By Daniel Eran Dilger
Published: 10:56 PM EST (07:56 PM PST)

A new report suggests that all Android app markets combined will soon outpace the app downloads of Apple's iOS App Store, but a parallel report notes that piracy and malware republishing continue to destroy Android app developers' ability to actually make money.

Ovum research analyst Nick Dillon issued a report cited by CNET stating that the group estimates that a variety of stores serving Android apps could deliver up to 8.1 billion app downloads this year, contrasted with an estimated 6 billion served by Apple's iOS App Store.

The Android platform has lots of software stores in addition to Google's own Android Market, including GetJar and Amazon. The Ovum report noted that Apple "can't compete with such diversity, but still leads in the value of its apps."

The group estimates that five years from now, Apple will be generating $2.86 billion in app revenue, while all Android stores combined will pull in just $1.5 billion, even while it claims Android stores will be servicing almost twice as many app downloads (21.8 billion vs 11.6 billion apps by Apple) in 2016.

Ovum track record not great

In July 2010, however, Ovum predicted that "the dominance of Apple’s iPhone in the mobile app download market will be eroded over the coming years as rivals Android, Symbian and BlackBerry make inroads." That report was made before the implosion of Symbian, BlackBerry and Windows Phone 7.

At that time, the group forecast that by 2015, Apple's share of the app market would plummet from 67 percent of all apps downloaded in 2009 to just 22 percent, while figuring that Nokia's "burning" Symbian platform would take a 19 percent share. It also figured that RIM's BlackBerry and Microsoft's Windows Mobile/Phone 7 would both lose smartphone share but somehow double or triple their app share over the next five years.

The report's author stated at the time that "the iPhone generates the lion’s share of smartphone app downloads but over the period we will see the share of application downloads becoming more equally distributed." Just over a year later, Ovum is now predicting that Apple will retain a massive revenue lead, even as it buries that fact under the more sensationalist idea that Android stores will service a lot of downloads.

Lots of apps, little revenue

Part of the reason Android has so many app downloads is because Google has no real limits on what users can upload into its Android Market. Apps with actual functionality are buried by massive volumes of phony apps that are really just wrappers for wallpapers and ringtones, as any search in the store demonstrates.

However, a larger problem for Android developers is rampant piracy. A study by Yankee Group analyst Carl Howe on Android app piracy notes that "Piracy is a problem for Android and Google isn’t helping."

"Android developers make much less money from paid apps than iPhone developers do," the report notes. While suggesting steps Google could make to help reduce rampant piracy, the report recommends that Android developers "consider adopting business models beyond direct app sales," including ad banners and in app purchases to unlock key features.

Among Android developers, the report states that 27 percent reported piracy to be a "huge problem," while another 26 percent view it as "somewhat of a problem." A full 53 percent said Google is too lax in its Android Market policies. While Google has responded to remove active malware from its software store, many malware titles have generated a quarter million downloads or more before being identified as malicious.

Android a leader in copy/paste

But Google isn't the only company selling Android apps. While its own market may be lax, there are even more permissive stores offering Android downloads, and many of these welcome illegitimately copied and republished versions of developers' apps. This is done to spread malware under the guise of functional apps (as illustrated below by research firm Lookout).

Howe reports that three quarters of Android developers said it was "easy to copy and republish an Android app," while half said that pirating Android apps is "very easy."

Recent reports by Lookout and Retrevio noted an 85 percent increase in the number of mobile malware detections and that Android users are 2.5 times as likely to encounter malware than just six months ago, but that Android users are also the least prepared and informed about malicious mobile software.

Both groups contrasted Android's security problems with the safety of Apple's iOS walled garden. Lookout specifically described a new form of malware attack ("malvertizing") directed at pushing Android users to download malware directly from websites through legitimate looking web banners within existing apps, something that isn't even possible on iOS.

Rampant Android piracy hurting more than just apps sales

In addition to lost sales, Howe stated that 32 percent of Android developers reported that widespread piracy has increased their support costs, while another quarter noted that the network load of pirated copies of their apps resulted in increased server costs.

