Business Insider: Dan Frommer

Why Facebook Needs Two Photo Apps

Dan Frommer — Fri, 25 May 2012 10:46:30 -0400

Facebook released Camera today, an iPhone app that lets you take photos, add filters to them, and share them on Facebook.

Hey, wait a second. Isn’t that what Instagram does, which Facebook just smartly agreed to acquire for $1+ billion?

Yes and no.

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Motorola Will Be Google's Most Interesting Project Yet

Dan Frommer — Wed, 23 May 2012 11:07:20 -0400

Google’s $12+ billion Motorola deal is closed, and Google veteran Dennis Woodside is taking over as Motorola CEO. Now the fun begins. For a variety of reasons, this has the potential to be Google’s most interesting project yet.

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Facebook's 4 Biggest Risks

Dan Frommer — Fri, 18 May 2012 15:10:54 -0400

Facebook, whose stock is trading on public markets for the first time today, has had an incredible rise - from zero to 900 million users in just over eight years. In the fast-changing technology world, though, today's Facebook can quickly become tomorrow's MySpace. Make no mistake: Everyone's favorite social network faces substantial risks. Here are a few.

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Microsoft's Mobile Comeback Is Looking Terrible

Dan Frommer — Tue, 24 Apr 2012 13:26:00 -0400

Microsoft ruled the PC market for decades with utter dominance. But today, as the future shifts toward mobile devices, things are not looking good for Microsoft. It's not that it's not trying: Microsoft is spending a lot of money and effort on cracking the mobile market, now in lockstep with Nokia, its top partner. But there's no indication yet that it's having any real success.

Losing Users

One troubling sign: Even now, more than a year after Microsoft started shipping Windows Phone 7 devices, U.S. mobile customers are getting rid of Microsoft devices faster than they're buying new ones.

In the three months ending in February, Microsoft's share of U.S. smartphone subscribers was 3.9%, according to comScore. That's down from 5.2% last November and 7.7% last February.

Longer term, Microsoft's share has been in a freefall: comScore had it at 18% at the end of 2009, and 36% in late 2007, the year Apple introduced the iPhone. (See chart above.) Since then, Apple and Google have gobbled up the lion's share of the smartphone market, with more than 80% of U.S. smartphones in comScore's latest stats.

The trouble is that Microsoft's phones - though decent - just aren't good enough to demand attention. They're certainly better now than they used to be - especially the new Lumia series from Nokia - but that isn't enough. To cause any real damage to Apple or Google, Microsoft's phones would have to be dramatically better than the competition, and they just aren't.

When Steve Jobs described the iPhone as "a leapfrog product that is WAY smarter than any mobile device has ever been," he wasn't just bragging. The iPhone completely changed the mobile industry in one day. Microsoft and its partners just aren't changing anything or making anyone nervous.

How To Win

There are two ways to succeed in today's smartphone market. You can either make a truly amazing product that wows consumers and gets them to seek it out by name - the iPhone way.

Or you can become the next-best thing: Something that the mobile carriers can tweak to their liking and shove in peoples' faces, and sell phones that way.

Operators still control a huge part of smartphone distribution, and that's how many (most?) Android devices have been sold: as alternatives to people who either can't or won't buy an iPhone, based on their carrier choice or other logic. Recall that Android didn't really take off in the U.S. until Verizon needed to produce the Droid series as its iPhone alternative.

Microsoft hasn't done either of these. The new Nokia Lumia 900 is nice enough, but no one's lining up en masse to ditch their iPhone for it. And you don't hear anything from AT&T or any other carrier about Windows Phones becoming their best-selling devices, either.

Sure, operators like Verizon Wireless may say they want Windows to succeed as an alternative to Apple and Google - of course they'd like to see today's platform leaders, their suppliers, less powerful. But carriers don't seem to be doing anything to make that happen.

There just isn't a real reason for people to buy Windows phones instead of iPhones, or even Android phones - features, design, price, services, anything. And until there is, the Windows phone platform isn't going to do well.

The Long Haul

The good news is that Microsoft has two things - money and patience - that could help it eventually succeed in mobile. (And mobile is too important to the future of technology for Microsoft to sit it out.) Windows wasn't a huge overnight hit, and it took the Xbox a long time to make any real money. Bing still isn't taking anything away from Google in the search industry. Recall that before the iPhone came along, Symbian and Palm were considered smartphone leaders. Now they're both gone. Things can change rapidly in this world.

