The problem will be in using some comparable as a measure of reference. This is a problem because first, there is no equivalent product in history, second, there are few similar products that are pre-ordered and sold without user samples being available, and third it's being sold through a very limited channel (on-line Apple Store). Lastly, the number includes only delivered units vs. reservation for pick-up.
Nevertheless, the figure is intriguing. One class of comparable products might be new smartphone products from companies that were launching on new platforms.
One example is the Android G1--the first Android device. It sold 663k units in the launch quarter. Another is the Nokia 5800, Nokia's first touch capable device. It sold 536k units in the first quarter (up to 1 million in the first 3 months). Sony Ericsson's first Windows Mobile device was the X1. It sold 237k units in the first quarter of sales. The first Sense UI HTC device (the Diamond) sold about 1 million units. The RIM Storm, RIM's first touch device sold 1.6 million units. Finally the iPhone which sold 1.1 million units in the first full quarter of sales (about 1.4 million if we include the weekend sales that fell outside the first quarter).
The iPad does seem to be doing rather well relative to these products. Again, their figures were for a full 90 days of sales and were sold through physical retail channels in a variety of geographic markets.
I will be surprised if the number of units sold in Apple's CQ2 don't exceed 1 million. (Apple will book all these sales only on delivery which means they won't appear in CQ1 sales figures). This will probably mean better performance with a new platform than Nokia, Google, Sony Ericsson or HTC and perhaps better than the iPhone.
On the eve of iPad sales start, and the soon-to-be classic quotes from iPad experts, it's time to play back some of the classic iPhone expert predictions from yesteryear:
"[iPhone] just doesn't matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It's no longer a novelty." - Eamon Hoey, Hoey and Associates, April 30, 2008
"We are not at all worried. We think we've got the one mobile platform you'll use for the rest of your life. [Apple] are not going to catch up." - Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008
"Microsoft, with Windows Mobile/ActiveSync, Nokia with Intellisync, and Motorola with Good Technology have all fared poorly in the enterprise. We have no reason to expect otherwise from Apple." - Peter Misek, Canaccord Adams analyst, March 07, 2008
"[Apple should sell 7.9 million iPhones in 2008]... Apple's goal of selling 10 million iPhones this year is optimistic." - Toni Sacconaghi, Bernstein Research analyst, February 22, 2008
"What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much... Apple's stated goal of selling 10 million iPhones by the end of 2008 seems ambitious." - Laura Goldman, LSG Capital, May 21, 2007
Motorola's then-Chairman and then-CEO Ed Zander said his company was ready for competition from Apple's iPhone, due out the following month. "How do you deal with that?" Zander was asked at the Software 2007 conference. Zander quickly retorted, "How do they deal with us?" - Ed Zander, May 10, 2007
"The iPhone is going to be nothing more than a temporary novelty that will eventually wear off." - Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007
"Apple should pull the plug on the iPhone... What Apple risks here is its reputation as a hot company that can do no wrong. If it's smart it will call the iPhone a 'reference design' and pass it to some suckers to build with someone else's marketing budget. Then it can wash its hands of any marketplace failures... Otherwise I'd advise people to cover their eyes. You are not going to like what you'll see." - John C. Dvorak, March 28, 2007
Even if [the iPhone] is opened up to third parties, it is difficult to see how the installed base of iPhones can reach the level where it becomes a truly attractive service platform for operator and developer investment." - Tony Cripps, Ovum Service Manager for Mobile User Experience, March 14, 2007
"I'm more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular... iPhone may well become Apple's next Newton." - David Haskin, Computerworld, February 26, 2007
"Consumers are not used to paying another couple hundred bucks more just because Apple makes a cool product. Some fans will buy [iPhone], but for the rest of us it's a hard pill to swallow just to have the coolest thing." - Neil Strother, NPD Group analyst, January 22, 2007
"The iPhone's willful disregard of the global handset market will come back to haunt Apple." - Tero Kuittinen, RealMoney.com, January 18, 2007
"[Apple's iPhone] is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't have a keyboard which makes it not a very good email machine... So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot." - Steve Ballmer, Microsoft CEO, January 17, 2007
"The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant... Apple is unlikely to make much of an impact on this market... Apple will sell a few to its fans, but the iPhone won't make a long-term mark on the industry." - Matthew Lynn, Bloomberg, January 15, 2007
"iPhone which doesn't look, I mean to me, I'm looking at this thing and I think it's kind of trending against, you know, what's really going, what people are really liking on, in these phones nowadays, which are those little keypads. I mean, the Blackjack from Samsung, the Blackberry, obviously, you know kind of pushes this thing, the Palm, all these... And I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong, but I think Apple can do wrong and I think this is it." - John C. Dvorak, January 13, 2007
