Last week Palm announced that its smart phones are selling disappointingly poorly.

I’ve been doing a lot of thinking about why Palm didn’t get my money or get most of my friends excited. Yes, my friend Luke loves his Palm, but he just hasn’t been able to convince me.

Why not?

I believe Palm made a fundamental market miscall. They assumed that people would adopt a small phone with a decent experience and web browser.

They bet against the geeks. They bet against the web.

They bet wrong.

As I walk around Vancouver’s airport you can see why. A phone is no longer just a phone. People walk around holding their gadgets in front of them. Some, like Blackberry users, do email. Every Blackberry user I know wants a bigger screen.

But more and more I’m seeing iPhones and Android devices in airports. Most of the time these users are not on the phone, but are stabbing at the screen with their fingers doing various things.

Palm bet against these users by putting a small screen in their Palm Pre. What Palm didn’t realize is that users who actually go into stores and buy phones now need more than just a phone, they need a Web device.

By betting against the geeks they made a HUGE market misjudgment because the market follows the geeks. People get this wrong all the time.

It’s really a shame, too, because Palm has a very nice OS and a great stance toward developers.

But until they give me a device with a glorious huge screen with super high resolution they aren’t going to have a chance with the new users.

Compare to what Microsoft is showing off with its new Mobile 7 devices. Huge screen. Android devices? Huge screens. iPhones? Huge screen. Nokia N900? Huge screen.

These are the devices that are pushing the industry forward. It’s too bad that Palm’s CEO Jon Rubenstein made such a fundamental misjudgment. Why did he make that misjudgment? I think it’s because he probably did customer research and the research kept telling him that people wanted a great phone first.

See, customers lie about what they really want. Truth is, they don’t know what they want until you show it to them.

Remember what Henry Ford said? He said that if he asked people what they wanted they would have told him to build a better horse-drawn carriage. Well, we all know how that worked out.

Rubenstein shouldn’t have listened to the marketers. People want big screens with easy to use email and web. Palm didn’t deliver that and now it’s the loser.

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The reasoning perhaps to why Android follows a similar usage path as the iPhone may be that it is now more mainstream thanks to the Verizon Droid advertising push last year and Google itself debuting the Nexus One.

Although it seems Google gives away more N1s for free at conferences than it sells.

Flurry released the January 2010 data today from its tracking of over 20,000 live applications with over 2 billion user sessions each month.

Both Android and the iPhone had eerily similar retained user percentages per month

The most interesting of the graphs in my opinion was the average session frequency per month.

While Android and the iPhone share the huge increase in social media use, the session totals are always in Android’s favor, perhaps due it being able to multitask and run several apps at once.

The conclusion Flurry provided is that mobile applications have reached a new stage of maturity, where apps perform similarly across platforms with their ultimate conclusion being that the content trumps the platform.

I think this is what principally Google wants to monetize as social interaction meets mobility and location with it providing an ideal direct target audience for advertisers.

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Morgan Stanley’s global technology and telecom analysts documented the rapidly changing mobile Internet market to provide a framework for emerging trends and direction.

To set the stage, Morgan Stanley forecasts that the mobile Internet market will be at least 2x the size of desktop Internet when comparing Internet users to mobile subscribers.

According to the report, Apple’s iTunes + iPhone/Touch ecosystem has created what “may prove to be the fastest ramping and most disruptive technology product / service launch the world has ever seen.”

For marketers, Apple has reset the market by empowering brands and developers to mine an entirely new channel to reach existing and potential customers, advocates, and influencers. You can expect to see brands increasingly exploiting popular apps as well as creating branded experiences in the Apple, Android and eventually in the Microsoft, BlackBerry, and Palm platforms as well. VW’s launch of its new GTI exclusively on the iPhone and iPod Touch as an app was as groundbreaking as it was telling.