In theory, the launch of Windows 8 later this year, and Microsoft's continued success with the Xbox, could be seen as possible inflection points for Windows phone. There should be some benefits to having a computer/console and mobile device running the same platform - Apple has exploited these, to an extent, with the Mac and iOS devices, and maybe Microsoft will, too, eventually.

But it will, again, have to be so amazing that people and/or carriers will really take notice and consciously switch their allegiance. And the odds of that happening, based on Microsoft's track record in mobile, are slim. If, in a year, we're still looking at mid-single-digit market share stats for Windows Phone, Microsoft will have to do something more dramatic and/or expensive to matter in mobile. And even then, it might be too late or might not work.

But for now, this comeback is not looking great.

Also: The End of RIM As We Know It

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This Is Why Google Is Absolutely Terrified Of Facebook

Dan Frommer — Mon, 16 Apr 2012 14:13:58 -0400

Google is still the biggest, baddest online advertising company on the planet. Its $2.9 billion profit last quarter, announced yesterday, was almost as much as Facebook's revenue for all of 2011.

But Facebook has something important that Google doesn't, and it scares Google's pants off: Facebook knows who you are, to an incredible level of detail. Because you tell it.

As you'll see, that allows Facebook to tailor its ads to a much finer set of users than Google's search ads currently allow. That's why Google is pushing so hard on Google+.

All that profile information you've filled out over the years on Facebook? That's not just there for your friends and colleagues to see, or for self-expression. Facebook is also able to use much of it to target the advertising you see on Facebook. (And, eventually, potentially all over the Web, the way Google does.)

The easiest way to see how powerful this is would be to take a quick spin through Facebook's ad-creation tool. It's remarkably simple and straightforward. Just figure out what your ad is for and give it a title, some body text and an image.

And then you'll get to the magic: Facebook's targeting page. Here, you can narrow your ad's target by an incredible basket of options. Location, age, gender, precise interests (as volunteered!), Facebook connections, sexual orientation, relationship status, languages, education and specific workplaces.

So if you want to reach the 100 people on Facebook who live in California, are between 18 and 36 years old, like "space" and work at Apple or Google, you can. Amazing.

Here's what it looks like:

Google's search advertising product, on the other hand, only offers a fraction of this targeting. You can target by location, languages and devices. But it mostly comes down to keywords: What are people searching for or looking at?

That's useful information, for sure, especially when you're selling something. But it would be nicer to also be able to target much deeper, the way you can on Facebook.

That's why Facebook, even though its business is much smaller than Google's today, represents such a threat to Google. It's only a matter of time until Facebook expands its advertising scale by opening the equivalent of "AdSense" - self-service ads for any site, using Facebook's superior targeting capabilities. That actually goes directly after Google's core business; that could hurt.

In the meantime, Facebook has a huge and growing set of data about its users that Google just doesn't. Heck, many (most?) of Google's search users aren't even really "users" at all - they're not logged in, they don't volunteer any personal information, etc.

And that's why Google+ is such a crucial project for Google - to get people logged in, sharing their information and interests with Google - not because Google suddenly wants to be social for the fun of it, but because it's crucial to catch up in ad targeting before Facebook becomes even more of a threat.

Also: Facebook's Real Mobile Question, Post-Instagram: Can It Challenge Apple and Google?

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Facebook's Real Mobile Question, Post-Instagram: Can It Challenge Apple And Google?

Dan Frommer — Tue, 10 Apr 2012 09:49:29 -0400

Facebook made a smart move today, acquiring red-hot mobile photo-sharing service Instagram for $1 billion. Not only does Facebook now own an important mobile property, but it also took its biggest threat - a thriving mobile-only social network - off the market. Brilliant.

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What Will Happen to RIM: 4 Real Possibilities

Dan Frommer — Thu, 05 Apr 2012 11:30:05 -0400

Research In Motion, the BlackBerry pioneer that lost its way, finally admitted last week that it's in need of a major transformation. After falling way behind rivals Apple and Google in the smartphone industry, RIM must reinvent itself or else.

