Apple's U.S. smartphone installed base has surpassed Microsoft's for the first time

Click to enlarge. Source: comScore

Given that the iPhone has been outselling Windows Mobile devices in the U.S. for nearly two years, it comes as something of a surprise that Apple (AAPL) has only now caught up to Microsoft (MSFT) in terms of active smartphone users.

But that's what the latest data from comScore show. The bar graph at right, drawn from numbers obtained by FierceDeveloper, shows that the installed base of iPhone users in the U.S. overtook Windows Mobile's sometime between July and October 2009.

Microsoft had a big head start, of course, but its market share has been stagnating lately. Research in Motion (RIMM), by contrast, enjoys both a head start and a growing market share. According to comScore, about 40% of the smartphones still in use in America are BlackBerries, while less than 25% are iPhones.

A copy of comScore's report can be purchased at the compay's site for $4,995.

Below the fold: A full-size version of the chart.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Source: comScore

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

Photo: Apple Inc.

[UPDATE: On Monday, Nov. 10, nearly a month later, Apple released Mac OS X 10.6.2, an extensive update that fixed the guest-account bug and more than three dozen other Snow Leopard problems. For a full list, see here.]

Call it fallout from the Sidekick fiasco.

Having watched Microsoft (MSFT) go through a weekend from hell for wiping out the personal data of thousands of T-Mobile (DT) customers, Apple (AAPL) finally acknowledged a data-swallowing bug that Snow Leopard users have been complaining about since September.

"We are aware of the issue, which occurs only in extremely rare cases, and we are working on a fix," an Apple spokesperson told CNET's Erica Ogg on Monday.

According to several hundred messages on Apple's discussion boards, the Snow Leopard problem is triggered when users log in and out of an old Leopard guest account and then try to log back in to their regular account. One victim described the effect as follows:

"Not only did Snow Leopard wipe out ALL of my documents, my email accounts, my address book, it broke the dynamic spell checker in yahoo messenger, caused random problems with Safari, InDesign, and others, caused lockups, spinning beach balls, loud fans… and it was just getting worse. I am restoring Leopard (sans snow) as I write this." (link)

The Sidekick disaster is of a different magnitude — which may be why Apple is willing to have the two discussed in the same news cycle.

On Saturday, Microsoft and T-Mobile warned Sidekick owners that any data not saved on their devices may have been lost due to a massive server failure in Microsoft's Danger division. T-Mobile halted Sidekick sales and offered affected users a $100 rebate while it tried to recover the lost data.

In a note to clients issued Tuesday, Kaufman Bros.'s Shaw Wu suggested that as many as 1.5 million customers may now be "ripe for the picking" by Sidekick's competitors.

"We believe RIM, Apple and Palm are well positioned to gain customers," he writes. "Out of the three, we believe RIM may be best positioned as it is already at T-Mobile, has a physical keyboard that Sidekick users crave, and arguably has the industry's best and most secure platform for messaging and e-mail communications."

For entertaining — if somewhat biased — accounts of the problems plaguing Microsoft's Danger division, I recommend Daniel Eran Dilger's posts on AppleInsider and Roughly Drafted Magazine here, here and here.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Meet the creative director who named a generation of Apple products

Photo: Apple

The TBWA\Chiat\Day creative team was horrified in 1998 when Steve Jobs pulled back a cloth and revealed the bulbous teardrop that came to be known as the Bondi-Blue iMac.

But then Jobs wasn't so crazy at first about the name they proposed for it.

No one had ever seen anything like the new computer, veteran creative director Ken Segall tells Cult of Mac's Leander Kahney in an exclusive interview published Tuesday evening.

"We were pretty shocked but we couldn’t be frank," Segall recalls. "We were guarded. We were being polite, but we were really thinking, 'Jesus, do they know what they are doing?' It was so radical."

Segall eventually came up with "iMac," a name that connected the original 1984 Macintosh with the rapidly expanding Internet. But Jobs took some convincing.

Below the fold, excerpts from the story as Kahney tells it:

Photo: Ken Segall

Jobs said he was betting the company on the machine and so it needed a great name. He suggested one at the meeting, Segall says, but it was terrible. It would “curdle your blood.” …

Segall says he came back with five names. Four were ringers, sacrificial lambs for the name he loved — iMac. “It referenced the Mac, and the “i” meant internet,” Segall says. “But it also meant individual, imaginative and all the other things it came to stand for.” It “i” prefix could also be applied to whatever other internet products Apple was working on.

Jobs rejected them all, including iMac.

“He didn’t like iMac when he saw it,” Segall says. “I personally liked it, so I went back again with three or four new names, but I said we still like ‘iMac.”

He said: ‘I don’t hate it this week, but I still don’t like it.’”

Segall didn’t hear any more about the name from Jobs personally, but friends told him that Jobs was silk-screening the name on prototypes of the new computer. He was testing it out to see if it looked good.

