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

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]

Both companies beat expectations last week, but only one of them was growing

Click to enlarge. Source: Company reports, Oct. 2009.

A year ago we ran a bar graph similar to the one at right. It showed that Apple (AAPL), despite the Mac's tiny market share compared with Microsoft (MSFT) Windows, was gaining on the software giant. The main reason: revenue pouring in from the iPhone but hidden as deferred earnings in Apple's balance sheet. (That chart is posted below the fold.)

Last week Apple and Microsoft once again reported quarterly earnings — and enjoyed nice pops on the stock market. But their growth rates turn out to be very different.

This quarter, deferred iPhone revenue isn't as big a deal for Apple as it was last year (non-GAAP earnings actually grew more slowly than GAAP; see here for why). Ironically, it was Microsoft that had to use deferred revenue from Windows 7 to show any growth at all. Otherwise, Microsoft's revenue for the third quarter was down 14% year over year and its earnings down 17%.

Apple's revenue, meanwhile, grew 25% and its income 46.6%.

Apple's war chest, in terms of cash and cash equivalents, is larger than Microsoft's, $34 billion to $33 billion, taking long-term debt into account (Apple has none).

And as far as market share, that depends what market you're looking at.

The bar graph above shows the Mac's share of the U.S. personal computer market, which has inched up to 9.4%, according to IDC.

Meanwhile, the iPhone's share of the worldwide smartphone market has grown from 2.8% to 13.3%, according to Gartner, while Windows Mobile has been relegated to "Others." And the iPod continues to command roughly 70% of the MP3 player market; Zune's share hovers around 2%.

The consensus on Wall Street is that Microsoft has turned a corner, and both Apple and Microsoft rallied last week. But over the past year — since we last did this exercise — Apple's shares have grown four times faster.

Below, as promised, last year's version of the bar chart:

Date: Oct. 26, 2008

Click on the chart to see last year's post.

Thanks to reader Mark Taylor for the suggestion.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Company wants to make its Flash technology available everywhere — and that means penetrating mobile devices.

Flash is coming to most mobile phones - except the one that starts with "i." Image: Adobe

Flash is finally coming to your smartphone—and so is Adobe (ADBE). With today's launch of the newest version its software, Adobe Flash Player 10.1, the San Jose-based company is making an aggressive push to get its product onto any gadget that allows for web browsing–Blackberry devices, netbooks, increasingly even TVs.

Crucially, Adobe has signed on a number of key launch partners for the product including Google (GOOG) and Research in Motion (RIMM). By the first half of next year, consumers can expect Flash on nearly every smartphone operating system including Google’s Android, Nokia’s (NOK) Symbian, Palm’s (PALM) webOS and Microsoft’s (MSFT) Windows Mobile.

This is great for developers, who have long had to use different software to make their applications work on different devices. And it’s even better for consumers, for whom web browsing will get faster and more consistent regardless of the device.

Flash is the graphics-rich software responsible for many of our most alluring web experiences. Three-quarters of online videos are delivered in Flash. Nearly as many of the web games we play are created using it. And it’s also responsible for some of the best graphics online. One tech analyst who enjoys the Washington Redskins is constantly annoyed that he can’t read Washington Post coverage of the team on his ‘berry because parts of the paper's online version, washingtonpost.com, are delivered in Flash.

Until now, Adobe has offered separate products for the personal computers and mobiles. Developers had to rely on Adobe Lite, a dumbed down version that didn’t allow for the rich experience of the web.

The new version of Flash has been in the works since Adobe launched its Open Screen Project in May 2008. Started with 25 partners, the project now has more than 50 that include everyone from chipmakers like Qualcomm (QCOM) to content providers like MTV networks.

With this move, Adobe hopes to transform Flash from a simple developer’s tool to a platform in and of itself. “Instead of writing for tv or phone or computer, developers can write in Flash across multiple screens and locations,” says Michael Gartenberg, an analyst with market research firm Interpret.

