Verizon's ad spending: $100 per Droid?
Going after AT&T's network and Apple's iPhone could prove an expensive proposition
Source: Motorola
Broadpoint AmTech analyst Mark McKechnie's estimate that Motorola (MOT) sold 100,000 Droid smartphones last weekend has been getting a lot of attention, although nobody's quite sure what to make of it. McKechnie called the number "encouraging." Nielsen's Roger Entner found it "a little troubling." IDC's Ramon Llama said it was "nothing to shrug off."
Part of the problem is that everybody is comparing Motorola to Apple (AAPL), which sold 270,000 iPhones in its first two days of sales in 2007 and 1 million iPhone 3GSs in three days last June. The consensus on the Street is that Motorola will do well to sell 1 million Droids by the end of the year.
The other problem — and the reason Nielsen's Entner is so troubled — is that the ground had been softened for the Droid by a carpet-bombing ad campaign, the biggest in Verizon's (VZ) history. According to Ad Age's Rita Chang, the carrier has budgeted $100 million to support the Droid, most of it to be spent before the end of the year.
You can do the math.
Droid vs. iPhone: The reviews are in
Motorola and Verizon invited comparisons, and that's what they got
Photos: Motorola, Apple
The Droid lands in stores Friday, and on Thursday the heavyweight reviewers — which is to say the Wall Street Journal's Walt Mossberg and the New York Times' David Pogue — weighed in.
Given that Motorola (MOT) and Verizon (VZ) pitched the Droid in its first TV ad as everything Apple's (AAPL) and AT&T's (T) iPhone was not, it was perhaps inevitable that every reviewer so far, including these two, treated its arrival as a grudge match.
Mossberg's review is positive but tepid — especially the video version. He plods through the comparisons item by item like a slightly boring homework assignment. His top-line summary:
Five things we like about Droid
And a few things we don't love about Motorola's forthcoming Google-powered phone.
Droid does (and doesn't) wow our writer.
The Droid is a fierce phone. Motorola's newest smartphone has a number of features that match and even best its biggest competitor, Apple's (AAPL) iPhone. It has a fast processor. It’s got a large display with almost double the resolution of the iPhone as well as a slide-out keyboard. And it’s got a five megapixel camera with flash and zoom and a video camera that renders your Flip camera unnecessary. Add to that a new sharp-edged form factor straight out of Star Trek. And the marketers have given their campaign a bunch of attitude with their “iDon’t” commercial that pits the Droid directly against the iPhone.
But is any of that going to be enough to woo iPhone fans to Motorola's new device? As I wrote in a September feature, the company has a lot riding on it. Thanks to a massive marketing push by Verizon Wireless (VZ), plenty of excitement is building for the Droid’s November 6 launch. But just a year ago there was a lot of similar hype around RIM's Storm, which was also going to take on the iPhone. Though initial sales were pretty good, the smartphone received lukewarm reviews.
Motorola's new offering will have to prove itself once the hype dies down. And with so many Android-powered devices coming to market in the next few months, it may be hard for the Droid, which Verizon Wireless will sell for $199 after an $100 rebate with a two-year contract, to stand out.
Fortune received a Droid to test this morning. I powered it up, and a monotone robotic voice uttered “Droid.” Here are five things I think Motorola (MOT) has done right with the Droid…and a couple features I miss.
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The Droid vs. the iPhone: Let's count the apps
Apple has 93,000 to Android's 11,300. But how many applications do you really need?
Photos: Motorola, Apple
In the flurry of quickie reviews that appeared overnight after Wednesday's unveiling of Motorola's (MOT) Droid — Google (GOOG) and Verizon's (VZ) latest answer to Apple's (AAPL) iPhone — little has been said about how the two platforms stack up in terms of apps.
At first glance, it seems an unfair comparison. Apple has spent a small fortune promoting those famous 85,000 iPhone applications — a number than has since grown to roughly 93,000 and is on track to hit 100,000 in a matter of weeks.
Source: AndroidLib.com
But it's not as if there are no apps for the Droid. As of Thursday morning there were 11,284, according AndroidLib.com's unofficial count of the offerings in Google's Android Market. Moreover, that number too is growing by the thousands. Android developers added 2,333 new apps in September and another 2,431 so far in October.
AT&T Mobility is nipping at Verizon's heels
Verizon Wireless' subscriber rolls are growing, but not as fast as AT&T's
Source: Company reports
In the quarterly report that Verizon (VZ) issued Monday, the number that's getting the most attention is 1.2 million.
That's how many new wireless subscribers Verizon added over the past three months. And it's being compared unfavorably with the 2 million that AT&T Mobility (T) gained in the same period.
Verizon, with a new total of 88.8 million subscribers, still has the largest wireless network — something its ads never tire of reminding us. But AT&T, with 81.6 million, is catching up, and there's no mystery why. AT&T activated a record 3.2 million iPhones in the third quarter, nearly 40% of which belonged to customers new to AT&T.
Meanwhile, Verizon's total churn rate is going up (from 1.33% last year to 1.49% this year) while AT&T's is going down (from 1.69% to 1.43%).
But AT&T's momentum may be short lived. More
The Droid: Serious iPhone competition
Motorola's Droid. Source: BGR
Just in time to rain on Apple's (AAPL) 2009 earnings report, a prime-time TV ad and a series of well-timed leaks have put the spotlight on Motorola's (MOT) Droid — a yet-unreleased smartphone that is being described by sources who have played with a prototype as the iPhone's first serious competitor.
The ad, which premiered Saturday during the Yankees-Angels pennant game, is pasted below the fold. The challenge to Apple couldn't be less subtle; it's a series of "iDon't" screens listing key features the iPhone doesn't have — from a physical keyboard to interchangeable batteries — that the Droid does.
The leaks are being funneled primarily through the Boy Genius Report, a blog with unusually good sources in the telecommunications industry. On Friday the site published an illustrated walk-through of Google's (GOOG) Android 2.0 — the new and reportedly much improved version of the open-source operating system that powers the Droid. Then, overnight Monday, Boy Genius posted a hands-on review — complete with photo gallery — that describes it as "the Android device to beat, and easily the most impressive."
