Category Archives: iPhone

Why you didn’t get the iPhone 5

Wonder why Apple only tweaked the innards of the iPhone? Apple sales of iPhones are up — way up. The table above shows the history of iPhone unit sales; the latest hardware upgrade, in the iPhone 4, launched in June 2010 only four quarters ago, pushing sales phenomenally higher. 55.2 million iPhones were sold in the past three quarters vs. 25.8 million in the same period a year prior. Sales are nowhere near cresting for the current design, so Apple likely is pacing itself for a hot, thinner iPhone 5 release in June 2012.

Sorry you have to wait. It would help if you didn’t buy so many of the current models.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

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Why does Facebook avoid mobile ads? It wants to be your wallet.

Here’s a blindingly obvious puzzle: Facebook doesn’t run ads on mobile. Digiday’s Mike Shields asked why last week, noting that with 250 million Facebook users logging in from iPhones and other smart handsets, it seems curious that Facebook would skip potential millions in advertising revenue.

Why, oh, why, is Facebook missing ads on mobile? We believe it has a bigger move in mind — to become your digital wallet. Cell phones, you see, are about to undergo their hottest revolution since they got hooked into the Internet, and there are billions of dollars for the players who can be first to train consumers in the “digital wallet” marketplace. Here’s the scoop:

1. Both the next-generation Apple iPhone 4S and Droid phones will likely support NFC, the “near-field communication” short-range signal that allows consumers to wave a phone in front of a cash register to transfer payments. (Google has told its developers that it will launch dozens of NFC Android phones by the end of 2011; we can’t imagine Apple will be left behind.) Soon, instead of supporting communication, cell phones will also hold the money that supports your livelihood.

2. NFC phones will revolutionize payments. Consumers will dig them, just as you now love your iPhone camera and video instead of lugging around an SLR, and merchants upset with high credit-card percentage takes from each transaction will be open to a new, handier, lower-cost way to get paid. (Ever have a retailer turn down American Express due to its fee structure? You’ve seen the market opportunity.)

3. Yes, there will be tons of competition for the new smart-phone-wallet space. American Express launched Serve in March to tap consumer funds from banks across multiple devices; AT&T, T-Mobile and Verizon formed a joint partnership called Isis to support mobile NFC transactions; expect Apple and its iTunes payment system to leap into the space, too.

So, why could Facebook beat them all? Because of its user base. PayPal makes nearly $4 billion in revenue a year from only 94 million active users buying stuff online; imagine what Facebook could do with 250 million social-networking addicts glued to their handsets. We outlined in Bloomberg Businessweek in March that Facebook has all of the pieces in place to support financial transactions, including Facebook Credits (a virtual currency) and Facebook Payments (a payment system incorporated to support “all lawful business”).

All Facebook needs is the mobile hardware, and that’s coming by Christmas. Facebook has a choice: It could clutter up its tiny mobile interface with ads, potentially turning off mobile users, or it could include a new beneficial service that helps users make payments with cell phones, while charging an invisible, small slice to merchants. Hmm. Which would you Like?

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Image: jirotrom

The Droid’s dude problem

Here’s a secret about new technology: Women are less likely to use it.

Repeated studies show that early adopters of devices such as tablet computers or smart phones skew male. 65% of iPad users are men, according to Nielsen. 73% of Android phone users are male, says AdMob. Even the iPhone and iPod Touch, devices that have been around for years, still have 54%-58% male users vs. female. The trend holds abroad; London-based Rabbit agency’s Dirk Singer notes only 5% of women told a UK study they would consider a Droid phone as their next mobile purchase vs. 11.4% of men.

Why is this important? Women direct about 85% of all product purchases in the United States, including 65% of new car sales, 80% of healthcare decisions, and a whopping 91% of new home sales. Their buying power is expected to increase in the next decade as Boomers age and men, with their weaker life spans, die off sooner; Fleishman-Hillard estimates women will soon control two-thirds of wealth in the United States.

Marketers enamored with the newest technology might pause and rethink their media strategies. Creative director Stephanie Holland has suggested that the majority of women “feel misunderstood” by healthcare, automotive, investment and other marketers. Are your channels in sync with the female consumers likely driving your sales?

