Mobile Q2: Smartphone growth surges; iPad’s rule continues

1Executive Summary

The second quarter of 2011 was all about smartphones: Thanks to Google’s Android and Apple’s iOS, feature-phone owners increasingly upgraded to more sophisticated handsets during the period, and mobile data consumption ramped up correspondingly. Nielsen recently reported an 89 percent increase in mobile data consumption among U.S mobile users in the first quarter of 2011 versus the period a year ago; that appetite on the part of consumers will only increase as more datafriendly handsets come to market and as the number of apps on the market further proliferates.

Despite predictions to the contrary, the iPad lacked any real competition in the tablet space during the second quarter. That dominance will slowly erode, though, as alternatives emerge for both consumers and business users. Cisco is attracting interest with its business-targeted Cius, for instance, which runs Android, and Hewlett Packard’s TouchPad is drawing positive reviews. Google’s Android operating system has been slow to address this market, but the platform is finally beginning to catch up with the coming release of Ice Cream Sandwich, a version of Android that will merge both the tablet and smartphone versions of Android into a single operating system. Indeed, Cisco has said that Cius will receive Ice Cream Sandwich once the upgrade is released.

The long-heralded space of location-based marketing is finally beginning to grab attention. Groupon has come to market with its mobile-targeted Groupon Now; it joins a host of players that includes Google, Facebook, WHERE and countless others in a contest to bring targeted, location-specific discounts to users on their phones. Location-based marketing still suffers from user-privacy issues, user awareness and a lack of extensive local advertising networks. But the combination of GPS-enabled location pinpointing and the embrace of social networks has laid the groundwork for an industry that can offer discounts and coupons to on-the-go mobile users and also provide a lucrative new revenue stream for retailers.

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Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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