For many of the marketers out there – there is not a great case for Tablets and Smartphones together. Most of them view tablets as a passing fad. This equation is perhaps complicated by the announcement of Phablets as a hybrid form and use factor! However, is Tablet really a fad?
A recent report published by the Adobe Digital Index is an eye opener. For February 2013, Tablets are attributed to be driving more traffic to websites than smartphones. The report is based on 100 billion visits to more than 1,000 websites worldwide over the last year – hence this isnt a fluke that you had blow over. Adobe attributes this shift in web browsing patterns primarily to the device’s form factor, which lends itself to leisurely (and more comfortable) browsing than smaller touch devices.
Listing down a key points on how and why Tablets are not a fad. They are here for good-
1. Frankly, with both WiFi Tablets and Entry-level Smartphones penetrating the $50 price point – the screen size is a big enabler for tablets.
2. As WiFi hotspot roll outs gather momentum – Tablets will push more and more of data.
3. So while Smartphone gathers numbers in the low end – it is the larger screen size devices (3.5″ – 4.0″ – 5″ – 7″- 9.7″) which will posssibly drive higher data consumption.
4. The customer at the economy end of connected devices ($50-$100) tends to use his device as a media machine – again for the $50-70 price – a tablet provides greater value than a 2.8″-3.5″ smartphone given the profusion of pirated content.
5. Tablets are also driving penetration across segments such as education, insurance for the large screen internet access advantage
6. For the Phablet space – this is a sub-category branching out into becoming a category by itself – but its numbers will take some building up – and the pricing still is $200 & above.
7. With tablet growth rates still well above smartphone growth rates, expect this gap to widen
8. Traditionally because of the higher screen size the engagement time on tablets has been higher than the smartphones as well.
Interestingly enough, in mature economies, Tablets have found yet another niche. Tablets are increasingly being used shopping activities.Adobe found that 13.5% of all online sales were transacted via tablets during the recent holiday season. Furthermore, as of January 2012, researchers found that consumers using tablets spent 54 percent more time per online order than their counterparts on smartphones, and 19 percent more than desktop/laptop users.
Thus the key take away from the Adobe report is this – tablets and smartphones are two different animals. Based on consumer use cases, one does not replace the other because mobile device owners are using tablets and smartphones to accomplish different tasks. This has implications on the way e-commerce companies as well as media companies and online content distributors would play up to serve the user. So this really gets into single device – multi use cases scenarios – all of is still building.
Thus i come back to my initial point – Marketers who are apprehensive of the scale and scope of tablets and are unable to fix “proper” answers to tablets, need to understand, there is no single answer… and the answers too are evolving at a fast clip! The risk that they run in trying to perfect the business cases and create understanding is that they could be left out of the markets. Proposition here is possibly not a case of inspiration but of evolution!
If the early results are any indication, Adobe, has become a model for companies coping with tech’s changing landscape. But the Business transition is easier said – Adobe will have to navigate the rise of cloud, Mobility, social media and highly targeted online advertising. It also pits Adobe against some very well entrenched competition – Microsoft and Apple in productivity programs, IBM and Google in digital marketing.
Adobe’s move into digital marketing- which has its roots in the acquisition of Omniture, a web analytics company in 2009 is an equally adroit move. The second leg of Adobe’s strategy re-orientation includes data driven marketing – real-time bidding on Google search ads, targeting display ads using Facebook profiles, analyzing which Tweets or blog posts drive traffic, testing different site designs to see which generate sales. To make those features possible, Adobe has spent $800 million in the last 3 years on acquisitions since Omniture: Day Software for website-content management, Demdex for ad targeting, Efficient Frontier for search and social media ad exchanges, and Auditude for inserting ads inside streaming videos. According to Gartner, marketing budgets will grow 9% this year, compared with 4.7% for IT. Adobe wants to benefit from that growth by selling marketing services and software simultaneously. Thus, Adobe tools once relied on just for creating a website, have become much more useful as a digital marketing suite.
Still, Adobe’s marketing push means going up against deep-pocketed companies like IBM, Microsoft, Oracle, and Google — all of which are more experienced in the enterprise software market. The next year or so will be critical for Adobe as it changes tracks and dons a new gear. It is a risk but then its vastly better than waiting for the emminent death of Adobe Flash.Adobe’s post-Flash strategy was announced in November 2011, alongside the restructuring that made digital marketing and Creative Cloud the company’s top priorities Adobe saw the writing on the wall and conciously anchored itself on the Creative Cloud and Digital Marketing as the next streams of business. Now we await the new Adobe!