A third of the developers said that piracy has cost them more than $10,000 in revenue, making developing for the platform less rewarding on top of the fact that Android users are less likely to pay for apps in the first place, despite the high download figures announced by Ovum.

"Android apps are living in the Wild West without a sheriff,” Howe wrote. “With five other major mobile OSs competing for consumer dollars, Google can’t afford to simply let pirates kill app developers’ businesses. They need to foster some law and order or developers will flee to other platforms and Android will lose customers.”

By Josh Ong
Published: 02:40 AM EST (11:40 PM PST)

Investment bank J.P. Morgan raised its estimates for tablet shipments in 2011 to 51.9 million units, citing the strength of Apple's iPad, while slightly lowering 2012 estimates because a "formidable number two tablet maker" has yet to arrive.

Analyst Mark Moskowitz issued a note to clients on Thursday, noting that Apple "continues to dominate and enjoy the lion's share of the tablet market." He also suggested that a true iPad competitor may not emerge until the arrival of Windows 8 late next year.

The firm raised its 2011 tablet projection from 46.1 million to 51.9 million units, while also reducing 2012 numbers from 76.3 million to 72.4 million. Moskowitz now estimates Apple's unit market share will stand at 70.9 percent at the end of this year and 62.8 percent in 2012. He predicts worldwide tablet revenues will reach $28.9 billion dollars this year.

"Beyond the iPad, there has not been another high-volume tablet offering, yet," he said. "We are still awaiting the emergence of a clear number two player, though this may not happen until the launch of Windows 8 in 2H 2012."

Moskowitz did note that a rumored Amazon tablet could be "interesting," possibly providing a lift to the non-Apple tablet market. He went on to say that the OS would likely be a weak spot for the device, though "brand name, content and distribution capabilities of Amazon" could threaten Apple's lock on the market.

Non-iPad tablet challengers will find themselves competing on price for second place, Moskowitz suggested, predicting that the Average Selling Price in the tablet market will decline 12.1 percent in 2011 and an additional 7.2 percent in 2012. Tablet makers have been aggressively slashing prices in order to move excess inventory, with Hewlett-Packard enacting the most dramatic price cut with a $99 fire sale for its discontinued TouchPad tablet.

Earlier this year, Moskowitz warned of a coming "bubble burst" for rival tablet makers because their build plans were too high. An "early dose of reality" reportedly prompted companies to dial down production of .

However, tablet makers are expected to continue waging a fierce price war this fall in preparation for the 2011 holiday season in order "to digest inventory and minimize losses," according to one report.

The analyst also cautioned that a continued surge in tablet sales is "bad news" for PCs. J.P. Morgan believes that tablets and smartphones are not only cannibalizing PC sales, but also causing consumers to defer purchases.

Apple sold 4.69 million iPads in the first quarter of calendar 2011 and 9.25 million in the second, for a total of 13.94 million tablets.

September 1, 2011 at 5:57 am

Like politics, smartphone wars come down to two major parties – Google and Apple – embroiled in a never-ending fight for consumers, especially those who have not made up their mind as to which operating system they’d like in their next smartphone. According to July 2011 data from Nielsen survey, “these ‘undecideds’ will be the ones device makers will be hoping to win over”. Interestingly, the Late Adopters among likely smartphone upgraders are the ones most likely to be undecided about their next phone platform.
The research firm discovered that forty percent Americans aged 18+ now have smartphones. Android leads the pack with a forty percent OS platform share  and iOS came in second with 28 percent. Compared to Nielsen’s June 2011 study, Android grew its share by one percentage point while iOS growth fell flat. The BlackBerry platform lost one percentage share and now stands at nineteen percent.
Of those buying a new smartphone next year, one third would opt for an iPhone and another third would go Android. This leaves other manufacturers outside the Android-iOS duopoly to fight for the remaining 33 percent of buyers.
Moreover, the smartphone is clearly on the rise…


