In that year, Gartner forecasts Android will actually rank second globally, behind the Symbian OS, which is used in Nokia devices that are highly popular in Europe and many countries outside the U.S. Symbian now runs on about half of all smartphones, but will fall to 39% in 2012, Gartner says.

The Gartner forecast gives Android such an enormous surge in popularity because of a variety of factors, but chiefly because of Google Inc.’s backing of Android and the range of cloud computing functions and related applications that Google will make available in coming years, Ken Dulaney said in an exclusive interview with Computerworld.

While the first Android product release, the T-Mobile G1, only won a lukewarm response, Android 1.5 (code-named Cupcake) is well thought-out, Dulaney said. Other expected improvements in Android for its application store and development environment will be “backed by the power of Google’s search engine,” he said. “Google’s other up-and-coming consumer and enterprise products should make[Android] a dominant platform.”

And because Android and Google operate in an “integrative and open environment, [they] could easily top … the singular Apple,” he said.

Android will also run on phones from several manufacturers, helping its growth, especially when compared to the iPhone, Dulaney said. In 2010, as many as 40 models of Android devices will ship, and the next OS update, code-named Donut, will ship in the second quarter, Dulaney predicted.

As an early example of how Android should be successful, Dulaney pointed to Motorola’s Cliq, with its Motoblur interface that he said “handles communications very effectively.”

To explain, Dulaney said that smartphone interfaces seem to have headed off in two divergent ways, with iPhone’s heavy focus on applications compared to Windows Mobile’s and Symbian’s focus on smartphone tasks and communications. But Android, he said, “has blended a focus on applications and tasks pretty well.”

Android’s interface allows a user to perform frequently needed tasks without going back to the top of the logic tree to switch between tasks, he said. Makers of Android “have done a good job of knowing how you work on a phone,” he said.

The complete Gartner forecast for smartphone OSes by the end of 2012 puts Symbian on top with 203 million devices sold, and 39% of the market. Android will be second with nearly 76 million units sold, and 14.5% of the market.

Coming in a close third, the iPhone will ship on 71.5 million devices in 2012, giving a 13.7% market share. Windows Mobile will finish fourth, with 66.8 million units sold, or 12.8% of the market.

Very close behind Windows Mobile, the BlackBerry OS will sell on 65.25 million devices in 2012, Gartner forecasts, making it fifth with 12.5% market share.

Various Linux devices will sell 28 million units, at 5.4% market share, in sixth place. Palm Inc.’s webOS will sell on 11 million units in 2012, about 2.1% of the market, in seventh place, Gartner says.

Android will have moved up the most from 2009 to 2012, from sixth place to second. BlackBerry will have moved down the most, from second to fifth, while iPhone will remain in third position and Windows Mobile will remain in fourth position, Gartner says.

…or “So You Think You’ve Got a Million Dollar App Idea”

(this piece also appeared on Silicon Alley Insider)

As a number obsessed techie and ex-management consultant, market sizing and research were a big part of my launch preparations for Exit Strategy NYC. Since launch, I’ve received many questions from people struggling to estimate the market for their iPhone app ideas.

I’ve put together this document as a guide for entrepreneurs considering developing an app. Below, I’ve compiled some up-to-date numbers about Apple devices. I’ve also laid out a framework for estimating what kind of sales can be expected from a paid app.

The Basic Facts

• 45 million iPhone and iPod Touch devices [Apple Earnings Announcement]
• 54% of iPhone and iPod Touch users are in the US as of June 2009 [Admob Mobile Metrics Report]
• The iPhone comprises 68% of worldwide iPhone OS devices and the iPod Touch makes up the other 32% [Admob Mobile Metrics Report]
• Only 75% of users actually download apps [Pinch Media]
  • The most frequently downloaded free apps reach approximately 30% of devices [comScore]
  • The most frequently downloaded paid apps reach approximately 3% of devices [My calculations - explained later]

Right off the bat, there’s a few back of the envelope calculations to make: 54% of the 45M devices are in the US which means ~ 25M devices. The US has about 300M people.  That means about 8% of the general American population has one of these devices.