In the age of Cloud,Mobility,Social Media and altering business models,Companies that simply try to preserve the status quo will fail – Inspired
Adobe is the midst of transition would inspire many a case studies. A company that epitomized Shrink Wrapped High Quality Software is working on complete re-doing of its business and revenue models with an eye on the future. Historically, Adobe has been a productivity suite company with its software being centred around enterprises, film-makers, webmasters and content creators and it has done well till recent times. Not wishing to be caught on the wrong foot holding on to status quo, Adobe has readied and implemented a radical change in its business model- It has embraced the cloud based distribution and digital marketing and is phasing out the CD based version of “pay beforehand $1400-$2400” software distribution to Software in the cloud, monthly subscription service. This sachet service works three ways – It steadies revenue per month, it reduces piracy (Adobe was losing a reported $1bn to piracy of its software) and it also increases penetration (The move to subscriptions is a clever and thoughtful way to lower the price point). This model works on a $20-$50 subscription model – and this would bring 325K subs by end of 2012 as per Adobe. Lready Adobe has a million free memberships on its Cloud.The current onboarding rate is 11K per week. Overall average revenue per user is 20% higher compared with the old product. That number will rise even further, the company says, because it is much more likely to sell support services, website hosting, or server management to cloud customers. Already Adobe is augmenting its cloud product by addition of features and functionalities such as Creative Cloud for teams, making it easy (collaborate effort); Adobe Muse (For creation of Mobile websites); Creative Cloud Connection for desktop synching and collaborative sharing;Creative Cloud Training; and demonstrating the unlimited access to the Digital Publishing technology used by major publishers to create interactive content for the smartphones and tablets.
Sure this audacious moved spooked the stock which lost steam in 2011 but it is back in action and has traced a healthy recovery. The stock is way behind its historic highs of $47.9- however at $35.5 it is trading 47% above its 2011 trough of $24.17. Even while the stock is underperforming as per analyst’s expectations- the 3Q, 2012 profits have reversed a trend of 3 quarters of dipping profits. In the most recent quarter, profit increased by 3.2% year-over-year. Looking back further, profit dropped 2.4% in the second quarter, 21.1% in the first quarter and 35.4% in the fourth quarter of the last fiscal year. The turnaround seems to be working for Adobe and we would get to know more about this in time. As for the shift from boxed software to subscriptions: It is far from over. In fact, it is the company’s greatest source of uncertainty.
Apple’s rush to adopt HTML5 might seem to be at odds with what many financial analysts have described as the major threat HTML5 poses to Apple’s monopoly with the App Store. Apple has been tweaking its implementation of HTML5 in the Safari browser to limit some capabilities, like auto-play of audio and video, using customer satisfaction as the reason. Perhaps it’ll be able to continue to steer developers who want the ultimate experience on iPhones and iPads to continue to use the App Store, even if it’s just to sell wrapped versions of their HTML5 interfaces. In any case, Apple has certainly decided that it has more to gain from embracing the emerging HTML5 standard — growing the potential market for iPads and iPhones — and getting out of its morass with Flash, than it would by dragging its feet or proposing its own alternative. Complicating matters are some ongoing patent disputes between Apple and the W3C (World Wide Web Consortium) — which drives standards for the web.
If Adobe and Apple are right in their public assessment of the opportunities which HTML5 presents them, then Microsoft may be the biggest loser — although even desktop vendors will benefit in some ways, as trendy web applications will be able to run on their machines, instead of being limited to tablets. Of the big loosers, is the web monopoly notably Microsoft. HTML5’s platform independence hits Microsoft where it hurts the most: Desktops and Desktop Applications. Obviously Microsoft isn’t standing still, so whether their share of internet-connected devices continues to slip — from 95% to 50% in the last three years — is open to debate, but the dominance will clearly erode, a trend likely to be accelerated by HTML5′s device-independent promise.
Revamping the web with an improved set of content protocols might really benefit everyone.
Clearly, though, Microsoft, Apple, and Adobe have the most at risk, and could still turn out big losers on this one.
Mobile application developers will also benefit from having a consistent set of interfaces across their target platforms. Suffering currently from the high cost of developing for multiple platforms, as HTML5 is fleshed out with related technologies like WebGL and hardware device APIs they will increasingly be able to have a single source code base that can be deployed across a wide variety of mobile platforms. Third-party HTML5 frameworks like Sencha and Appcelerator already help make that possible.
