Smartphones Explained - Eswar Priyadarshan, CTO

Eswar Priyadarshan, CTO

Friday, October 9, saw a news article featuring two names you never thought you’d hear in the same breath – Steve Ballmer and Giorgio Armani – announcing the release of an Armani branded Windows Mobile Smartphone. This odd couple pairing was yet another news story in a several month long drumbeat of stories about the inexorable march of the Smartphone into consumers hands.

Microsoft will have 15 new Windows Mobile Smartphones by the end of this year. Google Android is now available on 9 devices across 26 countries (riding on top of 32 carriers), with dozens more to follow in 2010. Verizon Wireless and Google recently teamed up to announce a new Android-based partnership. It’s been almost 4 months since the Apple iPhone 3GS was launched, so our insatiable desire for new goodies from Cupertino is back at fever-pitch. And what’s RIM going to do to counter all these behemoths? And what about Nokia, who I must point out, still leads all in unit mobile phone shipments worldwide?

So just what is this device, the Smartphone? Is it a phone that happens to have a keyboard and a browser? Is it a small computer that happens to have phone functionality? Or is it a small computer that just has a Wifi connection and a browser?

This is the first of 3 posts diving into the Smartphone phenomenon – we will cover definitions and examine some of the more significant players more closely this week, next week we’ll talk about what the Smartphone might mean to publishers around the world and in the week following, cover the impact of Smartphones on advertisers worldwide. Smartphones are now a small part of the market but obviously growing rapidly, thanks to some of the major industry moves mentioned above. It’s therefore smart for all publishers, advertisers, networks and platform players to have a clear definition, point-of-view and a plan.

We begin with some definitions of how a company like Quattro Wireless views the range of mobile devices around the world.

• Super Smartphone – Walt Mossberg of the Wall Street Journal first coined this term in an article entitled The Smartphone Wars. These are the high-end devices that have full HTML browsers, bigger screens and an open application platform.  Examples include: iPhone, HTC Dream (G1 Android), Palm Pre, HTC Hero (Android) and the Moto Cliq (coming soon).
• Smartphone – The industry definition is a bit general, but in a nutshell these are devices that run operating systems like Windows Mobile or BlackBerry OS, typically (but not always) have larger screens and QWERTY keyboards, and in essence run like mini-versions of desktop PCs.  The primary difference between these devices and Super Smartphones is the lack of full HTML browser and the absence of full touchscreen functionality.  Examples include BlackBerry Pearl, many of the Windows Mobile Devices, Palm Centro, Mototola Q, etc.
• Mass Market Device – These are typically smaller devices with proprietary operating systems, they tend to lack PC-like functionality and usually have no keyboard, only the numeric keypad and a rudimentary mobile web browser.  Examples include the Moto RAZR, Samsung R-450, Moto KRZR, etc.
• Gaming Device – These are devices primarily used for playing games.  They typically support a Wifi connection, an app/gaming platform and a Web browser that is full HTML in some cases (e.g. iPod Touch). Given their target demographic, gaming devices typically do not have calling features.  Examples include: iPod Touch, Sony PSP, Nintendo DS, etc.

The Quattro Wireless ad network receives millions of daily ad requests and serves ads across all mobile device categories listed above. In fact, the variety of devices, the types of networks they run on, and types of media and functions they support is an excellent reason for the ongoing utility and viability of mobile ad networks like us. The coming onslaught of new devices across all categories worldwide keeps us busy and ensures that we deliver the best user ad experience for consumers around the world.

Smartphones, Super or otherwise, are very important today for overall ad network metrics. Smartphone users over-index dramatically in terms of ad impressions because they typically are consuming a lot more web and app content, not just because their platform supports rich web and app features, but also because of the real Smartphone secret weapon, the Unlimited Data Plan. Simply put, Smartphone users possess great devices where they can surf all day without having to pay by the mobile byte – the net result is very high consumption of mobile content which results in many ad monetization opportunities. The touchscreen-based Super Smartphones take it up a level in that they over-index in terms of clicks and overall engagement since they encourage a “lean forward,” tactile interaction with the content.

You may have noticed that this Smartphone post isn’t necessarily an all-iPhone post. That’s because Smartphones are today not just about the iPhone. In a few months, after the Google/Microsoft blast we have been told to expect arrives, the “Smartphone wars” will feature close to 50 devices battling for supremacy and will include combatants from Apple, RIM, Nokia, Windows Mobile/Microsoft, mobile specialists like HTC (whose TouchWiz phones run on both Windows Mobile and Android), Palm, and old-new entrants like Dell.

The iPhone will lead the pack in overall functional packaging and user experience for a long while to come, but it’s worth spending a moment reviewing some of the other top Smartphone vendor contenders.

 

• Google Android has been a solid success based on data from Google plus what we have observed in terms of ad requests and click-through behavior – Android G1 users are heavy app users (overall downloads as well as usage) and we see high ad click-through rates on our network. We expect to see significant ad growth on Android as it grows from 1 phone (G1) to about 20 by year-end across many carriers worldwide.
• The BlackBerry from RIM has always been a mobile ad network favorite – BlackBerry users are classic Smartphone users – they browser early and often. The introduction of BlackBerry App World and RIM’s strong support for application developers has brought a big wave of BlackBerry Apps into the mobile ecosystem with all signs pointing to increased growth in overall traffic from applications and the mobile web. RIM’s purchase of the WebKit-based Torch Mobile browser caused a few high-fives amongst us fans of full HTML browsing on mobile devices – it’s a long overdue sign that RIM has fully embraced a no-compromises mobile web experience.
• Windows Mobile is still a bit of a puzzle – some nice devices (like the Armani), two releases for Smartphones (WM6.5 and WM 7.0) that are supposed to co-exist in harmony, a Sidekick release (Sidekick LX 2009) that is rumored not to have Windows Mobile as the OS, the list of puzzling twists and turns that goes on and on. To top it off was this week’s Sidekick Disaster, where it was bad enough that Microsoft-hosted Sidekick servers crashed, but then the news followed of nightmare spaghetti system integration that perhaps would never recover user data – an apt metaphor for the state of mobile from Redmond.
• Nokia caused some major naming confusion when they decided that they were going to call their mobile S60 Operating System the “Smartphone OS” and then promptly shipped many devices like the Nokia 7610 Smartphone that are great phones, but not what the average consumer would call a Smartphone, since they miss a full keyboard. They ignored the Smartphone market in the early parts of this decade, in favor of grabbing mass-market share in countries like India, and are now trying to return to Smartphone competition with a vastly altered competitive marketplace.

Next week, now that you’ve oriented yourself around the different meanings and interpretation of Smartphone, we’ll think it all out from the perspective of a publisher. What does full HTML browser mean? Should I build a mobile application? What do I need to do to get ads into my Smartphone mobile site or app?