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« Fortune 500 CEO Guide to Mobile - The Insights Before Creating Mobile Strategy | Main | Household Penetration Rates for Technology Across the Digital Divide »

January 18, 2011



I believe I did not, Bob. Rovio will continue to develop for android, but finds the several markets a fragmentation. They also stated the only viable gonto market strategy on Android is ad based revenue. It works for them, it is not an option for everyone.

@Carlos. After iPad 2 and iphone 5 fragmentation is still equal problem. After those iOS (not counting AppleTV) will still have two screen sizes, one set of API, a fraction of the devices, much faster software update rate, and other things that make the problem smaller.

The Retina display does not matter for a developer. An old app works on the double density display, to make it look better new set of graphics is needed. No big deal. For a full fledged iPad support a totally new UI is often needed.

iPhone also has very good baseline on which features are added once a year, not dozens of phones a year where features change randomly. There is fragmentation, but it is much more manageable. One store, and no big API and OS transitions (which RIM will need to do too) makes it less fragmented too.


True, depends on what you are developing, but there is a big class of modern applications that are really hard to fit in a low end Symbian without making big sacrifices. To say those count equally for the common "Nokia" platform (which as of yet does not exist because of the ongoing transitions), as Tomi makes it, is not feasible.

Also, not every customer is worth the same. If you are a government you must provide service for everyone, a business can go for the market they want to (be it high end Symbian, Android, Win7 or iOS), make an outstanding product, which is hard to do when targeting every platform. If it works then expand. IOS and Android customers install and use more apps than Symbian users. IOS users are more inclined to buy apps than Android users. When talking about platform, these things really matter. It is definitely not just about how many "smartphones" Nokia sold versus Apple or Android companies.

If fragmentation really does not matter why not say JavaME is the ultimate mobile platform? It has the far biggest reach, both smart- and feature phones (not iOS obviously, but they are just a small player, who cares?). Why do we need the native apps for?

Mikko Martikainen

There are obviously different sides to what makes a mobile platform, and there is no doubt the widest possible reach one can have is with SMS. However, you can't take the installed base of SMS capable phones and count that as one addressable market. In fact, I would argue that in most cases the market you can address with SMS services is limited by country and/or carriers. Of course, this is nothing new: most markets are in fact divided by country borders, even though there has been considerable effort to open the markets. In this sense, the iOS platform, even counting only the iPhone, is not such a bad choice: you can address a market of 68-90 million active user (depending on how you count the installed base) through a single channel. I believe the addressable market for the overwhelming majority of SMS or MMS services is not bigger than that, though if you can provide me data to show otherwise, I will gladly take it. Also, I would be very interested to know what is the average ROI of SMS/MMS services, though I don't know if the data to calculate that is available anywhere.

Phil W

@Mikko, Tomi puts the active users of SMS at 3.6 Billion, so 3600 million or more than 36 times the installed base you indicated.


Rovio does not promise that their apps will work on all Android phones. As of today, it works well on some, works poorly on some, and works not at all on others.

If you're buying an Android with the intention of playing specific games, you should check the nets before you part with your money.

But if you're on Verizon in the US, and if you bought your Android phone after Thanksgiving (11/26), Verizon is offering to give you up to $200 if you want to switch to the iPhone.

Mikko Martikainen

@Phil Yeah, but I don't think there is any realistic way you could address half of that market with a service. The biggest possibilities probably lie in China and India where you actually can address a huge market with your service, but in other regions and countries? As a service/software developer, what realistic way do I have to reach those active SMS users? What is the most users I can hope to reach, and how?



You can walk into any store in the UK - one of Apple's key markets - and walk out with an iPhone 4. 3.75 million represents 23% of total quarterly sales or, put another way, about two to three weeks supply.

Having a backlog of orders - which is to carriers, not individuals - which they're struggling to fulfill is true but that could refer to months down the line. Current reserves indicate that there isn't an immediate supply problem in terms of demand.

So, no. Not buying it.


Yes, I know. Like Phil says it'll be interesting in 2011.


I agree with some of your arguments. The problem is that it doesn't make economic sense at the moment.

As for JavaMe, it's on 2.1 billion mobile phones and PDAs so it actually is the dominant platform. The problem is Apple and Android don't use it.



games with a social flavor, Q&A services like chacha etc. Limited and good question. But I think he was talking more with respect to advertising, marketing and branding. Coca-Cola could have something like get updates by SMS via user subscribing to coca-cola SMS channel.

Bob Shaw

Interesting article on the split between smart phones and dumb phones primarily in United States. Even in United States, 72% of the mobile phone owners have web free dumb phones. The cost of ownership which is largely the cost of the carrier plans offered with smart phones appear to be the major issue in switching over.



I suspect a million or two of the supply is the stockpile of CDMA phones for the release on Verizon in several weeks. If they don't sell a million in the first 48 hours they will be disappointed.


very informative link Mr Bob Shaw, I thought US was well on the way to becoming all smartphone by this year-end.



yes Apple's profits are extremely good and wonderful, but the US press talks as if iOS app platform is the only thing that matters, that is wrong. As you yourself said we need to take a holistic view, and if we do that iOS is one among the many platforms. Web itself is a big platform and probably the biggest, facebook has a platform which has huge companies like Zynga making massive amount of money out of it(just curious any apple appstore company making as much money as zynga ~ 600 million in 2010)


Over the past decade under Tim Cook, Apple has repeatedly said that they aim to carry 4 to 6 weeks of inventory of Macs and iPods. Anything less and they'll say they are constrained (or in a demand-supply imbalance). They did not mention their aim for iPhone, but 3.75m is less (even by your calculations) than 4 to 6 weeks of inventory for 90 countries and 185 operators (involving many thousands of points of sale) and 324 Apple stores.

