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U.S. Smartphone market analysis Q2 2010, creating Smartphone Hits, analyzing U.S. consumer, APP market, APP communities, Mobile Advertizing, Mobile Marketing, Social Networks, Marketing Strategy, U.S. Economic Recesion, Consumer Insights.
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U.S. Smartphone market analysis Q2 2010, creating Smartphone Hits, analyzing U.S. consumer, APP market, APP communities, Mobile Advertizing, Mobile Marketing, Social Networks, Marketing Strategy, U.S. Economic Recesion, Consumer Insights.


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The U.S. Smartphone Market is growing 60%, the Smartphone industry is recreating itself, ther are new key players. …

The U.S. Smartphone Market is growing 60%, the Smartphone industry is recreating itself, ther are new key players.
On the post Apple iPhone 4 era, new challenges have been faced to launch Smartphones impacfully. The way that Apple has done has raised the bar.
To be a serious competitor it is necessary to consider more factors when putting together a Smartphone marketing strategy.

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  • 1. How the Smartphone industry will pull the U.S. 1 2 3 4 5 6 7 8 9 0 economy out from recession Q2-2010 Smartphone Industry Analysis Based on Wall Street Journal, Businessweek, Gartner, ITIL, Wired Magazine, FierceWireless, Digitime, NPD. Smartphones 1 2 3 4 5 6 7 8 9 0 Creating HITS Lattes Edgar Canul,
  • 2. The Q2-2010 U.S Smartphone market, 1 2 3 4 5 6 7 8 9 0 The Information you need to know. •60% ´s growth projection through the entire 2010 year, Cellular service bills, Consumers are the boost´s trigger of the global Smarthphone industry grew 64 % June 2009 to the Smartphone market. June 2010 period, while the U.S. market grew 41% YoY, Q2-2010. The U.S Q2 Smartphone estimated Market Value •Hits are the only option to be a key player in the U.S. is $ 5Billion. Smartphone market; Hits are necessary either to create brand or to make a series of product portfolio hits . •Apple´s iPhone & iPad debuted successfully as Hits; the Smartphone Hit = Innovation + Hollywood Movie Saga type Apple´s “how to create a Hit” formula has raised the bar. of launching. Industry will expect that competitors use this new benchmark, 1.5 M iPhones on the first weekend, to chart •Innovation might be something difficult to find, let the weekly the sales´ performance of their new products for APPs´ developer communities to find it for you, you only the 1st month, mimicking the weekly Hollywood Box need to make it easy for them offering a friendly office. development platform, friendly distribution platform, and miscellaneous means to sale their APPs; •Smart-pipe tactics are played by the Carriers to stimulate For a 2010 estimated Market Value of $4 Billion. their 3G wireless data service usage, while maximizing the Network Demand and Capacity management; AT&T •Social Networks extensive usage via Mobile handsets eliminated unlimited Data plans, while Verizon keeps increased the Carriers traffic and the Smartphone demand. them. Social Networks became as well a consumer powerful instrument. Word of mouth has finally an amplifier tool to •Consumers are cutting expenses, but not in wireless, invite the specific Smartphone users to become the fan or neither in their Smartphones, nor perhaps in their Carrier the critic of any specific product. Edgar Canul,
  • 3. Smartphone market scope Icons. This presentation switches, between U.S. and Global Market figures, so there are provided Icons as a visual help U.S Smartphone market Icon. 1 2 3 4 5 6 7 8 9 0 Global Smartphone market Icon. 1 2 3 4 5 6 7 8 9 0 Edgar Canul
  • 4. The Market projection by December 2010 1 2 3 4 5 6 7 8 9 0 According to Digitimes, the Smartphone market will reach 280 million units by the end of 2010 compared to 178 million units during 2009, representing a growth of 57% Edgar Canul,
  • 5. The Market Context on 1H2010, 1 2 3 4 5 6 7 8 9 0 Jun-2009 on Jun-2010 Despite the Global Economic Environment and according to Canalys the YoY June 2009 to June 2010, the Smartphone Industry grew 64% Edgar Canul,
  • 6. 1 2 3 4 5 The Q2 2010 Market Growth 6 7 8 9 0 According to Canalys the United States Smartphone market grew 41% Year on Year Edgar Canul,
  • 7. The U.S. is the largest Smartphone 1 2 3 4 5 6 7 8 9 0 Market in the World According to Canalys the United States Smartphone market is the largest in the world, in Q2 2010, shipping 14.7 million units corresponding to 23% of the global shipments Edgar Canul,