Morgan Stanley also predicts that smartphones will out-ship the global notebook + netbook market in 2010E. And, smartphones will also out-ship the global PC market (notebook + netbook + desktop) by 2012E. Driven primarily by 3G and a rich ecosystem of anytime, anywhere wireless capabilities, many consumers are finding their mobile online activity rise dramatically due 24×7 access to ‘cloud-based’ content and applications.

In reviewing the report, it appears that consumer usage of wireless data (including video + images + content + communications) continues to grow rapidly and this growth is expected to run its course for the foreseeable future. In addition, Morgan Stanley sees three platforms demonstrating especially strong momentum that combines consumer and developer adoption and interest.

1) Facebook (which is increasingly becoming a desktop + mobile communications hub);

2) Mobile (clearly led by Apple’s iPhone / iTouch / iTunes ecosystem)

3) The web (as online usage of products / services continue to gain share vs. offline counterparts and growing wireless usage expands market opportunities).

Social Networking Drives Growth

According to the report, Facebook represents the potential to serve as a communication platform and engine. With the smartphone, Facebook becomes a unified communications and multimedia creation tool and network that fits in your pocket and goes with you anywhere you go. While it already connects over 350 million users, Facebook’s market leaderships will extend as more consumers embrace more powerful mobile devices with video, photo, and high-speed wireless access. Also mentioned, and quite an interesting opportunity if you think about it, Facebook will offer easy and compelling voice and video chat functions and those capabilities will connect mobile and desktop users in new mediums and introduce new capabilities in the process.

Morgan Stanley views Facebook and Apple driving independent yet overlapping platforms that are forcing innovation in social and mobile connectivity and communications. Essentially, they are driving growth and ingenuity for one another while setting the stage for a new era of social networking.

Geo-Local and Augmented Reality

Similar to the recent Forrester report containing 2010 predictions for social computing, Morgan Stanley excluded Geo-local applications such as Loopt, FourSquare, and Gowalla as well as the bevy of Augmented Reality apps that are rolling out at an increasing pace.

Mobile does indeed symbolize the future of communication and collaboration, representing one-third of The Golden Triangle.

In addition, social and real-time (plus geo-local and augmented reality) applications will only fuel adoption and innovation, creating a bridge between online and offline interaction. Most important, the fusion of these technologies will fundamentally change how we communicate with one another as well as how we purchase products and services. Mobile Internet combined with geo-local and augmented reality applications and networks just may represent the last-mile in the ever-elusive local advertising and marketing markets.

Other key takeaways include:

Material wealth creation / destruction should surpass earlier computing cycles. The mobile Internet cycle, the 5th cycle in 50 years, is just starting. Winners in each cycle often create more market capitalization than in the last. New winners emerge, some incumbents survive – or thrive – while many past winners falter.

The mobile Internet is ramping faster than desktop Internet did, and Morgan Stanley believes more users may connect to the Internet via mobile devices than desktop PCs within five years.

Five IP-based products / services are growing / converging and providing the underpinnings for dramatic growth in mobile Internet usage – 3G adoption + social networking + video + VoIP + impressive mobile devices.

Massive mobile data growth is driving transitions for carriers and equipment providers.

Emerging markets have material potential for mobile Internet user growth. Low penetration of fixed-line telephone and already vibrant mobile value-added services mean that for many EM users and SMEs, the Internet will be mobile.

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Quantcast has just released their 2009 Mobile Web Trends Report. The report highlights overall growth trends, market share of web consumption across device manufacturers, operating systems and browsers, and provides a review of the top gifted devices of the 2009 holiday season based on post-holiday web-consumption increases. In addition, the report sheds light on anticipated 2010 developments in the mobile arena