How To Use These Numbers

Combine this data with your own numbers about how large of a market your product is addressing. For Exit Strategy NYC, our addressable market consists of all subway riding New Yorkers. In 2008, there were about 5M weekday riders and about 3M Saturday riders [MTA's ridership numbers]. The Saturday number is the more relevant one as it better captures subway usage by NYC residents rather than regional commuters. Neither number counts unique riders though, and given that there are 8M residents of NYC our addressable market size is probably somewhere in between these numbers. Let’s say 6M subway riders.

New Yorkers probably skew more techie than average, so let’s assume 10% (rather than 8%) have an Apple device. Also, Exit Strategy NYC works on both iPhone and iPod Touch devices. If your app requires phone/gps/camera/internet to work well, exclude iPod Touch users from your calculations.

How many Apple device toting subway riding New Yorkers are there?  Well 6M subway riders with 10% penetration = 600,000 potential users.

“But How Many People Will Actually Buy My App!?”

Entrepreneurs are optimists by nature, and it’s tempting to think that 100% of people will buy your product. After all, your product is awesome, right? But reality is a quite different story. In fact, only about 3% of users have purchased the most popular paid apps. To determine that number, I used sales figures from one of the all time best selling paid apps, Firemint’s Flight Control game. According to Firemint’s Alexandra Peters, sales to date have been 1.4 million. As a percentage of the 45M Apple devices, this is ~ 3%.

You should expect a similar upper bound of 3% to apply to whatever market vertical you’re addressing. Of course it’s possible that your app meets some crucial compelling need and therefore achieves a higher penetration rate in your vertical. But don’t count on it — it’s equally possible that your app gets lost in the noise and can’t get traction. Flight control has held a constant spot on the top paid app list for months now. Few others have this advantage.

Realistic Unit Sales Calculations

Returning to the Exit Strategy NYC figures, we knew that if we had an effective marketing and press strategy, we could probably achieve something close to this 3% penetration figure — perhaps higher as many New Yorkers are very passionate about the subway (see? there’s that ever-present entrepreneurial optimism!). 3% of the 600,000 subway riding devices would mean 18,000 unit sales. Does this translate to $18,000 total sales? Our maximum penetration figure was based on a 99c app, but what effect would Exit Strategy NYC’s $1.99 or $2.99 price point have on total sales figures?

Factoring in price into market sizing is difficult. Based on our own informal market surveying, we estimated that the most profitable price point would be $2.99 or $1.99. Around 75% of people willing to pay 99c would also pay $1.99 or $2.99. So 75% of 18,000 units at those prices works out to an ballpark range of around $27k – $40k. Like all software, the app’s unit costs are zero, it’s important to focus on maximizing dollar sales rather than unit sales.

A Growing Platform

One thing to remember is that the user base for apps is growing by leaps and bounds. In their latest quarter, Apple sold 5 million iPhones and 3 million iPod Touches. This means that the potential market for an app grew by more than 20% in only 3 months!

Non-Apple Platforms

One last thing to note: The iPhone certainly dominates headlines, but it’s not the only game in town. In fact, Blackberry outsells the iPhone every day. And in a town dominated by Wall Street, it seems like everyone and their mother owns a Blackberry. Realizing this, we carefully designed Exit Strategy NYC to be easily portable across different mobile platforms. Our app is available for iPhone, iPod Touch, Blackberry Bold, Curve, and Storm, Android Phones, and even as an e-book on Amazon Kindle.  Combined, the Exit Strategy App reaches a significant portion of New Yorkers.

But are device sales a good indicator of a platform’s expected app sales?

by Mark Walsh, 3 hours ago

The iPhone is increasingly going global. That’s a key finding in the latest monthly metrics report from mobile ad network AdMob. An analysis by the company found that 54% of iPhone and iPod touch users worldwide in June were in the U.S., down from 61% in January. This signals that international adoption has picked up since then, although the U.S. still has by far the biggest proportion of users of any country.