  • 8. 1 2 3 4 5 The Q2 2010 ASP 6 7 8 9 0 According to NPD and InformationWeek the United States Smartphone ASP is $143 My Estimation of the U.S. Market Smartphone-ASP is $337 Edgar Canul,
  • 9. The Q2 2010 Estimated U.S. Smartphone 1 2 3 4 5 6 7 8 9 0 Market Value and Average Selling Price U.S Q2-2010 Estimated Market Value & ASP Manufacturer Market Smartphone Estimated Estimated Market Share Market Volume Manufacturer Value ASP •RIM 32.10% 14700000 310 1462797000.00 •Apple 21.70% 14700000 634 2022396600.00 •HTC 14.40% 14700000 358 757814400.00 •Others 31.80% 14700000 153 715213800.00 Smartphone Market Value 4958221800.00 Smartphone ASP 337.29 Estimated U.S Market ASP= $337.29 Estimated U.S. Market Value=$ 4.95 Billion Edgar Canul,
  • 10. The Q2 2010 Market share by 1 2 3 4 5 6 7 8 9 0 Manufacturer According to Canalys During Q2 2010 the U.S consumers´ preference for Smartphone showed the following Market share •Manufacturer %Share ASP •RIM 32.1% 310 •Apple 21.7% 634 •HTC 14.4% 358 •Others 31.8% 153 (averaged) Edgar Canul,
  • 11. The Q2 2010 Market share by 1 2 3 4 5 6 7 8 9 0 Operating System According to NPD During Q2 2010 the U.S. consumers´ preference for Smartphone showed the following Market share •Android 33% •RIM 28% •Apple 22% These figures according to the NPD tracking of U.S. consumers, aged 18 and older, who reported purchasing a mobile phone. NPD does not track corporate/enterprise mobile phone purchases. Edgar Canul,
  • 12. The Smartphone Q2 2010 1 2 3 4 5 6 7 8 9 0 Market share by Operating System According to Gartner, during Q2 2010, the worldwide consumers´ Smartphone preferences showed the following Market share: •Symbian 41.2% •RIM 18.2% •Android 17.2 •Apple iOS 14.2% Edgar Canul,
  • 13. The Smartphone projection 1 2 3 4 5 6 7 8 9 0 through the end of 2010 According to Digitimes the Smartphone industry will reach 280 million units worldwide for the entire 2010, growing 57%. The projected share, by Operating System, will be as follow: •Symbian 35.0% •Android 19.6% •RIM 16.4% •Apple 15.2% •Windows Mobile 5.0% Edgar Canul,
  • 14. How Apple created, in just 3 months, a couple of Hits: iPad and iPhone-4 1. Bringing large APPs´ Developer communities. 2. Bringing innovation through the APPs´ developer communities. 3. Bringing crowds of Fans and anti-Fans. 4. Using the free Advertizing. 5. Utilizing the Pixar & Hollywood product Launching practices. 6. Its iTunes data highway utilized either, as an Upgrading instrument to update the Device´s Firmware & SW, or as an Internet tool for content distribution & retail shelf. 7. A remarkable APP development platform. The iPad interface has made its users to find themselves, inspired permanently, to stimulate the necessary creativity and innovation skills to Create a new APP, Edgar Canul,
  • 15. The Apple Hits way, 3 key aspects: •Collaboration, 1-5. •Infrastructure, 6. •Innovative Apps development platform, 7. Edgar Canul,
  • 16. Why to Create a Smartphone Hit? 1. Considering the Smartphone fierce competition, and based on the iPhone benchmark of 1.5 Million units sold during its first weekend, the only way to respond to these kind of challenges is creating one Hit. 2. To gain the media attention and get free advertizing. 3. To maintain the value of the ¨Smartphone¨ brand and increase the profitability of the Smartphone product as well as the Brand portfolio ASP. 4. To be recognized as a distinctive competitor, if you have new product that uses Android OS, what would be the factors which differentiate you from the other Handset Manufacturers? 5. To appeal the APPs´ developer communities. 6. To showcase your innovation and your Brand Muscle. 7. To conquer the Social Networks, dent the Market and get the Consumer attention. Edgar Canul
  • 17. How to Create a Smartphone Hit? • We know now what we need to create,.. a hit. • We need to figure out now How to create a Smartphone hit. ¨ Edgar Canul
  • 18. Hollywood context is the best reference to define a Hit • How many theaters you are showing one specific movie during its first weekend (3500 theaters, 2800 theaters.). • How many weekends in a row this movie maintains the same level of audience (3 weeks in a row with sold out.). • What is the Movie´s Box Office? Edgar Canul
  • 19. Hollywood context is the best reference to define a Hit • Height= Number of Show Rooms when opening, # of Theaters when launching. • Length= Number of weeks in the Box Office first place. Edgar Canul
  • 20. Hit multiplying formula Hit = Height * Length (Hit= large Box office) Edgar Canul
  • 21. The Long Tail definition for a Hit (Long Tail book by Christian Anderson) Hit = Head´s Area (The Hit Head area has to have large dimensions) Edgar Canul