But just because an application will run on any device doesn’t mean it will be optimized for every device. There is still much work to be done before developers can truly create and deliver one application for any platform. And there is one Flash holdout, a company that has managed to deliver great video experiences and superb graphics on its phones so far without Adobe’s help: Apple. (AAPL)

Source: Gartner August 2009

Sales of Nokia's (NOK) Symbian smartphones are drifting. Apple's (AAPL) iPhone is gaining on RIM's (RIMM) BlackBerry. Microsoft's (MSFT) Windows Mobile is still sinking. And the launch of the Palm (PALM) Pre barely made a ripple in the gobal smartphone market.

Those were the headlines from the smartphone portion of Gartner's 2009 Q2 mobile phone report, which saw smartphone sales grow 27% even as overall mobile phone sales, feeling recessionary pressure, fell 6%.

In this context, Apple was the clear winner. Its iPhone sales, as Gartner counts them, grew more than 500% year to year, and its market share, as we figure it, grew 375%. (See chart below the fold.)

"Apple's expansion into a larger number of countries in the past year has produced a clear effect on sales volumes, as have the recent price adjustments on the 8GB 3G iPhone," according to Gartner's press release. "Apple brought its much-anticipated new device — the iPhone 3G S — to market at the end of the second quarter of 2009, but its full potential will only start to show in the sales figures in the second half of 2009."

Gartner made note of the declining market shares of Symbian and Windows Mobile, but it expressed particular concern about the Palm Pre.

"This device attracted a lot of media attention but showed mixed results at the cash register as sales only reached 205,000 units," said Gartner principal analyst Roberta Cozza. "Palm currently ranks tenth in the smartphone market and Gartner remains concerned about its ability to gain traction outside the US market, where its brand is less strong."

Healthcare professionals would seem a natural market for smartphones, especially if the Obama administration makes good its campaign promise to computerize U.S. health care records.

But which smartphone will doctors and nurses be using?

Software Advice, an Austin-based resource for software buyers, tried to answer that question last week. In what it admits was not a "super-scientific" survey, it e-mailed a questionnaire to 700 healthcare professionals and processed 71 replies. The results, released on Tuesday, show an interesting mix of preferences that vary according to job description.

Doctors, nurses and and students showed a strong preference for the Apple (AAPL) iPhone. IT professionals, who seem to have sampled a wider range of devices, also preferred the iPhone, but not as strongly. Health administrators — at least the ones who replied to the survey — were unanimous in their preference for Research in Motion's (RIMM) BlackBerry. The Palm (PALM) Pre was a strong second among students.

As the report notes, "most people, regardless of brand, were satisfied with their phones." The Pre and Google (GOOG) Android phones were the only devices to get 100% ratings from their users. The iPhone scored somewhere in the 90s, Microsoft (MSFT)'s Windows Mobile in the 60s, and the BlackBerry around 50% — equally divided between satisfied and not satisfied. (See below.)

Finally, the Software Advice report compared what health professionals are currently doing with their smartphones with what they hope to do in the future. The only health-related activity in wide use today is prescription drug reference, thanks no doubt to the popularity of the Epocrates app, which runs in various versions on the iPhone, BlackBerry, Palm and Windows Mobile devices.

But in the future, as Obama and these health professionals see it, smartphones could be used for a wide variety of tasks, including tracking patients, ordering lab tests, viewing X-rays and CAT scans, making clinical decisions and "e-prescribing" drugs. See charts below:

Six out of 10 doctors isn't a bad result for Apple. On the other hand, a quick Google search reveals that six out of 10 doctors also recommend the wrong treatment for infants with milk allergies, don't understand how private health plans work and smoke Camel cigarettes — or at least they used to.

Owners of Apple (AAPL) iPhones who hold down jobs — as opposed, presumably, to those who go to school, are between jobs or live off the proceeds of their trust funds — are more than twice as likely to access the Internet from their phone as working Americans who own Research in Motion (RIMM) BlackBerries, Palm (PALM), or Microsoft (MSFT) Windows Mobile devices, according to a report issued Friday by Forrester Research.