The next-closest is the U.K., accounting for 7% of iPhone and touch users, followed by Germany (6%), France (5%), Canada (4%) and Australia (3%). Countries that represent huge potential markets include China, Russia and Brazil — each with at least 1% share. Regionally, North America had 58% of iPhone/touch users, followed by Western Europe with 26%, and Asia with 7%.

In terms of actual device totals, that translates into about 13 million iPhones in the U.S. and 1 million apiece in European countries such as the U.K. and Germany. Apple, which reported third-quarter earnings Tuesday, said it has sold 45 million devices using the iPhone OS globally to date.

The company posted a 15% profit gain for the quarter, in which it sold seven times as many iPhones — 5.2 million — as in the year-ago period.

Among other highlights from the AdMob report, Google’s Android in June for the first time surpassed Windows Mobile among smartphone operating systems in its share of ad impressions. Android increased its share to 5%, edging ahead of Windows Mobile’s 4%. The iPhone OS and Apple, as a manufacturer, continued to dominate with a 47% share of smartphone impressions.

AdMob says it serves more than 7.1 billion mobile banner and text ads per month across more than 7,000 mobile sites and 2,500 applications worldwide.

According to AdMob, there are many similarities between iPhone and iPod touch users in the US, especially in the demographic makeup of each group in areas such as age and household income. iPhone users are generally older. 69% of iPod touch users are between 13-24 years of age, while this same age segment represents just 26% of iPhone users. 31% of iPhone users are 35-49 years old, while only 12% of iPod touch users fall in this age segment. In total, 74% of iPhone users are over the age of 25, compared to 31% of iPod touch users.

The research also found that 5 in 10 consumers on both iPhone and iPod touch devices use the mobile Web more frequently than they read printed newspapers. More than 40% reported using the Internet on their mobile device more often than using the Internet from their computers or listening to the radio.

Loftlon Worth, vice president, comScore, concludes that “… (it is) important for marketers to understand the mobile landscape and the characteristics of the users of a particular platform or mobile device.. ”

Additional findings from the study:

• More than 70% of users on both the iPhone and iPod touch are male
• 78% of iPhone users have an annual household income of at least $65,000, compared to only 66% of iPod touch users with much less
• 46% of iPhone users have children, compared to only 28% of iPod touch users

In the next six months:

• 57% of iPhone users plan to purchase clothing, 47%, entertainment and 45%, travel
• 61% of iPod Touch users plan to purchase clothing, 53%, entertainment and 36%, cell phones

The total sample size of iPod touch participants is 3,848, while the total number of participants in the iPhone sample is 3,454. All results were tested for statistically significant differences at the 95% confidence level.

For additional information, please go here.

Ian Paul, PC World

Apple iPhone 3GS

The iPhone 3GS is hot according to AT&T. No, I’m not talking about the overheating issues, but a alleged leaked memo from the iPhone’s exclusive U.S. carrier. In the memo, AT&T reports the iPhone 3GS launch day on June 6 was the best-ever sales day for AT&T retail stores, according to MacDaily News. June 6 was also the second largest traffic day for AT&T stores, and the most upgrade eligibility checks in a single day were performed during the iPhone 3GS launch day. The 3GS debut was so huge, for AT&T retail stores anyway, that sales for the device surpassed launch day sales for the iPhone 3G by noon Central Time.

After the iPhone 3GS initial launch weekend, Apple also reported a successful launch of its latest smart phone reporting that it had sold more than one million iPhone 3GS devices at Apple retail locations. That’s the same number Apple used to describe the iPhone 3G launch weekend last year.

What’s surprising, however, is a growing consensus that the iPhone 3GS debut may have been far bigger than the launch of the iPhone 3G. Last summer, the iPhone 3G debut was lauded as the most successful launch of any tech product in history. For days after its initial availability, fans were lining up around the block at Apple Stores across the United States and the world to get their hands on the iPhone 3G. Device shortages were a regular occurrence, and customers in less populated areas were left waiting for months to get their own wonder gadget from Apple.

