Android continues to take chunks out of Apple, InMobi finds

by Marketing ON 8 May 2013

According to the latest InMobi, Australian Mobile Insights Report, Apple’s iOS smartphones continue to lose share to Android.

Between the months of January and March 2013, Apple’s smartphone share of impressions dropped 2% to 59% while Android grew 2% to 36% on the InMobi network.

The figure is impressive for the fact that the 23% margin is the nearest that Android has been to Apple before and displays a changing of the smartphone guards of sorts.

And this trend is not limited to local with other parts of the world, including New Zealand, showing Android is presently only 7.7% behind Apple.

Compounding Apple’s smartphone share loss, the iPhone also lost handset share of impressions for the first time in its history. While handset share decreased 5.4% to 45.7%, but it still held onto top spot.

Francisco Cordero, vice president and general manager of InMobi Australia and New Zealand, explains: “Android has come firing through this quarter, gaining on iOS following a great fourth quarter and Christmas sale period from Samsung which posted a record profit of AU$6.34 billion.”

The rise of the iPad has been good to Apple as it is still dominates the market, a 3% increase for the iPad, moving it to second most preferred tablet is a win despite the share loss to Android.

News isn’t great for Apple in overturning the market share with the launch of Facebook Home, the Samsung Galaxy S4 and the launch of the HTC Facebook phone piling on the heat.

“We believe that Android will maintain its momentum and close the margin between iOS even further next quarter,” says Cordero.

Actually, Australian ad spend dropped in 2012, says Carat

by Marketing ON 26 March 2013

Publishing its first forecasts for worldwide advertising expenditure in 2014, as well as revisions on 2012 and 2013 figures, Carat has forecast Australian advertising spend to achieve positive growth this year and next, but has downgraded Australia’s 2012 figures from positive 1.0% to negative 1.1%.

Australian ad spend in 2013 is expected to achieve 1.5% growth, a downward revision from 2.0% made at the previous forecast in August last year. And in its first look at 2014, Carat sees the Australian market maintaining modest growth of 1.4% in the positive.

Based on data received from 57 markets around the world, Carat predicts further positive momentum for global advertising expenditure in 2014, increasing by 5.0%, while the latest 2013 forecast is for 3.7% growth.

Digital advertising is expected to reach a share of 20% globally by next year, which is increasing on average 2% each year, with digital advertising already the dominant medium in the UK, the Netherlands and Sweden.

Even Western Europe, following two consecutive years of decline, is likely to return to growth as it benefits from the increase in multi-platform opportunities and the resulting increase in digital spend, Carat says.

From a global perspective, growth in advertising spend continues to be led by two of the original BRIC economies of Russia and Brazil who are forecast to continue delivering double digit growth in 2014. Russia will be boosted by the Winter Olympic Games and Brazil from the 2014 FIFA World Cup.

Decline in console sales as digital and mobile gaming sphere skyrockets

by Marketing ON 14 February 2013

Australia’s entertainment industry recorded $1.161 billion of retail sales in 2012, boosted by mobile gaming sales from smartphone and tablet users.

Australia’s Interactive Games and Entertainment Association (iGEA) announced the figures today, which include revenue gained from console hardware, games software and gaming peripherals sold through retail outlets.

Despite a drop of 23% on 2011′s numbers according to market researchers NPD Group Australia, iGEA CEO Ron Curry states the data fails to include the increasingly popular mobile and digital gaming space.

“As Australians consume video games across a broader range of mediums, it’s becoming harder to get a true indication of the value of the industry via a single source. While there is a decline in traditional sales, the gaming industry as a whole remains buoyant as people shift towards a ‘hybrid’ model in their consumption of interactive entertainment,” Curry says.

Technology analyst firm Telsyte believes the digital and mobile gaming sphere will see an 18% increase in 2013 on the estimated $620 million generated in 2012.

“The growth in digital gaming is driven by mobile app gaming on smartphones and tablets, which is offsetting the decline in physical purchases and even pushing the overall games market into growth,” senior research manager for Telsyte, Sam Yip, says.

