The shape of the smartphone and mobile data markets

With all the new mobile devices coming out, I thought it would be useful to give an overview of the market for mobile data. I covered some of this information in a post written about a year ago, but this one has a lot of new information, plus diagrams.

I believe the market for mobile data devices (smartphones, PDAs, mobile game machines, iPods, etc) is not structured the way most people think it is. A lot of new mobile products fail because they're not designed for the real market, or because they target imagined customers who don't really exist in large numbers.

There are two big erroneous assumptions that I think many people make about mobile data:


First incorrect assumption: Mobile data is for everyone. Most people assume that mobile data devices like smartphones will eventually be used by everyone. The idea is that they're being bought by early adopters now, but as prices drop they'll soon be adopted by the whole population. The market is supposed to look like this:



Higher prices are to the right. Smartphone sales start with the early adopters at the right, and then as prices drop everyone switches to smartphones and starts using all their features.

The only problem with this idea is that there's no evidence to indicate that it's true, at least not in the US and Europe (where I've done research). In fact, almost all of the evidence I've seen to date shows that the market is deeply divided into two groups. When surveyed, most people in the US and Europe say they will not pay anything extra for mobile device features other than voice and SMS. They'll use those features if you give them away for free, but as soon as you ask them to pay, about 65% of the population drops out. This makes them very unpromising targets for device companies that want to sell value-added devices, operators who want to sell advanced services, and software companies that want to sell mobile data apps.

Fortunately, the other 35% of the US and European population is willing to pay extra for mobile data features.

So the real market looks like this:



The people I labeled "value-added users" are the mobile data market. But that's only the beginning...


Second incorrect assumption: There is one smartphone market. Most people assume that there's just one market for smartphones, and that eventually we'll see the emergence of a single ultimate smartphone that everyone uses. I can't tell you how many times I got that question from press people and analysts when I worked at Palm: "Which is the device that everyone's going to use?"

The answer is, that device doesn't exist, because the people who are willing to pay extra for mobile data features don't all want the same features. They want conflicting things, and are very unwilling to pay extra for the features they don't want. The ideal hobile device for me might be completely repulsive to you, and vice-versa.

This misconception has fueled an uncounted number of online debates in which people argue why the device they like ought to be adopted by everyone. What they're really arguing is that everyone else should think and feel like them, which is why these online debates never reach a conclusion.

Rather than looking for the mobile market to "converge" the way that most PCs converged to Windows, I think we should expect mobile devices to diverge into different segments. The right analogy for the mobile market isn't PCs, it's cars. As the car market grew in the 1900s, it stratified into trucks and minivans and SUVs and sports cars and so on.

The same divergence is already underway in mobile data.


There are at least three segments in mobile data

If mobile data isn't for everyone on the planet, and if the market is divided into segments, the most important question to ask is what those segments are. What are the equivalent of the sports car, SUV, and minivan for mobile?

We researched that extensively at PalmSource, in a series of surveys that eventually talked to more than 12,000 people in the US, France, Germany, and the UK. In that research, we found at least three big groups of mobile data customers, each with different needs and tastes: people who focus on communication (e-mail, messaging, conferencing), people who focus on entertainment (games, video, music), and people who focus on managing information (databases, documents, note-taking). Each was about 12% of the population.

The results were very consistent across countries, so I'm comfortable that the same segments probably exist in most European countries. The only significant difference was Germany, where the percent of the population who said they were willing to pay for entertainment features was smaller. I don't know if that's a real difference in usage, or if folks in Germany are just less willing to admit that they might use a computing device to play games.

The results probably can't be projected to other places like Japan and China; somebody else needs to do that research (or I'll do it if you want to fund it ;-) .

Here's a little detail on each of the three mobile data segments:

The entertainment-focused users are generally younger than average; many are in college or their 20s. They see a mobile device as a lifestyle choice, and they're willing to pay extra for a device that'll help keep them entertained. Different people want different forms of entertainment, so there are sub-segments in the entertainment mobile market. The biggest division is game-playing vs. media (music and video). But entertainment can also include things like social messaging with your friends. It's anything you do for fun rather than a paycheck.

The communication-focused users are extroverts who live to communicate with others. They're often in people-facing jobs like sales. They're willing to pay extra for a mobile device that lets them keep up with others in multiple ways. E-mail, SMS, voice, conferencing, video calling -- basically, anything communication-related is compelling to them, and they will pay extra for a device that does it well.

The information-centric users are more introverted. Rather than focusing on their dialog with others, they tend to do a lot of thinking on their own, and want their mobile device to be a memory supplement and a means to capture new information. They're not by any means recluses, but ideas rather than social interaction are what really gets them energized, and so they're willing to pay extra for features that help them capture and remember ideas and information. What they really want is a brain extender. They often work in information-heavy jobs like medicine, law, science, and academia.

Of course, there's always some overlap between markets -- for instance, you might have a doctor who also wants to stay entertained when off work. So if you draw the three mobile data markets, they overlap a bit, like one of those Venn diagrams you drew in primary school:





Understanding the products


Now that we've mapped the customer landscape, we can start plotting various products on the chart. This is where we'll start to get some interesting insights. But first, we have to add one technology overlay: in the mobile world, some mobile devices have phones built in and some don't. So add a gray circle in the center:




Now let's chart some products.


The communicators:



This is the most crowded market (in fact, I left off a number of products because I ran out of space on the chart). Although there used to be communicators without phones built in (RIM's early products were an example), putting all communication in one place is a huge benefit to a communication-centric user, so merging the phone and communicator was an obvious move in this market.

I classify the Danger Hiptop as a borderline product between the entertainment and communication markets because it's focused on social communication for young people. Sony Mylo is another borderline product, this one without a phone.

The Palm Treo, SonyEricsson p900 line, and touchscreen Windows Mobile products are on the border between communication and information management. They all have touch screens and a lot of information management features, but also attempt to deliver robust e-mail. At this point, they are being outsold by the much more communication-specialized RIM Blackberry line.


In the entertainer market, you can see the strong role of sub-segments. The game-player market has been dominated by Nintendo's GameBoy, with the recent addition of Sony's PSP. The media market is ruled by the Apple iPod.



The iPhone is an attempt to create a phone + media entertainment device. It'll be interesting to see how the iPhone does in the market -- it was an obvious move to combine a communicator with a phone, but it's not as obvious that the entertainer is a natural match with a phone. The danger to Apple will be if users see iPhone as the worst of both worlds: a phone that lacks a good keypad and an iPod with very small memory.


Information managers are an underserved market. Early PDAs targeted these users, but the device features were too limited to build a lasting franchise. The main champions of the PDA market, Palm and Microsoft, have now both focused most of their effort toward communicators. As a result, information manager innovation has basically ground to a halt, and the users in this space are very frustrated.




