What Are Smartphones Used For?

Given that the majority of time spent on smartphones is in apps, it is appropriate to look at what apps are being downloaded in order to understand what people are actually doing.

Below is a list of top downloads in various countries, taken from App Annie’s statistics (iPhone and Google Play: The list is too long to put on this blog post, so please go App Annie to see all the entries).

You can immediately see that the lists for iOS App Store and Google Play are very different;

  1. Google Play is dominated by messaging and communication applications. Specifically, Facebook, Facebook messenger, WhatsApp, Skype and Instagram.
  2. On the other hand, iPhone users seem to be downloading a lot of other stuff. The top ranking apps are not dominated messaging and communication apps. There are a lot of games and some music apps.

AppAnnie Top Downloads

Now what does this mean? I suspect that this is telling us that Android users as a whole are using their smartphones for the essential tasks and the essential tasks only. By essential tasks, I mean communication. That is after all, what phones are for and what feature phones also did quite well with SMS.

Messaging and communication apps dominate Google Play but it is also certain that iPhone users download these apps too. Hence the dominance of this category on Google Play simply suggests that Android users don’t download much else on average. On the other hand, iPhone users download a lot more so the essential communications apps are lower in the rankings.

For example, App Annie has recently reported that Google Play worldwide quarterly downloads exceeded iOS App Store downloads by around 60 percent. However, Google Play downloads are most likely dominated by the essential messaging and communication apps, with little space left for others. If you are an independent app developer, the Google Play opportunity is probably much much lower than the total downloads number suggests.

Jobs-to-be-done in India

Just happened to read an article on The New York Times with a very interesting quote;

“Micromax is giving India what it wants: more bang for the buck,” Rahul Sharma, its co-founder and chief executive, said in a phone interview. “Most Indians don’t walk into a store asking for a smartphone; they go, “Bhaiyya, isme chat chalega?” (“Brother, will the chat apps work on this phone?”)

I suspect that this is not only relevant to the Indian market, but also key to getting “late-majority” and “laggards” to switch from feature phones to smartphones, even in countries like Japan with its ferocious appetite for high-end iPhones.

This is the ultimate jobs-to-be-done for smartphones. The specs or OS or ecosystems of smartphones don’t really matter.

Mobile Addicts

Flurry released a report on how many times people launch applications in a day. The data is quite interesting.

  1. People launch applications 10 times per day on average with a significant proportion opening apps more than 60 times per day (the addicts).
  2. Women are more likely to be addicts then men.
  3. In addition to people under 24-years of age, middle-aged parents were also more likely to be addicts.

In the report, Flurry touches on wearables;

Mobile Addicts launch apps over 60 times per day, making them consumers that are effectively wearing their devices. This analysis of the Mobile Addict should give us a sneak preview into the make-up of early-adopters of Wearables, and what types of apps and experiences will resonate with them. To date, many applications for Wearables have focused on fitness and health, but thinking about what’s next, developers should think about the other experiences that will delight the people who need to be connected all the time. This includes Teens, College Students and Middle-Aged parents who are interested gaming, autos, sports and shopping, and who may have a constant need to entertain or educate their children. After all, the people who we consider “Mobile Addicts” are already essentially wearing their devices 24/7/365.

While I agree with the general conclusion on wearables, I think we can go a bit deeper into discussion. My feelings are the following;

  1. Addicts are launching apps over 60 times per day. If we assume that launching means more than simply being notified, then it is likely that notification-type smartwatches are not enough for the addicts. Addicts aren’t satisfied with being notified; they want to do more.
  2. If smartwatches are going to replace the time that you spend on your smartphone, it has to be a better experience for the key task which addicts do 60 times per day. As long as smartwatches focus on notifications, they will never be a better experience, because that is only a small part of the jobs-to-be-done.
  3. Flurry suggests that wearables focus on what the addicts do. I do not agree. Addicts are obviously quite satisfied with their smartphones and have high demands. It would be difficult for a wearable to sufficiently replace them. Replacing a high-end product with a low-end one won’t work.
  4. Instead, wearables should focus on other things; things that do not require constant user interaction. Wearables should focus on being a new-market disruption.
  5. I am very interested in what role the form-factor plays in the constant-interaction shown by addicts. Obviously, if the phone is going to be accessed more than 60 times a day, it has to be in a very convenient location and has to be easy to pull out. It is obviously better for the device to be small enough to carry close by. Although there is a trend towards large smartphones, I’m doubtful if those phones allow this kind of constant-interaction, especially for women.

Data Usage Statistics

There are quite a few companies that provide insight into browser (web) usage statistics. Both StatCounter and NetMarketShare provide reports that you can just point your browser to. Chitika provides detailed analysis of topics-of-interest.

