By 35% a month lately, according to the ad requests pouring into AdMob's network

Click to enlarge. Other includes HTC Desire, Samsung Moment, Samsung Galaxy and HTC Tatoo. Source: AdMob.

"Traffic from Android devices has increased dramatically over the last year," according to a report issued Friday morning by AdMob, the world's largest purveyor of mobile ads.

In November alone, Android devices accounted for 27% of the hits on AdMob's U.S. ad network, up from 20% in October — a 35% increase in one month.

Of course, AdMob is counting ad requests, not handset sales, so its numbers cannot be used to measure market share in the traditional sense. But its reports do provide a monthly snapshot of where the rapidly expanding smartphone market is headed. The growth in Android traffic — fueled by the release of new Android-powered devices — is one of the featured themes of AdMob's November report.

Among its Android-related findings:

• Six months ago a single Android device, the HTC Dream (G1), generated 92% of Android traffic, while in November 2009 the G1 accounted for only 37% of requests.
• The Motorola Droid, HTC Magic and HTC Hero generated 22%, 21% and 9% of Android requests worldwide in November 2009, respectively.
• In November, 88% of Android traffic in the AdMob network was generated in the U.S. The U.K. was with second largest market with 4% of requests.
• In the U.S., the Motorola (MOT) Droid quickly became the No. 2 Android handset, thanks in part to heavy marketing by Verizon (VZ). In the U.K., the HTC Dream, HTC Magic, and HTC Hero make up 92% of Android requests.

AdMob was acquired by Google (GOOG) in November for $750 million shortly after Apple (AAPL) had reportedly expressed interest in buying its network. You can download its November report as a pdf from metrics.admob.com.

See also:

• Where in the world are Apple's 78 million handsets?
• The smartphone wars, one year later

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Mostly in the U.S., but Japan, France, Australia and China are coming on fast, says AdMob

Click to enlarge. Source: AdMob

By the end of December, according to Piper Jaffray's Gene Munster, Apple's (AAPL) will have sold 78 million iPhones and iPod touches worldwide.

So where, exactly, are those devices?

A report issued Friday by AdMob, the world's leading supplier of mobile ads, tries to map the location of Apple's handsets country by country based on the number of users who requested at least one of its ads in November — a number that increased 150% in 2009.

Among the highlights of its findings:

• In November, 50% of unique Apple visitors were located in the United States. The next four biggest markets were the U.K., France, Canada and Germany.
• In total, 23 countries had more than 100,000 unique Apple visitors.
• 50% of unique Apple users were located outside of the US, up from 39% in January 2009.
• The iPhone accounted for 71% and the iPod touch 29% of the total unique Apple users in November. In raw numbers: 18.0 million iPhones; 7.3 million iPod touches; 25.2 million total.
• The fastest growing countries between January 2009 and November 2009 were Japan, France, Australia and China. See the bar graph below.

Source: AdMob

AdMob describes itself as the world's largest mobile advertising platform, serving banner and text link ads on 15,000 mobile Web sites and iPhone and Android applications. Its reports are based on  handset and operator data on nearly 138 billion impressions. They do not, however, measure mobile markets in the traditional sense of number of handsets sold. And they have a bias toward devices like the iPhone and Droid that visit ad-supported websites and also run ad-supported apps.

You can download their November report as a pdf from metrics.admob.com.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Sorry, Google. The apps (and by that we mean appetizers) won out.

At long last there is proof of Google’s (GOOG)  long-anticipated smartphone. Late last week, the online advertising giant started handing out an Android-powered phone to employees. While refusing to detail the specs, the official Google mobile blog refers to it as a “mobile lab.”

The Googley vagueness continues on the blog, where it is described as, “A device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities.”

Of course, the gadget-obsessed immediately ran to the Federal Communications Commission to get those specs, and photos have been popping up all over. So, we now (mostly) know that it is a sleek-looking touch-screen phone made by HTC, powered by a high-end Qualcomm (QCOM) processor and featuring the latest Android 2.1 OS. From the looks of things, this GSM phone could operate on any number of networks abroad, but seems destined at least for T-Mobile in the United States.