Four out of ten Americans now wield smartphones, Nieslen says. Smartphones will continue eating into feature phones and dump phones until eventually all phones become smartphones, as predicted by Asymco’s Horace Dediu:
I don’t see non-smart devices being interesting to vendors in the near term. Each additional dumb phone added to a portfolio will decrease a company’s operating margin. The market dynamics are such that I think non-smart phones will disappear entirely from branded portfolios in 3 to 5 years.
Revenues for microelectromechanical systems in consumer electronics and mobile communications devices will grow 37 percent this year due to the rising popularity of tablets and smartphones, per this Consumer & Mobile MEMS Market Tracker report from IHS iSuppli. They also estimated that by 2015 sales of smartphones will beat dumb phones, which today account for more than two-thirds of all mobile phone sales. For more politics in smartphones, check out an amusing U.S. map telling whether you are an Android or an iOS state.
Cross-posted on 9to5Google.com

By Josh Ong
Published: 09:00 PM EST (06:00 PM PST)

Analysts for investment bank UBS raised their 2011 forecast for Apple's iPad on Wednesday, predicting total sales of 37.9 million units for a projected 63 percent market share.

Maynard Um issued a note to investors, noting that checks had indicated "soft sell-through for non-iPad tablets." He sees growth in the tablet industry being driven primarily by Apple's touchscreen tablet.

"The tablet market has seen a significant increase in shelf space and competition in the past quarter," Um said, adding that there is "limited visible differentiation" between non-iPad devices. Based on anecdotal retail checks, Samsung and Asustek are stand-outs, while Research in Motion and Hewlett Packard "do not appear to be gaining any critical mass."

According to his calculations, Samsung will sell 5 million tablets in 2011, while Asus is expected to sell 2.2 million. Meanwhile, RIM and HP are projected to sell 1.9 million and 0.8 million respectively.

"Although it is still early, a key risk for the industry could be on inventory correction, particularly for those vendors that are seeing more limited demand," Um wrote.

Looking ahead to 2012, the analyst raised the firm's forecast to 90 million, up from 80 million. UBS expects Apple to sell 53 million next year, leaving the company with a 58 percent share of the market. In the first half of calendar 2011, Apple sold 13.94 million iPads.

Um's upward revision of tablet estimates brings the device's ramp in line with the early stages of the LCD TV market. However, the analyst believes that tablet growth is being driven by utility and broader distribution, rather than the "mass market" pricing that spurred TV sales.

Retail channel checks show that "most stores have moved tablets to prime positions," with retailers like Best Buy created a separate "Tablet Zone" in their stores. According to Um, stores have cleared out older PC inventory and shelf space in order to make room for tablet displays. But, in spite of the increased visibility, he noted that "channel sell-in and sell-through appear likely to be two different stories for the majority of vendors not named Apple."

"Apple continues to dominate the tablet market with its iPad portfolio," he added. "At all retail channels we checked it was by far the most popular tablet being asked about, tested, and bought by consumers."

Alongside the bump in projected tablet sales, Um adjusted PC estimates for 2011 downward. He sees year over year PC growth coming in at 4.5 percent this year, compared to a previous estimate of 6.3 percent. After checking with PC retailers, Um does not expected to see "more aggressive promotions or buying in earnest until early September."

By Neil Hughes
Published: 05:00 PM EST (02:00 PM PST)

Apple will likely launch a new high-definition television set in March 2012 with three screen sizes and price points, one Wall Street analyst claims.

Trip Chowdhry with Global Equities Research issued a note to investors on Sunday in which he shared his "converged view" on an anticipated Apple HDTV, with information based on details culled from a number of developer events he attended.

Chowdhry said the product that is most similar to Apple's rumored HDTV is the Bose VideoWave, a 46-inch LCD HDTV with an integrated surround-sound speaker system. The VideoWave aims to simplify HDTVs by reducing clutter, and to improve picture and sound quality.

The Bose VideoWave gives the greatest sense of where Apple's alleged HDTV may be heading, Chowdhry claimed. He said his "converged view" of data from various developers is "probably" 75 percent accurate, and that it will "probably" be launched in March of 2012, with developer sessions at the Worldwide Developers Conference in June.

