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Smartphones Outsell Features Phones Among US Buyers in May

According to data from Nielsen, smartphones outsold feature phones among US buyers in May — for the first time ever. While Android is the leading OS (38% of smartphones versus 27% owning iPhones), Android’s marketshare has flattened among new buyers. Over the past 3 months the percentage of smartphone buyers buy iPhones has jumped from 10% to 17%.

Google Inserts Ads in iPhone Maps

Google has been inserting ads in iPhone maps for a few months. I spotted my first one yesterday.

Google Ad in iPhone Map

I’m guessing I should blame ATT for the frozen incomplete map above (it never loaded more that this), but I was annoyed that delivering the ad got higher priority than delivering my map. And for that I blame Google and Apple. Perhaps the map failure had nothing to do with the extra load of serving ads — but until the mobile map feature is highly reliable in San Francisco, Google and Apple should sequence the serve calls so that the ads load only after the map loads.

On the relevance front, I’ll give Google a C+. True, I was driving a car across the SOMA district of San Francisco, where Firestone Complete Auto is located. But I gave Google a few hints that I wasn’t on the market for automotive service at the time, and it ignored them. First, I didn’t search for automotive service. Second, I did search for a driving directions for a business a few miles from my current location — which suggests my car was running fine at the time.

Mobile Users Prefer Browsers Over Apps

eMarketer on mobile browsers vs apps

According to research conducted by Keynote, US mobile phone users prefer browsing their way to favorite websites rather than downloading an app version of the site that’s been optimized for the mobile-phone experience. The only categories where mobile users prefer apps over the standard browser experience are social media (namely Facebook and Twitter), games and music services.

The findings bring me back to 1999, when websites were obsessed with building-client app or browser-extension versions of themselves, only to realize that web users mostly opted to skip the download-and-install process in favor of browsing, bookmarking or searching for content by way of an upstart called Google. As eMarketer suggests, this data will disappoint sites that were hoping to use apps to snatch up permanent real-estate in a smartphone land grab:

“These preferences may surprise mobile experts who consider apps to offer the best content and shopping experiences. And marketers may be frustrated as well; getting an app on a user’s home screen is a constant reminder of the brand, but it doesn’t make sense to offer an app users don’t want.”

Interesting implications, too, for Apple’s iAds, the business unit dedicated to creating in-application advertising that, like the apps themselves, is designed exclusively for the smartphone experience. Maybe the naysayers are right.

AXA Insurance Makes Print Ads That Launch iPhone Video Ads

I admire the effort. But really. Can you imagine the sequence of events here?

First, imagine you’re caught up on your email, TweetDeck, RSS reader and to-do list, and your kids are asleep, so you’re reading a newspaper like you used to back in 1993. Just taking your time — you suddenly have nothing but time! — reading every article and glancing at the ads along the way. Just then you notice an ad for the insurance company AXA. What’s that? Right in the middle of the ad is something shaped like my iPhone! Oh, I see, I need to visit the App Store to download AXA’s iPhone app. Hold on a second. OK, done! Now let me put my iPhone over that iPhone-shaped thing in the ad. Oh wow! There’s a fun video followed by a product demo of something new from AXA!

It’s an inventive idea an all, but does anyone read magazines or newspapers like that anymore, let alone make time to play interactive games with print ads?

For a more favorable review, check out The Next Web’s Now This Is Remarkable. An Amazing Interactive (Newspaper) iPhone Ad.

Apple's iAds for Developers Program

Sample iAd for Developers

One thing that’s made me a fan of Apple’s iAds approach is its focus on building a mobile advertising experience for brands wanting *create* demand in mobile environments, rather than a platform that allows retailers and direct-response marketers harvest demand that was created elsewhere (the Google approach). As mobile advertising matures, brand advertising and DR advertising will both be elements of the winning model. But in these early days, as the the big players — namely Apple and Google — are establishing their ad products and their reputations, I’m wondering if it’s a good move for Apple to open the floodgates to mobile banners from app developers pitching you on their $0.99 downloadable products. When advertisers optimize for click-through and conversion-to-immediate-sale, the banners tend to favor jarring colors and annoying tactics to fool us into clicking — not beautiful ads that enhance the experience, like Superbowl commercials that are more fun to watch than the game. According to the Business Insider,

“the new iAd for Developers program is Apple’s way of getting more (albeit cheaper) ads in its system to fill its inventory glut, while also moving more app downloads through its App Store, and helping the developers who run its ads in their apps make a little more money. A potential win-win-win, if it works out.”