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iCloud, Not The New iPad, Is Apple's Real Key To The Post-PC Revolution

Dan Frommer — Fri, 16 Mar 2012 10:44:36 -0400

Apple's new iPad goes on sale today. People - already lined up around the world - will likely buy more than a million of them this weekend, and tens of millions this year. And there will be much talk about Apple's "post-PC" revolution.

But the real key to Apple's post-PC dreams - slipping past Windows and becoming the dominant consumer electronics platform for the decades ahead - isn't this new iPad, or any single gadget.

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iPad + Office + Apple + Microsoft: Why It All Makes Sense (AAPL, MSFT)

Dan Frommer — Thu, 23 Feb 2012 08:29:00 -0500

Click here to read it at SplatF →

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iPhone Address Book Fiasco Should Be Apple's Cue To Build Its Own Social Network

Dan Frommer — Thu, 16 Feb 2012 10:30:53 -0500

Apple is good at many things, but so far, it has not excelled at "social" Web services. For example, Ping, the music-focused service it launched in 2010, is seen as one of its rare failures.

But now Apple has a real chance to do something "social" properly, by turning its huge and growing base of iOS users into a useful social platform, while maintaining appropriate privacy and security.

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15 Education And Learning Startups You Need To Know

Dan Frommer — Tue, 13 Dec 2011 12:55:48 -0500

One of our theses is that software is going to transform nearly all aspects of education, from the teaching process to grading and communicating with students.

It's not the most glamorous field for entrepreneurs -- selling into the existing education industry is a nightmare -- but it's potentially lucrative, and doing good work here means potentially changing the world in a meaningful way.

So there's no shortage of education and learning startups. Here are some of our favorites.

Chegg

"Netflix for textbooks" boasts "at least one customer from well over 7,000 of the 8,000 higher education campuses in the U.S." according to a recent AdAge article.

chegg.com

Knewton

"Adaptive learning" company -- where each student gets a personalized curriculum based on their skills and level.

As the company explains... "Knewton analyzes learning materials based on thousands of data points—concepts, structure, difficulty level, media format—and uses sophisticated algorithms to piece together the perfect bundle of content for each student, every day."

knewton.com

Kno

Kno started as a tablet company but is now focusing on e-textbooks, boasting 100,000 in its store at 30% to 50% off list price. Its opportunity is to capitalize on the growth of iPads and Kindles that are being brought into the classroom.

kno.com

See the rest of the story at Business Insider

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SPECIAL REPORT: The Future Of Learning

Dan Frommer — Tue, 13 Dec 2011 10:50:00 -0500

The Future Of Learning, Transformed By Software

The education and learning industries, like most, should be profoundly transformed by software and technology over the next decade.

It may happen slower than some fields, such as media, communication, and entertainment, which have already seen disruption. But barring a major derailing, it will happen -- there are simply too many new opportunities, improvements, and efficiencies to ignore.

Click here to continue →

15 Education And Learning Startups You Need To Know

From learning tools to cool games, here's who's hoping to change education today.

POLL: What Technology Will Change Learning The Most?

Tablets, e-books, gaming, or something else?

Teach Your Kids How To Code, Not How To Speak Chinese

Software is the language of the future. Make sure your children can speak it.

6 Charts About The Future Of Learning

Online learning is coming, but not for everyone.

ALSO: The Future Of Social Media

Will Facebook survive the mobile revolution?

DON'T MISS: The Future Of News

Here's how you'll get your news in a decade.

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POLL: What Technology Will Change Learning The Most?

Dan Frommer — Tue, 13 Dec 2011 09:12:43 -0500

New technology and startups are starting to improve the learning process on all sides, from better resources for teachers to new, fun ways to study. Which will make the biggest difference?

Vote in our poll and share your comments below. And don't miss our entire special report on the Future of Learning.

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6 Charts About The Future Of Learning

Dan Frommer — Tue, 13 Dec 2011 09:12:24 -0500

This past summer, the Pew Research Center published a report on the "Digital Revolution and Higher Education." The whole report is worth a read, but we're drawn to the charts. Here are a few.

In these, only 15% of college presidents said that most of their students have taken a class online. But half think that 10 years from now, most students will take classes online.

Interestingly, college presidents see a greater educational value for online learning than the general public. Some 51% of college presidents polled said online courses offer an equal educational value, compared to classroom courses, versus just 29% of the public.