Apple's rumored HDTV is apparently being benchmarked against the VideoWave because it has reduced its number of cables to just three. Chowdhry believes that any television set from Apple would have just one cable.

The VideoWave also sports a thickness of six inches, packing in 16 speakers. Chowdhry said that Apple's purported HDTV will be a third as thick and will also have 16 speakers.

"These 16 built-in speakers gives a complete surround sound experience, without the need for any external speakers," he said.

Bose's HDTV product comes in just one screen size and price point: 46 inches for $5,200. Chowdhry said that an HDTV from Apple will have three screen sizes and three price points.

"The DSP chip in Apple HDTV is a brand new chip based on Apple's acquisition of PA Semi," he added. "As of now, this new chip is not in mass production."

Claims of a forthcoming Apple-branded Internet-connected HDTV are not new, and one report from April even suggested that Apple could release its own television set this year. One analysis issued earlier this month found that Apple's market capitalization could grow by $100 billion if it were to enter the HDTV market.

By Katie Marsal
Published: 10:15 AM EST (07:15 AM PST)

Apple's iOS has surpassed Nokia's Symbian to become the world's second largest smartphone platform with a 19 percent market share, behind only Android's 48 percent share with multiple manufacturers, according to the latest figures from Canalys.

Because Android phones are made by a wide number of hardware manufacturers, Apple's surpassing of Nokia made it the world's largest individual smartphone manufacturer in the second quarter of 2011.

"The iPhone has been a phenomenal success story for Apple and a watershed product for the market," Canalys Vice President and Principal Analyst Chris Jones said. "It's an impressive success story, given that Apple has only been in the smart phone market for four years.

"With the next-generation iPhone anticipated in (the third quarter of calendar 2011), it's likely that Apple's position will grow even stronger in the second half of the year."

Also moving ahead of Nokia in the second quarter was Apple's rival Samsung. However, Canalys said that Samsung, the largest Android device vendor, had an "underwhelming" performance, considering the opportunities available due to Nokia's struggles.

"Samsung has failed to fully capitalize on Nokia's weakened state around the world, as the Finnish company rides out a challenging transitional period," Jones said. "It's the best placed vendor to grow at Nokia's expense, taking advantage of its global scale and channel reach, but it hasn’t yet done enough to capitalize on this, particularly in emerging markets."

Samsung's 17 million smartphone units sold in the quarter placed it behind the record 20.34 million iPhones sold by Apple last quarter, Canalys said. Nokia's smartphone sales were just 16.7 million units last quarter.

Though Android is the leading platform in 35 of the 56 markets Canalys tracks, the firm found that Nokia has retained its leading role in emerging markets like Brazil, Russia, India and China.

"The problem for Nokia is that demand for its Symbian-based smart phones has dissipated very rapidly, particularly in operator-led markets, such as Western Europe, where it's been strong in the past," said Canalys Principal Analyst Pete Cunningham. "It badly needs the first of its Windows Phone devices to launch as soon as possible to arrest a decline and, hopefully, silence its critics."

In all, Canalys found that the smartphone market grew 73 percent year over year, with more than 107.7 million total units shipped in the second quarter of 2011.

While the latest Canalys estimates represent sales and market share, Apple is far and away the market leader in terms of profits in the mobile industry. One analysis released last week found that Apple represents about two-thirds of the mobile phone industry's profits due to growing iPhone sales.

By Neil Hughes
Published: 09:05 AM EST (06:05 AM PST)

Both Apple's Mac and iPad lineup are poised to make significant gains in the second half of 2011, as the Windows-based PC market remains "relatively stagnant" and is predicted to see 4 percent growth, according to a new analysis.

Deutsche Bank analyst Chris Whitmore believes the traditional PC market does not have "meaningful new offerings" coming this year, while Apple is aggressive with both new hardware and software. Heading into the back-to-school and holiday season, he sees Apple as "particularly well positioned for more share gains."

Specifically, Whitmore cited the recent launch of Mac OS X 10.7 Lion, as well as Thunderbolt-equipped MacBook Airs introduced last month as key products in driving Apple's market share gains.