One criticism of these data when applied to mobile platform analysis is that they do not include app usage. Hence data usage from the native Facebook, Twitter or WhatsApp applications are not included. With PCs, most people use web browsers to access online resources so this is not an issue. However on mobile, we know that a lot, if not most of Internet access is actually through these native applications and not through browsers. Therefore the data from StatCounter, NetMarketShare and Chitika is less relevant for understanding user behavior.

Data usage on carrier networks is separate statistic that provides information from a different angle. This counts traffic from both native applications and web browsers. However it only includes usage on the carrier networks and does not include WiFi usage. Let’s compare this data.

First web usage data from StatCounter for Europe, Oct 2013 (only mobile data excluding tablets). This data shows that Android is a little bit ahead of iOS in web usage. Compared to the US, Android usage is higher in Europe. A common explanation is the lack of attractive subsidies for the iPhone in Europe, which make the iPhone much more expensive to own than an Android phone.

StatCounter os eu monthly 201310 201310 bar

Asymco recently tweeted data usage on network carriers in Europe for the same period (source Amdocs). We immediately notice that iOS (iPhone) usage is much higher compared to web usage.

BlzKOleIQAA7ZVK png large

These two sets of data are not directly comparable, and care should be taken in their interpretation. Regardless, considering other evidence, I think it is safe to say that iPhone users seem to use Apps much more than Android users. This is why Android beat iPhone in web usage, but lost in total data usage.

This is unlikely to be a simple App ecosystem issue. Although developers still tend to target iOS first and Android second, for the apps that most people use, these are already available cross platform. These cross-platform apps (Facebook, WhatsApp) probably constitute the vast majority of data usage and it is difficult to image that iOS only apps make a huge difference.

I don’t know the answer to this. You could say that it has something to do with engagement, but it’s a pretty broad term and I’ve never seen information that tells me how user behaviors change with engagement levels.

Hints on Apple’s Wearable Strategy From Nike

According to CNET, Nike plans to exit Fuelband hardware, their wearable technology for tracking exercise throughout the day.

What does this suggest?

  1. Apple CEO Tim Cook sits on Nike’s board. It is likely that there is a secret collaboration between Nike and Apple that led to this decision.
  2. This decision would make sense if Apple is planning to release a wearable which makes the Fuelband obsolete. Such a device should be both cheaper, smaller and more wearable than the Fuelband. Otherwise, it is simply not a better fitness tracker.

Key points;

  1. Nike is not abandoning fitness tracking. Instead it is focusing on software.
  2. Nike is releasing a public API for Nike+ so third party trackers can plug into it.

Some thoughts;

  1. Although smartphones, especially the iPhone 5s with the M7 chip, are getting better at tracking movement throughout the day, not everybody carries the device on their body at all times. Phablets for example, are often carried around in purses in Asia, even by men. This limits their usage as fitness trackers.
  2. Carrying your expensive smartphone with you when you exercise is not the best experience.
  3. If we want to make our smartphones better fitness trackers, we would want a smaller device, not a larger one.
  4. I doubt that Nike is abandoning the Fuelband in favor of devices that people are less likely to use while exercising.
  5. Nike obviously thinks that third parties can create better fitness tracking hardware then what they are currently capable of. What product do they have in mind? Is it the Jawbone? Is it the Samsung Gear? Is it Android Wear? I don’t think that they are too compelling and think that Nike is looking more at future devices.
  6. Keep in mind that Nike has not released Fuelband software for Android devices. Their Fuelband app is iOS only.
  7. The Nike brand is totally capable of selling at premium prices without being drawn into a price war. Their main business is selling shoes at high prices. Cheap rivals are not likely their main concern.

Why the Fallacy of Android-First

Dave Feldman wrote a very interesting post on TechCruch (“The Fallacy of Android-First”) where he details why the startup that he founded (Emu) launched Android-first, but after sixteen months, they reverted to iOS only.

There are many interesting points in this post. Here, I would like to categorize his findings and to draw a typical general picture of an innovative market leader and a follower frantically trying to catch up.

The allure of Android

Followers generally try to catch up with the combination of a) price and b) more features. With both more features and a price benefit, it seemly looks like the follower’s offering is better in all accounts. However, if you look under the hood, you often find that the features haven’t been well thought out and that they are actually quite useless.

In comparison, leaders usually focus on actual benefits. If they succeed, the leaders prevail and the market separates into low-end which becomes a price war, and the high-end which is rather stable. If leaders fail and are dragged into the price war, then the market loses the leader and everybody chases features that look good on paper, but are not beneficial to the user.

This is a common theme in many markets. It is also what is happening in mobile.

The Dave’s article, he mentions the allure of Android as the following;

  1. On Android, you can replace the built-in Messages app, while still using the underlying SMS/MMS medium, saving the effort of building a communication service.
  2. Android apps were supposedly easier to build.
  3. Fragmentation was supposedly becoming less of an issue.