"I am pretty skeptical. I don't think [iPhone] will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed." - Jack Gold, founder and principal analyst at J. Gold Associates, January 11, 2007
"Apple will launch a mobile phone in January, and it will become available during 2007. It will be a lovely bit of kit, a pleasure to behold, and its limited functionality will be easy to access and use. The Apple phone will be exclusive to one of the major networks in each territory and some customers will switch networks just to get it, but not as many as had been hoped. As customers start to realise that the competition offers better functionality at a lower price, by negotiating a better subsidy, sales will stagnate. After a year a new version will be launched, but it will lack the innovation of the first and quickly vanish. The only question remaining isif, when the iPod phone fails, it will take the iPod with it." - Bill Ray, The Register, December 26, 2006
"The economics of something like [an Apple iPhone] aren't that compelling." - Rod Bare, Morningstar analyst, December 08, 2006
"Apple is slated to come out with a new phone... And it will largely fail.... Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits... When the iPod emerged in late 2001, it solved some major problems with MP3 players. Unfortunately for Apple, problems like that don't exist in the handset business. Cell phones aren't clunky, inadequate devices. Instead, they are pretty good. Really good." - Michael Kanellos, CNET, December 07, 2006
"We've learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They're not going to just walk in." - Ed Colligan, Palm CEO, November 16, 2006
Now why would anyone buy a WinMo 6.x (aka Windows Phone Classic) phone today? Is this is a classic example of the Osbourne effect?
Maybe there is more to this story. Buried in the WP7 launch was news that Classic would carry on and a new "starter" edition would also be made available. Said Starter edition would be sold only in emerging countries and target 2G and 2.5G networks.
Furthermore, Ballmer made it clear in a Q&A that they would "continue to invest" in "Classic" WinMo/Windows Phone.
So Microsoft is not quite foolish enough to ignore the consequences of an orphaned platform. The impact of the dual platforms on the ecosystem is another story.
full-year revenue would be "well below" its previous target of $1.6 billion to $1.8 billion. Wall Street was expecting $1.6 billion
If we assume $1 billion/yr. revenues, that works out to about 3 million smartphones a year out of a market that Gartner just forecast to be 215 million this year. That gives Palm just 1.4% share of smartphones.
The WebOS is a fine piece of code, but one has to understand that success in this business is not just doing something right. You have to do everything right:
Nokia has great distribution and logistics, not so good software or platform story
Palm has great software, not so good distribution or platform
RIM has great distribution and service, not so great software
Android has good software but not great integration of solution
Apple's software and platform are great, but distribution is still weak
Microsoft has nothing good at all
The question of acquisition invariably comes up. The obvious answer would be to pair Palm with somebody who needs what they have and who has what they don't. Unfortunately no perfect fit arises.
What are we to make of the new Windows Phone 7 Series?
First, we have to distinguish it as a new platform. Let’s use Microsoft’s new naming conventions and call it “WP7S” as distinct from the current Windows Mobile 6.5 aka “WinMo”.
Steve Ballmer said they will continue to “invest” in WinMo presumably in parallel to the WP7S platform. This is an interesting development since although there might be some interoperability of applications, the new platform will likely have a new set of APIs.
What strikes a follower of the WinMo platform is that the new WP7S is orthogonal in its positioning. Whereas WinMo was for either hard core, ROM burning, .cab-editing geeks, or for corporate suits, the new WP7S is going for the Xbox, Facebook ADHD hipster user. Perhaps Microsoft is also going for the “average” user though that did not come through the presentations.
So these two constituencies (geek vs. socialite) are quite distinct and a product that pleases one won’t please the other. Evidence of this is the fact that many existing users are feeling dejected over the absence of true multi-tasking, the locked memory cards, the lack of compatibility with the old UI and apps, and the overall “dumbing down” of what they thought was a haven of nerdiness in a sea of iPhone hype.
If Microsoft pours more resources into the new WP7S at the expense of the WinMo platform then we can assume they are “firing” their loyal geek users. Frankly, they are a difficult set of customers whose advice tends to steer a product into ever-more complexity and over-service.
This sets up a potential schism repelling the geek set toward Android and the corporate set perhaps sliding toward iPhone.
That would leave Microsoft in a quixotic pursuit of iPhone users without the benefit of an ecosystem.
Three new ambitious platforms starting with zero installed bases and no applications are going up against the following:
Symbian with more than 200 million users and 20k apps
WebOS with less than 3 million users and about 1k apps
Windows Mobile with 30 million users and about 2k apps
iPhone OS, about 75 million users and 150k apps
Android with 3 to 5 million users and approx. 20k apps
Blackberry OS with more than 50 million users and a few thousand apps.