Cheaper ads to fill an inventory glut? That doesn’t sound like the formula that’s made Apple successful elsewhere.

8 Weeks In, Apple Swoops Up 50% of Mobile Advertising Market

iAd Claims $60MM in 2H10 Ad Commitments

From TechCrunch coverage of Apple’s WWDC:

“Apple has iAd commitments for 2010 totaling over $60 million, which the company says represents almost 50 percent of the total forecasted US mobile ad spending for the second half of 2010. Jobs said in his keynote that Apple has only been selling iAds for 8 weeks.”

We're Such Irrational Creatures; or, The Reason to Invest in Brands

In David Pogue’s glowing review of the iPhone 3G S, he reminds us why creating a passionate — and irrational — love affair between our brands and our customers is more important than selling them on the rational merits of our product and its price, why direct-response advertising alone can’t succeed without brand marketing. Here’s how he describes the pre-3G S models of iPhone:

“Your emotions were swept away by everything Apple does so well: beauty, polish, elegance, simplicity and the thrill of interaction. (Those were not, ahem, phrases typically used to describe existing cellphones.)

“Meanwhile, your brain kept waving its little hand in the back of the classroom. ‘But the camera’s terrible!’ it would say. ‘It can’t record video! There’s no voice dialing! No copy and paste! The iPhone can’t even send picture messages — even $20 starter phones can do that!’

“But 21 million iPhone sales later, it’s become clear that the heart usually manages to shut the head up.”

The heart doesn’t operate in a vacuum, though; it’s only a handful of inches away from its more rational sister organ. I mean, the original iPhone had to work through some very left-brain pricing snafus. The right answer for marketers, especially as they shift more dollars to online, will require a balance between sparking an emotional fire with customers (the specialty of brand advertising) and delivering the goods at the right time and right price (the realm of direct-response marketing).

What’s equidistant from Madison Avenue and Mountain View — Topeka, Kansas?

Most iPhone App Developers Don't Make Money

Tech Startups 3.0 from a small survey by UK-based game consultant Adam Martin that suggests most iPhone app developers don’t make much money.

Pull My Finger iPhone App

“Martin surveyed 100 development teams, received 85 usable responses, and found that 52% of the developers had earned less than $15,000 for their efforts and 33% earned less than $250.”

While his data set is small, I support his sound advice to aspiring app makers — given the poor odds of making a lucrative living as an independent iPhone app developer, “don’t quit your day jobs.” It’s much better advice than the NY Times a few months ago in its article “The iPhone Gold Ruch.”

NY Times Overplays the "iPhone Gold Rush" Opportunity

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Free Willy film

I hate sloppy and irresponsible articles like The iPhone Gold Rush piece in today’s NY Times. OK, it’s in the Style Section, but still.

It’s a mini profile of three successful developers of iPhone apps who have made, respectively, $800,000 in five months, $100,000 in three months, and $250,000 in two months. The article’s subtitle — it almost reads like career advice — is “Develop a popular app and quit your day job.”

In the 15th paragraph, there is this dose of reality:

“There are now more than 25,000 programs, or applications, in the iPhone App Store, many of them written by people like Mr. Nicholas whose modern Horatio Alger dreams revolve around a SIM card. But the chances of hitting the iPhone jackpot keep getting slimmer: the Apple store is already crowded with look-alike games and kitschy applications, and fresh inventory keeps arriving daily.”

But it’s a short detour into reality. The article’s final words on the matter:

“‘I’m going to milk the gold rush as long as I can,’ Mr. Nicholas [one of the fabulously successful developers] said. ‘It’d be foolish not to.’”

I’m trying to imagine an article in the Times under the headline “Independent Movie Goldmine: Make a really good feature film and quit your day job,” with a profile Slumdog Millionaire’s simple formula for generating a $290 million global box office.

Congratulations to the 3 developers who’ve hit pay dirt. There are probably a few others, too. But 3 of 25,000 is a 0.012% hit rate. Let’s not all go quitting our day jobs just yet.

UPDATE: The article’s author, Jenna Wortham, strikes a much different tone in a related post on the NYT’s Bits Blog, starting with the more cautious headline, “Will the iPhone 3.0 Fuel a Second Gold Rush?” Should I blame the editor for erasing that question mark? By the blog post’s second sentence, Wortham’s already casting doubt on the easy path to iPhone riches:

“But the chances of hitting the iLotto have grown increasingly slim. As more developers seek their fortune in the glossy curves of the device, the App Store is becoming crowded. Competition is spiking, driving down application prices — and the chances of becoming the next iMillionaire.”

Hmmm.

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