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Sunday, September 18, 2011

Apple v. Android war impacts mobile video uptake

Expect more mobile video to go mainstream as the quality of the devices in people's hands continues to increase. But the showdown between Apple and Android in the market could have wide-reaching implications for video uptake.

Global smartphone shipments and tablets continue to outpace basic feature phones, accounting for the lion's share of sales in 2011. Technology market research firm Infonetics Research.Infonetics expects global smartphone revenue to grow 31% in 2011 over 2010, to $117 billion, with Apple and Android battling it out for dominance.

The outcome of that battle will have a mobile video impact, considering that Apple developers are focused on creating video streaming apps for the platform, while broadcasters and pay-TV operators worldwide are looking to leverage iPhone and iPad apps to bring their TV Everywhere plays to fruition. In contrast, Android has few video apps in the Android Market to date, hampered somewhat by the fragmentation amongst flavors of the OS. Netflix, for example, still only runs on certain Honeycomb OS-based tablets. HBO Go is not yet available at all for Android tablets.

Apple's stronger volumes and higher ARPU helped increase its global smartphone revenue share every quarter thus far in 2011, now at 36% of the smartphone market in 2Q11. However, combined across all vendors, Android continues to be the #1 smartphone operating system in the world, used in nearly half of all smartphones shipped worldwide.

Android-friendly HTC and Samsung leapfrogged into second and third place, respectively, in the global smartphone market in 2Q11, ahead of RIM and Nokia.

Meanwhile, tablet sales jumped 80% in 2Q11, led by the Apple iPad.

"The clear synergy between smartphones and tablets, with their shared touchscreen features and common application environments, make them by far the hottest segments of the mobile broadband device market," said Richard Webb, Infonetics Research's directing analyst for microwave and small cells "Just as iPhone users are more likely to buy an iPad as their tablet, so too are Android users more likely to buy Android-based tablets. It is increasingly important for vendors to have a strong portfolio in both market segments to leverage this synergy."

A total of $31.4 billion was spent on smartphones in 2Q11, down 1.4% from the previous quarter despite unit shipments being up about 2%, indicating unit-price erosion impeded revenue growth.

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