Highlights

• North American mobile web share up 110% in 2009 (Dec ’09 vs. Dec ’08)
• Global mobile web consumption share up 148% in 2009
• Apple continues to dominate, though market share has declined as increased competition emerges
• Android supports over 12% of North American mobile web pageviews, overtaking RIM’s Blackberry
• Motorola’s Android based Droid is the most impressive market entry since the iPhone and is largely responsible for a 10x improvement in Motorola’s North American mobile web share
• Apple, Nintendo, Motorola and HTC saw the largest ‘stocking stuffer’ bounce this past holiday season, and
• Pre-launch web visibility points to a wide variety of new devices from Motorola, HTC, Blackberry and others in 2010

Quantcast Mobile Report1

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Google’s Nexus phone was first “leaked” in December after they distributed them at a Google party (no gag order in effect). Naturally, the phone created a free social- and mainstream media frenzy in pretty much no time flat.

But employees were the only ones with sneak previews—until recently. Saturday, Engadget posted a video tour of the Nexus UI and a preliminary review—and the Nexus is not the iPhone killer:

[I]s this the be-all-end-all Android phone / iPhone eviscerator? In two words: not really. The thing that’s struck us most (so far) about the Nexus One thus far is the fact that it’s really not very different than the Droid in any substantial way. Yes, we’d say the design and feel of the phone is better (much better, in fact), and it’s definitely noticeably faster than Motorola’s offering, but it’s not so much faster that we felt like the doors were being blown off. It is very smooth, though we still noticed a little stuttery behavior (very slight, mind you) when moving between home pages. Still, opening applications and moving between them was super speedy, as was Google maps, and any area of the phone where you’ve got to get through long lists. Don’t get us wrong, the phone cooks — but it’s not some paradigmatic shift for Android.

So while it’s slick and cool, the Nexus isn’t a huge technological change—and it’s not changing the game the way the iPhone did. It’s a viable smartphone option, and probably typical of the second generation of Android devices.

And then there’s the possibility Google will surprise us all. At Search Engine Land, where Danny Sullivan will be liveblogging the event tomorrow, Greg Sterling points out that if Google really wants to surprise us, they could introduce an Android tablet computer—effectively upstaging Apple’s event scheduled for January 26, where they’re anticipated to unveil their own tablet.

Boringly, Google will probably just formally premiere the Nexus. Maybe they’ll be ready to sell it immediately, even.

What do you think? Will Google go for the obvious or the surprise factor?

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Well, it finally did!

The new Google Mobile App for iPhone just hit the iTunes App Store:

You can also change the colors of your iPhone app, turn on improved voice searching, and, get this, the new app supports Australians!

Huh?

Yeah, apparently…

…you can now choose your spoken language or accent. For example, if you’re Australian but live in London, you can improve the recognition accuracy by selecting Australian in the Voice Search settings. And now both Mandarin and Japanese are supported languages as well.

I wonder if there’s a setting for Brits living in North Carolina–cos you all know how strange that accent sounds!

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Recognizing the how important coupons are in driving foot traffic for small businesses, Google started allowing users to upload coupons to their Google local listings back in 2007.

Well this week, just in time for the holiday season, they’ve enhanced their local service by pushing coupons to mobiles. From the release post:

First up, with more and more people using their mobile devices to find local businesses, we’ve added a new option for Local Business Center users in the US to display their coupons on mobile devices. Additionally, we’ve made it simpler to find and print coupons from your desktop, so now it’s easy to get discounts wherever you are.

Activating mobile exposure for your coupons is as simple as ticking a box in your Google Local Merchant area.

Once it’s activated, people viewing your business listing on their mobiles will see your active coupons. They can then click through to a mobile optimized page detailing the specifics of your coupon.

Google has also taken the opportunity to enhance the printable pages available on the stand web version of their local listings, so any coupons that people bring into your store will look consistent.

There’s no getting away from the burgeoning mobile market, and Google Local is your easiest way to get exposed to the market. So if you haven’t got your Google Local listing yet – get one now!