The reality

The reality was that allure #1 was a feature that was not well implemented. It was so bad that it was close to unusable from a developer point of view.

  1. Android’s SMS APIs are not well documented. The APIs have also changed over time.
  2. Individual apps can block each other from receiving SMSes. This means that the presence of other apps affects whether your app works or not.
  3. Other issues with MMS make it a nightmare to support.

So the feature was there on Android, but it was very difficult to use in the real world.

There are also other issues described in the post and they basically say the same thing; Android has the features and support, but it’s often not very useful.

The lesson

The lesson is that features which the followers implement are rarely useful. You can’t trust them to have thought out all the issues. Although leaders will also fail sometimes, followers are much more likely to introduce useless features.

日本人のiPhone好きは特殊か、それとも普通か?

なぜ日本人はiPhoneが好きか?

2014年1月15日にカンター・ジャパンが日本のiPhoneのシェアが69.1%で、Androidの30%を圧倒していることが紹介されました。そしてどうして日本人はこんなにもiPhoneが好きなのかということがネット上で話題になりました(例えばJ-Cast「日本人はなぜこんなにiPhoneが好きなのか ユーザのITリテラシーが低いから?」)。

理由ははっきりしていました。それは日本ではiPhoneの価格を補填していて、Android端末と価格差がなかったからです。場合によってはiPhoneの方がAndroidを買うよりも割安という状態でした。

「同じ価格なら、大多数の人はiPhoneを買うでしょう?」

というわけです。

もちろん他の要因を考えることはできます。理屈としてはかなり無理がありますが、例えば上記のJ-Castの記事では以下のような要因も挙げられています。

角川アスキー総合研究所主席研究員の遠藤諭氏に聞くと、考えられる要因を挙げた。まず、欧米と比べて日本のユーザーはITリテラシーが低いとの指摘だ。欧米の学校におけるIT教育の素地は、日本とは比べ物にならないという。そのため、スマホ入門者にとっては比較的操作がしやすいiPhoneに流れるのではないか、と推測した。

まぁ、どう考えてもこじつけとしか言えない、とんでもない理屈ではあります。

他にもいろいろなことが言われていますが、同程度に穴だらけの理屈がまかり通っています。

実は中国人も日本人と同程度にiPhoneが好き

つい先日、Umengという中国に強みのあるアプリ・アナリティックス企業がスマートフォンやタブレットの利用動向のレポートを出しました。その中でこう述べています。

High-end smart phones (pricing above 500US$) have a significant market share in China, contributing 27% of total devices.

… 80% of these are iPhone.

つまり500 US$よりも高価なスマートフォンを購入できるだけの豊かな中国人の間では、80%の人がiPhoneを購入しています。一言で言うと

「買うことさえできれば、大多数の人はiPhoneを買うでしょう?」

というわけです。

日本ではiPhoneが実質0円なので、「買うことさえできれば」というのはスマートフォンユーザの全員が満たしている基準になります。

ということで日本のiPhoneのシェア 69.1%と、中国のハイエンド・スマートフォン・ユーザのシェア80%というのは同じものを見ていると言えます。

結論として中国でも日本でも、

「買うことさえできれば、7-8割の人はiPhoneを買う」

と結論できます。

なかなかデータは手に入りませんが、日本と中国に見られるこの数字はおそらく世界の大多数の国でも同じだろうと私は推測しています。つまり日本人のiPhone好きは特殊な現象はなく、ましてやガラパゴスでもなく、普遍的なことだと思います。

The OS for Wearble Devices (Android Not)

Google is releasing an Android SDK for wearables this month (March, 2015).

So what is their vision for wearables is? The example that Pichai reportedly gave is a “smart jacket” with sensors.

Seriously?

The only wearables that I know of that are currently succeeding in the mass market, are the fitness trackers. The Nike FuelBand’s and the Jawbones. NPD has reported that the market for digital fitness devices was $330 million. Given the price of these devices, it looks like millions have been sold.

So the question is, does the FuelBand run Android? Does it run Linux?

The answer lies in the hardware that enables them to be small enough to comfortably fit on your wrist and last a full day on a single battery charge. It looks like the CPU is an ultra-low power ARM Cortex-M3 with 256 Kbytes flash (hacknikefuelband.com).

Not really enough to run Linux or Android.

Even the Pebble smartwatch which is a bluetooth connected notification center, uses a non-Linux OS (FreeRTOS) according to Wikipedia.

Simply put, the hardware that would comfortably fit on your wrist cannot run Android yet. Pichai is right; you need something jacket-sized.

64-bit Android

In September, 2013, just after the iPhone 5s was announced, I wrote that we would be able to gauge Google’s commitment to the high-end based on when the 64-bit version of Android would be released. I commented that Google might not prioritize 64-bit, mainly because their focus has shifted to the low-end with the departure of Andy Rubin.