What it means: Opportunities and dangers

Some types of convergence are better than others. Combining phone technology with a mobile data device can be very successful when you stay within a single usage market. You tailor both the phone features and the data features to the needs of that particular type of customer. But trying to converge two markets is an extremely risky idea, something mobile companies should avoid. The needs of the markets conflict, so there is an extremely high risk that you'll end up being cannibalized on either side by products designed specifically for the needs of single markets.

The communicator market is over-crowded and therefore risky. When you realize that the communicator market is only about 12% of the population, there are probably more communicator products shipping now than the market can support. Communicators are likely to face price pressure, and some of the products will probably sink like a stone. The RIM and Palm OS products are probably a little safer here because they have more unique features and loyal customer bases, and Nokia may do okay if it can add some differentiation. But Windows Mobile communicators are likely to be a happy market only for mobile companies that can live on commodity margins.

This is not a place where I'd be looking to build new devices, but many companies are introducing new communicators because they'd rather pursue an established market than build a new one.

The iPhone is not a Blackberry killer. One of the things I like about this chart is that it shows immediately why the iPhone is not a major threat to Blackberry sales. They're in very different markets. If RIM is hoping to move into the entertainment market with devices like the Pearl, iPhone definitely interferes with that. But the immediate impact of the iPhone is on the products closest to it, meaning Microsoft Zune and the SonyEricsson music phones.

If you don't fit in one of the segments, it's very hard to sell. One of the messages of the market segmentation is that people will pay extra for great solutions to the needs they have in a particular segment. If your product doesn't solve any of those problems, there's not a market for it. Many failures in the mobile data market have been products that focused on features rather than solving specific problems. They may be beloved by technophiles, but there aren't enough of those people to drive a lot of sales. See Nokia's 770 Internet tablet for a good example.

The biggest opportunity is in information management. This market is about the same size as the communicator market, but no major player is investing in it today. This segment is out of favor because of the decline in PDA sales, but remember that people thought the MP3 market was a backwater until Apple introduced the iPod. I can tell you from personal conversations, and the market research, that there's a substantial market here, and the people in it are very frustrated. I think the ideal product for this market would be a minitablet note-taker, which I refer to as an "info pad." You can read more about it here.


What about the middle of the chart?

The other segment we haven't discussed is the center of the chart, the place where information management, communication, and entertainment all come together. Some people like to think of this as the home of the ultimate converged device, and every now and then you'll see a hardware company try to tackle it.

They all fail.

In reality, the center of the chart is a market dead zone. To use the car analogy, designing a mobile data device for all three markets simultaneously is like trying to build a sports car that doubles as a minivan and a tractor. The result is not pretty, and won't be bought by anyone except gadget enthusiasts like me. Unfortunately, there aren't enough of us to make a significant market.



That's my view of the mobile data market. I'm sure other people have different perspectives; please post a comment and share yours.

44 comments:

Anonymous said...

Really interesting article. I like the mapping of devices - never seen anything like that.

The only thing that bothers me is that is doesn't really consider new types of applications for these devices. What about all the LBS/mapping/GPS applications that are starting to appear? I start to think that something might be happening when my 78 year old mother asks me which phone she should get to run TomTom on.

I sort of think that there are applications for these devices out there that we haven't really explored yet. Who knew in 1992 that we'd spend 75% (minimum?) of our computer time in html browsers now 15 years later.

I believe that the best thing that the iPhone does is to light a spark to get people thinking about what could be possible instead of what exists today. That will most certainly spread to other non-iPhone platforms.

Michael Mace said...

Good points!

>>it doesn't really consider new types of applications for these devices. What about all the LBS/mapping/GPS applications that are starting to appear?

You're right, this is just a snapshot and will definitely evolve over time.

The emergence of new types of applications will have a couple of impacts on the market. First, it will move some people from the "non value add" group to the "value add" group.

Second, it will be adopted by some or all of the three big usage groups. But they'll use it in different ways. For example, the communication users are likely to love the use of GPS for getting directions to meetings (because they tend to be in jobs like sales that involve a lot of meetings).

The entertainment-centric folks would probably be more interested in finding ways to use location services to play -- maybe geocaching, or location-based social games.

Same technology, totally different usages of it based on the needs of the user. But unless you make sure at least one of those usages really works, the technology won't get bought by anyone.


>>I believe that the best thing that the iPhone does is to light a spark to get people thinking about what could be possible instead of what exists today.

I agree completely.


>>That will most certainly spread to other non-iPhone platforms.

I wish I agreed with that too. Maybe I've become too cynical from my experiences at PalmSource, but my read on the vast majority of consumer electronics companies is that they only want to copy whatever other people have built. The success of the iPod hasn't led to a new wave of devices tied to online services, but it did lead to a bunch of MP3 players designed to look superficially like iPods.

Tommi Vilkamo said...

Once again, great post!

However, as a Nokia insider I'm not so sure about the "zone of death" on your last chart, and the death-valley-of-mid-range-devices on chart 2.

After all:
- general-purpose S60 models such as 6600, N70, and N73 sell like hot cakes and bring a huge piles of money for Nokia
- industry analysts always urge Nokia to fill any gaps in the mid-range (see e.g. this article I googled quickly:
http://www.arcchart.com/blueprint/show.asp?id=405&qtabs=99999)

Any thoughts about these?

Perry Ismangil said...

Great post, gives me understanding of where I am: Smack right in middle of the zone of death. That's why I couldn't find the right device!

For a long time I always combined a Nokia phone and a Palm device (Info+Comm). And then I found the short-lived Zodiac and was happy (Info+Comm+Ent).

Now I have to choose between N series (low Comm+high Ent) and E series (high Comm+low Ent)...

marcol said...

I'm having trouble reconciling the analysis with my principal use of data on my E61 (certainly principal in terms of bytes used) i.e. using the browser to access the web. I'd say browser use mostly splits between the 'information' and 'entertainment' categories and with this factored into the equation I sit squarely in the centre of the diagram. I'd love to see numbers for what other people actually use devices like the E61 for, but I'm betting that I'm far from alone in using a mobile device quite extensively for web access. If that's the case, I think a lot of the devices confined to the 'Communication' circle should be shifted to the centre of the diagram.

I can see where you're coming from, and I'd pretty much agree with your mapping of devices if the web were completely left out of the equation, but leaving the web out of an analysis of the mobile data market seems to me to be, with all due respect and the best will in the world, a rather large mistake.

David Beers said...

Tommy Vilcamo wrote:
general-purpose S60 models such as 6600, N70, and N73 sell like hot cakes and bring a huge piles of money for Nokia

I took Mike to be talking about mobile data usage, so the handsets represented in his Venn diagrams would be those that are targeted at those "value added" users he was talking about at the start of the post. The middle-of-the-road S60 handsets you mentioned obviously sell well, but it's not my impression that they're substantial mobile data drivers.