Here, we start to see which types of colleges are leading the way in online learning: community colleges and less-selective colleges. Those trends are expected to lead the way, with 4-year private school presidents considering their undergrad student bodies the least likely to be taking online classes.

Not surprising: 62% of college presidents think that more than half of student textbooks will be entirely digital in 10 years. Only 7% of college presidents think that less than 25% of student textbooks will be entirely digital.

What's helping that trend? Apple's iPad. Here's a bonus chart from Kleiner Perkins' Mary Meeker showing just how fast the iPad is gaining steam relative to the iPhone and iPod.

More from our special report on The Future of Learning:

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Teach Your Kids How To Code, Not How To Speak Chinese

Dan Frommer — Tue, 13 Dec 2011 09:12:13 -0500

There is a belief among some -- perhaps out of fear, or prudence -- that children today should study Mandarin Chinese as their second language. If China is going to rule the world in a few decades, at least my kid will be able to communicate.

That's an interesting idea, but the reality is that no matter who is ruling the world, if your kids don't live in China, their lives are much more likely to involve software than speaking Chinese.

So make sure the second language they study is code. Then their third language can be anything you'd like -- Mandarin, Spanish, Latin, French, whatever.

That's not to say that everyone should become a computer scientist -- that's not practical. But it's a good idea for everyone to at least understand how computers and software work, and how to write rudimentary code. It can be as simple as HTML, or as complex as C -- that part is up to the individual, and the actual languages will change every so often. But a little code is good for everyone.

Why? What's the point?

Think about how profoundly software has changed industries like, say, communication. The phone in your pocket even ten years ago was lucky to have a black-and-white display with a built-in game like "Snake". A decade later, your iPhone screen has more pixels than your old TV, thousands of software applications are a click away, and you can message someone across the world in a second.

Apply that change to every industry, from education -- our focus today -- to medicine, construction, the arts, etc. And we morph again, from a manufacturing economy to a service economy to a software economy. Again, not everyone will be writing code. But many more people will be ordering it, writing it, managing it, and interacting with it. It makes sense to understand it and to be able to create at least a little.

Personally, I don't regret spending seven years of my life learning French -- it's cool to be able to say hello and order a croissant in Paris in the local language, before the waiter responds in perfect English.

But I do wish I'd spent at least some of that time instead learning how to write computer software.

As it is, I managed to self-teach myself HTML in the mid-90s, a skill I use every day. But I wish there was a stronger focus on computer engineering in my elementary and high school curriculum, even at the expense of a foreign language.

That's not to say that people shouldn't be able to learn Chinese. Various reports -- the Economist, the New York Times -- have traced the growth of Chinese language programs in American schools. But in reality, it's not all that practical. See this point-counterpoint from BusinessWeek.

Some of our future will surely involve doing business with Chinese corporations and people. But much more of it will involve science, software, mathematics, and engineering. Software is the real future. So teach your child how to code first -- and how to speak Chinese second.

More from The Future of Learning special report:

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The Future Of Learning, Transformed By Software

Dan Frommer — Tue, 13 Dec 2011 09:11:45 -0500

The education and learning industries, like most, should be profoundly transformed by software and technology over the next decade.

Tablets and electronic textbooks will gradually replace heavy, static paper books. E-books have different economics than paper, but are easier to update, can be more interactive, and are much more portable.

Education will become more distributed as web services connect teachers and learners in new ways -- including self-service learning. This won't replace formal education for most, but it should lead to an increase in informal and semi-formal education. It should also lead to an increase in asynchronous education, where people are learning the same thing at different times -- the opposite of much of today's education. Think of it as "DVR" or "on-demand" education, vs. today's learning, which is more like live TV.

Adaptive learning -- where students learn at their own pace using personalized curricula -- may improve overall education quality at all levels. Some students will be faster than others, or better at certain things, but the idea is that this way, no one's left way behind.

Streaming video and videoconferencing will make it easier to study courses originated in different cities, states, or countries. How about learning French from someone in Lyon? Or a humanities course from a world renowned specialist? These videos can also be made publicly available to anyone, not just registered students: See Apple's iTunes U or Google's YouTube Edu for early courses from dozens of universities.

Students and educators will get better online tools to perform their jobs. For educators, better grading, course management, and communication tools. For students, better course selection and study tools.