This year, the lines were not as long for the iPhone 3GS, and the frenzy that accompanied the 2008 iPhone 3G launch was not present. This could have been for a number of reasons including better inventory supplies on Apple’s part, and a public less willing to line up for days on end just to get their hands on a smartphone. But if suspicison are correct, then relative customer apathy was not an issue for Apple this year, and the recession may not have made much of an impact on iPhone 3GS sales either.

Other signs of the iPhone 3GS’ popularity are also starting to crop up. Earlier this month, Apple resurrected its iPhone availability tool to help you find the Apple Store with the best 3GS supplies near you. Customers in the United Kingdom and Canada may find it harder to get the iPhone 3GS in the coming weeks. The World of Apple is reporting that two carriers–O2 in Britain and Fido in Canada–have run out of their iPhone inventories; however, Apple Stores in both countries are still stocked up with inventory.

So the iPhone 3GS is shaping up to be the hottest iPhone ever, but we may not know how hot until Apple releases its quarterly earnings report later this month.

According to an AT&T company memo, the launch of the iPhone 3GS wasn’t just a banner sales day for the carrier this year but broke records for any single day of retail sales in the company’s history — including for already stellar iPhone sales.

The leaked e-mail characterizes “iLaunch Day 2009,” its nickname for the June 19th iPhone 3GS release date, as the “best-ever sales day” and just second in terms of actual floor traffic. Many of its other sales-related records were also shattered at the same time, ranging from the number of upgrade eligibility checks made in a day to the sheer volume of orders taken through AT&T’s website.

The notice obtained by multiple anonymous MacDailyNews readers also illustrates just how quickly the seemingly more modest iPhone update outpaced the already large-scale iPhone 3G launch last year. 3GS sales not only exceeded the first days after both Thanksgiving and Christmas, either of which have always been popular shopping days, but were so brisk as to overtake the iPhone 3G’s launch day count by just noon in Texas time.

Interest in the stores was so high that AT&T stores were considered at “peak” activity for 11 hours, or nearly half a day, despite the company accepting pre-orders online for day in advance.

As could be expected, the cellular company doesn’t provide a concrete sales number in the memo and, when contacted by AppleInsider for confirmation, only repeats its mantra that it accepted hundreds of thousands of pre-orders in the run-up to the iPhone 3GS going on sale less than two weeks ago.

“We have no further comment beyond that,” a company spokesman says.

Apple has been slightly more open on the subject and previously said it sold one million iPhone 3GS devices over the course of its launch weekend through all of its outlets. Although the same number as for last year, the California-based electronics firm reached this figure in 2009 with only eight countries onboard for the first day, or less than half the 21 that were ready on July 11th, 2008. The similar numbers, combined with a smaller-scale launch, indirectly confirm that US launch sales, including through AT&T, have spiked that much higher in 2009.

(CNN) — When Apple starts selling what it bills as the fastest, most powerful iPhone yet on Friday, the company’s latest entry will only heat up the already sizzling smartphone landscape.

Got smartphone fever? A new version of the Apple iPhone goes on sale Friday.

Fans, techies and ordinary consumers eager to purchase the new iPhone 3GS may be preparing to stand in line at Apple stores around the United States and seven other countries. But they have more choices than ever when it comes to phones that act like mini-computers.

“We expect that [smartphones are] going to be the fastest growing consumer segment for quite some time,” said Ryan Reith, a senior research analyst for technology research firm IDC.

“It’s all about connecting to the outside world.”

The U.S. smartphone market grew by 68 percent last year and is projected to grow by 20 percent in 2009 and almost 25 percent next year, according to IDC. Compare four smartphones »

No wonder companies are rushing to meet the demand for sleek mobile devices that combine e-mail, data, music, photos — all in the palm of one’s hand.

Interested in something other than the iPhone? The options include the new Palm Pre, Research in Motion’s BlackBerry Storm or phones powered by Google’s Android or Microsoft’s Windows Mobile operating systems.