Here's my question, Mike. If a third of the value-added mobile data user market is really information-centric as you describe, why is this market so underserved?

It doesn't seem like a technology problem. From a purely hardware standpoint the requirements of the entertainment users and the information users seem not to be very different: mass storage and larger displays than typically found on communication-centric smartphones. And from a software standpoint the needs of the information users are not bleeding edge: something like your Info Pad would be a cinch to develop: you just need a nice clean user interface, a good full text searchable database and a nice extensible sync archetecture.

So is it a genuine blind spot among the market leaders or is there actually a business problem with serving this segment that no one is talking about?

Anonymous said...

I think I am comfortable with your broad classification of the market, but not so happy with the placement of the current devices in the diagram.

I would think applications play a role. For example, there are many entertainment applications for the Treo out there, many of them shareware or freeware. I don't know how many people actually get and use those applications, but shouldn't their existence affect the placement of the Treo in your diagram (pushing it more into the middle)?

Or are you implying that the vast majority of users use only the pre-installed applications? If not, then I think each device should be mapped into a cloud in the diagram, not into a single point.

Alessandro

Shane said...

I think an important factor in discussing smartphones and mobile data markets is the pricing of the data plans. It seems to me that pricing is one of the most significant factors limiting usage of mobile data... and this is largely a business issue and not so much a technology issue.

Pricing influences behavior, or use of technology.

I think the move from internet dial-up to broadband/DSL in the US shows that people are prepared to pay for internet (data) service when the pricing is reasonable.
Another example of where pricing influences behavior is from South Africa: mobile phone calls are expensive in South Africa, where users do not have virtually unlimited calls. Consequently, many people use their cell phones more for SMS than as a phone. In contrast, in the US few people use SMS since it is relatively cheap to make calls.

I think we will see the same trends with mobile data plans when they are more competitively priced, i.e. more people will use mobile data.

Jason Devitt said...

I have another interpretation for your chart. The mobile phone is like a black hole. It sucks every other device into it. You can orbit it, but you have to get very close, or else you risk being slung into deep space. And if you cross the event horizon, you die.

The main difference between your interpretation and mine is that I don't believe there are real opportunities in the outermost segments. As you point out, there are essentially no communication devices that are not also phones (apart from the Mylo, which no one would call a success). There are really no information-centric devices that are not also phones, if we agree that the late-90s PDA is dying. But you see an opportunity there, and I don't.

A vacant lot is not always a good place to build. Sometimes it's vacant for a reason. To be successful today, an information-centric device would have to have a wireless Internet connection, partly because the Internet is such an important source of information, and partly because you couldn't lower the bill of materials enough by leaving it out to make the price compelling. (At the height of Palm's popularity, adding wireless connectivity was much more expensive.) It must also be easy to enter information on an information-centric device. Therefore, unless you deliberately and perversely make it difficult to compose and send an email, any successful information-centric device today will also be a very good communication-centric device. At which point no manufacturer will be able to resist the temptation to put a SIP client on the thing and call it a phone.

Standalone entertainment devices have endured longer. But that's because of memory and battery life. It is easy to imagine a phone that is also an excellent mp3 player, provided the thing has plenty of memory and a long-lasting battery. The technology is not there yet, but it will happen, and at that point the dedicated mp3 player will go away. It is harder to conceive of a phone that is also an excellent video player, because of the trade-off between screen size and portability. But the market for dedicated video players is negligible compared to all these other devices.

That leaves games. The market for Gameboys, PSPs and the like is large and it's difficult to conceive of a great game console that is also a great phone. So these may be an exception.

But apart from Gameboys, I believe that every successful new device will be in a tight orbit around that black hole.

Jason

Michael Mace said...

Ahhh, excellent comments. Thanks very much.


Tommi wrote:

>> I'm not so sure about the "zone of death" on your last chart....general-purpose S60 models such as 6600, N70, and N73 sell like hot cakes and bring a huge piles of money for Nokia

The general-purpose S60 devices do indeed sell like hotcakes, and congratulations for that. But how many of them are being bought as general-purpose mobile data devices? Without a lot of market research on Nokia's customers, it's hard to say. I know that in the past, when we surveyed S60 buyers, few of them even knew that S60 was in their phones, let alone that the phones were capable of doing much more than voice. They usually just thought the phones were Nokia cameraphones.

If you look at the low sales of S60 applications compared to the number of S60 phones sold, I think that confirms that S60 is not being used as a general-purpose mobile computing platform. Not yet, anyway. I hope you guys will be able to change that. But I think that as you push more into mobile data, you'll find your customers tend to cluster in either communication-centric or entertainment-centric groups, and it'll be hard to create one phone that pleases both groups.

Meanwhile, the 770 tablet might make a dandy information management device if it had the right applications...


>>industry analysts always urge Nokia to fill any gaps in the mid-range

If I read the ArcChart report right, they were encouraging you to produce more mid-priced phones, not phones positioned at the middle of the usage chart. But I should add that if your goal is really to get more share in the US market (as the article suggests), then I think what you need is thin flip phones available for both CDMA and GSM. That's more important than hitting a certain price point.

By the way, congratulations and best wishes on your new role!


marcol wrote:

>>I'm having trouble reconciling the analysis with my principal use of data on my E61 (certainly principal in terms of bytes used) i.e. using the browser to access the web... I'd say browser use mostly splits between the 'information' and 'entertainment' categories

Remember, the segmentation isn't driven by usage, it's driven by what people would pay extra for. If you're on a flat-rate data plan, then you're basically browsing for free and that's not relevant to the segmentation. The question is, what drove you to buy the E61 and pay the $40 or $60 or whatever you pay per month for the data plan in the first place? Do you pay the plan for yourself, or does your employer pay? If you pay, did you do it just to do general-purpose browsing, or did you have a particular usage in mind when you signed up for it?


>>I'd love to see numbers for what other people actually use devices like the E61 for

So would I. Until we get that data, you and I are both speculating, and I'm uncomfortable with that. The trouble is that people like you and I are so different from the average user that we're not representative samples of much of anything. No offense meant, it's just in the nature of the Web.


>>leaving the web out of an analysis of the mobile data market seems to me to be, with all due respect and the best will in the world, a rather large mistake.

Agreed, and I didn't intend to leave it out. I just think that the type of web usage you do will sort you into different parts of the chart. If someone is truly paying extra in order to participate in all three usages, then yes they are in the center of the chart. But all the research I've seen so far says those people are a very small minority.


David wrote:

>>If a third of the value-added mobile data user market is really information-centric as you describe, why is this market so underserved?