Inventory is not only what's on the store shelves but also includes units on the loading dock and in transit to the operators and stores.


This blog isn't really for mobile enthusiasts, fanboys of some company (like various gadgets sites) or stock-watchers. This blog - and whole Tomi business - is for people who make money on hardware delivered to clients. This is slightly another plane of reality and looks like many commenters here don't understand this. For those people *really* doesn't matter that Apple is more profitable than Nokia. For them important is how much money they can make on existing hardware by Apple or Nokia.



That's a nice comfort blanket for them, however it doesn't detract from the fact that the iPhone is immediately available in Apple's key markets (CPW for example will deliver on-line orders in two days, have stock in store and are currently even offering a £50 off deal which is not something you do if inventory is tight) and they have nearly three weeks inventory in stock. That indicates the outlets have local inventory as well as Apple's reserves.

The fact Apple would like more is irrelevant - there is no immediate supply shortage and current consumer demand is satisified.


@Bob Shaw: That echoes what I wrote here previously about data plan cost.

As of end of 3Q10, AT&T reported ~33.5m subscribers with 3G smartphones out of 68m postpaid subscribers, or almost 50%. Verizon reported that only 23% of their 82.3m postpaid subscribers have smartphones. Sprint and T-mobile are likely in the same ballpark, though closer to 30%. And those on prepaid accounts are overwhelmingly non-smartphone owners.

Conclusion: AT&T is fairly saturated. Verizon is not.



The point I was trying to make with the JavaME example was that the number of supporting handsets is not all there is to determine the desirability of a platform, from a software developers point of view.

JavaME is huge by units, but the platform is very fragmented. The devices that can run the app can be of all sizes and shapes and with or without a keyboard, acceleration sensors and so on. Also the JavaME implementation is different from device to device. The promise of Write once Run everywhere is not reality and JavaME does not cater all the features that native smartphone apps can use via native APIs.

This means that it is very hard to design and implement an app that would be *great* on a broad range of those devices. It would almost inevitably lead to compromises, sacrificing quality for user base.

In addition to that the devices that support it are in average less capable than the super smartphones like N900, iPhone or Nexus S. Also the users are less likely to buy your app. First, because the users are less technology oriented, have less money to spend and because the buying process is much harder than in the dedicated App stores.

The desktop like APIs, capable baseline for phones with reasonable amount of RAM and GPU as default and the App store are the biggest things that have changed in the smart phone after iPhone came to market. Because of the first two things Apps are now much easier for developers to create, for iOS, Andoid and soon Symbian, when Qt gets some wind under it’s wings. Those apps are then much easier to find and buy because of the App stores, that standardize the rules, give confidence of the payment process and stores your credit card information.

Mikko Martikainen


I understand your point, and I agree with Tomi that there is huge potential for the right kind of SMS and MMS services. I would honestly like to know what kind of hoops a startup would have to jump through to get their new pay-by-SMS-service up and running in the US and all EU countries, in all carriers' networks? That would mean reaching around 800 million potential users. And how much is the carriers' cut of the SMS payments? Would the startup need to negotiate carrier billing deals with all carriers or how does it work?


Since Apple's quarter ended on Dec 25, and since the Verizon iPhone isn't available until Feb 3, I highly the inventory includes many CDMA iPhones. If there were "a million or two", then 3.75m is way too low, and Apple's inventory management and supply chain must really suck.


That might be true at CPW. But in the US, Walmart, Sam's Club, and Radio Shack have been more or less out of stock since at least two weeks before Christmas. Each advertised a $50 off weeklong-sale on iPhone 4s, but none of them had more than a couple of hours of inventory for the first day, with no more stock arriving for the rest of the week.

Regardless, 3.75m is not a large number for a product with an expected 16+m in sales across 90 countries.

Mikko Martikainen


I tend to agree with you since I'm and iOS developer, but I have to also say that there is a logic in Tomi's argument for not including non-cellular devices. His point of view is all about the possibilities that being always connected and reachable brings. Now, in the current situation, WiFi-only connectivity is enough to cover a big part of the use cases, but you can't rely on it to use FaceTime, for example. Take your iPod Touch, go on a hike outside and you won't be able to receive calls. That doesn't happen (or rarely happens) with devices that have a cellular connection, and thus developers will be able to design different kinds of services, applications and experiences that rely on near 100% reachability.

As an example, and I know Tomi is not so into location based services but still, imagine a service for home buyers (I don't know if this already exists so bear with me): stroll around a nice area of town on a Sunday afternoon and think how nice it would be to live there. Activate the service to let it know you're interested in apartments around your current location, and you'll start getting notifications of apartments that are on the market and which have public showings in the next couple of hours. Go to the showing and show the message you got and you'll get a small discount on the real estate agent fees if you choose to buy. And the next Sunday, if you happen to be in the area again, you'll get notified again. Think of it as an "impulse buying" service for apartments and properties.

A service like that won't work with WiFi-only. Hence, the distinction between smartphones and other smart devices can be important. But as I said, I agree with you that you can't just look at the size of the installed base of a certain feature or manufacturer and say it's all that matters. Disposable income of the users is important, as is having easy channels to reach the whole user base. Those parts Apple excels in, and will continue to do so.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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