Senior Consultant, Mobile Devices & Platforms Expert DigiWorld by IDATE
The new iPad unveiled by Apple yesterday was much as expected. Rumors during the run-up proved fairly accurate when it came to the main features of this third version of Apple’s tablet (especially retina display and 4G) and we believe that this update is a fairly solid response to what competitors have been able to produce so far. No groundbreaking features but rather improvements aimed at strengthening Apple’s position in the market.
Below are some thoughts on what we learned yesterday. These analyses build on our ongoing research on the mobile device market – as found in last year’s report on LTE devices (which is part of our LTE Watch service). If you are interested in this topic, an in-depth analysis of mobile device manufacturers’ strategy and future mobile device innovations, can be found in our upcoming report on Next Generation Mobile Devices which is due out in Q2 2012.
- Support for LTE is not necessarily the main advantage of the iPad as is a feature aimed chiefly at users in the US. The new iPad, powered by Qualcomm multimode LTE baseband, supports both 700 MHz and 2100 MHz LTE bands which in itself limits its interest worldwide. Those two bands are and won’t be the much used by operators when deploying their LTE networks. From a European perspective for instance, the device will need to support the 800MHz, 1800MHz and 2.6GHz bands to be usable. But this is not a major issue, given the limited deployments so far in those frequency bands. What this LTE support tells us is how important Long-term evolution has become in the US as a differentiating argument in the mobile device market. It’s also impressive to see how much the US wireless market has evolved over last 4 years. Remember when the first iPhone was launched back in 2007, with no support for 3G because of those new-gen networks were still embryonic in America? Now, the US is at the forefront in deploying the latest radio access network technology, and Apple could not ignore it when targeting its domestic market. It is still unclear how far US operators have been pushing Apple to go that way, but one thing is sure: the announcement that the latest iPad supports LTE was clearly US-driven.
- Given the low rate of deployment for LTE networks outside the US (and Japan and South Korea which are the two other big LTE markets), and the increasing number of bands to be supported, supporting DC HSPA+ and HSPA+ was Apple’s only option to limit the number of different versions of the iPad and have 4G-branded iPads sold internationally. There has been a lot of debate over whether or not it was fair to use the term 4G for DC HSPA+ and HSPA+ technologies. They are indeed evolutions of 3G standards; their performance is an improvement over what we are used to and, for everyday uses, can be considered to deliver “LTE like” performance. We should also remember that even LTE is not considered by the 3GPP as a 4G technology: only LTE-Advanced and WiMAX IEE 802.16m are considered as such. In any even, from a market and network deployment perspective, supporting DC HSPA+ and HSPA+ was the best solution for the non-US market. Operators all over the world announce are upgrading their networks to this standard to able to support downlink rates of up to 42 Mbps (in dual carrier mode). The new iPad will support this maximum theoretical bitrate, while DC HSPA+ will eventually be able to sustain 84 Mbps. Plus these deployments will be in existing 3G bands, so Apple will not need to provide support for other bands.
- Apple is by no means the first device manufacturer to announce support for LTE. Samsung, HTC, LG and especially Motorola were first to launch such devices in the American, South Korean and Japanese markets. As we expected and noted in our report on LTE Devices and in our LTE Watch service insight last year, Apple has taken a more cautious approach in its release timetable, waiting for baseband solutions to be mature enough to lessen the number of wireless versions of the iPad, and enable Apple to provide a solid enough 4G experience in terms of battery life. Here, Qualcomm was the most relevant solution for Apple – providing the broadest support for RAN. As mentioned earlier, providing support for DC HSPA+ alongside LTE and CDMA2000 EV/DO was a strategic move on Apple’s part – both in terms of industrial process (reducing manufacturing and BOM costs) and marketing (being able to call it 4G worldwide).
- In terms of battery life, Apple could not afford any noticeable reduction in performance when using 4G. Of course new LTE basebands from Qualcomm (probably the MDM 9600) somehow reduced their footprint, but also forced Apple to perform some major reengineering to handle increased drain on the battery. This basically boils down to making more room for bigger batteries, without altering the form too much. The relative increase in the new device’s thickness (9.4mm as compared to 8.8mm for the iPad 2) is an indication of how challenging it was for Apple to provide support for LTE and deliver increased graphical performance required for the retina display. When we look at the specs, the new iPad battery is a 42.5 watt-hour unit, as compared to a 25 watt hour battery previously… so nearly twice the capacity as before. Impressive. It still remains to be seen how the new iPad compares to other LTE tablets. There appears to be a growing consensus around the web that the new iPhone will naturally support LTE as well. I’m not so sure, as the design constraints this involved for a smartphone are a whole other ball game. It will be much harder to make extra space for increased capacity battery. In any case, the technical challenges are big enough for me to think that, should it support LTE, the new iPhone will be rolled out in October rather than in June.