  • 22. First of all, what is the Hit´s area equation The shape of the Head´s area is already defined by the Long Tail formula Hit = (Commercial Launch)1/X (Where X is the length of time ) Edgar Canul
  • 23. What are the components of the formula Height = Commercial Launch Length= X Commercial Launch= Innovation * Execution * Value * Brand* Number of units shipped. Length= X ; X = # of days X= # of Weekends. Edgar Canul
  • 24. The Head of the figure is the Hits Ground Revenue When creating hits, there is not focus at all for the long fail Time This is the Hit Area. Edgar Canul
  • 25. Hits are measured just as Hollywood saga movies´ premiere Revenue & Volume Number of weekends with a sales record The more units are sold during the first 4 weekends the better. Edgar Canul
  • 26. Let´s use the formula to launch a product to compete with Apple Height = Number of products sold during the 1st weekend= 1,500,000 Length= Follow it through the first month= 4 weeks Number of 1/X 1/X* Cumulative weekends=X 1500000 Volume 1 1 1500000 1500000 2 0.5 750000 2250000 3 0.33333 500000 2750000 4 0.25 375000 3125000 Edgar Canul
  • 27. The volume shipped during the 1st month is Height = Number of products sold during the 1st weekend= 1,500,000 Length= Follow it through the first month=4 week The cumulative volume by the 4th week is 3,125,000. Even that this is a hit case, during one month it could have been assumed that the cumulative sale would be 4 times 1,500,000, which would make 6 Million Instead the cumulative value is 3,125,000. Edgar Canul
  • 28. This is the volume shipped by weekend 3500000 3000000 2500000 2000000 1500000 Series1 1000000 500000 0 1 2 3 4 5 6 7 8 9 10 11 12 Edgar Canul
  • 29. This is the volume shipped by weekend 1600000 1400000 1200000 1000000 800000 Series1 600000 400000 200000 0 1 2 3 4 5 6 7 8 9 10 11 12 Edgar Canul
  • 30. The time erosion • Once the product is launched the product will be moved to the Long-Tail, going away from the Head. • The time erosion will make the product volume shorter and shorter, day after day, until the product is 100% ramped down. Edgar Canul
  • 31. How to make bigger the Hit´s Head • Timely product launch • Free advertizing, (Effective advertizing) • Large volume of products shipped when launching • The Consumers pulling the products from the retailers Edgar Canul
  • 32. Is working in the Head enough to create a hit? To make a successful a hit-case it is necessary more than working in the head, which is only the product launching arena, it is very important the following: • Firstly it is necessary to define a collaboration environment with other industries and communities. • Secondly, make your product deployment pathway, between R&D and launch, to mimic the Hollywood´s movie launching activities in many aspects, with emphasis in: • Smartphone distribution • Thorough performance measurement of the premiere date audience level. Edgar Canul
  • 33. What would be key symptoms of successful hit case? • Your product´s Premiere date has to be discussed in the Web 2.0 services as well as the Social Networks, with high ratings and high traffic, specially on the eve of the Opening Date. • Have in place and active and long Pre-Sale waiting list. • Sold-Out sign hanged on the Point of Sale on the premiere date ¨ Edgar Canul
  • 34. The Smartphone as an Internet product Your Smartphone is blessed for being an Internet Product, because it can utilize all the new Internet practices for: • Marketing • Distribution • Trade • Selling Chris Anderson is author of the Long Tail and Free and editor of WIRED magazine, we are using Free´s content to put together your Smartphone launching strategy. Edgar Canul
  • 35. The Smartphone as an Internet product, Marketing & Advertizing Strategies Chapter 4, Psychology of Free. Following the Max formula (page 164) put together an Advertizing strategy for a TV mini- series. 1.Get the 3rd party financing 2.Create a Blog before launching to increase the expectation 3.Perform Public Relationship on the eve of Launching 4.Leak a rumor on-line maybe trough Facebook. 5.Launch the TV show 6.Twit the new development of your mini series 7.Increase the characters 8.Upload the not broadcasted film segments in to You tube 9.Make a contest to find which segment should have been broadcasted, the audience will generate Internet traffic and clicking Edgar Canul,