I lived through this one. Most consumer electronics companies just want to copy the successful products of other companies. The number of large consumer electronics companies with the will to try truly category-changing products is vanishingly small. Venture capitalists generally won't fund hardware companies, so you can pretty much forget about startups doing it.

Even if you do get an established company that's willing to create a new category, most don't have the skills. The consumer electronics companies are generally terrible at user interface and software services, and most of the computer hardware companies have been effectively lobotomized by 20 years of dealing with Intel and Microsoft. If you make Windows computers, you generally have to compete on process efficiency, not design creativity. Most computer companies lost their creative reflexes a long time ago.

Final barrier: Unless you've been living in the mobile data world, the info management opportunity is not all that obvious. People assume that Tablet PC is a good product for info management, and since it's not selling well, there must be no market.


Alessandro wrote:

>>I would think applications play a role. For example, there are many entertainment applications for the Treo out there, many of them shareware or freeware. I don't know how many people actually get and use those applications, but shouldn't their existence affect the placement of the Treo in your diagram (pushing it more into the middle)?

Not unless people were buying the Treos specifically to play the games. Everything I've seen says that people buy the Treo for e-mail and/or PIM, and that any entertainment apps they get are afterthoughts. The fact that so many of the games are freeware kind of reinforces my point -- people may use this stuff, but they won't pay extra for it. The driver of the segmentation is what they pay for.


>>Or are you implying that the vast majority of users use only the pre-installed applications?

Last time I checked, about 60% of Treo users added third party software.


Shane wrote:

>>I think an important factor in discussing smartphones and mobile data markets is the pricing of the data plans. It seems to me that pricing is one of the most significant factors limiting usage of mobile data

No question, if you make something cheaper people are more likely to use it.


>>I think we will see the same trends with mobile data plans when they are more competitively priced, i.e. more people will use mobile data.

It's pretty sad for the operators, though, isn't it? They have to almost give away their technologies in order to get people to use them. What they're trying to find is some features that people will actually pay for. That's what the segmentation is intended to show.


Jason wrote:

>> The mobile phone is like a black hole. It sucks every other device into it.....I don't believe there are real opportunities in the outermost segments. As you point out, there are essentially no communication devices that are not also phones (apart from the Mylo, which no one would call a success). There are really no information-centric devices that are not also phones, if we agree that the late-90s PDA is dying. But you see an opportunity there, and I don't.

Actually, I think even the information-centric devices that are phones are terribly compromised.


>>To be successful today, an information-centric device would have to have a wireless Internet connection, partly because the Internet is such an important source of information, and partly because you couldn't lower the bill of materials enough by leaving it out to make the price compelling.

Agreed, a WiFi chip would be a no-brainer in an info pad type device. But I think you'd put it there because people would complain otherwise, not because it's essential to what you'd do with the device.

I would not put a cellular radio in one of these devices.


>>It must also be easy to enter information on an information-centric device. Therefore, unless you deliberately and perversely make it difficult to compose and send an email, any successful information-centric device today will also be a very good communication-centric device.

No. I think the leading usage of a properly-crafted information device would be capturing notes in ink. You don't need a keypad for an information device, and in fact it's a waste of space. Check out my post on the info pad if you want more details.


>>Standalone entertainment devices have endured longer. But that's because of memory and battery life.

I'm not sure I agree. I think the standalone entertainment devices endure because you don't have to include a phone in order to have a great entertainment device. But definitely there are also battery and memory capacity issues.

Anyway, thanks for sharing your perspective. We'll have to wait and see what happens in the market to see who's right, but in the meantime it's definitely a fun discussion.

Tommi Vilkamo said...

Michael Mace said: The general-purpose S60 devices do indeed sell like hotcakes, and congratulations for that. But how many of them are being bought as general-purpose mobile data devices? ... They usually just thought the phones were Nokia cameraphones.

Heh, you might be right ;)

But I think that as you push more into mobile data

To be honest, I have never understood the point of "pushing mobile data" or selling devices as general-purpose-mobile-data-devices. I keep hearing these points, but I don't see the intrinsic value of it. I think mobile data is just one technological enabler, among the countless others.

Anyways, I completely agree with your basic argument: there won't be a single winning device concept, but many - targeted for different customer segments. And I have referred to your beautiful car market analogy in quite a many occasions already...

congratulations and best wishes on your new role!

Thank you!!

Anonymous said...

This makes sense in terms of what the market today, but will the center of the chart really be a dead zone years from now? It seems that we are seeing the beginnings of societal changes based on mobility. If it eventually becomes commonplace for most people to use mobile devices for financial transactions, location-based services, remote controls for home appliances, and who knows what else ... people will want and expect to have a single device that does everything. There will still be different market segments who want different features, but everyone will have converged devices with a certain basic feature set that they require for daily life. Won't that make the middle of the chart the biggest market?

G. Fawkes said...

This seems hauntingly familiar to something I believe we saw a few years ago at a PS Conference, right Mike? :-) Hope they gave you all the rights you need to share-- ~grin~

I had a similar conversation to points you make in a previous post about the iPhone with Kevin Burden the other day also-- I seriously question Apple's ability to pull off the positioning of this device, and once the initial magnetism of Apple-groupies has gobbled up the requisite few hundred thousand devices, and the gadget-o-phile press has received their requisite sock-drawer sample, I wonder how many will be moving through the channel during the third quarter of sales? I suspect that between the number that are returned to the store smashed ("It slipped out of my hand, the little buggar!") and those that reap the wrath of users expecting a phone to work like a phone ("There's no buttons, and it's driving me CRAZY! I'm constantly dialing the wrong number!") and the frustrated music lovers used to having ALL their music who are suddenly faced with still carrying two devices ("Let's see, I have my iPhone and I still need my iPod cause my Pink Floyd collection is all on the iPod but At The Drive-In is on the iPhone...") I think the recipe is 'unmet Wall Street Expectations' (TM).

Mike Compeau
www.compeau-fawkes.com

Marc Tassin said...

I work for a company that writes software for mobile devices and this analysis is right on the money.

The only disagreement I have is in regards to Information Management devices. I think they have continued to evolve and that the uber-device for these users already exists. It's the UMPC.

My argument as to why is pretty long so I posted it here for those who are interested.

And thanks for saying so clearly what I've been working (and failing) to put into words myself!

Marc Tassin
Ilium Software

marcol said...

>>>>I'd love to see numbers for what other people actually use devices like the E61 for


>>So would I.


You might have seen this, which has at least some sort of numbers relating to what people actually use their phones for.

http://www.mmetrics.com/press/PressRelease.aspx?article=20070110-ringbacks

Unfortunately it just seems to record did use/didn't use figures for the month rather than bytes consumed or time spent using a particular form of data. The figures vary a lot from country to country but do go some way to supporting my suspicion that web browsing is used quite a bit. In the UK (where I am) more people browsed than used email on their phones (according to these data).