- The Retina display is probably the most obvious improvement. The previous iPad had just a standard resolution for a 9.7-inch display, but the pixel density of the new iPad really makes a difference … both with the previous model and with what the competition is offering. It is not sure how many of Apple’s display partners (LG? Samsung? Hitachi? Sharp? Panasonic?) are involved here, and if competitors will have access to this technology (it took some time for Apple’s competitors to release a smartphone with higher ppi than the iPhone 4S). What is certain is that Apple may well prevent its rivals from getting their hands on the technology by occupying the production channel. Given Apple’s unmatched capacity to order such components in very high volumes, its competitors will likely find it difficult to find enough components for their own devices.
- In all of this, there has been no mention of Amazon and its Kindle Fire… even though it is reported to be Apple’s most successful competitor in the tablet market. Apple still isn’t targeting this segment of the market overtly, even with a lower-priced iPad in its line-up. This may be a sign that, for Apple, Amazon is more a competitor for Android tablets than for the iPad which is aimed at the mid-range to high-end market.
Senior Consultant - DigiWorld Institute by IDATE
Mobile Internet is here and geared for growth, despite the global recession. For 2016 the worldwide penetration rate of Mobile Internet will reach 34.7% - or 2.89 billion users - generating service revenues (apps and advertising) of 43.3 billion EUR. IDATE has published a report dedicated to the mobile Internet providing its readers with detailed information about market's structure, data & forecasts 2008-2016, player profiles and strategies. It also spotlights the current and upcoming trends and the different kinds of mobile Internet usages.
“Since the introduction of the Apple App Store, the focus in the mobile Internet has been mainly on the ‘Battle of the OS’. This is now seemingly all but over, with Apple and Google in a victorious duopoly. The scenario has now shifted to the ‘Battle of the platforms’, with players such as FaceBook and Amazon, who do not own an OS, joining the fray, and who are providing alternative platforms which aim to bypass the native OS system”, says Soichi Nakajima, senior consultant at IDATE
Focus on the tablet market
It is just recently in 2010 that the tablet market started growing with the introduction of Apple iPad. In 2010, around 19 million tablets were sold, 16 million of them by Apple, which even in 2011 remained the clear leader.
Contrary to the smartphone market where Android has reached a leader position, the tablet market is still by far dominated by one manufacturer. Apple indeed has the advantage of being the first mover and different factors have hindered any significant growth by Android.
- Even when the Android Honeycomb was released, the Tablet OS was still a beta version, which found it difficult to compete with the already mature iOS. Because of this beta status of Android for tablets, Google only distributed the OS to selected partners. This resulted in some manufacturers launching products powered by the smartphone version of Android. This also led to voices being raised against Google for not respecting the Open Source agreement that tied it to the developer community. Although several improvements were gradually brought to Honeycomb, the next version of Android, known as Ice Cream Sandwich (Android 4.0), should bring more maturity to the system.
- The delayed and restricted release of Honeycomb along with its associated SDK did not help, leading to a lack of available apps adapted to tablets. While Apple App Store and Google Android Market are more or less on a par on the smartphone segment, they are still worlds apart in terms of tablet specific app catalogues. As of end Q3 2011, the App Store referenced 140,000 different iPad specific apps while there were comparatively few of them on the Android market
- The fact that the tablet is a new segment has enabled other tablet operating systems to gain some visibility, such as QNX OS that powers RIM Playbook or WebOS which powered HP Touchpad devices. Although these tablets were not hugely successful, they brought differentiated user experience in a world where it is very difficult to differentiate oneself in the Android ecosystem
Worldwide tablet sales ('000)
In the near future, it can be expected that Apple will gradually lose its market share as their competitors gradually come up with better counter-offers. What happened on the smartphone market will be repeated on the tablet market, although probably at a quicker pace. On the smartphone market, it took two years before competitors started having true ‘iPhone killer’ products. For tablets we expect Android to pass iOS in terms of sales in 2013. One big question mark is related to legal disputes on the market for patent infringement issues.
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Market and forecasts 2010-2015: smartphone and tablet traffic skyrocketing
IDATE has just released its “Mobile Video” report which takes a look at the mobile video market and its different business models, technologies and core devices. It also provides readers with an analysis of the market and forecasts for its development up to 2015, along with key data on the stakeholders, traffic and sales.
“The global mobile video market (cellular networks only) was worth an estimated 4.3 billion EUR in 2010, and forecast to reach 12.6 billion EUR in 2015, which translates into a compound annual growth rate (CAGR) of 24% for the period. The increase is even more impressive when looking at traffic volume (i.e. number of video minutes) which is due to rise at an average annual rate of more than 80% over the next five years. OTT (over-the-top, i.e. online) traffic accounts for the majority of video viewing time on mobile networks: 60% in 2010, and increasing to 70% in 2015,” says Project manager and Senior consultant Samuel Ropert.
Mobile video market in the biggest countries in 2010
The United States and Japan top the ranks of the world mobile video market on cellular networks. Over in Europe, Italy is the biggest market at close to 300 million EUR, followed by Germany. Italy owes its status to heavy take-up levels combined with an attractive selection of content, such as championship football, which stimulates usage and sales revenue. The price of a basic mobile video service is also much cheaper in Italy than in other countries, plus users have the ability to pay by the week and not just by the month as is usually the case.
Japan’s mobile video market is being undermined by the broadcast video market (which is not covered in this report) which is free for users, but which generates hundreds of millions of euros in ad revenue.
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