With all the Googlers eager to show off their new gizmos, and this, the calendric peak of the holiday party season, it was inevitable that in the Bay Area at least, the two would combine.  Sure enough, a friend attending a holiday party over the weekend in San Francisco with a number of Google folks making merry was presented with the new phone. “Mostly, I wanted to see the photo of the engagement ring that was on it,” she says, requesting anonymity. “It wasn’t an iPhone, and besides, there were pigs-in-a-blanket and these really good mini-cheeseburgers, and I was hungry, so I didn’t pay too much attention. “ So there you have it.

Table stakes: iPhone quality hardware

Discounting for a moment that this occurred in gadget-jaded Silicon Valley (and that the mini-cheeseburgers were really good), it does offer a point worth examining. Great hardware is the minimum starting point in the smartphone market these days, and it doesn’t get anyone’s blood racing by itself. As a piece of hardware, the Google phone, dubbed the Nexus One according to employees, had better be on par with an iPhone. If not, as we have seen time and again with would-be competitors, it will be a non-starter.

Let’s assume Google’s phone is tip-top in the hardware department. What sells smartphones these days has as much to do with the software running the phone and the applications available as the hardware. Again, Apple (AAPL) leads the pack by a wide margin with its mobile apps store.

Google’s open-source mobile OS Android has been getting mostly good reviews, especially in its latest incarnation running on Motorola’s (MOT) Droid phone. What Google needs to do, however, is get more Android phones out there to attract more developers and get the critical application mass it needs.

What has everyone most excited at the moment is the (rumored) prospect that Google will sell its Nexus One as an unlocked, carrier-agnostic piece of gear starting in January. Fine, as long as the phone is still relatively cheap. If Google comes out with a $500 unlocked phone, it will fade as quickly as all of Nokia’s similar unlocked and pricey efforts.

But if Google sells its phone contract-free for the same $199 the iPhone sells for (with a two-year AT&T (T) contract) it will have a monster on its hands. How could that happen? Google, rather than a carrier could subsidize the phone, and make up the cost via mobile advertising (it just bought AdMob), or maybe just take a hit to build a market. Google can certainly afford it. Either way, Android gets very huge, very fast, and that is what Google really wants.

Would that upset Google’s roster of current Android customers, including Motorola, Samsung and some of the wireless carriers? Sure it would, but this isn’t about the old-school wireless ecosystem, it’s about the mobile Web and Google’s designs to own it. If Google wants it, it needs to step up. If not? Those pigs-in-a-blanket sure look good.

An analyst describes the smartphone innovations he expects from Apple in 2010

Photo: Apple Inc.

In a note to clients issued Wednesday, Piper Jaffray's Gene Munster suggests three ways Apple (AAPL) can stay ahead of the coming wave of smartphones powered by Google's (GOOG) Android OS.

• Build an iPhone for Verizon. Munster continues to believe there's a 70% chance Verizon (VZ) will get an iPhone before the end of 2010. The value of more than doubling the phone's addressable market — i.e. adding Verizon's 89 million U.S. subscribers to AT&T's (T) 82 million — would more than justify the cost of manufacturing a CDMA iPhone, according to Munster.
• Give the iPhone a battery that lasts longer than one day. "Apple has introduced advanced battery technology with its portable Macs," he writes, "and we expect the company to dramatically improve the iPhone battery life with the next several hardware launches."
• Turn the iPhone into a digital wallet. Munster predicts that future iPhones will have built-in RFID (radio-frequency identification) technology, allowing them to make retail payments with a single swipe.

"We've just scratched the surface" in terms of apps and accessories, says Munster, who has an interesting take on Apple's continued resistance to Adobe (ADBE) Flash. He sees it as a slightly Machiavellian move with strategic implications.

"Apple has built a moat around their apps," he writes, "in part by excluding Flash, preventing app developers from building apps in Flash and porting them to all mobile platforms."

UPDATE: On Twitter late Thursday, Eldar Murtazin, the Moscow-based editor of Mobile Review, posted this cryptic note: "Foxconn received order for next generation iphone." Foxconn is the trade name of Hon Hai Precision Industries, which manufacturers most of Apple's products.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Is Apple's iPhone-without-a-phone the McDonald's Happy Meal of mobile communications?

Click to enlarge. Source: Flurry Analytics

Peter Farago of the mobile analytics firm Flurry uses data from its November report to make the case that Apple (AAPL) is quietly — and successfully — using the iPod touch to lock in a loyal base of under-age users who will eventually become the next generation of iPhone buyers.

"While it is clear that the iPhone has significant short-term revenue value for Apple," he writes in a report issued Sunday, "Flurry believes that the iPod Touch holds more long-term strategic value for Steve Jobs and team."