Remember, the segmentation isn't driven by usage, it's driven by what people would pay extra for. If you're on a flat-rate data plan, then you're basically browsing for free and that's not relevant to the segmentation. The question is, what drove you to buy the E61 and pay the $40 or $60 or whatever you pay per month for the data plan in the first place? Do you pay the plan for yourself, or does your employer pay? If you pay, did you do it just to do general-purpose browsing, or did you have a particular usage in mind when you signed up for it?

I am on a flat-rate plan and I stomp up the £7.50 for data (capped at 1 GB) each month myself. I'd call this cheap but certainly not free. I wasn't compelled to buy the data package and chose to because I wanted it. It certainly falls into a 'what people would pay extra for category'. I use the data for communication (email), and what you might call 'general-purpose browsing'. To be honest I find it a bit hard to pigeonhole a lot of the browsing as either entertainment or information. If I read your blog using my phone is that an information or entertainment use? I'm certainly getting information (many thanks!) but also it's entertaining. To complicate matters further, if I post a comment using the phone, wouldn't that make it communication too?

I'm still not that sure web browsing fits too well into the three categories you have.

Anonymous said...

You have successfully communicated the segmentation of the market for communication devices in a non-traditional way - congratulations! May I offer the following thoughts?

a) you depict the market segments as being equal, as if to say that the market values each of the three segments (capabilities) equally. I would submit that if the market is segmented as you indicate (a communication device has to provide all those capabilities), the user defines what is of value, (i.e., younger students will value entertainment at the expense of the other two, and data-intensive users will not value entertainment).
b) users don't percieve themselves as you have depicted, and therefore do not procure a device based upon their dominant needs. The marketing departments of smart phone makers should take advantage of this, and distinguish their product as being able to meet the data-intensive users' needs. I am assuing that this is why RIM dominates the Corporate market - mobile E-mail communication dictates a data-intensive solution.
c) the devices that cater to these market segments should also be segmented, (ex. the data-intensive segment is dominated by those with a QWERTY input device, the entertainment segment has input devices optimized for games (game-boy) or music (Ipod jog wheel), and the cell phone segment has the standard phone keypad input device). Since all of these input devices are very divergent, then any device that tries to meet all of the market segments will be a compromise in design. Consumers should perhaps realize that one device may not meet all their needs.
d) if the market truly values all of the segments listed, then the "optimal" device is one that must be able to do all of these functions simultaneously. Most of the younger generation in the work-force today can multi-task several activities such as processing E-mail, conducting multiple IM conversations, listening to music, talking on a cell phone, while watching the New York stock exchange ticker tape. Is a mobile device the right tool to accomplish multiple functions given the processing capabilities and small screen sizes?

Thanks for the opportunity to pontificate.

Michael Mace said...

Tommi wrote:

>>To be honest, I have never understood the point of "pushing mobile data"

You're right -- bad word choice on my part.


>>I think mobile data is just one technological enabler, among the countless others....there won't be a single winning device concept, but many - targeted for different customer segments.

You have no idea how nice it is to hear somebody from Nokia say that.


Anonymous wrote:

>>This makes sense in terms of what the market today, but will the center of the chart really be a dead zone years from now?

Good question, and I don't know for sure.

Here's my theory (and it's just a theory): I think the usages we found in the research are grounded in basic personality types (introvert, extrovert, etc). Those do not change over time. A mobile device is intensely personal, much more so than a PC, so it needs to match your personality.

I think the sizes of the segments are more likely to change than the segments themselves.

But you're right that segmentations can evolve, just like the SUV car segment didn't really exist fifty years ago.


>>There will still be different market segments who want different features, but everyone will have converged devices with a certain basic feature set that they require for daily life. Won't that make the middle of the chart the biggest market?

Good question, and I think the answer is "it depends." (How's that for an evasive answer?) If most people trade up to differentiated products that are different in various contradictory ways, then the center is still a dead zone. Remember, the center isn't a lowest common denominator -- it represents trying to create a single device that has all the features of the various markets. That's mostly what happened in PCs, and my basic argument is that I think it won't happen in the foreseeable future in mobile devices because they're so personal and because you have to make tradeoffs due to weight, size, batteries, etc.


Mike C. wrote:

>>This seems hauntingly familiar to something I believe we saw a few years ago at a PS Conference, right Mike? :-) Hope they gave you all the rights you need to share

Sure did. I'm quoting only from information that was released publicly. There was a whole bunch more data that didn't get released, and unfortunately I can't talk about it.


Marc wrote:

>>The only disagreement I have is in regards to Information Management devices. I think they have continued to evolve and that the uber-device for these users already exists. It's the UMPC.

Thanks for the comment. You made good points in your blog post. I think it's kind of a judgment call at this point, and you could turn out to be right.

I chose to leave the UMPCs out of my chart because for me they're trying to do too much. I feel like they're too dinky to be a good PC and too overbuilt to be a good information appliance.

I'd love to see a well configured UMPC go head to head with a properly-designed info pad type device. I think the info pad would sell a lot better, but we'll never know until and unless somebody builds one.

By the way, you guys make cool software.


marcol wrote:

>>You might have seen this, which has at least some sort of numbers relating to what people actually use their phones for.

Cool! More data!


>>Unfortunately it just seems to record did use/didn't use figures for the month rather than bytes consumed or time spent using a particular form of data.

Hey, better than nothing.


>>The figures vary a lot from country to country but do go some way to supporting my suspicion that web browsing is used quite a bit.

Yup. I wish we knew more about what they're doing, and why (and what are the demographics of the people browsing). For example, I'd love to know what percentage of that activity is WAP browsing as opposed to HTML. And it would be very valuable to know how much time they spend accessing the information, and whether they paid extra to get it.


>>I am on a flat-rate plan and I stomp up the £7.50 for data (capped at 1 GB) each month myself. I'd call this cheap but certainly not free.

Agreed, and that's a good price. You definitely count as a mobile data user.


>>I'm still not that sure web browsing fits too well into the three categories you have.

It doesn't fit anywhere -- it's a tool, not a usage. What matters is what the person does with the browser, and why. Your pattern of usage puts you in the middle of the chart. I'd probably be there too, based on what I do with devices.

The question is how many of us there are. Most of the information I've seen says the number is pretty small.


Anonymous wrote:

>>I would submit that if the market is segmented as you indicate....the user defines what is of value, (i.e., younger students will value entertainment at the expense of the other two, and data-intensive users will not value entertainment).

Yes, that's how most mobile data users appear to operate.