The continued hype surrounding the next-generation of Sony PlayStation and Microsoft Xbox consoles is seen as a contributing factor to the retail revenue decline, which began in 2005 ahead of the release of the current console gaming systems.

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End to beer discounting as supermarkets and brewers seek margin over market share

by Marketing ON 11 February 2013

The days of heavily-discounted and bulk beers sold at Australian supermarkets appear to be numbered following a recent report that demonstrates minimal margin for the big retailers, while beer manufacturers have indicated a move away from using market share as a measure of success.

Both major supermarket groups have been unceremoniously slashing prices on cartons in recent years, an era dubbed the ‘Beer Wars’, but now Coles has declared it will be ending the practice, with consumers expected to pay the price.

Coles explained that while sales in wine were growing and turning good revenue, it had decided to stop “unprofitable bulk and corporate sales and [has reduced] unsustainable price discounting, especially on beer,” a spokesperson told BusinessDay.

Despite Coles’ decision, both Lion Australia chief executive James Brindley and SAB Miller Asia Pacific chief executive Ari Mervis recently said that there is not about to be a change in their own beer prices, but rather a shift in strategy that has previously focused too heavily on market share as a measure of success.

Merrill Lynch analyst David Errington views Coles’ dependency on wine earnings as alarming with wine surpassing beer profits. 75% of Coles (and Woolworths) EBIT (earnings before interest and taxes) is now generated by wine, despite it making up closer to 40% of their sales revenue.

“The over-reliance on wine earnings is being underpinned by the fact that the major retailers lose money selling beer despite making up 30% of their sales,” Errington says.

He explains that the main reason liquor retailers have been losing money selling discounted beer all comes down to the relevant cost of doing business. “On a case of VB sold (not on promotion), we estimate the gross margin for the retailers is under 5%, which is well below the cost of doing business (on our estimates) of 15%,” he says.

This takes on added significance when it is revealed the margins of the beer-makers are more than 30%, when compared to the retailers’ single digit margins.

Interestingly, the beer industry has seen a good recovery in beer consumption in the past three months thanks largely to the summer period, with the amber fluid still one of the most branded products around.

iPhone 5 fails to woo new Apple customers, Android retains lead

by Marketing ON 28 November 2012

Apple’s iPhone 5 has largely failed to woo new customers to the brand, taking the majority of its sales from existing iPhone owners to leave Android as the most-owned operating system in Australia.

Since overtaking Apple’s iOS as the most common smartphone operating system in July, Google’s Android has continued to pull ahead, despite September’s launch of the iPhone 5.

While the new iPhone’s release managed to boost iOS’ share of sales back up to equal with the combined sales of Android-based devices – a position it hasn’t occupied since December last year – it is yet to have an impact on the overall share of smartphone ownership in Apple’s favour.

Data from Kantar WorldPanel’s ComTech study of 10,000 Australian mobile phone owners, released exclusively to Marketing, shows that, as of the end of October, Android commanded 40% of smartphone market share compared to iOS’ 38%. In the month of October, the iPhone 5 accounted for 32% of smartphone sales, well above the 20% enjoyed by Samsung’s flagship model the Galaxy S3 at its peak in August. In October, the S3’s share of sales dipped to 11%, while in total Samsung’s extended stable of handsets accounted for 29% of smartphone sales.

Share of smartphone sales

Note: Samsung figures are a sub-set of the overall Android figures.

Kantar found the recent growth in Apple purchasing has caused little to no change to Apple’s share of smartphone ownership levels, with almost 80% of iPhone users who upgraded in October buying another iPhone. Strategic insights director at the research group, Tamsin Timpson, says Apple is not attracting new customers to the same extent as Samsung.

“It seems people want something a bit different,” Timpson says. “The image of the Apple brand is still very strong, and that comes through in the loyalty figures, but there’s definitely a group of people out there that want something different.”

That group is more likely to be and older and male than the iPhone buyer, according to the data, which shows the Galaxy S3 owner significantly more likely to be male and over 34 years of age.