"In terms of Life Stage Marketing," Farago writes, "the practice of appealing to different age-based segments, Apple is using the iPod Touch to build loyalty with pre-teens and teens, even before they have their own phones (think: McDonalds' Happy Meal marketing strategy). When today's young iPod Touch users age by five years, they will already have iTunes accounts, saved personal contacts to their iPod Touch devices, purchased hundreds of apps and songs, and mastered the iPhone OS user interface." (link)

The evidence that Apple's strategy is working, Farago says, can be seen in a graph of end-user sessions recorded over the past six months.

Flurry, according to Farago, tracks 15 million end-user sessions every day from its "analytics solution" code embedded in 3,000 applications on 4 platforms: Apple's iPhone OS ( both iPhone and iPod Touch), Research in Motion's (RIMM) Blackberry, JavaME and Google (GOOG) Android.

The graph above shows that the iPod touch's share of those user sessions has grown 4 points over the past six months — the same as Android despite starting from a much larger user base. While the iPhone continues to grow in user sessions, its share in Flurry's data has dropped from 57% to 50%.

Even more significant, according to Farago, is that kind of things the kids are doing with their iPod touches.

"Anecdotally," he writes, "we know the 'iPod Touch Generation' is made up of heavy MySpace, Facebook and SMS users, who voraciously share their lives with, and influence their ever-expanding social graph. Importantly, this also includes promoting products they like. Empirically, Flurry compared how iPod Touch session usage has changed over the last six months across key application categories important to this demographic; namely, Social Networking and Games."

Farago's empirical evidence is displayed in the two charts below, which show the iPod Touch growing faster than both the iPhone and the Android devices in Flurry's Social Networking and Games categories.

Via GigaOm.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

The iPhone leads the pack, Android is gaining, everybody else is losing share

Click to enlarge. Source: AdMob

It's been a year since Google (GOOG) released Android OS, the open-source smartphone operating system widely perceived as the most likely to overtake Apple's (AAPL) iPhone in the long run.

As it happens, Google this month also purchased AdMob, the world's largest purveyor of mobile phone advertising. So this seemed as good a time as any to take a snapshot of the changing smartphone marketplace, as measured by ad requests to AdMob's network.

We reviewed a year's worth of AdMob data — including the October numbers released Monday — and charted it on the graph at right (reproduced full-size below the fold).

There's a bias in the data, since AdMob ads run better on iPhone OS and Android devices than on, say, Research in Motion (RIMM) BlackBerries. But the trends are clear.

Over the past year, Nokia's (NOK) Symbian has lost the largest raw market share, down to 25% last month from 59% the same month a year earlier. In percentage terms, Windows Mobile (MSFT) is the biggest loser, down 70% in 12 months, with Symbian, Palm's (PALM) Web OS and BlackBerry OS close behind.

These numbers are based on worldwide ad requests. Apple's lead is even greater when AdMob zeroes in on the U.S. and U.K. markets. For a look at how the iPhone's share of the U.S. and worldwide markets have grown, see the chart prepared by MacRumors' Erik Slivka here.

Below the fold: A full-size fever chart of AdMob's worldwide data for all the major smartphone operating systems.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Source: AdMob

Add media and marketing executives to the long list of constituents who wish North American mobile systems were more like those in Asia.

Though the entertainment and advertising rarely are on the cutting edge when it comes to embracing new technologies, a group of muckety mucks at the Paley Center for Media International Council meeting in New York last week made it clear that the future of  media consumption is the mobile devices – at least the mobile device as used by consumers in countries such as Japan, Korea and even China.

"If you look at what's happening in Japan and Korea the potential for mobile is huge," says Nick Brien, president and CEO of Mediabrands, a media holding company and unit of Interpublic Group (IPG).'

"The future is here," Brien adds. "And it is there."

For a panel discussion on "Monetizing the Mobile Landscape," Brien described mobile marketing initiatives launched by his company and its divisions that showed how marketers and entertainers alike could effectively using wireless handsets to build brands with consumers. He cited an example of a McDonald's (MCD)-sponsored concert in Japan accessible only on wireless devices.

Reality, only better?

On the same panel, Peggy Johnson, executive vice president of the Americas and India for Qualcomm (QCOM), noted that Japan also benefits from consumers' ability to use their cellphone as a wallet. NTT DoCoMo (DCM) since 2004 has offered a service called FeLiCa, that allows subscribers to pay for goods (or ride trains and enter office buildings) with a swipe of their phones.

