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Oct 06
October 6, 2009 (Computerworld) While the Google-backed Android mobile operating system currently runs on less than 2% of all smartphones, Gartner Inc. predicts it will surge to 14% of the global smartphone market in 2012 — ahead of the iPhone, as well as Windows Mobile and BlackBerry smartphones.

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.

Dulaney will share his smartphone forecast and views on mobile OS battles during his popular annual presentation at Gartner’s Symposium ITxpo, which runs Oct. 18-22 in Orlando.

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.

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Jun 07
Published: June 7, 2009

Developers of programs for the iPhone have already managed to make a decent living selling hundreds of thousands of copies of games from their living rooms or garages.

But now, a new way to profit from writing software for the iPhone is emerging: Sell the apps, then sell your company.

With the number of downloads through Apple’s App Store topping one billion and more than 40 million iPhones and iPod Touches sold since 2007, an increasing number of companies are seeing the mobile industry as a source of sustained revenue. Recently, IAC/InterActiveCorp, the Internet media conglomerate founded by Barry Diller, and Amazon.com, have bought app developers. Smaller companies have begun to assemble properties.

Since Apple showed that new apps sell phones, the market for apps is expanding quickly. Palm, Research in Motion, Nokia and Microsoft are all building app stores to work with phones running their operating systems. Apps can also be built for phones running Google’s Android software.

Most of the action is still in iPhone apps, which is what makes Apple’s Worldwide Developer’s Conference this week in San Francisco of interest to developers and potential investors.

Developers will be showing new products running on Apple’s latest software, which allows users to buy subscriptions to applications and easily buy add-ons like access to higher game levels or additional city guides. The potential for added revenue should increase interest from buyers looking for acquisitions.

“There’s going to be a lot more interest in iPhone applications after the upgrade,” said Greg Yardley, a co-founder of Pinch Media, a mobile analytics firm. “We’re going to see some really neat business models emerge because of the new ability to sell virtual goods.”

The increased interest in app developers is being driven by companies seeking to build cellphone apps for their products or services. They see it as a way to reach beyond the Web for consumers. Though many apps are free, the willingness of people to pay 99 cents or more for one gives companies hope that apps may be a more reliable source of revenue than Web sites.

“Companies are asking themselves, ‘How can we get on the iPhone?’ ” said Matt Murphy, a partner at venture capital firm Kleiner Perkins Caufield & Byers, which maintains a $100 million fund devoted solely to investing in start-ups creating apps for the iPhone. “Instead of trying to organically create their own property, they’re looking at applications with traction and cherry-picking the ones that seem like a good fit.” (A polished, professional iPhone application can cost around $50,000 to produce.)

With an instantaneous and established presence on the iPhone platform, he said, a company could tap into a stable, loyal fan base. For a big company that is trying to go mobile, and quickly, “those few million users are almost more valuable than the property itself,” he said.

That was the approach taken by IAC, which has more than 35 Internet-based companies, including Ask.com, CollegeHumor and Evite. Last month, the company bought UrbanSpoon, a start-up based in Seattle that recommends nearby restaurants, for an undisclosed sum. It is one of the App Store’s most popular products, having been downloaded close to five million times.

“The iPhone is a big part of our mobile strategy,” said Leslie Cafferty, a spokeswoman for IAC. “It takes a lot to invest in developing an application. It was much more appealing to pick one up.”

CitySearch, another of IAC’s properties, first worked with UrbanSpoon to syndicate advertisements and reviews through the start-up’s Web site. When the iPhone application made its debut last July, it was “the icing on the cake,” said Ms. Cafferty.

For the three creators of UrbanSpoon, it was “partially opportunistic” to be bought by a larger company, said Ethan Lowry, one of the founders. “It let us think on a grander scale of the services we can offer.” And it offered stability, he said. “The security of a larger company has taken some of the financial stress out of the situation,” he said.

Amazon, with its Kindle electronic book reader, looked at phone apps as a way to expand the market for the e-books it sells. In late April, Amazon bought Stanza, a software service that allows users to browse and buy from a library of 100,000 books through a phone.

But it is not just larger companies beginning to see promise in the popularity of the phone and high demand for its programs.

Tapulous, a start-up in Palo Alto, Calif., bought a game called Tap Tap Revenge from its developer, Nate True, in July. The game, patterned after video games like Guitar Hero that challenge players to keep rhythm with popular songs, has been downloaded by one out of every three digital shoppers in the iTunes App Store, according to market research firm comScore.

“We’re very excited to connect with people at W.W.D.C. who have interesting ideas and applications in the music gaming space,” said Andrew Lacy, the chief operating officer of Tapulous.

Other companies are making a business out of acquiring raw programs to redesign, polish and release into the App Store. For example, Ngmoco, a video game start-up based in San Francisco devoted solely to publishing games for the iPhone and iPod Touch, recently bought the quirky, colorful puzzle game Rolando designed by a British developer, Simon Oliver.

“When we built our company, we decided the best model was to harness interesting developers and bring their projects to market,” said Neil Young, the chief executive at Ngmoco. Mr. Young said the company also develops games in-house, but is always reaching out to developers to see what they are working on next.

So far, their approach appears to be working: many of their games rank highly in the App Store’s most-popular lists. The company has four more games to be released in the next two months and 15 new games under development, including several sequels to Rolando.

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