Until now, I had not heard any credible reports on when a 64-bit version of Android would be available. Now, on March 11th, ABI Research reports that “the first 64-bit version of Android OS is expected in the second half of the year”.

At this point, there is no way of knowing how accurate ABI Research’s prediction is. There is also no way of knowing if Android and ARM’s 64-bit implementation will deliver a significant performance improvement like Apple’s A7 chip did, or whether the gain will be rather insignificant as most industry pundits claimed when the A7 was announced.

All I can say is that we don’t know yet.

2013 Smartphone Sales Decreased in Japan

MM Research Institute (MMRI) recently published a couple of reports (1), stating that in Japan in 2013, smartphone shipments decreased by 3.7%. This was due to a combination of the following factors;

  1. Total mobile phone shipments decrease by 10.2%.
  2. Smartphone penetration is nearing saturation at roughly 45% of total mobile phone subscriptions.

Smartphone saturation

Observer the following graph from MMRI. This shows the number of subscribers. Blue is for smartphones and pink is for feature phones. The last bar is for Dec. 2013.

You can see how smartphone penetration is saturating. The current smartphone penetration is 44.5% and it looks like it might stop at 50%.

NewImage

Additional information from the report;

  1. 52.4% of feature phone owners answered that their next purchase would be a feature phone. Only 34.4% said that their next purchase would be a smartphone.
  2. Reasons for not purchasing a smartphone include a) pricey data plans, b) no need for the additional features, c) difficulty of use.
  3. Smartphone users average 6,826 JPY per month whereas feature phone users average 3,746 JPY per month.

In interpreting this data, you have to understand that Japanese feature phones are pretty capable. They can do email (even email to/from PCs), surf mobile web sites (and there are many of these in Japan), play music, watch TV, take photos, play games and make NFC enabled purchases. You can even use LINE, the explosively popular messaging app although features are limited.

Also, virtually all smartphone data plans in Japan are unlimited data. There are some pay-as-you-go schemes but you quickly reach the ceiling after which your plan actually becomes the same as an unlimited data plan. Pre-paid plans are rare.

On the other hand, feature phone typically do not need data plans to access email or watch TV. A cheap voice plan is sufficient. You can subscribe to a data plan if you want to surf the mobile web or do more complex stuff, but I suspect that most of these users are now using smartphones.

Smartphone sales decline

MMRI data for 2013.

  1. Total mobile phone sales decreased by 10.2%.
  2. Smartphone sales decreased by 3.7%
  3. Apple garnered 32.5% (+9.2 points vs. 2012) mobile phone share, or 43.6% of smartphone share.
  4. Other vendors are Sharp (14.6% share), Sony (12.6% share), Fujitsu (9.7% share), Kyocera (8.8% share), Samsung (5.9% share)
  5. Percent of smartphones sold vs. total mobile was 74.1%.

Combining the subscriber base (44.5% on smartphones) to the annual sales (74.1% smartphones), it is clear that feature phone users are clinging on to their old models. This is probably because R&D on feature phones has ceased and no new features are being added. Additionally, carriers are not promoting feature phones.

Implications for countries outside of Japan

What this data means is that around 50% of Japanese mobile phone subscribers do not need the high-end features of smartphones, and would be satisfied with email and voice. They don’t need Facebook or LINE on their phones (although they could if they paid for a data plan). They just need a convenient way to communicate.

Now assuming that we can apply this 50% number to other countries. Since these countries do not have the feature-rich feature phones that the Japanese have enjoyed for more than a decade, we can assume that low-end Android phones on pre-paid plans are being purchased instead.

What I am trying to say is that although U.S. smartphone penetration is now at 64%, which is significantly higher than the Japanese 44.5%, a large proportion of this number probably includes subscribers on cheap pay-as-you-go or pre-paid plans. These subscribers may be using their smartphones in a manner that is similar to Japanese feature phone users, hence including them in smartphone market share is potentially misleading.

In other words, U.S. smartphone penetration may be significantly higher than Japan but the way that people are using mobile phones in general might be much more similar.

Smartphone penetration is not the right metric

Instead of looking at smartphone penetration, I propose that we should be looking at data consumption. We should be looking at what percentage of the subscribers use their smartphones to use services over the Internet thereby consuming lots of data, and what percentage use it only for voice and simple messaging. Instead of looking at the hardware, we should be looking at how people use them. If data consumption data is hard to obtain, we should be using their data-plan (unlimited, postpaid, prepaid) as a proxy.

Similarly, we should be looking at how many iPhone users consumer lots of data and how many Android users consume lots of data.

In other words, at the low-end, Android is not a smartphone platform. It is a platform upon which vendors build a feature phone.