>>users don't percieve themselves as you have depicted,

Hmmm, interesting. Why do you say that? Although the labels I've used are not common, most of the mobile data users I've talked to are extremely clear on what features they do and don't care about.


>>I am assuing that this is why RIM dominates the Corporate market - mobile E-mail communication dictates a data-intensive solution.

I think RIM sells because it does e-mail so nicely. The device and service have both been heavily optimized to make e-mail work well.


>>the devices that cater to these market segments should also be segmented,

Agreed.


>>the data-intensive segment is dominated by those with a QWERTY input device

Actually, I think the keyboard is for communication users. The hardcore information-centric people will trade off the keyboard to get a bigger screen and more storage, and are less focused on messaging.


>>Since all of these input devices are very divergent, then any device that tries to meet all of the market segments will be a compromise in design.

Yes, I agree.


>>Most of the younger generation in the work-force today can multi-task several activities such as processing E-mail, conducting multiple IM conversations, listening to music, talking on a cell phone, while watching the New York stock exchange ticker tape.

That's the image, but when I've done research with young adults, their usual attitude is that while they can do a lot of things what they really want from a mobile device is entertainment. Any information and business e-mail features are necessary evils that they'll use if they have to, but they wouldn't pay extra for them.

I'll be very interested to see if their attitudes change as they age.


>>Thanks for the opportunity to pontificate.

You're welcome. That's what this weblog is all about!

Chris Dunphy said...

"The only disagreement I have is in regards to Information Management devices. I think they have continued to evolve and that the uber-device for these users already exists. It's the UMPC."

The UMPC may be it - someday.

But it isn't even close now.

The price needs to be cut in half.
It needs to go a few days (ideally a week) between charges.

And most importantly - the UI is totally wrong and overly complex.

We always used to point out that it would be easier for the PDA to evolve into the perfect information manager than it would be for the PC to shrink. But now that PDA's have stopped evolving, maybe the UMPC has a chance.

But for the time being - I'd much rather have a Tungsten X than any UMPC made today.

- chris // www.radven.net

Marc Tassin said...

I think your comment perfectly highlights Michael's point as I understand it. There are different types of users out there and each has different needs. For you, a Tungsten fits those needs perfectly. For me, a Tungsten just doesn't cut it. Does that make the Tungsten a terrible device? Not at all. It's great at what it does. The same is true of the UMPC.

I'll address your comments in detail on my own blog but I just want to say that I think people need to judge devices based on how well they serve their target market, not on how badly they serve someone they weren't designed for.

Rory said...

I think after a couple iterations of refinement, the iPhone could easily be considered to be in the center, which I wouldn't call a dead zone. Going back to your car analogy, take a look at Subaru. Sure, it's no tractor (which isn't a car anyway, really) but most of their vehicles are kind of a sporty, SUV, station wagon cross. I bet if you looked at their customer demographics they have a pretty wide range of interests, desires, and reasons for buying.

On the surface I agree that the iPhone is focused on entertainment and voice communication, but it already contains email capabilities which pulls it toward the Blackberry category (certainly no Blackberry killer, though, I agree, at least for now). It also has a great operating system that I think can (and will) be leveraged for document and information management. Add support for Office docs and it basically owns that category.

Very interesting points though, thanks for sharing so much.

Dean Bubley said...

Hi Mike

This all makes a lot of sense. One angle that's not really on it, though, is the split between user-oriented smartness, and operator-oriented smartness.

I have in front of me a SonyEricsson K800i and a Nokia N73. Both are the same size, same 3.2MP camera, same form factor, probably about the same price.

The K800i is from O2, and has minimal customisation, is not "smart" as it used an embedded OS, but does certain things like the camera function excellently. It's also got a very fast UI. Apart from voice & SMS/MMS it's not really a "service device" although it's great for comms & some entertainment (photos, plus an MP3 player)

Conversely, the N73 is from 3's new X-series range and is based on S60. It's got a lot of customisation, both 3-branded & tuned stuff, plus a variety of optimised clients for Skype, Yahoo, Sling, Orb, eBay etc. This is very much a "service" device, but focused also on comms+entertainment. The UI is also comparatively slow & clunky.

To be honest, if I had to choose between them, I'd take the SonyEricsson, even though the "smarter" product is the same price, because the operator "content" stuff gets in the way of what I want to do for myself.

Michael Molin said...

>>There will still be different market segments who want different features, but everyone will have converged devices with a certain basic feature set that they require for daily life. Won't that make the middle of the chart the biggest market?

Michael Mace wrote:
it represents trying to create a single device that has all the features of the various markets. That's mostly what happened in PCs

Hello Michael,

You really have answered it. The solution is to develop a new generation of PCs.

As for now - it's a UMPC initiative. But PC platform has three necessary elements: display, keyboard and pointing device. And new releases of UMPCs from Samsung and Sony have the keyboards as a confirmation of this - so they are PC subnotebooks again like HP Omnibook 100 in 1993.

The task of a ultra-mobile device is providing communication like cell phones do.

The task of a ultra-mobile computer is providing mobile computing and communication so the solution is a computer with a form factor of a cell phone that has all three elements of a PC platform - cell computer.

This is a two UIs (widescreen display and compact QWERTY keyboard) - two touch-sensitive display solution as a platform - as a touchpad is the second UI for a notebook and a pointing device, in the cell computer it's not only a keyboard for typing, it's the system dashboard, standard program interface - menus and toolbars, a site map for navigation on the Web sites and permanent advertising space for advertisers like Sponsored Links section at Google or banner advertising at NYTimes.com website.

The cell computers is a new market for telecom and computer industry. The form factor is approved by the market - Motorola RAZR V3 - a phone for everyone's needs in its design. The development strategy for touch-sensitive UIs is well met by the market with iPhone launching.

I really hope that Microsoft and Apple will launch the cell computer platform after launching Zune and iPhone.

Regards,

Charles Curran said...

I posted a reply on my blog: http://charlescurran.typepad.com/

I find Mr. Mace's analysis well though out but not forward thinking enough about the adoption of smart phone functionality by the mass market. Time will tell who is right.

Rod said...

Hi Mike, you're post of the week on this week's carnival of the mobilists.
http://www.mobbu.com/Blog/31/carnival-of-the-mobilists

Rod

Jouni said...

Great analysis, but... only about 36% of the mobile data market?!? Shouldn't the main interest be in the remaining 64% instead of over-analysing the mere 36% of market?

--jouni

Michael Mace said...

Chris wrote:

>>We always used to point out that it would be easier for the PDA to evolve into the perfect information manager than it would be for the PC to shrink. But now that PDA's have stopped evolving, maybe the UMPC has a chance.

I agree. But there's a lot to do.


Marc wrote:

>>I think people need to judge devices based on how well they serve their target market, not on how badly they serve someone they weren't designed for.