“He rejected it twice but then it just appeared on the machine,” Segall says, laughing. “He never formally accepted it.” …

Segall is delighted that iMac grew on Jobs. “It’s a cool thing. You don’t get to name too many products, and not ones that become so successful. It’s really great. I’m really delighted. It became the nomenclature for so many other products. Millions of people see that work.”

Segall says over the last few years, the debate about dropping the “i” prefix has come up several times at Apple. “They’ve asked: ‘Should the company drop the “i”?’ But there’s a desire to keep it consistent: iMac, iPod, iPhone. It’s not as clean as it should be, but it works.”

You can read more of the interview, including the story of how the "Think Different" campaign got started, at Cult of Mac here.

Also worth visiting: Segall's own blog, Observatory, with his commentary on everything from Motorola's (MOT) Cliq ads (he loves them) to Research in Motion's (RIMM) appropriation of The Beatles' All You Need Is Love (hates it; "they’ve successfully broken the gall barrier.").

Kahney, the former news editor of Wired.com, is the author of several books about Apple (AAPL), including most recently Inside Steve's Brain.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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.)

IT departments are finally starting to buy Apple's smartphone, says a Deutsche Bank report

Click to enlarge. Source: Deutsche Bank

"There is growing evidence that the iPhone is making inroads into the Enterprise," writes Deutsche Bank research analyst Chris Whitmore in a report to clients Monday.

According to his estimates, Apple (AAPL) by the end of the year will have shipped about 2 million iPhones into corporate accounts through various routes, including internal IT department purchases and formal reimbursement policies.

That would give Apple about a 7% share of the enterprise smartphone market this year, up from 2% in 2008.

IT departments were famously resistant to the iPhone when it was launched two years ago. That resistance has begun to melt, writes Whitmore, for several reasons:

• User satisfaction. He cites the recent J.D. Power survey that named the iPhone "best in class" for both the consumer and enterprise markets
• Virtual keyboard. The initial perception that physical keyboards are critical for enterprise users has proved to be a "fallacy," says Whitmore.
• Enterprise applications. Among the 95,000 apps available for the iPhone, Whitmore estimates that 6,000 are enterprise-related, illustrating what he calls the "accelerating utility of the platform."
• Sluggish competition. The incumbents, Research in Motion (RIMM) and Microsoft (MSFT) Windows Mobile, with >60% and 20% enterprise share, respectively, "are years behind Apple," he writes, "and appear to be losing ground in Developer support / Application development."

See also:

• J.D. Power: iPhone is No. 1, again
• Top 10 reasons IT won't support the iPhone
• Forrester: Top 4 reasons IT should support the iPhone

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Those Get-a-Mac spots aren't cheap, but they deliver a lot of bang for the buck

Photo: Apple Inc..

Apple (AAPL) shells out a ton of money for advertising. In fiscal 2009 it spent $501 million, according to the 10-K form filed Tuesday. That's up from $486 million in 2008 and $467 million in 2007.

But half a billion doesn't seem like so much when it's compared with the $1.4 billion Microsoft (MSFT) spent in fiscal 2009, or the $811 million Dell (DELL) spent on ads I can't remember ever seeing.

In fact, as a percentage of revenue, Apple has actually been decreasing its ad spending every year for the past eight, from nearly 5% in 2001 to 1.37%  today (1.17% if you use non-GAAP revenue). That's less than half the 3.6% of revenue Research in Motion (RIMM) spends advertising BlackBerries. (See chart below.)

Most recent fiscal year. Source: Company reports

Yet even if you despise Apple and never use their products, you tend to remember their ads. How does Apple get so much bang from its marketing buck?

I can think of five reasons:

1. The ads are memorable. Apple spends its money on creative, producing a few clever ads rather than a lot of forgettable ones. Those Get-a-Mac ads are marketing events in their own right, picked up on YouTube and re-played again and again at no extra cost to Apple.
2. The ads are well-placed. Apple pays a steep premium to be seen during the World Series or on the back of glossy magazines, but it stays away from the low-cost media where its competitors pour so many of their ad dollars, either directly or through co-op ads. You don't see AT&T (T) advertising the iPhone in newspaper fliers, for example. "Apple doesn't want anyone else promoting its products," says Financial Alchemist's Turley Muller, "just because it is so meticulous and Martha Stewart about marketing and positioning."
3. The Apple brand speaks for itself. In Interbrand's 2009 report, Apple was the 20th most recognizable brand name in the world, up there with Coca Cola, IBM and McDonalds. "The Apple brand is the most supported within its industry," according to Interbrand, "and among the most iconic of relatively young brands in the world."
4. Apple Stores are their own best advertisement. Sales per store at those 273 retail outlets was down this year ($25.9 million per store vs. $29.9 million in 2008), but traffic was up — to 45.9 million visitors in the fourth quarter alone. How many of those shoppers — bathed in hip music, surrounded by slick Apple products, coddled by preternaturally helpful staffers — left with their reality permanently distorted?
5. Word of mouth. While Apple's rating on the American Consumer Satisfaction Index was down 1.2 points this year, that was still 9 to 10 points above its nearest competitors. Apple users tend to be intensely, zealously loyal, and they do the company's evangelical work for free.

