Smartphone Trends

Picture the scene: you’re sat next to a man – it’s always a man – at a dinner party. He has a new phone. He’s delighted with it and the chance to tell you all about its features. This man is boring. He’s the sort of man whose wife develops selective hearing whenever he buys a new toy. He is playing Top Trumps long after he left the playground and, what’s more, he’s out of step with most of the world.

When consumer technology was the province of hardcore geeks, lists of specifications meant a great deal. It was a badge of honour to have more RAM, a better graphics card and a faster processor. The Top Trumps analogy works well because, for many, it was the individual numbers that mattered more than the sum of the parts. Some gadget buyers still have that mindset, but they don’t drive huge sales numbers.

Apple announced on Monday that its latest device, the iPhone 5, was ordered more than two million times in the first 24 hours of availability. The figure is striking because it’s twice the number racked up by its predecessor, the iPhone 4S, in the same period. While many in the tech press declared the iPhone 5 “boring” – perhaps a result of spending months picking over any crumb of information about the device – consumers are excited.

Samsung’s latest stab at taking on Apple in the press is a US print ad that compares the iPhone 5’s features with those offered by its star product, the Galaxy SIII. It’s hilariously ineffective. Not because the Galaxy is a lesser phone but because many of the specs touted by Samsung are meaningless to all but the most nerdy readers, hardly the audience that will glance at a newspaper ad. Who outside Samsung’s marketing department has even the foggiest idea what “ShareShot”, “GroupCast” and “Direct Call” mean?

In a similarly wrong-headed move, Motorola’s RAZR i, unveiled to the press in London today, carries with it ageing branding – the first RAZR was introduced in 2003 – and a huge list of specs. Elsewhere in the world, Motorola is making the job even harder for itself with product names like the Motorola Droid Razr Maxx HD which sound as if they were developed by a five-year-old boy with ADHD.
When the first iPhone was announced in 2007, it didn’t include many features that were already considered essential. There was no multimedia messaging, the camera was far worse than those included in Nokia’s cutting-edge smartphones and it was not 3G. But, crucially, the features it did include were enjoyable to use and the experience of using the device overall felt complete. That’s where many phones fail.

While the geek constituency relishes digging deep into many layers of settings and features, the mainstream consumer audience simply doesn’t. It wants devices to be easy and enjoyable to use. That’s why video calling, though present on devices for years, didn’t start to grab the popular imagination until Skype and latterly Apple’s FaceTime service branded it and made the process simple.
Popularity does not directly correlate to quality. While it’s easy to argue that the Samsung Galaxy SIII is, in fact, a better phone than the iPhone 5, it and other challengers to Apple’s dominance are not sold as clearly or as effectively.
Gadget makers need to show consumers why their product is appealing rather than simply telling them. Ernest Hemingway put it well, though he was discussing bull fighting: “The dignity of movement of an iceberg is due to only one eighth of it being above water.” Where Samsung, Motorola and the rest of the pack present lists of specs and features, Apple aims to demonstrate how its devices will fit into customers’ lives. And it succeeds.

CUPERTINO, California—July 24, 2012—Apple® today announced financial results for its fiscal 2012 third quarter ended June 30, 2012. The Company posted quarterly revenue of $35.0 billion and quarterly net profit of $8.8 billion, or $9.32 per diluted share. These results compare to revenue of $28.6 billion and net profit of $7.3 billion, or $7.79 per diluted share, in the year-ago quarter. Gross margin was 42.8 percent compared to 41.7 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.

The Company sold 26.0 million iPhones in the quarter, representing 28 percent unit growth over the year-ago quarter. Apple sold 17.0 million iPads during the quarter, an 84 percent unit increase over the year-ago quarter. The Company sold 4.0 million Macs during the quarter, a two percent unit increase over the year-ago quarter. Apple sold 6.8 million iPods, a 10 percent unit decline from the year-ago quarter.

Apple’s Board of Directors has declared a cash dividend of $2.65 per share of the Company’s common stock. The dividend is payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012.

“We’re thrilled with record sales of 17 million iPads in the June quarter,” said Tim Cook, Apple’s CEO. “We’ve also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we’ve got in the pipeline.”

“We’re continuing to invest in the growth of our business and are pleased to be declaring a dividend of $2.65 per share today,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $7.65.”

Roughly a year ago when we summarized the state of smartphones at the Appnation conference, less than 40 percent of mobile subscribers in the U.S. had smartphones. Today, one in two mobile subscribers has a smartphone and that figure is moving steadily upwards. By most measures, it has been the year of the App once again, driven mostly by the rise of Android and iOS users who have more than doubled in a year and account for 88 percent of those who have downloaded an app in the past 30 days. In just a year, the average number of apps per smartphone has jumped 28 percent, from 32 apps to 41. Not only is the 2012 smartphone owner downloading more apps, they are increasingly spending more time using them vs. using the mobile web — about 10 percent more than last year.

Some things haven’t changed, however. The Top Five Apps continue to be Facebook, YouTube, Android Market, Google Search, and Gmail. And smartphone owners spend just about the same amount of time on apps each day (37 minutes a day in 2011 compared to 39 minutes today). Finally, privacy continues to be a concern with the vast majority (70% in 2011 and 73% in 2012) expressing concern over personal data collection and 55 percent wary of sharing information about their location via smartphone apps.

Apple has announced its financial results for the fiscal second quarter of 2012 that ended in March 31, 2012. Their total revenue for this quarter was $39.2 billion and the quarterly net profit was $11.6 billion. In comparison, the figures were $24.7 billion and $6.0 billion respectively for the same quarter last year.

As usual, the iPhone did very well this quarter, with Apple selling 35.1 million of those, up by 88 percent compared to year-ago quarter. Sales were down compared to the first quarter, however, where Apple managed to sell 37.04 million iPhones, the reason for this being chalked down to the holiday season that boosted the sales in the previous quarter.

As far as iPads are concerned, Apple sold 11.8 million of them, a 151 percent jump over the year-ago quarter but still down from the 15.43 million sold in the previous quarter. Apple also sold 4 million Macs (7 percent increase) and 7.7 million iPods (15 percent increase).

The current amount of cash in Apple’s bank account now stands at a staggering $110 billion, up by $12.4 billion since the last quarter.

Mozilla, the company best known for one of the most popular web browsers worldwide, Firefox, is planning to unleash their first smartphone on the market before the end of 2012.