Less obvious is the benefit HTML5 offers for mobile device vendors that are lagging in the war to gather applications. Many developers have ignored webOS and BlackBerry because of the high cost of developing a separate version of their applications. Running HTML5 will give those platforms a new lease on life — if webOS hasn’t completely disappeared by the time HTML5 has a chance to try and save it.
Amazon has been quick to realize the potential for HTML5 to unlock more content for its Kindle platform, announcing a new version of the Kindle e-Book format, KF8, that is based on HTML5, and an HTML5-based Kindle reader available on the web. What Amazon will lose in its proprietary lock on the Kindle format it is hoping to make up for with a surge of content suitable for its Kindle readers, resulting from the support of HTML5.
From the outside the apparent losers from HTML5 would seem to be Adobe and Apple. Adobe has been king of the cross-platform development hill with Flash, where it has a near-monopoly on development tools. Adobe is quickly gearing up with an impressive set of similar tools for HTML5, but it won’t have the same monopoly position it enjoyed with Flash. Countering its loss of market share, the total market may expand exponentially as HTML5 is likely to experience dramatic growth for the forseeable future — and of course includes the iOS platform as a target, always a sticking point for Flash. In the long run Adobe believes it can use its broad suite of tools to continue to be the leader in standards-based web development tools — HTML5 or not.
Industries evolve, Industries mature and the products and technologies travel through their lifecycles through intriguing phases such as Question Marks to Stars to Cash Cows till the die out (The BCG way of explaining things).Heeding industry trends, companies are often forced to give up on once-premiere products and offerings in order to survive.
Examples abound: In Case of Nokia dropping the ageing Symbian for Wp in smartphones, IBM and HP spinning out its hardware business to focuss on software consultancy and Netflix splitting its DVD subscriptions into Qwikster and staking its future on streaming content.
However, there are cases where managers and boards stick on to old products and platforms and forget evolving to the new paradigms and then go out of business… the all familiar example “Frog in Burning Water” example.
A classic example is that of the Flash from Adobe. Adobe, which last week doubled down its efforts on Flash, releasing Flash Player 11, Air 3, and ramping up its 3D and HD support–even as many critics argue the industry is shifting away from Flash and toward HTML5. With such a disruptive technology as HTML5, at what point does Adobe give up on its flagship Flash product, which has long been Adobe’s bread and butter? At what point is Adobe stubbornly ignoring the writing on the wall?
Danny Winokur, Adobe’s VP and GM of Flash has no plans to give up on Flash. Publishers and content creators, he says, are still “really excited” about the technology. However, that doesn’t mean Adobe is rooting against HTML5–in fact, the company has heavily invested in HTML5 with its Edge suite of tools. That would mean that while Adobe is working at Flash, it is also building its bridge to the future paradigm. As for now, Adobe continues to drive innovation on both fronts [of Flash and HTML5]. Not everyone shares Adobe’s long-term support for Flash. Top directors of Google Chrome and Internet Explorer have sung HTML5’s praises; Mozilla Firefox product VP Jay Sullivan is also betting short on Flash stating that HTML5 is the longer-term answer.
Winokur states that the capabilities of Flash will absolutely come to HTML5 over time. He argues that in each round of innovation that is happening across with both platforms, Flash has been trying as aggressively to drive HTML5 innovation–but there are always opportunities to go out and innovate ahead of the standards and bring content publishers the latest and greatest capabilities that are available on devices, and let them take advantage of those things even before they’ve been fully standardized.
Adobe is investing in both [HTML5 and Flash] and is readying both platforms. As and when HTML5 takes over, Adobe would move all its efforts on the HTML5 platform and let drift Flash. However, that might be a long way away to a time when when content publishers are not interested in ongoing investment in Flash.
Continuing on the series of posts on Android and its latest OS version 2.2: Froyo. Read the earlier posts here: Part 1 and Part 2. Froyo will feature tethering and WiFi Connection sharing, improvements to the browser and Android market place. Most Importantly Froyo comes with Adobe Flash 10.1. In Android Flash may have a strategic ally to counter the iPhone shunning them.
Froyo also sees the introduction of native support for tethering and connection sharing over Wi-Fi. Android thus is the first platform to introduce native support for portable Wi-Fi hot spots, but operator commitment to the feature will be limited, at least initially. Connection sharing puts extra strain on cellular networks, and many operators will choose to offer the service on condition that users opt for a higher-value data tariff. This scenario supports the thought that US and European markets will shift away from “unlimited” data tariffs toward a tiered structure dictated by usage and potentially even by quality of service in the longer term. The advent of tethering and connection sharing over Wi-Fi may also prompt the advent of tariffs structured according to particular functions or applications.