While Whitmore sees the Mac making further inroads, he has projected the PC market will grow 4 percent this year, a number that is below Wall Street consensus. He said while corporate PC demand is healthy, consumer demand for Windows-based machines, particularly in developed markets, has disappointed.

"Our recent checks with the PC supply chain suggest overall orders have softened modestly in the past several weeks due to weaker European and U.S. consumer (notebook) demand and more conservative back-to-school expectations from OEMs," he said.

Further helping Apple's cause are the troubles apparently faced by PC makers looking to develop the Intel-based "Ultrabook" specification for thin-and-light notebooks. Whitmore said PC manufacturers have suggested that Ultrabook production won't ramp up materially until 2012, as the industry struggles to compete with the pricing of Apple's MacBook Air.

While the Mac alone is predicted to earn market share gains at the expense of Windows-based PCs, factoring in the iPad makes Apple's growth even greater. Calling it the "Gold Standard" of the tablet market, Whitmore said the iPad will continue to dominate for the foreseeable future, while competitors, like the recently discounted HP TouchPad, are expected to struggle.

Whitmore said Apple will make it even more difficult for the competition this fall, when it launches its next-generation mobile operating system, iOS 5. The fifth major version of iOS will add features like Notification Center, iMessage and Newsstand to the iPad, as well as the iPhone and iPod touch, when it becomes freely available later this year.

By Katie Marsal
Published: 02:20 PM EST (11:20 AM PST)

Apple's iOS and Google Android have more than doubled their collective smartphone market share in the last year, and now represent nearly two-thirds of all devices sold, according to Gartner.

The research firm's latest figures show sales of smartphones by operating system in the second quarter of 2011. Android, available on a number of devices from multiple manufacturers, is the top platform, with 46.8 million units sold amounting to 43.4 percent of the market.

Gartner's numbers show that Nokia's soon-to-be-abandoned Symbian platform stayed in second place, with 23.9 million units sold and a 22.1 percent share. That placed Apple's iOS in third, with 19.6 million smartphones sold in the quarter, good for 18.2 percent of the market.

The numbers released Thursday by Gartner stand in contrast to other recent sales reports. Specifically, earlier this month Canalys declared Apple's iOS the world's second-largest smartphone platform, ahead of Nokia's Symbian, with a 19 percent market share.

Roberta Cozza, principal research analyst at Gartner, said Nokia retained its place as the No. 2 platform by volume came because of a combination of sales efforts and greater concentration in retail and distributors' sales. It is expected that Apple will unseat Nokia, in Gartner's numbers, in the next quarter.

"We will not see a repeat of this performance in the third quarter of 2011, as Nokia's channel is pretty lean," Cozza said.

Gartner's analysis found that Apple exceeded expectations, thanks in part to the iPhone becoming available on 42 new carriers and in 15 additional countries in the second quarter of 2011. The iPhone is now available in 100 total countries.

The totals included in Gartner's figures represent what the firm claims are sales of units to end users. That's why Gartner's figure of 19.6 million iPhones sold is less than the 20.34 million that Apple actually shipped in the June quarter.

The research firm declared both Google and Apple the "obvious winners" in the worldwide smartphone market, accounting for 62 percent of all sales together. That's double the 31 percent the two combined for in the second quarter of calendar 2010.

Gartner analysts said that both iOS and Android have "usability that consumers enjoy, the apps that consumers feel they need, and increasingly a portfolio of services delivered by the platform owner as well."

In hardware sales, including smartphones and traditional cell phones, Gartner found that Apple's 19.6 million units sold to end users was good enough for fourth place, with a 4.6 percent total market share. Nokia was the market leader with 97.8 million units sold, representing 22.8 percent of the market, while Samsung came in second with 69.8 million sales and 16.3 percent. LG was in third with 24.4 phones sold, representing for 5.7 percent.

"Smartphone sales continued to rise at the expense of feature phones," Cozza said. "Consumers in mature markets are choosing entry-level and midrange Android smartphones over feature phones, partly due to carriers' and manufacturers' promotions."

Of course, total unit sales only tell a part of the story. Last month, an analysis of mobile phone industry profits found that Apple takes two-thirds of all profit in the entire industry.

