user interface, are probably spending more time online on their devices than most other smartphone users.

What About Nokia, Palm, Motorola, and Rim?

While Nokia devices were responsible for just over 62% of all smartphone traffic worldwide, none of Nokia's smartphones ranked in the top 20 in the U.S. Palm's Centro, on the other hand, looks like a major boon for the company, as it is only trumped by the Blackberry Pearl when it comes to traffic volume.

Motorola, which does not have a single smartphone ranked in the top 20, still dominates the mobile traffic rankings with its RAZR V3. which was responsible for 3.7% of all mobile Internet use worldwide in August. The iPhone was the 17th most used phone on the mobile web and generated 1% of all worldwide traffic, up from 0.6% in July.

The iPhone is clearly growing quickly in the U.S. and now that Apple seems to have gotten its supply chain under control, chances are that it will continue on this track. However, it is also important to point out that, in the overall market, Apple is still only a small player. Most users, according to AdMob, are still accessing the mobile web on a RAZR.

Is The Apple iPhone Coming To China? China Mobile.

Ed: China is the largest mobile market in the world. Mobile phones often displace traditional phones, as well as computers.

Is The iPhone Coming To China?

from TechCrunch by Jason Kincaid

A rumor is circulating that the iPhone may be finally making its way to China. The original source of the rumor is China Communications, which has cited a China Mobile insider as its source. According to the source, China Mobile will be offering the iPhone at a heavily subsidized discount in order to court the massive Chinese population, many of whom would have trouble affording an unsubsidized phone.

An article from It.hexun.com (translated here), says that the source is a member of the Ministry of Industry and Information Technology (MIIT), and offers further details:

China Mobile will procure the handsets for their full price, and then on-sell subsidized handsets to consumers. The source explained that China Mobile could buy a 3G iPhone from Apple for USD 299 – an example price – and then sell the handset to users for USD 199, treating the additional USD 100 as compensation to Apple.

Past talks between China Mobile and Apple have failed, largely because of Apple’s past insistence on taking a portion (believed to be between 20-30 percent) of the carrier’s monthly fees from iPhone customers.

With the release of the iPhone 3G, Apple stopped insisting on a rev-share agreement with carriers. An earlier report on a possible deal explained that the largest hurdle had been removed, but there were still “practical issues” that had to be taken care of.

Thanks to The China Perspective for the tip.

Report: China Mobile to Sell Subsidized iPhones

from AllThingsDigital -- WSJ by Eric Savitz

Apple rumor du jour: Research firm JLM Pacific Epoch is reporting that a publication called China Communications quotes “an insider close to China Mobile” as saying the carrier has decided to sell subsidized Apple iPhones in China. Not the firm sourcing you might prefer, but interesting nonetheless.