Apple spends a ton on advertising. But it seems to be money well spent.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Apple gains, RIM drifts, Palm holds steady in the latest ChangeWave survey

Source: ChangeWave

Research in Motion's (RIMM) BlackBerry, with a 40% share, is still the most popular smartphone among the 4,255 owners who responded to a ChangeWave survey in September. But Apple's (AAPL) iPhone is gaining fast, according to research director Paul Carton.

"Apple (30%) has seen a huge market share jump since the previous survey," he writes in a release issued Tuesday. "Not only has the iPhone 3GS release enabled them to gain 5-pts overall — for the first time it has also placed them within striking distance of the number one spot in the consumer market."

Palm (PALM) remains far behind at 7%, Carton notes, but adds that "this is the first survey in nearly two years where their share hasn’t fallen – and that’s a clearly encouraging sign."

ChangeWave surveys are often dismissed as unrepresentative — which they are. But in this case, the so-called ChangeWave Alliances' 20,000 professionals "who spend their everyday lives on the frontline of technological change," according to its website, represent the sweet spot of RIM's and Palm's target market.

For more results — good and bad — from the survey, see the charts below the fold.

Apple continues to lead on the customer satisfaction front, with 74% of iPhone owners describing themselves as "very satisfied."

Source: ChangeWave

However, when asked whether they were planning to buy an iPhone, BlackBerry or Pre in the next 90 days, the BlackBerry gained, the Pre held steady and the iPhone fell sharply in comparison with a similar survey conducted in June.

Source: ChangeWave

Carton attributes the fall in iPhone purchase plans as a natural "settl[ing] back" after the "huge spike of excitement" that accompanied the iPhone 3GS launch in June. He notes that the 8-pt drop between June and September (from 44% to 36%) is a lot less than the 22-pt drop he picked up a year ago after the July 2008 launch of the iPhone 3G.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Consumers and business users alike prefer it over the BlackBerry

Photo: J.D. Power

Here's a bullet point you can expect to see at Steve Jobs' next keynote.

Apple's (AAPL)  iPhone has once again come in first in J.D. Power's semi-annual customer satisfaction study, despite a battery that continues to disappoint.

Apple increased its score in both the consumer and business user portions of the survey.

Research in Motion's (RIMM) BlackBerry was No. 2 among business users and No. 3, after Apple and LG, among consumers.

More broadly, the survey found:

• Smartphone owners are happier: Consumer satisfaction is up 14 index points (on a scale of 1,000) from six months ago; business owners are 43 points more satisfied than they were in 2008.
• Traditional cellphone owners are less happy: Their satisfaction is down 6 points from last April, "likely as a result, according to J.D. Power, "of heightened awareness among traditional mobile phone owners of advanced features available on smartphones."

The smartphone survey was conducted between January and June 2009 among  3,221 smartphone owners who have used their current mobile phone for less than two years.

In a separate survey of 12,595 traditional mobile phone owners, LG was No. 1

Below: the smartphone consumer results. For more on the survey, click here.

See also:

• J.D. Power survey: iPhone tops in all but battery
• J.D. Power: iPhone beats BlackBerry

Source: J.D. Power

Source: AdMob

Apple (AAPL) now has a substantial — if not the largest — share of the smartphone market in every region of the world except Asia and Africa, according to a report issued Wednesday by AdMob.

Overall, the iPhone's worldwide share grew to 40% from 33% over the last six months. In North America, its share of the smartphone market is 52%, as measured by hits on AdMob's ads.

AdMob, which bills itself as the world's largest mobile advertising marketplace, delivers ads displayed on smartphone screens, so its statistics tends to favor phones heavily used for Web surfing. "AdMob does not claim that this information will be necessarily representative of the mobile Web as a whole or of any particular country market," it warns at the bottom of the report. "AdMob’s traffic is driven by publisher relationships and may be influenced accordingly."

Among the report's other findings:

• Although its marketshare has been declining, Nokia (NOK) continues to hold 12 of the top 20 smartphone devices in AdMob’s network. Nokia’s N97 and 5800 XpressMusic touchscreen devices were the fourth and fifth most popular smartphones in the UK in August.
• Research in Motion's (RIMM) BlackBerry share declined only slightly over the last 6 months. There are 7 RIM models in the top 20 smartphones in North America.
• Google's (GOOG) Android is growing rapidly in North America and Western Europe. The HTC Magic (my Touch) is a Top 10 smartphone in both North America and Western Europe.
• Palm's (PALM) Pre also had a strong month due to the addition of new publishers to the AdMob network.

To read AdMob's report, click here. For an analysis of why it may unrepresent Apple's competitors, see Silicon Alley Insider's Dan Frommer here.

Below: AdMob's graphs showing the changes in worldwide OS share and the distribution of that share by region.