Over time, these changes could eventually profoundly transform the structure of education: When, what, and where you study, who you learn from, how much it costs, how many can attend, etc. But it's going to take a while.

In the meantime, gradual changes should at least help create a better learning experience in settings that accept it.

More from our Future of Learning special report:

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Why The iPhone's Market Share War With Android Actually Matters (AAPL, GOOG)

Dan Frommer — Thu, 01 Dec 2011 13:27:00 -0500

This editorial is part of our GREAT DEBATE feature on Android Vs. iPhone.

As we discuss the iPhone vs. Android battle, it's important to understand the ways people are keeping score. One of those stats is "market share", which attempts to contrast how many iPhones and Android phones are being sold over a given time period.

I originally wrote this post for SplatF explaining why Apple's iPhone market share -- currently well below Android's -- actually matters. Here it is again.

While Google Android’s share of the smartphone market soars, Apple’s is drooping.

Last quarter, Android represented 53% of smartphone shipments, according to Gartner — some 60 million devices shipped worldwide.
That represented three times more Android shipments than the year-ago period (21 million), and twice as much market share (25%).
Meanwhile, Apple’s market share dropped to 15%, down from 17% a year ago and 18% during the prior quarter. Overall shipments grew, but not nearly at the rate as Android’s.

Now, there’s a good explanation for some of this: It was widely known that Apple would be announcing a new iPhone in October, so many people delayed their purchases. Assuming Apple can ramp up supply of the iPhone 4S during the holiday season, it stands to have a better quarter.

But even the best iPhone Christmas probably won’t even come close to Android’s quarter. And even if you broaden your scope to “years” and not “quarters”, it’s safe to say that Google is winning the market share race, and this is not good news for Apple.

(Yes, Apple is beating Google and its partners in many other important categories, such as its share of the industry’s profits, the mobile apps market, and the tablet market. If you add the iPod touch numbers to Apple’s total, iOS looks a little better. Etc. But pure smartphone market share matters, too.)

Why? Because this isn’t just about selling devices and making a few hundred bucks a pop.

It’s about building the dominant mobile platform for the next decade or longer.

And a big part of that is getting that platform into as many hands as possible, teaching the world how to use it, and building an addictive experience around it that people can’t easily switch away from. And it’s harder to dominate when you are being outsold 3-to-1.

The best news for Apple is that, so far, this “dominant mobile platform for the next decade” race is nowhere close to being decided.

Google, specifically, has shown little appreciation for its growing popularity:

Android has not taken advantage of its market share to build an ecosystem that people can’t easily switch away from. There is nothing “sticky” or addictive about Android. If anything, Apple is still doing better in that regard with iMessage, Siri, iCloud, etc.
Google has not yet made an app and media market that makes publishers more money than Apple does, or which developers would favor for other reasons. I don’t know any savvy developers who are building only for Android, or first for Android. They’re still picking iOS first, because that’s where they are getting the best results and/or making the most money.
And even if Google did make the significant changes necessary to beat Apple in those regards, it doesn’t have the upgrade path in place to deliver them to most existing Android users. Any big, new things Google makes won’t reach most people until they buy their next phones. And that’s another opportunity for Apple (or anyone) to steal those people away from Google.

What might Apple do to improve its position?

One important thing is to address the mid- to low-end of the market. Let’s see how the iPhone 3GS — now free at AT&T — does that. (And: Is that enough?)
Another might be to experiment with larger screen sizes, which some people seem to prefer. If Apple can do it in a way that doesn’t screw up its app experience too much, it might be a good idea.
Particularly in the U.S., it’s probably important for Apple to support 4G LTE networks with next year’s devices. Carriers are in a hurry to get people onto LTE, and right now, that means pushing Android. I think Apple was right to hold off this year, but it should aim to have LTE support next year.
Keep coming up with things like iMessage, Siri, FaceTime, iCloud, iTunes Match, etc., which lock people into being long-term Apple users.
Keep improving the iOS experience for app developers and media publishers, so they continue to prefer building for Apple instead of Google. This includes user-facing features like Newsstand, which help generate revenue for publishers, and developer-facing features like geofencing, which drive new features and apps. (Ideally, without harming the user experience, as Apple did in the Kindle app.) But addressable market size also matters, and that means maximizing device sales.
Consider sacrificing margins a bit to drive further sales. Billions more in the bank won’t help if Google really does get its act together and pull away. Dominating the handheld computing market is a once-in-a-generation type opportunity. It would be a shame to see Apple come in second place only because it was being too financially conservative.

