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

Daniel Eran Dilger finds anti-Apple bias in Gartner's research

"Looking into its crystal ball, Gartner Group has predicted that Google’s Android will become the second largest smartphone platform by 2012," writes Daniel Eran Dilger in the one-man blog he grandly calls Roughly Drafted Magazine. "Problem is, nobody’s talking about how terrible Gartner is at predicting things, or that Gartner’s 'research' has historically been paid for by special interests."

So begins Dilger's reaction to an interview with Gartner analyst Ken Dulaney that appeared Tuesday in Computerworld and was picked up uncritically by more than half a dozen tech websites.

Drawing on historical records and making generous use of internal Microsoft documents made public during antitrust proceedings, Dilger attacks not only Dulaney's numbers, but the credibility of the entire Gartner research group.

The result is a 1,700-word screed that may be the most thorough take-down of a tech industry analyst — and his employer — since Eliot Spitzer went after Henry Blodget.

At issue is Dulaney's forecast that has the major smartphone operating systems divvying up the 2012 market as follows:

• Nokia's (NOK) Symbian: 203 million devices (39% market share)
• Google's (GOOG) Android: 76 million (14.5%)
• Apple's (AAPL) iPhone: 71.5 million (13.7%)
• Microsoft's (MSFT) Windows Mobile: 66.8 million (12.8%)
• Research in Motion (RIMM) BlackBerry: 65.25 million (12.58%)
• Miscellaneous Linux devices: 28 million (5.4%)
• Palm's (PALM) WebOS: 11 million (2.1%)

Dilger finds it hard to believe that Android market share will grow 400% while the iPhone's stands still, but he is hardly a disinterested observer. He pens a pseudonymous column for AppleInsider and has written a book about Mac OS X Snow Leopard to be published next month by Wiley. His blood runs Apple red.

But he knows his stuff, and he has mined those Microsoft documents for some pure gold. He points to evidence, for example, that Microsoft paid Gartner — along with IDC and Forrester — to tilt results and publish reports putting Microsoft products in a favorable light.

One document, according to Dilger, shows that Microsoft spent hundreds of thousands of dollars in an effort that “successfully lobbied and changed the Gartner Group TCO [Total Cost of Ownership] model to show Windows as providing the lowest overall TCO [in comparison to so-called Network Computers].”

Now, Dilger claims, Microsoft's support for Windows Mobile is running dry and Gartner is looking for a new customer with equally deep pockets. Someone like Google.

The best quote in the piece, taken from Microsoft’s manuals on evangelism (and not necessarily directed at Gartner in particular):

"Analysts sell out – that’s their business model. But they are very concerned that they never look like they are selling out, so that makes them very prickly to work with."

You can read the Roughly Drafted piece in its entirety here.

Gartner has not yet returned a request for comment.

[Follow Philip Elmer-DeWitt on Twitter @ philiped]

Apple's (AAPL) iPhone still has what Net Applications describes as a "commanding lead" in the smartphone search market, but its competitors are gaining fast, according to preliminary data issued overnight Tuesday.

When Net Applications issued its first survey of this market last month, it reported that nearly two out of every three Web searches conducted from a mobile phone in February were made from an iPhone. As Net Applications measures it — a big caveat (see below) — the iPhone's share of searches dropped in March to 63.41% from 66.44%.

This does not mean that iPhone Web browsing is shrinking, the Web metrics firm notes, because the overall market is growing rapidly. (link)

But it does mean that Google's (GOOG) Android, Nokia's (NOK) Symbian and Research in Motion's (RIMM) BlackBerry — in that order — are catching up, although none has yet managed to grab more than a 9% share.

Android's growth is particularly striking: up 2.31 points, or 36%, in one month. (See the chart below for the full results.)

The BlackBerry, which was consigned to the catch-all "other" category in February, finally emerged in March as a line item of its own, but with only a 2.69% share.

How can the iPhone's share be so high and the BlackBerry's so low?

As we pointed out last month, the fact that it’s easier to surf the Web on an iPhone is only part of the answer. A more important reason emerges from Net Applications’ description of how its surveys are conducted:

“Our mobile share methodology measures share for browser capable mobile devices. This means the mobile device must be able to render HTML pages and javascript.  Visits to WAP pages are not included.” (link)

WAP (for Wireless Application Protocol) was the Web browsing standard for BlackBerries and other mobile phones  –  famously dismissed by Steve Jobs as the “baby Web“  — until the iPhone came along and offered a Web browser with HTML and Javascript.

In other words, Net Applications is judging the race for mobile Web dominance using the rules set by the iPhone.