I agree with that too. If there's one thing I've learned from studying mobile customers, it's that you can't apply your own preferences to someone else.


Rory wrote:

>>Going back to your car analogy, take a look at Subaru.

Okay.


>>most of their vehicles are kind of a sporty, SUV, station wagon cross. I bet if you looked at their customer demographics they have a pretty wide range of interests, desires, and reasons for buying.

And a glorious one percent of the auto market. I have no question that there are some customers at the center of the diagram, but I think it's a relatively small group.

But I admit it's hard (okay, completely impossible) to predict what people will do in the future.


Dean wrote:

>>One angle that's not really on it, though, is the split between user-oriented smartness, and operator-oriented smartness.

That sounds cool. And you're right that I was 100% focused on the user angle.


>>The K800i is from O2, and has minimal customisation, is not "smart" as it used an embedded OS....Conversely, the N73 is from 3's new X-series range and is based on S60. ....if I had to choose between them, I'd take the SonyEricsson, even though the "smarter" product is the same price, because the operator "content" stuff gets in the way of what I want to do for myself.

You expressed it perfectly. I think the key question is, are mobile devices more like appliances (just do the job) or like PCs (versatility wins)? So far, the appliance approach is winning.


Michael Molin wrote:

>>The solution is to develop a new generation of PCs...

Interesting ideas. I hope somebody will build it. The more experiments we get in the market, the better.


Jouni wrote:

>>Shouldn't the main interest be in the remaining 64% instead of over-analysing the mere 36% of market?

My focus was on figuring out how to make successful commercial products in mobile data. The 36% are the only ones who'll pay for it. If you want to give it away for free, the 64% will be interested, once they finish playing with their subsidized cameraphones.

Soo said...

Really enjoyed this. A very illuminating post.

Bernardo said...

I think you forgot about the NSeries devices from Nokia, that can be charted in pretty strong positions in the Entertainement(N73, N93) Information (N95)segments...

Kimmo said...

Great article, it really opens up thinking.

I would like to comment on the Dead Zone. The reasoning behind trying to create a device for all three segments is doomed to fail is the form factors. But in fact those problems can be eliminated by a new UI for the devices. Speech recognition is today mature enough to provide a messaging solution, entertainment application control functions, search functions etc into any smartphone.

With new UI, the center spot is actually the hot spot, not a dead zone.

Please refer to www.nuance.com

Michael Mace said...

Hi, Kimmo.

Unfortunately, just making a UI change is not sufficient to let a device span across multiple usages. Many of the tradeoffs in device design are hardware-related. For example, an entertainment user will tend to prefer a larger screen rather than a keyboard (for watching videos), while a communication user will tend to prefer a built-in keyboard (to help type messages). Build in both, and the device gets bulkier.

As for the Nuance product, Dragon Naturally Speaking, I have been a believer in the promise of speech recognition for about 15 years, ever since Apple worked on it for the Mac. After reading the good reviews for the newest version of Dragon Naturally Speaking, I bought it so I could try it out on my PC. Based on what I've seen so far, I am extremely disappointed. Although the product is okay for live dictation to a PC, it is far, far, far from being ready for deployment on mobile devices, in the ways mobile device users would use it. If the people at Nuance think otherwise, they are having an entertaining fantasy.

When I get the time, I'm planning to write a post on the subject and will explain.

Even when DNS does get fixed (which I believe is going to require a generational change to the product), mobile device hardware is not powerful enough yet to host it on the device. It'll take several more years before it is.

Erik said...

I think your categorization of the types of devices by usage is very good. But, like some other posters I think converged devices that fall into your death zone the entertainment, communications and information needs are worth attempting. The key is improving the user interface (UI).

The needs of the communications segment are well served by the current crop of devices because communications segment has the least demanding UI needs. Mobile telephone and SMS easily fit into a pocketable form factor.

Entertainment users need a UI that is similar to that of a game console running on a HD monitor with a wireless controller. Good luck squeezing that into a small form factor. Granted, I like my grandson's nintendo DS lite but it feels claustrophobic.

Similarly the information consumer/worker needs a PC with reasonable screen size, a usable sized keyboard and a accurate pointing device.

As a smart device user I fall into the information category. And, also being a gadget junky I have a VX6700 smart phone with a bluetooth headset. Its a great gadget but, when I'm on the road for business I pack a notebook computer. I need the screen size and keyboard to accomplish real work. All the information systems types I know and work with use the pocket cell phone and notebook combination for work.

The old saying 'size matters' pretty much sums up the problem with converged devices for both the entertainment and information categories of users. I can get to the web on my VX6700 but, it's not nearly as enjoyable with that tiny screen and keyboard.

So, I think that the future success of converged devices with the information and entertainment segments will depend of the availability of improvements to the UI.

My bluetooth headset is a good example of extending a smart device UI for greater convenience and functionality.

Do you know of any future UI improvements that might let me travel with a smaller device and still accomplish real work?

Anonymous said...

A period of substantial inovation and openness in mobile devices will come soon after prices on low end cell phones come down to the point that the cellco's end the era of the subsidised handset. Remeber when all home phones looked alike? That was because they were distributed through the phone company. After the equipment monoploy was broken we had all kind of different phones including the exposion of cordless phones and answering machines. As the subsidies of the handsets go away the operators(particularly GSM)will have a very hard time selling either sim locked handsets or thoose loaded with custom firmware or limited capabilities. Therefore the customers will often be buying handsets seperate from the subscription. They will be looking for certain functionalty in their choice;and than installing software from a thrid party. The cellco's will at that point have to either support the customer with an open pipe to the internet or lose the customer to an alternate operator that does.

For example a blackberry would be a device that requires a highspeed data link; not a device/subscription combination.

Evidence of how the subsidies are stiffling inovation through control of the handset/rate plan connection can be seen in how much further ahead the countries with similar wealth that have never allowed the practice of subsidies are with 3G deployments and usage. Namely scandanivian and many asian nations. Customers in these nations generally purchase handsets and subscriptions seperatly through differeent outlets and do not upgrade them simultanously.

Anonymous said...

Great article and great discussion. Couldn't close the browsing window without leaving my bit of wisdom (at least for now). Even though we are communicating, this is entertainment. And even though I might want to save all this info, it's still entertainment.

The center is dead. And it's obvious we will not agree on it. Not everyone sees it that way. That's why a lot of the big manufacturers and CEO's still plunge in it with new and improved products in search of the "killer application" and the "ultimate device"... I've worked in one of the biggest mobile telco operator in the world. I know a lot about the search for the holy "killer-app".