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MediaPost reports that by mid-2011, half of cell phone subscribers, about 150M people, will be using smart devices. Smartphones are already showing a marked increase—Nielsen predicts that Q4 of this year will show that 40% of new phones sold are smart devices (as opposed to the Q309, slowest quarter in recent memory with smart devices accounting for only 25% of new phones).

I think that smartphone adoption will be crucial to mobile marketing finally taking off in the US. The fact that most phones today are still incapable of real web browsing has contributed to the slow start to mobile marketing. I’ve been saying for years that a better web browsing experience, like that of a smartphone, is crucial to the success of mobile marketing. And Nielsen agrees:

Nielsen also anticipates more users paying for video and premium content on their phones.

What do you think? Will smartphones reach this much of the market in another 18 months? Will 2011 be the year of the mobile?

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Why am I excited? Well, it’s because I am not an AT&T customer and won’t be for the foreseeable future. So what? Then that means I won’t have an iPhone to replace my red-headed stepchild, 15th cousin twice removed, black sheep of the touch screen smart phone family BlackBerry Storm. As a pure stop-gap measure to being included in Apple’s app-mania I have purchased a new iPod Touch. Are you following here?

So let’s do the math. If I don’t want to go with AT&T because I think there is enough evidence that their network may indeed suck I can still have iPhone fun (to a degree) but then be able to have the potential iPhone killer, an Android phone to replace my BlackBerry? I’m in! And now since Chief Googler Schmidt proclaims the Age of Android is about to fire up well I may be positioned to be the cool kid on the block! Woo hoo!

OK so it’s Friday and I am a little worn out. Here’s the news from TechCrunch

During Google’s third quarter earnings conference call today, one message came out loud and clear: Google’s mobile strategy is starting to pay off. “Android adoption is about to explode,” declared CEO Eric Schmidt, explaining that all the “necessary conditions” are set for growth: There are now 12 Android phones out there (most recently the Motorola Cliq ) across 32 carriers in 26 countries.

As a Verizon customer I am ready to trade in my Storm for the Android phones they have on tap. While it may be a little risky due to Android’s early stage of product development and testing I am ready to give it a shot.

Google would love to see that for sure as evidenced by this quote

In response to a question about how material mobile searches are to Google, CFO Patrick Pichette replied:

Again, we don’t give the detail numbers. On a quarter over quarter basis, mobile searches grew 30% on Google. It tells you something about the mobile space, the smartphones, and how they are transformative. They are basically transforming how people live on a mobile basis. If we move forward the adoption of these mobile phones by lowering the cost because it is open source, think of how many searches [that will produce].

The sound of Google’s cash registers ringing as a result of mobile search will be deafening. Regardless, I am ready to be converted. I am ready to be further assimilated into the Goog. Take me to your leader!

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The initial Android phones from HTC & Samsung are decidedly lackluster but were great inroads of progress toward competing with and ultimately supplanting the iPhone.

Its not even a year ago as the HTC Dream G1 became the first Android enabled phone to be released publicly on October 22nd and now I have listed at least 50 Android phones expected in the near future.

I enjoyed the G1 when I first got it last year and then the next generation Google Ion that I got from Google IO, but I miss the keyboard and need more from the processor.

The Droid seems to deliver minus the QualcommSnapDragon processor & increased RAM/ROM that I feel is needed to truly outclass the iPhone in processing performance.

The formerly named Motorola Sholes, Tao, & Calgary is now officially the Droid with some impressive specs:

• Texas Instruments OMAP3430 600 MHz CPU
• 5MP camera with flash
• 3.7 inch Capacitive screen
• 854 by 480 resolution
• 3.5mm headphone jack

The Motorola Droid looks to be the first professional use high end Android phone as well the upcoming Sony Xperia X3/X10 Rachael as the middle market is targeted by the HTC myTouch 3G & Hero while leaving the low end “clicks” to the Motorola Cliq & HTC Click.

Dominos may have been able to Avoid the Noid a decade ago but the iPhone does not look like it will be able to Avoid the Droid entering the next decade.

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