The results of the February and March surveys are summarized in the chart below. To learn more about Net Applications, click here.

See also:

• Windows Net share shrank 3.68% year to year
• Report: iPhone has "commanding lead" on Web
• Apple starts 2009 with strong Net gains

There were several $10,000 prizes at stake — as well as some free mobile phones — but at the end of the three-day Pwn2Own smartphone hacking contest at the big CamSecWest conference in Vancouver, British Columbia, which closed on Friday, none of the devices had been cracked.

The contest, sponsored by 3Com’s (COMS) TippingPoint computer security division, pitted some of the world's sharpest hackers and computer security experts against five smartphones: an Apple (AAPL) iPhone, a Research in Motion (RIMM) BlackBerry and phones running on Google’s (GOOG) Android, Microsoft’s (MSFT) Windows Mobile and Nokia’s (NOK) Symbian operating systems.

Although the rules were relaxed each day to make hacking easier, the phones managed to withstand the few attempts that were made to "pwn" them — Internet-gamer slang meaning to conquer or gain ownership.

The Web browsers were not so lucky. In a separate contest, now in its third year, the security barriers of Apple's Safari, Mozilla's Firefox and Microsoft's Internet Explorer were breached in the first day — Safari's in less than 10 seconds using an exploit prepared before the contest. The latest version of Microsoft's Web browser — IE8 — fell even before the browser's official release. Only Google's Chrome survived day one. See here.

It's not clear why the smartphones did so well and the browsers so badly. It may be that the devices are too new to have been studied closely. "There's a lot we don't know yet about them," Charlie Miller, the man who cracked Safari so quickly, told CNet's Elinor Mills (link). In fact, there were very few attempts made. Tipping Point's twitter feed mentioned only two: one against a BlackBerry and another against a Nokia phone running Symbian.

But there's no question that smartphones are vulnerable to attack. SearchSecurity.com reports that during one conference presentation a team from Core Security Technologies, a Boston-based penetration testing company, demonstrated how to crack into the iPhone, Google Android and Windows Mobile devices using something called a simulated stack overflow vulnerability.

According to Alfredo Ortega, one of the Core researchers, the iPhone had the most security features, making it the most difficult to crack. Windows Mobile, he said, was the easiest to defeat. (link)

When it’s not running contests, TippingPoint operates its ZeroDay Initiative, in which it pays computer security specialists — also known as “white hat hackers” — a bounty for previously undiscovered vulnerabilities in return for a promise not to exploit them.

TippingPoint, in turn, notifies the vendor and simultaneously develops a patch that it offers to its security clients. Once the vendor has developed its own patch, TippingPoint and the vendor coordinate public disclosure. The researcher can either be given credit for the discovery or, if he or she prefers, remain anonymous.

See also: White hat hackers target the iPhone

Below the fold: the rules of the contest as posted on the CamSecWest website here.

Phones (and associated test platform)

• Blackberry(TBA)
• Android(Dev G1)
• iPhone(locked 2.0)
• Nokia/Symbian(N95-1)
• Windows Mobile (HTC Touch)

Day 1 (Raw functionality out of the box, users configured for service) post phone, post email

• SMS
• MMS
• Email (arrival only)
• wifi on if default
• bluetooth on if default
• Radio stack

Day 2

• All of Day 1
• Email/SMS/MMS (reading only – no secondary actions)
• wifi on
• bluetooth on (not accept pairing by default. Paired with a headset. pairing process not visible)

Day 3

• All of Day 1 and 2
• one level of user interaction with default applications
• bluetooth on (not accept pairing by default. Paired with a headset/other devices upon request. pairing process visible)

What is owned? Must demonstrate…

• loss of information (user data)
• incur financial cost

How secure is your smartphone? We may find out next month.

Hackers and computer security experts gathering on March 18 in Vancouver, British Columbia, for the third annual Pwn2Own contest will be targeting five smartphones: an Apple (AAPL) iPhone, a Research in Motion (RIMM) BlackBerry and phones running on Google's (GOOG) Android, Microsoft's (MSFT) Windows Mobile and Nokia's (NOK) Symbian operating systems.

The contest, sponsored by 3Com's (COMS) TippingPoint computer security division, will award $10,000 prizes to anyone who can break into one of the phones and "pwn" it — hacker and Internet-gamer slang meaning to conquer or gain ownership. The smartphones themselves will be awarded as prizes to whomever cracks them first.