By Sam Oliver
Published: 09:20 AM EST (06:20 AM PST)

Contrary to recent reports that Apple would invest $1 billion in an LCD manufacturing plant from Sharp, industry insiders believe it's more likely that Apple is simply making an advance payment to secure display components.

Citing sources in the Taiwan supply chain, DigiTimes reported on Thursday that Apple more likely made a deal with Sharp for panel purchases, rather than actually investing in the Japanese company. Insiders said given the business relationship Apple has had with another display maker, LG, it's unlikely Apple would invest $1 billion in a facility.

Regardless, "tighter collaboration" between Apple and Sharp means Apple will become less reliant on its rival and chief supplier, Samsung. Despite the fact that Apple buys a great deal of components from Samsung, the two companies are engaged in a bitter legal battle with multiple lawsuits spanning across the globe.

Another company that may feel the squeeze from an Apple-Sharp deal is CMI. The company recently began supplying IPS panels for the iPad 2, but closer ties between Apple and Sharp could hurt orders for the company.

Earlier this week, rumors were reiterated that Apple plans to invest $1 billion in a Sharp factory that would build screens for its iPhone and iPad products. Such a move was said to ensure stable supply of LCD displays.

Apple's moves with display suppliers are believed to be tied to recent issues with components from LG. A report earlier this month claimed that LG Display lost its status as the leading iPad 2 display maker after LCD shipments were allegedly plagued by quality issues.

Following the problems, Apple shifted more of its orders to Samsung and new partner CMI. CMI reportedly hopes to become a regular supplier for Apple, and is ramping up production of 9.7-inch iPad displays. It now has a monthly output of about a million units.

"But CMI still needs to stabilize the quality of its IPS panels and enlarge production capacity in order to stand a chance of winning more orders from Apple," Thursday's report said.

By Neil Hughes
Published: 12:57 PM EST (09:57 AM PST)

The addition of Sprint as the third iPhone carrier in the U.S. would add 1.2 million sales this year, helping Apple achieve its strongest holiday quarter ever, according to one analysis.

Maynard Um with UBS Investment Research sees Sprint selling about 1.2 million iPhones in the fourth quarter of calendar 2011. Sprint is the third-largest carrier in the U.S. with 52 million subscribers, well behind market leaders AT&T, with 99 million customers, and Verizon, with 106 million subscribers.

"We believe that the addition of Sprint as a carrier for iPhone is a logical extension of Apple's strategy," Um wrote in a note to investors on Wednesday. "The company has increasingly moved away from the exclusive carrier model and has been using country and carrier expansion as one way to drive growth of its iPhone & iPad lines."

The analysis came in response to a report issued on Tuesday by The Wall Street Journal, which claimed that Sprint will join AT&T and Verizon for a mid-October launch of the fifth-generation iPhone. That timeframe is slightly later than Um had anticipated a new iPhone to arrive, but he does not expect a mid-October launch to have a material impact on Apple's bottom line for the current quarter.

Increasing iPhone sales quarter after quarter have helped to propel Apple to new heights, with record sales and profits a common occurrence. In its last fiscal quarter, the Cupertino, Calif., company sold 20.34 million iPhones, its most ever in a three-month frame.

Um expects that upward trend to continue this holiday season, aided largely by the anticipated launch of the iPhone 5 on three major carriers in the U.S. Combined with the launch of iCloud and continuing strong performances by the iPad and MacBook Air lineups, he believes the end of 2011 will be the strongest holiday quarter in Apple's entire history.

Presuming the iPhone does debut on Sprint's network in October, Um also anticipates that a 3G-capable iPad model compatible with Sprint's network will also debut in calendar 2012. He sees that as yet another catalyst to drive sales and profits even higher.

Um did not offer a prediction on Sprint iPhone sales in 2012, but analyst Gene Munster with Piper Jaffray forecast on Tuesday that the addition of Sprint will add 6 million sales over the next calendar year. For comparison, in the last quarter, AT&T activated 3.6 million iPhones, while Verizon's activations totaled 2.3 million.