In Line with Google’s intent of providing a comprehensive browsing experience, Froyo is the first platform to offer native support for Flash Player 10.1 as well as Adobe’s Integrated Runtime (AIR) both of which were demonstrated extensively at Mobile World Congress in February 2010.However, it should be noted that although Android 2.2 supports Flash Player 10.1, hardware requirements dictate that not all Android devices will be compatible.
The final pillar of focus in Froyo is Android Marketplace. Google claims that application usage has far exceeded its expectations, with the average user downloading more than 40 applications. Google has opened up the search function in Froyo to allow developers to “plug into” it, so applications can be easily identified on the device. To this end, the search function now spans the Web, applications and contacts, offering a drop-down menu for users. Applications can also be updated automatically over the air.
However, the next version of Android will see bigger developments to Marketplace. Demonstrations showed over-the-air application downloads to the device controlled from a PC browser, and music also featuring in the Marketplace. This will be supported by Simplify Media, a company recently acquired by Google, which will enable users to stream music and photos between PC and device. This echoes Apple’s purchase of Lala in December 2009, a company similarly focussed on music streaming.
For a point release, Froyo includes an abundance of new features and Google has to be applauded for the speed at which it is innovating and improving the Android platform. However, new features in Froyo and hints of future plans confirm that the rate of innovation and the requirement for new code releases is accelerating rather than slowing down. While the seventh platform release in 18 months is a remarkable achievement and indicative of the value Google is adding, it may also be unsustainable for a large proportion of manufacturers.
The need to keep pace with a vertically integrated player in Apple is a challenge Google relishes but its partners find highly demanding.Most Android manufacturers are struggling to deliver customised user interface layers on top of Android 2.1. With competition increasing and device prices falling, the number of manufacturers will be able to maintain a high level of differentiation on Android will shrink dramatically over the next two years. Many phone-makers will be driven to offer devices with “vanilla” Android or with lightweight customisation that is largely cosmetic. As performance and feature distinctions grow larger between each Android release, manufacturers struggling to keep pace risk becoming uncompetitive.
Adobe goes multi-platform with its Flash Player 10.1. There is a list of goodies to the new version of Flash player and here’s listing the few big differentiators out there.
1.Flash Player 10.1 will be the first of its kind to support the full package of Flash services and will come for most of the mobile and desktop OS – Windows Mobile, Palm webOS, Android, Symbian and Blackberry OS, along with the Linux, Mac OS and Windows.
2.Flash content will be playable directly from the OS file manager, web browser or streaming applications.
3.Flash Player 10.1 will support all popular touch gestures (including multi-touch ones), the accelerometer functions and stylus inputs
4.The browser-based runtime will allow viewing all the Flash content on the Web, playing streaming videos, interacting with games, banners, ads, etc.
5.Flash Player 10.1 wi’ll be actually GPU accelerated, meaning that it would play back YouTube in HD perfectly.
This being a spin out from the Open screeen project, the roll outs will be on the same basis. While Windows and WebOS will get the Flash betas late this year, Android and Symbian will come early next year and Blackberry would take longer/since RIM just joined the Open Screen project.It also means that Apple will not recieve the Flash 10.1! Thus, the full Flash will be on basically every single smartphone platform except Apple OSX.
About Open Screen Project
Flash Player 10.1 is the first consistent runtime release of the Open Screen Project that enables uncompromised Web browsing of expressive applications, content and high definition (HD) videos across devices. Using the productive Web programming model of the Flash Platform, the browser-based runtime enables millions of designers and developers to reuse code and assets and reduce the cost of creating, testing and deploying content across different operating systems and browsers. Flash Player 10.1 is easily updateable across all supported platforms to ensure rapid adoption of new innovations that move the Web forward.
The browser-based runtime leverages the power of the Graphics Processing Unit (GPU) for accelerated video and graphics while conserving battery life and minimizing resource utilization. New mobile-ready features that take advantage of native device capabilities include support for multi-touch, gestures, mobile input models, accelerometer and screen orientation bringing unprecedented creative control and expressiveness to the mobile browsing experience. Flash Player 10.1 will also take advantage of media delivery with HTTP streaming, including integration of content protection powered by Adobe® Flash® Access 2.0. This effort, code-named Zeri, will be an open format based on industry standards and will provide content publishers, distributors and partners the tools they need to utilize HTTP infrastructures for high-quality media delivery in Flash Player 10.1 and Adobe® AIR® 2.0 software.