  • 36. The Free Web 2.0 Marketing & Advertizing Strategy The use of Blogs, Facebook, Twitter, You tube will magnify the expectation for your product reflected as internet traffic. The Social Network´s word of mouth transactions are Free advertizing instruments, you don´t need to pay for them. The Internet traffic will trigger the snow ball effect for your product. (Smartphone manufacturers might have to protect their Brand Value, consequently it might be advisable to limit the usage of these Social Networks and Web 2.0 services, utilizing them only as the Echo instruments for your Instituted Marketing Messages.) Edgar Canul,
  • 37. What is the First Step to conquer the consumers, the audience, the Web 2.0 and the Social Networks ? •Define your Smartphone´s Premiere date. •Define your Smartphone APPs´ road map. •Publish your launching date, with at least 2 month in advance. •Accommodate the Instituted Advertizing Campaign during the first month after the Premiere date, or in a suitable schedule on the eve threshold prior to your Premiere date. •Make the Web 2.0 services, as well as the Social Networks, to magnify your Instituted Advertizing Campaign Messages. Edgar Canul,
  • 38. How does Hollywood trigger the ticket Pre-Sale? Answer: Generating Internet traffic in advance Analyzing the Harry Potter 7 and Kunkg Fu Panda 2 cases, the premiere dates are already published in the Internet, these Movies are gaining Internet traffic. Kids are pushing their parents to have their tickets bought in pre-sale. HarryPotter7 link, KungFuPanda2 link 2010 2011 Harry Potter 7: P1 Harry Potter 7: P2 Kids Movies Nov 2010 Jul 2011 Road Map 2010-2011 Kung Fu Panda 2 Jun 2011 Jun July Ago Nov Dec Jan Feb Mar Apr May Jun Jul Ago Edgar Canul,
  • 39. Conquering the Free Advertizing Considering the impactful launch of the iPhone-4, which was covered remarkably by the media, providing free advertizing when reporting the product market deployments and the consumers´ impressions. It might be concluded that for an impactful Smartphone launch, it is necessary to count with this volume of marketing and advertizing coverage, either free or paid.. The Social Networks marketing is a valuable instrument to have the consumers´ attention maintained focused on your product. These New Marketing practices, such as Social Networks, followers, fans and APP developer communities have made possible to count with a Powerful echo instrument to magnify & multiply your corporate instituted marketing core messages. Edgar Canul,
  • 40. Smartphone Market, 1 2 3 4 5 6 7 8 9 0 The Key boost trigger CONSUMER IS THE KING He is the one who has selected the device in her hand or in his pocket to become his/her Smartphone. Edgar Canul,
  • 41. The Consumers are cutting expenses in 1 2 3 4 5 6 7 8 9 0 other than Smartphone industry to: Acquire the newest Smartphone Hit. Edgar Canul
  • 42. The American Consumer. 1 2 3 4 5 6 7 8 9 0 How is the King behaving? Consuming wise… CONSUMER IS THE KING Edgar Canul
  • 43. The U.S. 2010 Consumer Behavior 1 2 3 4 5 6 7 8 9 0 According to August 2nd businessweek Magazine, which has in the front cover : ¨American Consumers Are Cutting Back Except When They´re Not¨ Consumer would cut costs in their other than luxury items expenses. Edgar Canul,
  • 44. The Carriers applying the Smart-Pipe tactics and discontinuing the Unlimited data plans •According the ITIL Service governance practices, there are 2 main basic considerations when selling Internet services to the consumers: •Service Utility •Service Warranty •Service Level Package(SLP), which in this case is the equivalent to Data Plan, is the package in which it is defined the level of Utility and Warranty of the Service. •Excessive Demand by the consumers might have already put at risk the SLP Warranty. •ITIL has a Demand Management practice, that once it is applied on the SLP brings as a result the SLP adjustment. •This new adjusted SLP will bring the necessary funds for the carrier to adjust the Service Capacity according to the demand. •The purpose of Demand Management is to understand and influence customer demand for services and the provision of capacity to meet these demands. Edgar Canul,
  • 45. No more Unlimited data plans. The Consumer Perspective The consumers perception about the elimination of the unlimited data plans has not triggered yet any big reactions. According to WSJ, it might be either because consumers don´t know their amount of monthly data usage, or, because they don´t care the price they are charged for it. Edgar Canul,
  • 46. Mobile Apps, the Third Parties Innovation The Mobile Apps Value, in the Smartphone economy, is bringing innovation by multiple means, such as: • Apps on the Carrier portfolio. • Apps developed by the Handset manufacturers. • Commercial Apps by multiple brands. • Apps for marketing. • Mobile Ads. • Global content Apps, by global developer communities. • Local content Apps, by local developer communities.