The key is having access to the Internet anytime, anywhere.

“Mobile Web browsing is a huge thing,” said MG Siegler, a writer for the technology news site TechCrunch. “People especially want to get on the Internet and do the things they’re doing when they are at their [home] computers, which is social networking and sharing photos.”

When it comes to mobile Web surfing, the iPhone seems to be the king. A recent report by AdMob found Apple’s device generated 65 percent of mobile HTML browsing, a statistic that didn’t surprise Siegler.

“The Web browser on the iPhone has been up to this point far superior to what it is on some of the other phones out there,” he said. “The great thing about the iPhone is that you don’t have to have a mobile specific page. You can look at the regular page and just see it perfectly fine.” Read about the new iPhone’s features

All about apps

While Apple has lots of buzz and appeal, it’s not the dominant smartphone player. The company had only about a 20 percent share of the U.S. smartphone market in the first quarter of this year, a distant second to Research in Motion’s 55 percent slice of the pie during the same period, according to IDC.

Apple is the undisputed leader, however, when it comes to mobile applications — the software programs that let users do everything from play games to track their calorie consumption and everything in between. Sign up to receive information about CNN’s iPhone app

Apple’s App Store has a whopping 50,000 applications available, and a number of its competitors recently launched their own stores in the hopes of catching up. It won’t be easy: BlackBerry’s App World, Palm’s App Catalog, Microsoft’s Windows Mobile Catalog and Google’s Android Market have only a fraction of Apple’s offerings.

“It’s pretty clear that Apple has the lion’s share of people who want to develop mobile apps. It’s a great distribution platform,” said Erica Ogg, a writer for CNET News.

Some competitors are trying to lure developers to their platforms by letting them keep more of the money generated by their apps. While Apple offers a 70/30 split — with developers getting to keep 70 percent of the revenue and the company taking 30 percent — Research in Motion is offering a more favorable 80/20 split, Reith said.

Ironically, industry observers believe Apple’s success itself may eventually drive some developers to competing stores where their apps would be less likely to get lost in the crowd and have a greater chance of standing out.

“I would think that developers would want to look at a lot of these other platforms, like the Palm Pre, because they would still be so early on in the development cycle that they could get their app out there,” Siegler said.

“If the Palm Pre ends up taking off and sells millions of units then they’re much more likely to be successful.”

Speed matters

In fact, Siegler believes the Pre could be the biggest wildcard right now because it’s the first smartphone since the iPhone to use multi-touch. The feature lets users maneuver around the interface by using their fingers — double-tapping the screen to zoom in or out, for example, or “pinching” with their thumbs and forefingers to do the same thing.

Beyond the technology inside smartphones, the focus now is also on improving the infrastructure that services them.

“You’re going to start to see in the next year Verizon and Sprint, followed by probably AT&T and T-Mobile, start to increase their networks so you’ll have Internet speeds on your device that will be almost equivalent to broadband within your house,” Reith said.

All of this technology comes at a price. The iPhone 3GS, for example, starts at $199, with a required two-year contract that will have consumers shelling out at least $70 a month with AT&T. Both Reith and Siegler don’t see the monthly fees changing any time soon, which may cool some consumers’ smartphone fever.

“Definitely more people are interested in smartphones, but I think the costs of the data plans are for a lot of people prohibitive,” Ogg said.

“Especially with the way people’s budgets and finances are today, there’s still plenty of room for the free phone that comes with your plan that does basic things.”

APPLE has unveiled “the most powerful iPhone we’ve ever made”, complete with video camera and a new “Find My iPhone” feature.

The iPhone 3GS will be available in some countries, including the US and UK, on June 19, but will launch in Australia on June 26.

The 16-gigabyte iPhone 3GS will cost $US199 ($248), and the 32-gigabyte model $US299 ($372), at launch in America. Australian pricing is yet to be released.

Meanwhile, the price of an original eight-gigabyte iPhone 3G will drop to $US99 ($123).