Brien, Johnson and others in attendance at the council event felt that the combination of robust wireless networks, mobile payments systems and a simplified platform that gave media companies access to subscribers could quickly transform the way companies build relationships with customers.

Qualcomm's Johnson talked about something her company is calling "augmented reality."  Fix your mobile phone on a building, say, and, using mapping technology, the phone might be able to identify all the retailers in the building, and provide you with user-generated reviews of the restaurant – or just the reviews and rankings of people in your circle of friends. As you're clicking through the reviews, the restaurant could send you coupon or other enticement to lure you into the eatery.

Of course, notes panelist Susan Whiting, vice chairman of the Nielsen Company, consumers will have to opt into this kind of service or marketers and mobile companies would quickly find themselves running into privacy issues – though she notes that younger consumers have a much different attitude about online privacy than older tech users.

Yet for all the talk about the great wireless applications in Japan, Korea and other Asian nations, a great deal of the action around smartphones and other new devices has shifted to the United States thanks to Apple's (AAPL)  iPhone and now Google's (GOOG) Android operating platform. In the second quarter, Nielsen says, one in four phones sold in the U.S. were smartphones.

The couch potato's killer app: Mobile TV

Smartphone users are frequently online. Nielsen research from the third quarter of this year suggests that owners of Android phones, for example, will be more likely to use more of the data features on the device more often than if using other smartphones, suggesting that its users truly will use Andoid phones as pocket computers – not voice calling devices.

And video consumption on the small screen is getting to be a big deal: In the second quarter, Nielsen says, there were 15.3 million active mobile video viewers, or 7% of all U.S. mobile subscribers.

A few years ago pundits thought consumers would only watch tidbits (remember "Mobisodes") on their mobile phones. Now people watch entire programs, even films, on their iPhones. Indeed, there's anecdotal evidence that some people watch television or video programming on their mobile devices even when a large-screen television or computer screen is in the room. (Perhaps they are too lazy to look for the remote?)

The upshot: Asia may have a head start when it comes to mobile services, but never underestimate American couch potatoes' ability to consume media – especially television – on whatever platform comes along.

Touchscreen phones are on fire, comScore reports, and Apple is leading the pack. For now.

Three months ending Aug. 2009. Source: comScore MobiLens

There's a thundering herd of imitators behind it, but Apple's (AAPL) iPhone still dominates that fastest-growing segment of the U.S. smartphone market, according to a comScore report issued Tuesday.

Touchscreen mobile phone adoption in the U.S. grew at a breakneck 159% rate last year, comScore reports, easily outpacing the 63% growth of the broader smartphone market.

By last August, nearly 34 million Americans were carrying smartphones, 23.8 million of them touchscreen devices. And of those touchscreen phones, 32.9% were iPhones.

“The iPhone clearly set the trend in the industry for touchscreen devices, so it’s no surprise that it has the largest share of the market,” said comScore VP Mark Donovan. “But as other players have entered the touchscreen market with compelling devices, competition is clearly heating up.”

Donovan mentioned Google's (GOOG) Android platform in particular, although the closest Android contender in August was the T-Mobile (DT) G1 running a distant seventh after two proprietary LG phones, the BlackBerry (RIMM) Storm, the Palm (PALM) Pre and the Samsung Instinct.

Below the fold, comScore's spreadsheets, including one that shows preference by age group. (The smartphone sweet spot seems to be ages 24 to 34.)

Chatting with a Canadian analyst, Cupertino execs offer hints about Apple's future plans

Rendering: Piper Jaffray

Apple executives (AAPL) have strict rules about not discussing products that the company has not announced. But they'll talk about market opportunities, as three of them did on Thursday at a special event for RBC Capital. And sometimes that's enough to discern what direction the company is heading.

In a report to clients issued Friday, RBC's Mike Abramsky ticks off the key takeaways from his meeting with Eddy Cue (vice president for iTunes and Internet services), David Moody (vice president for worldwide Mac marketing) and CFO Peter Oppenheimer.

What caught my eye was what they had to say about where they did — and didn't — see opportunities in digital content. They were talking about Apple TV, but it was as if they were thinking about future tablet computers.