Image: Pranav Singh

The pricing genius of the $0.01 iPhone case

Ah, mimicry. is making hay off of Apple’s iPhone 4 reception troubles by running contextual ads online next to articles about iPhones. The banners are designed to look like official Apple ads (same fonts, layout style), and clicking through to the site offers a killer promise — get an iPhone case that solves your antenna issue for only 1 penny!

The math is impossible, you say? Why, yes. Check out and the company adds $3.99 for shipping and handling. USPS tells us the cost to ship a 3 oz. package is $1.22, leaving DefaultCase with a nice estimated $2.78 for each small piece of plastic. Great case study in how to manipulate prices to convey value, while also riding a major company’s bad press.

P.S. The site also suggests the cases are a $35 value. A touch of reference pricing to sweeten the deal. Yum.

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Has Apple snared 20% of total mobile ad spending?

Do the math and your jaw will drop.

While Steve Jobs was distracting you Monday with the glittering iPhone 4G’s front-facing camera, potentially heralding an era of video calls into the U.S., Apple was plotting its real move — staging a 40% margin slice of the nascent mobile advertising market. If you can believe Apple’s announcement, it has already booked one-fifth of the entire mobile advertising market — and the crazy thing is Apple’s mobile ad platform won’t go live for three more weeks.

Mobile advertising has been hampered for a decade by shoddy interfaces, shrunken visual inventory, changes in consumer modality (you use tiny handheld devices to talk and text things, not surf the web), and — most recently — Apple’s own groundbreaking app universe. More than 225,000 push-button apps have now been downloaded 5 billion times, and each of those buttons gives handset users a way to find information online — weather, sports scores, games — while avoiding the old-style Internet. Until now, that’s almost 225,000 unique tiny media formats that advertisers would have to push their way into if they want to try to intercept that audience. (Don’t think mobile advertising has stalled? Then please review the past decade’s comical missed mobile ad spending forecasts.)

But on Monday, Apple announced its iAd mobile advertising network had booked $60 million in ad commitments for the second half of the year — a run rate of $120 million annually, or 20.2% of the total $593 million that eMarketer says will be spent on mobile ads in 2010. Let us repeat. Apple’s iAd mobile ad platform, which will turn on July 1, has already gained one-fifth of the mobile ad market. At a 40% margin.

Apple’s platform gives hungry garage-based app developers the other 60% cut, something better than nothing, and marketers a way to outwit all of those nasty web-ad-inventory-avoiding applications by intercepting them all. And unlike Google’s app-ad systems, Apple’s doesn’t push you away from apps into the web when you click on one but lets you continue easily onward in your app-fueled journey.

What can we say, Steve? Forget that glittering glass iPhone; your margins are looking su-weet.

Image: Stephen Mitchell

The apples don’t exist

This bit works on several levels. First, it’s a dramatic ad pointing out New York City residents waste 270,000 pounds of food each day while others go hungry. Second, it was shot on an iPhone (backstory here). Which third, means that soon special effects will be as simple as the Lego brickfilms now being made by your 9-year-old. Which, of course, fourth, means the visual representation of reality will soon be so hard to judge that we won’t know what is real and what is not. But fifth, our view of reality has always been artificial — money itself is an elaborate fiction of ones and zeros on computer systems — so why not view the world as we want?

Your mobile app will fail. So line up some more.

Look at your smart phone. See those colorful apps on the screen? Now ask yourself, what happens when the cost of making one of those becomes almost zero?

It’s happening. Apps are morphing from software into advertising channels because the cost of producing them is plummeting., as BusinessWeek reported, is just one of several companies that allow non-techies to create their own apps for a few hundred dollars. If you sell steaks by mail, you can draft a tiny software icon that offers grilling tips and barbecue recipes. If you are recruiting college students, you could launch a how-to-meet-people-on-campus app that also promotes your higher ed program. The app stores are now an unlimited new marketplace for promoting products, with handy software that provides a service … and subtly promotes your brand.

Bad for long-term loyalty, good for short-term buzz

The bad news is apps stink as a loyalty device. App usage follows traditional power laws in that most consumers stop using most apps after a month; this spring a study by Pinch Media of 30 million app downloads found only 20% of people continue to use a given app after a single day, and after 3 months only 1% of users continue tapping on a given app. Hire an interactive shop and dream as big as you want, odds are that within a few weeks your mobile app will fail.