Under the rules of the contest, the organizers will reduce the difficulty each day that the smartphones are able fend off the attacks. The first day the phones with be "raw metal," with no applications installed, forcing contestants to use Wi-Fi or network exploits. On the second day, the rules will be relaxed to allow the applications that come installed with the phones, including e-mail and Web browsers, but no third-party apps or downloads.

A second Pwn2Own contest track will pit hackers against browsers, with $5,000 prizes for contestants who can break the security of one of these five Web browser configurations: Internet Explorer 8, Firefox or Chrome installed on a Sony (SNE) Vaio running Windows 7 as well as Safari or Firefox installed on a Macbook running Mac OS X.

The prizes are awarded on a "per bug" basis. If more than five people win prizes, TippingPoint will award additional $5,000 bonus prizes for Most Interesting Browser flaw, Most Interesting Mobile Device Flaw, and Best in Show.

The Pwn2Own contest is run in conjunction with the annual CanSecWest security conference, now in its 10th year. The contest made headlines in the Apple press last year when Charlie Miller, a former National Security Agency employee, broke into a MacBook Air in less than two minutes under the second day's relaxed rules, which permitted him to direct the laptop to a website preloaded with an exploit code. See here.

When it's not running contests, TippingPoint operates a so-called ZeroDay Initiative in which it pays computer security specialists — also known as "white hat hackers" — a bounty for previously undiscovered vulnerabilities in return for a promise not to exploit them.

TippingPoint, in turn, notifies the vendor and simultaneously develops a patch that it offers to its security clients. Once the vendor has developed its own patch, TippingPoint and the vendor coordinate public disclosure. The researcher can either be given credit for the discovery or, if he or she prefers, remain anonymous.

Pwn2Own 2009 runs from March 18-20. The rules and prizes are posted here.

Who can keep track of all the touchscreen smartphones — and their attendant app stores — that emerged from Mobile World Congress this week to compete with Apple's (AAPL) iPhone?

RBC Capital's Mike Abramsky can. Attached to a report to clients released Friday is a handy chart of "emerging competitors" that covers most of the latest mobile operating systems: Palm's (PALM) webOS, Microsoft's (MSFT) Windows Mobile 6.5, Google's (GOOG) Android, Nokia's (NOK) Symbian S60 and couple of proprietary outliers.

The chart would be more realistic if it included the two smartphones battling most fiercely for the U.S. market: the iPhone and Research in Motion's (RIMM) BlackBerry.

But it's hard to tell the players without a scorecard, and this is a good start. The full chart is posted below the fold, with thanks to AppleInsider.

Abramsky sees the increasingly competitive landscape — and the pressure it will put on Cupertino to change the iPhone's pricing structure when and if it ships a third-generation model this year — as further justification for the "underperform" rating he slapped on Apple in January. Abramsky's $70 price target is the lowest in the business. (See Mike Abramsky's bad Apple advice.)

Apple shares closed Friday at $91.2, up 0.62% for the day.

Below: Abramsky's taxonomy.

Click to enlarge.

It's Mobile World Congress week in Barcelona, where the city's famous pickpockets have dozens of new gadgets to choose from, and the shadow of Apple's (AAPL) iPhone once again looms large.

Last year, rival cellphone manufacturers used the event to announce their own touchscreen smartphones.

This year, what's getting the love is the iTunes App Store, with its 20,000-plus applications and half a billion downloads.

Among the announcements making headlines this week:

• Nokia's Ovi Store. An online app and media portal that comes "pre-integrated" on Nokia's (NOK) new N97 (right), but will be available for download on a slew of existing Nokia phones come May. (link)
• Windows Marketplace. Along with a new version of Windows Mobile, Microsoft (MSFT) announced Monday that it will open a new Windows Marketplace offering — you guessed it — 20,000 apps, some of which actually run on mobile devices. (link)
• App Store for Symbian. PocketGear, which had previously built its own Palm App Store and an App Store for Windows Mobile, unveiled an App Store for Symbian, the operating system that runs Nokia's smartphones. How it will compete with the Ovi Store remains to be seen. (link)
• Android Market. Google (GOOG) opened an application marketplace for the Android platform last October, but so far it has only accepted free apps. Look for an announcement from Google this week about how that's going to change.
• BlackBerry Applications Center. Research in Motion (RIMM) invited developers to submit programs to its forthcoming Applications Center in October. We may be hearing more this week about when that will open for business.
• Palm Software Store. This one went live in December with 2,000 apps and 1,000 free games available for download to both Palm (PALM) OS devices and Windows Mobile.