“When there is a new iPhone launch, the profile of its owners becomes younger and more female dominated each time,” Timpson adds.

Cost is also a factor for many late adopters of smartphones, making the range of cheaper, pre-paid Android models more attractive to new customers.

While the larger screen of the S3 is seeing an Android-based handset eclipse the iPhone for usage of the mobile web, photos, gaming and other features suited to the big screen for the first time, the iPhone continues to outstrip its rival when it comes to other high-use smartphone functions.

The heavy use of these features such as social networking and shopping on the iPhone is driven by the younger, more female owner base, which Timpson believes prefer Apple’s sleek, fashionable design and brand image. “It’s a fashion thing… the features that are more mainstream, such as social networking or shopping, tend to over-index on the iPhone, while the lower penetration usage functions, such as mobile TV, over-index for the more male Samsung audience.”

However, despite ceding ground in the content battle, the iPhone still reigns supreme when it comes to value to manufacturer and telecommunications carriers, and loyalty. iPhone 5 owners spend slightly more on contracts per month – $69.16 compared to $63.56 for S3 owners – and far more on apps per month – $2.78 on average compared to $0.44 for S3 owners. Over the course of a two-year contract, this equates to around $134 more for service plans and about $56 more through app stores per user.

Loyalty to the Samsung brand languished at 50% in October compared to the 80% repurchase rate enjoyed by the iPhone. But for those who switch away from an iPhone, Samsung is the preferred choice, setting up a rivalary between the two brands that looks set to intensify.

Android dethrones iPhone as most owned smartphone platform in Australia

by Marketing ON 27 July 2012

Google’s Android operating system has overtaken Apple’s iOS as the most owned smartphone platform in Australia for the first time, growing its share of the market by 7% in the past quarter and capturing the hearts of technology early adopters.

Over the past year, Marketing with the help of Kantar WorldPanel’s ComTech data has been tracking smartphone penetration in Australia and the battle between iPhone and Android for operating system supremacy in Australia. Data from the ongoing study of 10,000 Australian mobile phone owners shows that, as of the beginning of July, Android commanded 38% of smartphone market share compared to iOS’ 37%.

Kantar’s strategic insights director Tamsin Timpson says Android’s surge has been driven by the success of Samsung, the operating system’s range of offers for new smartphone converts and how female orientated and mainstream the iPhone has become.

“It was in contract [post-paid market] where Apple had its stronghold and it’s now lost that,” Timpson explains. “The share for the contract market is now pretty much level between Apple and Samsung.”

In an ironic twist, Timpson believes the iPhone’s popularity may now be working against it, as early adopters looking for less “mainstream” alternatives hone in on Android, just as Apple’s meteoric rise was built on its position as an edgier alternative to Microsoft. “The younger males who are typically the early adopters of new technology want something different now… I think they want to separate themselves from iPhone because it is so mainstream. Android, Samsung and HTC are showing much more strongly in that younger male demographic.”

With three in five (59%) Australians aged over 16 years now smartphone owners, the surge of Android will see developers and marketers begin to place an even heavier emphasis on Android devices. Android’s growth looks set to continue in the absence of a new iPhone release, with the operating system taking in 63.2% of smartphone sales in the four weeks to July 8, compared to iPhone’s 25.8%, (down from 29.9% in March).

During Apple’s third quarter earnings report on Wednesday morning, CEO Tim Cook and CFO Peter Oppenhiemer blamed consumers holding out for the widely discussed next iPhone release for a global slow down in sales, while hinting at a Spring release for the launch of the handset’s sixth iteration.

“iPhone sales continued to be impacted by rumour and speculation about new products,” Oppenhiemer said. “We’re reading some rumours and speculation [about a] new iPhone and we think this has caused some pause in customers buying.”

True to form, Apple kept quiet about release dates, but Oppenheimer did mention that Apple “could not be more confident in our new product pipeline,” and also mentioned a Spring “transition”. This transition was brought up in the Q&A after the presentation, to which Oppenhiemer replied, “Not something that we’re going to talk about in any level of detail today”.

