Insights from Tracking 200 Apps Across 50 Apple Tablets in Testing
Using Flurry Analytics, the company identified approximately 50 devices that match the characteristics of Apple's rumored tablet device. Because Flurry could reliably "place" these devices geographically on Apple's Cupertino campus, we have a fair level of confidence that we are observing a group of pre-release tablets in testing. Testing of this device increased dramatically in January, with observed signs of life as early as October of last year. Apple appears to be going through its cycle of testing and polish, which is expected from any hardware or software company as it nears launch.
Apple is expected to announce the yet-to-be named hardware on Wednesday, January 27 in San Francisco. There has been broad speculation about the functionality of the tablet, and what kinds of content and media partners the new device will feature. Additionally, there has been speculation about the most likely use cases for this kind of device, as well as which operating system the device will support. The choice of operating systems is particularly important for application developers because if the tablet runs on the same or upgraded operating system as the iPhone, then current applications running on the iPhone will also run on the tablet.
On these devices, Flurry observed approximately 200 different applications in use by testers. Studying category trends provides insight into the kind of user Apple is targeting and how it expects the device to be used. Below is a chart that shows the number of applications in use by category across test devices.
For Play not Work
Historically, tablet devices have been considered substitutes for anything where workers use clipboards, note pads or day runners. In more industrial settings, they could be used for inventory management, taking purchase orders or data entry. However, there was a surprising dearth of applications that support these use cases. Instead, the largest category was games. With a larger screen, more memory, multi-touch and multi-tasking expected, games will play better than ever on Apple handheld devices.
A Media Machine
The tablet device clearly targets consumers. The mix of applications observed comprises mainly of media and entertainment consumption as opposed to enterprise, productivity and computing. Specifically, popular tested apps include news, games, entertainment and lifestyle. In particular, there was a strong trend toward news, books and other kinds of daily media consumption, including streaming music and radio. In fact, the most widely downloaded of any single specific application was a new app. In its October Pulse report, Flurry studied iPhone as an e-reader and the threat this poses to Amazon Kindle. With rumors of large newspaper and book publisher deals, combined with its reading-friendly form factor, we speculate that the new Apple tablet will focus heavily on daily media consumption. Finally, across all applications detected, there was a strong theme of sharing and/or social interaction including social games, social networking, photo sharing and utilities like file transfer applications.
Not the Battle for Your Living Room
The device is positioned to appeal to the users who are out-and-about rather than compete directly against the TV, stereo and game console in the living room. With supply chain reports from Asia that light-weight 10.1" LCD and OLED screen components are in short supply due to large purchases presumably by Apple, we can surmise that the device will be thin and light, designed for portability. Further supporting this notion is the pattern of apps we detect for restaurant, movie show times and other apps that help users find points of interest around them, including travel guide applications.
A Rocket Booster for Developers
A noteworthy observation is that the Apple hardware we detected was running on OS 3.2, which has not yet been released. Currently the iPhone and iPod Touch are running on OS 3.1.2. Historically, Apple releases OS upgrades just before releasing new hardware. With significant expected changes (e.g., multi-touch, multi-tasking) for the tablet device operating system, there was concern among application developers that the tablet would not support existing iPhone applications. However, from the testing we observed, it appears that Apple wants to leverage the 130,000+ applications already available in the App Store on day one for the new device. For the developer, this is good news. Senior research analyst with Piper Jaffray, Gene Munster, is forecasting 2010 sales of iPhone and iPod Touch devices at 36 million, an increase over his estimate of 25.7 million for 2009. With tablet shipments for 2010 perhaps reaching 10M, according to AVI Securities, we see this as a major boost to application developers.
Flurry Estimates 20,000 First Week Nexus One Sales:
Not an Apples to "Apple" Comparison
The Google Nexus One launch has become the most controversial and confusing Android handset launch to date. With publicity "leaks" over the holiday season, the Nexus One handset received unprecedented buzz. This same hype helped create the expectation of a revolutionary Android handset and its potential to be an iPhone killer. To gauge the success of Google's first handset launch, Flurry leveraged its analytics reach to estimate launch week sales of the Nexus One.
Flurry monitors usage of more than 10,000 developers' applications on iPhone and Android platforms. In total, Flurry tracks applications on approximately four out of every five iPhone and Android handsets in the market, generating over 25 million end user sessions per day. To estimate first week sales totals for the Nexus One, myTouch 3G, Droid and iPhone 3GS, Flurry detected new handsets within its system, and then made adjustments to account for varying levels of Flurry application penetration by handset. Flurry additionally crosschecked its estimates against Apple actual sales, released for iPhone 3GS, which totaled more than one million units over the three days, June 19 - 21, 2009. Flurry first week sales estimates can be found in the table below.
While Flurry estimates that Nexus One was outsold by Droid by more than 12 times, myTouch 3G by 3 times and iPhone 3GS by a staggering 80 times, it's worth noting there are significant differences in the marketing, distribution and perception of the device as revolutionary vs. evolutionary. In short, key business decisions and other factors related to the Nexus One launch make an "apples-to-apples" comparison difficult.
As a product, the Nexus One boasts the most advanced Android OS to date as well as unique features, such as Google Voice and Google Maps. However, potentially due to the heightened "promise" created by early buzz, the handset has ultimately fallen short on sales expectations. Without the "wow factor" now expected with each new challenger to the iPhone, especially the first smartphone with Google's own branding, demand generation has been modest.
Next there is distribution, pricing and marketing to consider. For its release, Google executed an online "soft launch" of the Nexus One, a very different go-to-market strategy compared to Verizon's launch of Droid, on which it spent a record-breaking $100 million on marketing, including aggressive TV advertising spends. Instead, Google chose to market and sell the device to consumers directly through its own website. While this distribution strategy is among the most innovative facets of the Nexus One launch, and a threat to carrier control of the consumer relationship, a series of customer service and other mistakes reveal Google's lack of retail experience. Further, Google chose to launch its Nexus One after the holiday season. While selecting this launch time may have been designed to avoid competing unnecessarily with its carrier and OEM partners over the all-important holiday season, this also adversely affected sales.
Additionally, T-Mobile, Google's carrier partner for Nexus One, did not provide the same carrier co-marketing support as it did for the myTouch 3G launch. Cannibalization may also be playing a role as the Nexus One competes against the myTouch 3G for any new T-Mobile customer. In effect, sales are now split between the two handsets. And while Google, in an effort to avoid channel conflict with T-Mobile, appears to have set the direct-to-consumer price for the handset at over $500 dollars, the high price point combined with the fact that the handset is only considered an "evolutionary" improvement over previous Android devices, indicates that Google did not take the steps to maximize first week sales. This is especially evident when one considers that among the most expensive costs associated with the launch - marketing - has not been incurred, and could have been applied to lowering the direct-to-consumer price point.
With each consecutive Android launch, consumers are enjoying more choices in the market. The flipside of this, however, is that it will take increasing innovation and decreasing price points to attract new smartphone consumers. Further, for Android to continue to chip away at Apple's third-party app developer support - key to delivering consumers more value - it needs to aggressively grow the Android device installed base. Only then will application developers more fully support Android.