Also making news in Barcelona is Adobe (ADBE), which announced Sunday that it expects to ship a full-fledged version of its Flash player in 2010 that will run on Windows Mobile, Google's Android, Nokia's Symbian and the new Palm OS. Steve Jobs had complained that Flash Lite wasn't good enough for his iPhone. Last we heard, Adobe and Apple were working together to get Flash up to speed, but apparently they're not there yet.

"We would love to see it on the iPhone, too," said Adobe's Anup Murarka, according to a report on CNET.com. "But it's Apple's decision on when and how they support any new technology. So we will continue to work on it." (link)

For comprehensive — if somewhat breathless — coverage of Mobile World Congress 2009, check out Engadget here.

UPDATE: We weren't kidding about Barcelona's pickpockets. On Thursday, the London Telegraph reported that Microsoft execs were "in a panic" after a cellphone loaded with a top-secret copy of Windows Media 6.5 was lifted from the pocket of an Australian telecommunications executive. See here.

We've known since October, when Apple released its latest earnings report, that the iPhone had a bang-out summer – shipping nearly 7 million units in the quarter, up from just over 1.1 million the year before.

But it wasn't until Thursday, when Gartner Research issued its smartphone sales report for the third quarter of 2008, that we learned just how well the iPhone did vis-a-vis its competitors.

Apple's (AAPL) share of the worldwide smartphone market leaped 327.5% in Gartner's survey, catapulting past Microsoft's (MSFT) Windows Mobile to grab the No. 3 position and putting it within striking distance of Research in Motion's (RIMM) BlackBerry for the No. 2 spot.

Smartphones running on Nokia's (NOK) Symbian operating system are still No. 1, with nearly 50% market share, but they lost ground as Symbian sales shrank for the first time, down 12% for the quarter.

Apple's results would have been even more impressive – and would have knocked RIM off the No. 2 perch, as Steve Jobs claims -  if Gartner's researchers hadn't reduced the iPhone's quarterly sales numbers by the more than 2 million units that Apple shipped before the end of the quarter but were still sitting in inventory.

Gartner's preliminary sales figures – listed both by vendor and by operating system – are available in its press release here.  But they are easier to visualize in the bar graphs, pasted below the fold, that Ars Technica's David Chartier has helpfully produced. See here.

Apple's iPhone is the star in a series of charts published Tuesday by Needham & Co. analyst Charles Wolf.

The first is a quarter-by-quarter snapshot of the worldwide smartphone market that shows a sharp uptick in Apple's (AAPL) share set against the downward drift of its major competitors — Nokia's (NOK) Symbian, RIM's (RIMM) BlackBerry and Microsoft's (MSFT) Windows Mobile.

The second chart shows the same data without Symbian — which lets you zero in on the competition between the iPhone, BlackBerry and Windows Mobile. In this chart, the rise in Apple's market share after the July release of the iPhone 3G looks positively meteoric.

The third chart shows the battle for the U.S. smartphone market, which is shaping up as a two-way race with the iPhone closing in on BlackBerry and Palm (PALM) and Microsoft Windows falling ever further behind. Note that Apple more than tripled its market share in the third quarter to grab 30% of the domestic smartphone business, while RIM lost considerable momentum and most of its lead. According to Wolf, the seven million iPhones Apple shipped in the September quarter accounted for all the growth in smartphone shipments that quarter — and then some. See AppleInsider here.

A snapshot of the global smartphone market issued Thursday by Canalys shows just how big a dent Apple's iPhone made in the cellphone universe last quarter.

With a surge of nearly 6.9 million shipments in calendar Q3, the iPhone leapfrogged past RIM (RIMM) and Motorola (MOT) to grab 17.3% of the smartphone market.

That put Apple (AAPL) in second place after Nokia, and helped cut the market-leader's share from 51.4% to 38.9%.

It also helped expand the entire smartphone category, which grew 28% from the same quarter last year to reach 40 million phones. The much larger cellphone market, by contrast, grew 3%.

Canalys also reports that Apple grabbed the No. 2 spot in smartphone operating systems, as the next table shows. Nokia's Symbian still dominates with 46.6% market share, but that's down sharply from 68.1% last year. RIM, Microsoft (MSFT) and Linux also registered gains, but nothing that compares with Apple's.

The Canalys report came the same day as a survey of business users that showed the iPhone leading all other smartphones in terms of customer satisfaction. See J.D. Power: iPhone beats BlackBerry.

However the iPhone's reign as No. 2 could be short-lived, according to Canalys. The U.K.-based research firm expects RIM to overtake Apple in the December quarter. RIM is selling three new products this holiday season — the Bold, Storm and Pearl 8220. If Steve Jobs has any more iPhones up his sleeve, we won't see them before Macworld in January.