About the center. You can't be everything to everyone. And yes, we are very few in the center. It may work to target the center as you may actually grab a large chunk of revenues by doing it. But who is actually buying your product? Probably a whole segment is getting attracted to that multi-tasking "do-it-all" platform because it's great on one thing (and then it has other stuff that helps to sell it). Maybe it's fashion. But the usage and the payed usage is driven by a specific segment that finds in that product something appealing and unique for them. The point is, you probably didn't need to cloud your device with all that other stuff in the first place! Get a cheaper device, get higher margins, get better usability, and still grab those revenues. Launch faster than others, and just improve your device (and OS, apps, etc.) as you go along.

The fact that you actually have a device targetting the core, and find success, doesn't mean you couldn't have done it some other way. Probably cheaper, faster to market, and with better margins.

In the end, if you try to be everything to everyone, and find some success, someone will attract that same piece of the market right after you, with a sleeker, cheaper, more TARGETED device & app to that specific major segment who is actually buying, using and paying for it.You may win a battle, but what about the war?

Anyways, very interesting article.

If I can build on this analysis, it would be interesting to see how much each segment is actually worth. And my guess is that, when you fragment the market so thin, you are bound to get a large chunk of "lost" revenue in the middle. We are few in the middle, but we still might be willing to pay a lot and to explore usage of many different stuff. But in the end, aren't we dead as a segment since we are searching for the best of different worlds in one application, one device, one platform? We will never be fulfilled.

Cheers.

FCC

Anonymous said...

My concern is when we talk about college students; they are all in three users that you have mentioned in your article. I am an MBA student. In my school life, I need a smart phone where I can access information immediately on the go, use instant communication with my Prof. friends and family and entertainment between the classes or on the way to school. For instance, I need to search and read lots of information for my papers. I want to have e-text books. Meanwhile, I want to be updated about the job openings. I want to keep in touch with my family where ever I go when ever I want. I absolutely want to be entertained, watch videos and listen MP3s. I am information, entertainment and communication user and I want a phone that satisfies all my needs. So, Isn’t a smart phone which able to do every thing that I have listed above place in the death zone? Do you think a smart phone like this can survive in the market? If it survives is it because it targets to a very specific group?

IM Thanks

10KB said...

Great analysis!

Suggestion one. How about to change the segment name "information" to "knowledge" since entertainment is a kind of information and communication is information exchange.

Suggestion two. How about to change the name "dead zone" to "technology limitation".

How To Buy A Franchise In Montreal said...

Have you read the article "Smartphones: The Clear Choice over Mobile Internet Devices in US " it talks about "As categories of mobile devices converge, there are four primary types of productivity tools—the ultra-mobile PC (UMPC), the mobile Internet device (MID), smartphones, and smartphones with mobile companions, reports In-Stat http://www.in-stat.com . The clear winner in an In-Stat survey of US consumers is the smartphone, either alone or with a mobile companion, the high-tech market research firm says. Nearly half of the respondents chose the benefits and capabilities associated with smartphones. Fewer than 10% indicated a preference for the capabilities of MIDs." It hink this article is great as well as your brilliant post!

Cheers,
Jared

Mohtashim said...

Quite interesting and useful post!! Segmentation of mobile data market shows a clear demarcation of user need and demand. But I believe 'communication', 'Entertainment' and 'Information' segments are becoming one nowadays. Devices are becoming more and more application/services rich. Mobile data services have reached to new horizon with services like SNS, LBS, GPS and mobile financial services. Users are not only buying products but also looks for services. It would be interesting to see how these device/services will attract more users and penetrate the potential market.

Looking forward to see another analysis on latest data services market.

Once again great article !

gene.evans said...

Michael,

Excellent article. I have come back to this article several times for perspective. I think the emphasis on communicators over PIM has accelerated, now that Palm has officially stated they are no longer going to develop their PDA products and the category seems to be considered dead by the pundits. The Pre seems to fit into the communicator segment but with a twist or two.

Would be interested in hearing your take on what might come out to meet the needs of the information centric segment -- maybe netbooks or slates with excellent data input capabilities such as improved handwriting recognition.

Would love to see an update that re-evaluates market segmentation based on what you've learned since, emerging applications for mobile, and what's happened in the market during the last two years. Again, excellent article, and still quite relevant. Thanks for publishing it.

aesopus said...

Really insightful article, read it first more than a year ago. What impresses me more is how right were you with the no-interference relation between Blackberries and ipods; also makes me wonder if the netbook boom -apart and because of the current economics- is fulfilling the space for the information devices so empty in your graph

Michael Mace said...

Thanks for your comments, Gene and Aesopus.

I do have some thoughts on what's happening to the information-centric users, but before I spout off on that, I should acknowledge that I don't have any new market research on the subject. So these are just guesses, and you should take them with several grains of salt.

--I think some info-centric users are buying iPhones or iPod Touches, and trying to adapt them for information management functions. So they're not loading music, they're buying info management apps. Unfortunately, information management without a stylus is awkward, because the apps tend to have a lot of functions, and without a stylus you have to access those functions through elaborate menu trees. I've been playing with HanDBase on the iTouch; it's not fun.

--I think most of the people buying netbooks are not getting them for mobile information management. I think they're just trying to get the cheapest notebook computers they can find.

--I think the info management market is still badly underserved. Most of them are still waiting for an info pad, even if they don't realize it.

jfainlight said...

I also agree that this is a fine article, even 2 years later.
I would suggest that vendors are now punting their target audience with APPs. If they provide a simple way to develop and distribute APPs then they can state that they are in (or moving toward) the center and it is NOT dead.
My son has an iPhone and it is all entertainment. I have one (work dictated it over my Pearl) and it is a cross over leaning heavily towards communications with entertainment and some information management.
Thanks for the read.

Moin Rehman said...

First of all this is great. Probably saved me $20,000 in market research. Now how does Apple Iphone and Appstore fit into this model? If you look at Appstore it seems to me that you can find software for information recorders, entertainment seekers and the communicators. It seems to me that Apple decided to create a great user experience, with a robust application platform geared towards those people who love the Internet. And then it unleashed the App Store to allow massive customization thus meeting the needs of many outside the capabilities of the initial product release. I would like your feedback on how the mobile phone market had changed from being feature centric to more OS centric with ISVs driving the customization needs. It seems that we maybe following a similar model as the PC market. Where open and multi-purpose architecture triumphed closed and single purpose devices.
I would love to get your take on it.

Moin

The Bayer Facts: said...

Great display of the info; however, it appears to leave out $2.5B in the AIDC/RFID segment - important, think of many of the smartphones now coming out with the RFID and NFC built-in. And totally misses the NFC with with mobile payments/retail should be signficant.

bowling instructions said...

in the segment of "The entertainment-focus" is where I can be because I am less than twenty years and I'm in college. I love technology and use of music and videos on my cell phone. Other than that I like message to all my friends to keep in touch with them!