The “transition” could be the introduction of a smaller iPad or the launch of the next iPhone. MacRumours points out that it will need to take place before the end of September in order for the new release move the dial on next quarter’s figures. Apple also said that it expects a year-over-year increase in Mac, iPad and iPhone sales in September, fuelling speculation of a Spring launch.

According to Timpson partnerships with the carriers could also be impacting on iPhone’s fortunes in Australia, with around two-thirds of new phone buyers in the Australian market classified as ‘upgraders’ who buy new handsets with the same carrier. “Optus is very tied in with Samsung and Telstra with HTC,” Timpson says. “Handset manufacturers need to make sure they’ve got a really strong relationship with their carriers otherwise that carrier is going to push a different brand.”

While the surge in Android handsets represents the first time the operating system has toppled the iPhone for market share in Australia, iOS users continue to user their phone for more tasks than Android users, with 55% using 11 or more non-voice services a month compared to 22% for Android overall. This access to a greater range of content and apps is borne out at the advanced handset level also with only 33% of Samsung’s Galaxy S II owners and 35% of S III models being heavy users of non-voice services.

“iPhone owners are still the highest spenders and very much engaged with their phones,” Timpson concludes. “They over-index on everything compared to the average smartphone owner. Because Android is capturing a much higher proportion of new smartphone owners those people tend to be lighter users of non-voice services and aren’t as engaged with their smartphones.”

Timpson predicts that Apple will hit back, but much will depend on how the sixth-generation iPhone is received when launched later in the year.

Tablet ad impressions surge by 34% [infographic]

by Marketing ON 12 July 2012

Ad impressions served on tablets surged 34% in quarter two of the calendar year, while smartphone impressions continued to record strong growth and Apple continued to dominate, according to analysis of impressions served on mobile ad network InMobi.

The network’s quarterly ‘Australian Mobile Insights Report’ revealed that Apple devices – the iPhone, iPod and iPad – increased their share of the rapidly increasingly number of ad impressions being served through mobile devices.

At the overall operating system level, Apple’s iOS grew 10.8% on quarter one to command 64.7% of mobile impressions. The iPhone dominated all other devices, increasing its share from 43.7% to 51.6% and putting it well ahead of the next most prolific device – the iPod with 7.4% of impressions. The iPad was also dominant over its competitors, garnering three-quarters (73.5%) of tablet impressions and 5.7% of impressions across all devices, making it the fourth highest server of ads overall. Its nearest competitor, Samsung’s Galaxy Tab 10.1 Inch model delivered 11.8% of ads served to a tablet device.

Ad impressions served on smartphones increased by 10% over the period, with Samsung’s S and S II models rounding out the top five devices for ad impressions, making the top five handset list a Samsung-Apple duopoly for the first time. RIM’s BlackBerry 9700 previously sat in fifth place but thanks to a 6.4% drop in impressions served on RIM’s network the handset has dropped to sixth.

Head of InMobi Australia and New Zealand, Francisco Cordero, says the exponential growth in tablets is due to reduced retail prices and richer web browsing experiences associated with the larger screen format, and is only set to continue.

“Samsung and Apple are completely dominating manufacturer shares since the arrival of the Apple iPhone 4S, new iPad and Samsung Galaxy S3,” Cordero says. “With the introduction of new tablets to the market, including the Microsoft Surface and Google’s Nexus 7, and reports that Apple will launch a mini iPad, we expect tablet impressions to double by this time next year from 290 million to 580 million.”

Growth in impressions served on the Android network could not match iOS, with Google’s operating system growing by only 1.8% quarter on quarter to reach 25.4% of impressions. Samsung devices commanded 12% of impressions, an increase of 2.2%, while HTC was down slightly to 6% and RIM languised with 4.2%.

Even higher growth in tablet impressions was experienced in New Zealand, with a 78% jump indicating a strong upward trend in tablet usage across the Pacific region.

Earlier this year, InMobi opened a second Australian office in Melbourne, helping it serve over 1.9 billion ads in Australia between April and June this year.

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