Now: There is also a good chance that there just won’t be a single, dominant mobile platform for the next several decades — that there will always be two or three companies vying for the position, but never a clear “Windows”-like leader.

But I can’t imagine that’s the best-case scenario that the folks at Apple or Google are aiming and building toward. Even if that’s the eventual outcome, it still makes sense to be in land-grab mode now.

Within a year, we’ll see how serious Google and Apple — and even a few others, like Microsoft, Amazon, and Facebook — are about that.

How 125 Days With Spotify Have Changed My Music Habits

Dan Frommer — Fri, 18 Nov 2011 12:38:00 -0500

This post originally appeared at SplatF. For more like it, follow @SplatF on Twitter.

Now that I work from home and don’t commute as frequently, I have been listening to more music on my main computer. Not a lot, but for at least 5-15 hours per week. For the past few months — about 125 days since Spotify launched, actually — I have also used Spotify in addition to iTunes.

Here are some of my observations of how Spotify has changed my music habits.

When I know what I want to listen to, and/or plan to listen at a higher volume, I still try to listen to it in iTunes first. My computer speakers and headphones are decent, and I prefer a brighter sound, so audio quality and an equalizer are important to me.
If I don’t have an album, I will go to Spotify to listen to it. If I like it enough to play it more than twice, I’ll probably buy it from Amazon or iTunes. (Have done this a few times already. I’ve actually probably spent about $60-$80 on Amazon and iTunes since I started using Spotify.) I have also not bought certain albums that I had planned to, because listening to them a few times on Spotify proved to be enough. I have also found, liked, and purchased at least one album that I discovered on Spotify’s limited editorial (front page) section. More of this, please.
Why am I still buying songs when I am paying for a subscription to listen to as much as I want? Part of it is the sound quality. Part is that syncing stuff to my iPhone (and playing it back on all devices) is still much easier in the iTunes world than the Spotify world. And part of it, probably, is some weird psychological desire to still “own” something I care about.
The whole “stuff your friends are listening to on Facebook” feature is neat. At first, I used it as a gag, playing Weird Al and Nickelback songs to scare people. It’s something I wanted AOL to build into AIM in college. But here’s what I really want: A live playlist of what my friends are listening to, within Spotify, that I can listen to. Updating in real-time as people listen to more stuff. It might not work for everyone, but I seem to have enough friends listening to Spotify most of the day that it could be interesting. Of course, the playlist itself might suck, but that’s a different problem.
I paid for Spotify’s $10/month premium plan, mostly to get rid of the commercials. I am typically an advertising fan, and I still miss 90s Chicago-radio ad jingles. But Spotify doesn’t offer those types of commercials. And it’s annoying to listen to a quiet album while I’m working or before bed and get interrupted with a DAVVVVID GUETTTAAA promotion. It seems Spotify is serving up annoying, unrelated ads just to get you to pay to turn them off. (And it worked!)
I love that Spotify offers a standalone app — I do not want to listen to music in yet another Chrome tab, which is why Pandora and Rhapsody haven’t lasted for me. But the Spotify app is pretty disappointing. It doesn’t feel like a great Mac app. It reminds me of TweetDeck — a strange, dark gray thing that is tremendously useful but feels cheap and awkward. Maybe this doesn’t matter to most people, but it matters to me.
I’ve run into a few problems with Spotify’s music selection, but not as many as I’d feared. I guess this was a problem in the early days of iTunes, too. I assume it will get better, and not worse, but we’ll see…
Some of the stuff I read from musicians pulling out of Spotify or trying to raise money for their next record on Kickstarter makes me feel like listening to Spotify is as dirty as browsing the selection at my local bookstore and then ordering everything from Amazon. But I guess that’s the way the music business crumbles. It’s better than stealing, no? And I’ve been trying to go to more concerts and buy more merch to support the bands I really like.

In general, I really like that Spotify exists, and I plan to continue to use it and iTunes/Amazon in parallel. If anything, it makes me wish that Apple would just take my money and start its own subscription music service already. (The same way seeing the JooJoo in person made me really want an iPad.)

