Recent iPhone sales provide greater reach for mobile marketers
Tuesday, January 26th, 2010 by Tomer TishgartenApple has done it yet again. According to the Q1 2010 results (source), consumers snapped up 8.7 Million iPhone devices this past quarter. While a few mobile market analysts feel that Apple missed their sales target (BTW, some expected sales to reach the 9 Million to 11 Million units mark), the growth of the iPhone still represents a healthy 100% increase in sales in comparison to the same quarter last year.
In my discussions with Marketers, I’m regularly asked whether iPhone app development or iPhone mobile campaigns make sense considering the dominance of rival smartphone devices such as RIM’s BlackBerry. There’s valid concern if you consider only the number of mobile devices but that number isn’t as important when you consider usage. While RIM currently outsells Apple in smartphone devices (RIM sold 10.1 million devices in the quarter ending November 28, 2009 whereas Apple sold 7.4 million iPhones in about the same period), the iPhone accounted for 60% of page views AND 75% of mobile revenue at the top online retailers this past holiday season according to Omniture (source). So while BlackBerry devices are more prevalent, users avoid using this device to browse the web. This decision is likely based on the poor web browsing experience. And Marketers that are considering the accessibility of their website should optimize it for the iPhone.
So Marketers that want to interact with the largest group of mobile users should first focus on the iPhone platform — nothing else compares. But besides usage, Apple provides plenty of additional reasons for why the iPhone platform will also win in the long run:
- The current quarter’s iPhone unit sales numbers exclude the 55% year-over-year growth in sales of the iPod Touch. The iPod Touch is a Wifi-enabled mobile device that supports many of the iPhone applications. The iPod Touch user segment represent a group that is not bound by telephony service but are still connected (likely to be a younger demographic).
- Sales growth was driven by strong global demand. This implies that marketers can now expose their application/campaign or brand to an international audience (while facing the challenges that come with such a relationship).
- With the introduction of the iPhone 3GS, demand for the iPhone has spilled from the consumer market over to the enterprise market. Apple reported that 70% of the Fortune 200 are either deploying or piloting the iPhone. While marketers may have previously focused on the business to consumer or B-to-C market segment, they now have an opportunity to create applications that address the needs of the business to business or B-to-B market.
- Apple continues to invest heavily in customer service, whether it is through training of mobile carriers on device or one-on-one coaching of new customers at their 283 stores (currently present in 10 countries). This is a critical tactic for Apple to attract and service an older demographic of users that may not be as comfortable with touch-based technologies.
- The numbers did not account for the upcoming product introduction of a tablet-like device. This highly anticipated announcement is expected tomorrow but the value of this news is that Apple will give marketers yet another device that will support mobile applications. The segment of the users that select and use this device is still unknown but it is potentially a new group of untapped users.
- Lastly, Apple has completed two recent acquisitions: music streaming service Lala and mobile advertising platform Quattro. Both represent the company’s continued future-looking view on revenue generation and demands.
Apple seems to be benefiting from a positive feedback loop. While the iPhone does have its flaws (it is not a perfect mobile device!), Apple has built an elegant smartphone unit that is extremely user-friendly. Additionally, iPhone users regularly promote their smartphone to other non-users in their social circles so the masses are choosing iPhone when deciding to go mobile (source). For brands that are still on the sidelines or ones that are only focused on the alternatives (which is a mistake; source), there’s no better time than now to jump on the iPhone platform bandwagon.
January 26th, 2010 at 12:42 pm
Clearly the iPhone has had significant growth. It will be interesting to see what will happen once the Google phone (Nexus One) leaves their current pilot phase (after all, we have only seen the beginning of what they will likely offer). If your argument is that mobile penetration will continue to increase significantly as smart phones become more the norm, then I am right there with you. It may be that developing for the iPhone is a good place to start, but I think you will find that marketers that ignore the other emerging platforms do so at their own peril.
January 27th, 2010 at 10:31 am
Joe — the challenge that Google and RIM face is that iPhone is the preferred platform for mobile browsing. iPhone is also responsible for generating significant mobile revenue (and marketing is about making money). Here are some stats for you:
According to December 2009 data from AdMob (which is now owned by Google), Apple accounts for the lion share of traffic with the exception of Africa and Asia where Symbian is dominant. Since the data comes from apps/website that participate in mobile advertising, I expect that the data is skewed and does not clearly represent general online traffic where iPhone is likely the dominant device (again with the exception of the two markets above).
One thing to note is that Android is showing some signs of growth (20% for October 2009 compared to 27% for December 2009 in the US market; stat pulled from AdMob). While some marketers may inquire whether they should add Android to the mobile marketing mix, I would suggest that they take a “sit and wait” approach since Apple’s mobile strategy execution is far better than Google’s (just search “nexus one customer service” and you’ll see the disaster that Google created for themselves).
I would image that we will know by the end of this year whether Android is a true rival to the iPhone. For now, Google is just trying to catch up to Apple on the mobile front in the same way that Microsoft is trying to catch up to Google on the search front.
January 27th, 2010 at 11:11 am
I am not disputing that Apple is a very smart company with a great track record of success. My main point is ignoring other platforms that might leapfrog the iPhone platform is a mistake.
February 3rd, 2010 at 12:36 pm
If your focus is near term, then the iPhone platform is the first priority. On the ApartmentGuide.com 2009 campaign we had over 300,000 downloads of the iPhone app. This exceeded the Google Android app downloads. Long term, I expect Android will gain significant mobile marketing share.
From the perspective of your entire marketing campaign, it makes sense to extend your marketing to all major smart phone platforms. Consider the traffic, and search engine optimization benefits to the main business web site. In previous SEO campaigns, I’ve seen a large number of links and significant buzz around articles and reviews of mobile apps that originated from blogs and social media.