Here's what Abramsky reports, in analyst shorthand, about that portion of the conversation:

Video/Content Opportunities. After music, video content is expected to be the next "exploding" opportunity, but requires overcoming industry rights dysfunctionality, competing with subsidies (cable box, video), and developing the right consumer "offer". Apple TV, while still a "hobby", is well positioned to benefit from evolving market dynamics. Apple was less enthusiastic about the online book/newspaper market, given unattractive industry structure.

Sounds like they expect an Apple tablet — should they be building one — to be used a lot more for watching movies or shows made for TV than for reading novels and newspapers.

Among other highlights of the Apple execs' remarks:

• iPhone: Interest remains strong among overseas carriers despite increasing competition, thanks to high returns per unit and low churn. Going to multiple carriers in Canada and Europe doesn't seem to have hurt Apple's margins.
• Android: Vertical integration and the iTunes ecosystem are Apple's secret weapons against the Google (GOOG) challenge. Developers, they claim, prefer Apple's single-platform model over Android's multiple hardware configurations.
• Windows 7: Bring it on. Apple, not surprisingly, sees the transition to Microsoft's (MSFT) new operating system as an opportunity to sell more Macs.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

New software transforms your phone into a GPS device – and a pretty good one, too

Navigon's MobileNavigator app for the iPhone has features some standalone units lack. Photo: Navigon.

As my wife will tell you, I have a comically bad sense of direction. I once got lost driving home from the mall.

This makes me a prime candidate for a GPS device. I’ve used a few for brief stints, mostly on long road trips, but never got into the habit of using one for everyday errands. There are a couple of reasons for that. For one, it’s a hassle to dig the thing out of the glove compartment. For another, entering an address on most of these things is a crazy-making experience.

My perspective changed recently, though, when I bought a new GPS unit for $70. Well, that’s not exactly what happened. I actually downloaded a GPS-based iPhone (AAPL) app for $70.

Yes, 70. Seven-zero. I’ll be the first to admit that it sounds crazy to pay that much for software that runs on a phone. The overwhelming majority of phone apps out there cost between 99 cents and $10.

Why would I pay so much for an iTunes download? Well, this directionally challenged consumer needed another GPS device. We had one in the newer car that my wife usually drives, where it did me absolutely no good. I had been compensating by using Google Maps (GOOG) on my phone to find my way to meetings in a pinch, but wasn’t comfortable – or safe – to keep glancing over to prepare for the next turn.

So in late August I took the plunge and went shopping for navigation software on the iTunes app store. At the time, there were two main options: TomTom’s app was $100; Navigon’s was on sale for $70. Both had gotten decent reviews, but I was drawn to Navigon’s for its ability to speak street names; rather than say, “Ahead, turn right,” it can say, “Ahead, turn right on Embarcadero.” It also has the bells and whistles we've come to expect from GPS units: points of interest, gas stations, restaurants. I decided to go with Navigon.

I was prepared to have serious buyer’s remorse. For $69.99 (plus another $30 for a windshield mount) this had to be good.

And it is. I’ve loved Navigon’s MobileNavigator software since I bought it. It’s actually better than the few standalone GPS units I’ve used. I can pull addresses from my phone’s contact list to set a destination and avoid the hassle of tapping through annoying menus. It shows me highway signs, indicates the best lanes to move into, and warns when I’m pushing too far past the speed limit. Best of all, my phone is always in my pocket – so I have navigation help even when I’m not in my car. On a hectic day trip to Southern California recently, I used MobileNavigator in a rental car to find my way from LAX to an out-of-the-way spot in Santa Monica. (Next time, though, I'll have to remember to bring the iPhone charger; by the time I got home, the iPhone's battery was all but dead.)

From the look of things, it won’t be long before a lot more phones start doubling as GPS devices. Smartphone customers seem to see value in the software. A few examples: MobileNavigator (now $90) is the #3 top grossing app on iTunes. AT&T (T) has begun selling a navigation service that works on dozens of phones in its lineup. And Motorola’s (MOT) Droid, a smartphone that’s arriving next week on Verizon’s (VZ) network, comes with free turn-by-turn directions via the latest version of Google’s Android operating system.

That’s not so great for companies like TomTom and Garmin (GRMN), who make a lot of money selling standalone GPS devices – their stock prices took a hit this week on the announcement of Google’s free software. But for wayward travelers like me, GPS navigation in phones is a killer app.

follow me on Twitter: twitter.com/jonfortt