But Spotify still isn’t a mainstream business success yet, and Apple has been smart to stay away from subscriptions as long as it has. Beyond the huge challenge of getting people to sign up for them, there are also some technical and user-experience issues: How to differentiate between music someone owns and music they’re “renting”? Does DRM become necessary again? Why would most people subscribe if they’re mostly stealing music, anyway? Etc.

I also plan to test Rdio out a bit. The company has been kind enough to loan me a free account, so it’s on my list of things to experiment with. But for whatever reason, it feels like Spotify is getting more traction than Rdio. And if Spotify can succeed in making music streaming a social activity, those network effects could matter.

This post originally appeared at SplatF w/Dan Frommer.

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Why Apple's iPhone Market Share Actually Matters (AAPL, GOOG)

Dan Frommer — Tue, 15 Nov 2011 14:17:00 -0500

This post originally appeared at SplatF. For more like it, follow @SplatF on Twitter.

While Google Android’s share of the smartphone market soars, Apple’s is drooping.

Last quarter, Android represented 53% of smartphone shipments, according to Gartner — some 60 million devices shipped worldwide.
That represented three times more Android shipments than the year-ago period (21 million), and twice as much market share (25%).
Meanwhile, Apple’s market share dropped to 15%, down from 17% a year ago and 18% during the prior quarter. Overall shipments grew, but not nearly at the rate as Android’s.

Why? Because this isn’t just about selling devices and making a few hundred bucks a pop.

It’s about building the dominant mobile platform for the next several decades.

The best news for Apple is that, so far, this “dominant mobile platform for the next several decades” race is nowhere close to being decided.

Google, specifically, has shown little appreciation for its growing popularity:

That is, Android has not taken advantage of its market share to build an ecosystem that people can’t easily switch away from. There is nothing “sticky” or addictive about Android. If anything, Apple is still doing better in that regard with iMessage, Siri, iCloud, etc.
Google has not yet made an app and media market that makes publishers more money than Apple does, or which developers would favor for other reasons. I don’t know any savvy developers who are building only for Android, or first for Android. They’re still picking iOS first, because that’s where they are getting the best results and/or making the most money.
And even if Google did make the significant changes necessary to beat Apple in those regards, it doesn’t have the upgrade path in place to deliver them to most existing Android users. Any big, new things Google makes won’t reach most people until they buy their next phones. And that’s another opportunity for Apple (or anyone) to steal those people away from Google.

What might Apple do to improve its position?

One important thing is to address the mid- to low-end of the market. Let’s see how the iPhone 3GS — now free at AT&T — does that. (And: Is that enough?)
Another might be to experiment with larger screen sizes, which some people seem to prefer. If Apple can do it in a way that doesn’t screw up its app experience too much, it might be a good idea.
Particularly in the U.S., it’s probably important for Apple to support 4G LTE networks with next year’s devices. Carriers are in a hurry to get people onto LTE, and right now, that means pushing Android. I think Apple was right to hold off this year, but it should aim to have LTE support next year.
Keep coming up with things like iMessage, Siri, FaceTime, iCloud, iTunes Match, etc., which lock people into being long-term Apple users.
Keep improving the iOS experience for app developers and media publishers, so they continue to prefer building for Apple instead of Google. This includes user-facing features like Newsstand, which help generate revenue for publishers, and developer-facing features like geofencing, which drive new features and apps. (Ideally, without harming the user experience, as Apple did in the Kindle app.) But addressable market size also matters, and that means maximizing device sales.
Consider sacrificing margins a bit to drive further sales. Billions more in the bank won’t help if Google really does get its act together and pull away. Dominating the handheld computing market is a once-in-a-generation type opportunity. It would be a shame to see Apple come in second place only because it was being too financially conservative.

Perhaps this market share stuff really doesn’t matter that much, and won’t.

Within a year, we’ll see how serious Google and Apple — and even a few others, like Microsoft, Amazon, and Facebook — are about that.

This post originally appeared at Dan Frommer's SplatF.

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How Does Sony Make Money? Life Insurance! (SNE)

Dan Frommer — Fri, 11 Nov 2011 08:29:50 -0500

Sony's profits come from an unexpected source, says Dan Frommer at SplatF, click here to read his full post →

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