It should be noted that Microsoft’s new Windows Phone “7 Series” will compete with Microsoft’s Windows Mobile 6.5 which will continue as a product line.
MeeGo will also compete with Nokia’s existing Symbian OS for developers, replacing Maemo.
Most of these new platforms will not have products shipping for at least 6 months during which time another 50 million (at least) new users will join existing ecosystems.
There are now nine smartphone platforms, but who’s counting? I’ve been hearing predictions of consolidation for years and although platforms have come and gone (PalmOS, SavaJe), the total number continues to increase.
If nothing else, this seems to indicate that the industry is not in any state of maturity or point of “over-service” where commoditization takes place.
Windows Mobile 7: we so dropped the ball in our early phone OS presence that now it seems like it's a losing battle to have a dog in this fight. But WinMo7 is out there. To me, I can imagine this becoming like the Zune HD: well praised and all, but not making a dent in the market because everyone has already moved on to the iPhone platform. David Worthington interviews Brandon Watson, “director of product management in the developer platform at Microsoft”: Watson claimed that many developers of applications for the iPhone OS–which the iPad uses–are not making money. Developing applications for the iPhone and iPad is expensive, he said, because iPhone OS uses the Objective-C language rather than Microsoft’s more pervasive .NET platform. And Apple’s control over the platform has alienated some people that make software for its products, he said.
Now if we can get the Grand Poobah of Ovi to chime in, we'll be all set.
The common thread among the Android fans is that Google is the agent of disruption of a hated operator business model. Since disruption is well understood (though not by many) it is fairly easy to evaluate this hypothesis.
The problem with disrupting network operators is that disruption can only happen when the underlying service/product they provide becomes "good enough" i.e. more than what customers can absorb. A new basis of competition emerges and we all know what happens.
Here's the problem: since mobile broadband is by all accounts not good enough, it cannot be disrupted. Operators are very critical in building out this new mobile computing future and they are investing and will reap rewards. Bitpipe models will only emerge after 4G when there will be ubiquitous high speed networks and competition will shift away from coverage and more to price and convenience of plans.
What is happening instead of operator disruption is that mobile voice which is more than good enough is being disrupted. Businesses built around mobile voice (e.g. handset vendors who have not developed a viable business model around data) will simply evaporate and their profits will condense around entrants who have mobile computing platforms.
Google is moving on this opportunity but they are not executing in a way that ensures they control the future platform due to the their being on the wrong side of the modular/integrated dichotomy.
Android will disrupt but I expect it will take 10 to 15 years. The life cycle of a new global network generation rollout is about 10 years. We're in the middle stage of the 3G cycle that traces its beginnings to early this decade. 4G will take another 10 years.
A Google spokesperson confirmed for eWEEK that there are 16,000 Android free and paid apps, not 20,000 as others previously reported. (iTunes App store is around 120k now with over 130k apps having been "seen").
A few more data points re. Android:
There are 5 Android instantiations of varying distribution through the first two weeks of December: 1.1, 1.5, 1.6, 2.0 and the fresh 2.0.1. It seems Google is prepared to see that number go much higher. You can see the distribution of platform versions in a pie chart here:
If a developer chooses only the most popular platform version, he gets to target about 54% of the installed base.
Motorola's Droid ships with only 256 MB available for app storage. Google Android does not support installation of apps to SD cards, so developers face a very real limit. Many of the most popular iPhone apps (games) easily exceed 100 MB, so not very many quality apps would fit on Droid (and some won't fit at all: Magellan RoadMate app ($59.99) alone weighs in at 1.36GB). That's why Droid only offers users three measly panels for displaying apps; users probably won't even be able to fill up two before they run out of storage space.
Droid comes with a built-in turn-by-turn app Google's Maps Navigation likely because no other nav app would come close to fitting into the Droid's limited 256MB app storage space.
iPhone now tops WinMo and is second only to RIM. The only line that is going down is the dumbphone category which lost 10 million users.
Those users were mostly switched to RIM and Apple. RIM gained about 4.3 million users and Apple gained about 3.5 million.
Android user base still lowest of all platforms and increased by about 0.6 million. They are likely to beat Palm however next few quarters. At this rate however it's very hard to see an installed base that is going to challenge Apple for a long time.
The number of games per platform. All approximate.
Nintendo DS 600
Sony PS3 600
Microsoft Xbox 700
Sony PSP 700
Nintendo Wii 1000
Google Android 3,000
iPhone/iPod touch 22,000
If IDC prediction of 300,000 iPhone Apps by end of next year holds and if the ratio is preserved at about 20% games, then there could be 60,000 games on the Apple platform by next year. It's doubtful that the other platforms will grow by more than 10% in the same time frame. Are there any implications if one game platform has more titles than another? It's interesting that all the other platforms are in the same order of magnitude.