Based on a mail survey of 61,033 Americans fielded in February and March 2008 — back when iPhones started at $499 (not $99) and had only been available for six months — the study found "a quantitative difference in what working iPhone owners do."

In particular, the authors found that:

• Working iPhone owners are more than twice as likely to use the mobile Internet. While only 9% of mobile phone owners and 38% of all working smartphone owners access the Internet from their phone at least weekly, a massive 78% of working iPhone owners do so.
• Mobile email and texting are much more common among working iPhone owners. Whereas one in two working smartphone owners sends mobile email at least weekly, more than three in four working iPhone owners do so. And 80% of working iPhone owners text weekly in contrast with 60% of working smartphone owners and 36% of  working mobile phone owners.
• Households that own iPhones spend more on mobile bills than the average mobile household. Working iPhone owners as a group spend $87 on their household mobile phone bills monthly, while all working smartphone households spend $76 and working mobile phone households spend $66 per month.
• Working iPhone owners are twice as likely as all mobile users to go online in public. In addition to home and work, the two most common places to go online, more than a third of working iPhone owners go online outside or in another public place. This is twice as many as all working mobile phone owners (17%) and nine percentage points higher than all working smartphone owners (26%).
• Fifty percent are more likely to read a blog weekly. Twenty-three percent of working iPhone owners read a blog at least weekly, whereas only 16% of working smartphone owners and 11% of working mobile owner owners do so. This blogging difference extends to maintaining a blog as well, where working iPhone owners are almost twice as likely to do so.
• A third are more likely to maintain a social networking profile weekly. Twenty-six percent of working iPhone owners maintain profiles on social networks, while only 19% of working smartphone owners and 14% of working mobile phone owners do.
• Twenty percent are more likely to use instant messaging weekly. Forty-four percent of working iPhone owners uses instant messaging at least weekly versus 37% of working smartphone owners and 24% of all working mobile phone owners.
• More working iPhone owners telecommute and access the network from home. Twenty-eight percent of working iPhone owners telecommute regularly, and 42% regularly access an employer’s network from a computer while at home. This is a greater percentage than is found among working smartphone owners, where only 20% telecommute regularly and 34% access an employer’s network regularly from home.
• Although more connected to work, fewer iPhone owners bring laptops home. Despite this greater tendency to telecommute and access an employer’s network from home, working iPhone owners are less likely to bring a work laptop home (36%) compared with all working smartphone owners (42%).

The full report is available here as a downloadable PDF for $749 — with a three-week money-back guarantee.

Below the fold: A sample graphic showing that iPhone owners are younger and richer than the general smartphone population.

Apple (AAPL) and Research in Motion (RIMM) were the big winners in the first quarter of 2009, according to a report on the mobile phone industry issued by Gartner, Inc. on Wednesday.

Against a backdrop of weakening sales, smartphones — and in particular, touchscreen smartphones — were the exception.

According to Gartner, worldwide mobile phone sales totalled 269.1 million units in 2009 Q1, down 9.4% from 2008. But smartphone sales exceeded 36.4 million units, up 12.7% from the same period last year.

"Much of the smartphone growth during the first quarter of 2009 was driven by touchscreen products, both in midtier and high-end devices," said Roberta Cozza, principal analyst at Gartner. "'Touch for the sake of touch' was enough of a driver in the midtier space, but tighter integration with applications and services around music, mobile e-mail, and Internet browsing made the difference at the high end of the market."

Nokia (NOK) and "Others" — which apparently included Microsoft (MSFT) Windows Mobile — were the big losers in the smartphone market. RIM, however, grew its market share nearly 50% year over year, while Apple's share increased 109%.

See chart below.

Curiously, Gartner reports that Apple shipped 3.938 million iPhones in the first quarter of 2009, while Apple reported selling 3.79 million in the same period. The difference, according to an Apple spokesperson, is that Apple reports the number of iPhones it "shipped in" to its customers, while Gartner estimates "ship through," and includes the number of units it believes are sitting in inventory.

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