Apple vice president of marketing Phil Schiller told the Worldwide Developers Conference in San Francisco: “The ‘S’ stands for speed, because this is the most powerful iPhone we’ve ever made.

“What is inside is entirely new.”

The iPhone 3GS looks just like the current iPhone, but promises to load messages, games, documents and website more than twice as fast as the current iPhone.

Apple has also improved the iPhone’s widely criticised camera, increasing its resolution from 2-megapixels to 3-megapixels, and adding video capture and an auto-focus mechanism.

Users will be able to focus the camera by tapping objects shown on the iPhone’s screen.

The iPhone 3GS would also be able to respond to voice commands, Mr Schiller said, announcing what song is playing or automatically dialling names saved in its contact list.

Apple’s new phone will also come with a digital compass, a better battery offering up to 9 hours of web surfing or 5 hours of talk time, and will feature new iPhone software offering more than 100 extra features.

The new software will also be available for use on existing iPhone handsets when it is released on June 17. iPod Touch users will also be able to download the software for a fee.

New features include picture messaging, cut and paste for text, a search function for applications including email, and the ability to remotely delete the data from their iPhone if it is stolen.

Senior vice president of iPhone software Scott Forstall said the “Find My iPhone” feature let people use an Apple online Mobile Me service to locate lost or stolen devices.

“It will show you on a map where your phone is,” he said. “You can send it a message and it plays an alert sound whether or not you left it in silent mode.”

The feature also lets people remotely erase all data from lost or stolen iPhones, then reload the information using iTunes if they are reacquainted with their devices.

New Apple 3 GS iPhone

Palm handset beat 8Gb iPhone in cost of goods

Rick Merritt
EE Times
(06/08/2009 7:00 PM EDT)

SAN JOSE, Calif. — Apple Inc. leapfrogged the Palm Pre with the announcement of its iPhone 3GS Monday (June and undercut the Pre by dropping existing iPhone prices to $99. Palm, however, undercut Apple slightly in the cost of hardware in handsets with 8 Gbytes flash.

The new iPhone 3GS uses an upgraded application processor, baseband and more NAND flash memory to deliver new media capabilities at $199 for a 16 Gbyte model. That’s the same price—figuring in a $100 rebate–as the Pre released Saturday (June 6) with 8 Gbytes flash.

Teardown specialist Portelligent (Austin) estimates the cost of goods of the Pre at just under $160. That compared favorably with the existing iPhone 3G with 8 Gbytes flash that Portelligent pegged at $173.

By comparison the HTC Dream—the first phone to use the Google Android software—cost $143 in hardware to build but had less than 256 Mbytes of flash, according to Portelligent, a division of TechInsights which publishes EE Times.

Details of the Pre teardown including photographs of its internals were released on June 7.

Initial reports said lines of consumers looking to buy the Pre at retail shops over the weekend were significantly lower than those for the first two generations of iPhones.

The new iPhone 3GS now supports HSDPA networks with downloads of speeds up to 7.2 Mbits/second, implying a new baseband processor. It also sports new video, graphics and audio capabilities, implying a significantly upgraded applications processor, said Jeff Brown, principal analyst at Portelligent.

The 3GS can record video at 30 frames/second at VGA resolution. Its camera has been upgraded to an autofocus version supporting 3 Mpixel resolutions.

The camera also has built in video editing capabilities and a feature that allows the camera to focus on whatever spot a user touches on the phone’s LCD. The phone also supports limited voice recognition for hands-free operation.

“All these features will require a significantly more powerful apps processor,” said Brown.

The new iPhones use an upgraded version of the Apple operating system announced earlier this year. Apple said it has put more than 50,000 applications for the iPhone in its App Store.

A 32 Gbyte iPhone 3GS costs $299. The new phones will be available June 19, but the lowered price on existing phones begins immediately.

Separately, Apple announced a new version of its computer operating system that has expanded support for multi-threading. The Snow Leopard software will be available as an upgrade in September for $29.