But what about as an ad vehicle with a given campaign life? Think of it like this. Instead of consumers using Google search to find your web landing page, they’ll now use app stores to find your push-button mobile software. It doesn’t matter if usage falls off from your mobile app because — just as you refresh ad creative — you can launch a series of new apps for pennies next month as well. If apps are almost free, and have a short life, then instead of viewing them as one-off software utilities, consider them as sequenced media placement.

An app a day keeps the mobile in play

Mobile apps were born at 6 p.m. on June 29, 2007, when Apple rolled out its iPhone acknowledging that even with a beautiful touchscreen design, getting on the internet through a mobile browser is a pain. What good is the web in your pocket if you can’t easily tap into it? So tap Apple did, including “apps” with single-touch icons that launch specific internet-based programs. (Google, the current PC portal to the internet, must still be freaking out about this, but that’s another story. And probably why Google is aggressively entering the mobile software business, giving away free GPS directions to keep you paying attention.) Apple now has about 85,000 such mobile programs for the iPhone, and Google’s Android mirrors it — click on this icon and weather, sports scores, or Bloomberg headlines pop up.

As costs decline for building such simple mobile software, we see a competitive marketplace heating up. Brands will vie for shelf space by building scores of apps related to their brand. Imagine Crest with tooth whitening apps, dating apps, dentist location apps, calorie counting diet apps, public speaking tips, personal portraits for your Facebook page … an unlimited array of onramps leading to whiter smiles based on toothpaste sales. The simple mobile app will move away from software to media placement, just another advertising channel.

It is arrogant, isn’t it, to try to build a single mobile app that becomes a “portal” for every consumer to use? As the web has taught us, consumer communication patterns don’t fit into such traps. So if you’re playing with mobile apps, we suggest you move beyond one big idea. Don’t do a single app. Do a hundred. Create a campaign calendar and fill up the timeline with scores of mobile buttons launching like soldiers going to war.

Image: William Hook

What the AT&T apology means for the iPhone

Last spring at the annual South by Southwest Interactive conference in Texas, Guy Kawasaki had just started to interview Chris Anderson on stage when a cell phone went off in the audience. “It can’t by AT&T,” Guy cracked, “because they have no coverage in Austin.”

AT&T has gained notoriety as a spotty network, and so has launched an apology campaign with “Seth the Blogger.” The videos have in turn caused a little controversy, since Seth is really Seth Bloom, a senior vice president at Fleishman-Hillard, AT&T’s PR agency, and not a techie blogger. (Unpaid bloggers get upset when paid professionals impersonate them. No matter.) We think Fleishman-Hillard struck the right tone and got the message out, namely that the iPhone is a data-guzzling beast and keeping up with it requires significant investment in infrastructure.

iPhone over?

The real story here is the glow may be fading from the iPhone’s design beauty. The iPhone gave AT&T huge momentum — AT&T, the sole carrier of the Apple phone, shot from 70 million to 77 million wireless customers in 2008, and ended the year as the United States’ largest mobile provider. Margins have grown fatter too: AT&T’s wireless segment operating income margin ballooned from 12.2% in 2006 to 22.5% in 2008, driven largely by increased data usage from iPhones. But as glass pads with apps become a low-cost commodity, AT&T may lose its Steve Jobs advantage. AT&T notes in its last annual report “we have three to four other wireless competitors in each of our service areas and compete for customers based principally on price, service/device offerings, call quality, coverage area and customer service.” The market is saturated with sexy phones. Time to build out the network.

To hear a whimsical debate on the matter, catch The BeanCast advertising podcast, which we recorded last night with host Bob Knorpp, Bill Green, Greg Verdino, and Åsk Wäppling. Åsk lives in Malmö, Sweden with gads of bandwidth, and wonders why we Yanks don’t have video conferencing on mobile yet.

iPhone subways: Augmented reality gets real

Augmented reality is one of the themes of William Gibson’s recent book Spook Country, in which high-tech renegades overlay ghostly images on real-world locations to create “locative art,” visible via special glasses. You know, like the dead body of a famous writer floating in the street, showing the scene from the moment he died.

The idea of the internet overlaying reality is becoming concrete. Now an iPhone 3GS app by Acrossair, above, points you to the nearest subway station, with ghostly arrows telling you which way and how far to walk. The technology that makes this work is all logical — a combination of the phone’s video screen, GPS locator, and accelerometer — but the result seems magic.

Coolhunter Tom Ajello has a detailed profile of other augmented-reality mobile applications here.

Via Brandflakes.