  • 47. Mobile Apps Innovation Offer a scalable consumer experience, every time that consumers download a new App, their Smartphones become a new product again. The Smartphone user experience is permanently recreated.
  • 48. New product again. Scalable consumer experience The Smartphone user experience is permanently recreated. (the alchemy) Edgar Canul
  • 49. Mobile Apps Business The Mobile Apps business is growing 180-200% year on year Today it is already a multibillion dollars business, the value of the market at the end of 2009 was 2 billion US dollars (According to research2guidance) 18 2009=2 Billion 2010=4 Billion 16 Billion US $ 2011=8 Billion 14 Calculation by Edgar Canul 2012= 16Billion 12 Estimated value for the APPs Business 10 8 16 6 4 8 2 4 2 0 2009 2010 2011 2012 Edgar Canul
  • 50. Mobile Ads Business During 2010, The Mobile Ads Business is targeting to make 600 million US dollars according to the WSJ digits These are the recent Mobile advertizing companies acquired by • Apple Quattro transitioning to iAd • Google AdMob • RIM trying to acquire a Mobile Advertizing company (according to WSJ) Edgar Canul
  • 51. Smartphone Hits 2.0, The Converging Context During the YoY period of June 2009 to June 2010, more industries kept adding to trend of the Internet & Mobile Smartphone Industry convergence. There are now, many more industries in the Mobile Internet Services. Edgar Canul,
  • 52. The Newest industries, either actively debuting in a bold role or getting a star role are: •Cloud Computing enterprises, •Consumer communities, •Traditional IT companies •Apps´ developer communities Edgar Canul,
  • 53. The Converging Trend New big business Today the Marketing & Advertizing Industries are growing in the following Mobile services. • Social Networks via Smartphone •Mobile Web Marketing, •Mobile APPs Marketing •Mobile Ads Edgar Canul,
  • 54. Creating Smartphone Hits 2.0, on the convergence era in America What is Converging now? • Internet • Mobility • Smart Pipes, Carriers and Operators. • Smart Phones, Mobile Phones and Corporations • Cloud computing & Services Scalability for SaaS, PaaS, WaaS, and IaaS • Web 2.0 • Web 2.0 Marketing • Mobile Marketing, Mobile Adds • Social Networks • Consumer Communities • Compliance • IT and Telecom Infrastructures providers • Hollywood kind of Handheld Launching • APPs (Applications) as the product functional scalability • APPs´ developer communities • Mobile Internet Experiences • Media & Multimedia • Content • Usability satisfaction • Security Strategies & VPN sagas • Upgradable Mobile Platforms • Mobile clients and APIs • Sourcing, Parallel Sourcing, Out Sourcing, Near Sourcing, Cloud sourcing, Crowd sourcing • Followers & Fans for your Products & Brand s • … • Free advertizing • …. • ...Creating value for consumers Edgar Canul,
  • 55. Conclusion Considering the Smartphone industry growth, it might not pull the whole U.S. economy out from recession, however growing at 40-50 % per year, it might double in a two years time frame, creating new Jobs and Business opportunities. Edgar Canul
  • 56. Annex 1 Edgar Canul
  • 57. The Global 2Q-2010 Mobile Handset Market figures According to FierceWireless these are the 5 top Handset makers in Q2-2010 •Nokia 34.6% •Samsung 19.9% •LG 9.3% •RIM 3.5% •SE 3.4% These handset figures include both: •Smartphones •Entry basic phones Edgar Canul,
  • 58. HITS Road Map 2010-2011 Global, Europe, America, Kids. Soccer FIFA Mobile Global W.Cup Final World Congress Europe 2010 2011 Soccer UEFA Champions League Final U.S NFL Super Bowl Kids Harry Potter Kung Fu 7 Panda 2 Jun July Ago Sep Oct Nov Dec Jan Feb Mar Apr May Jun Edgar Canul,