Mobile Q4 2011 in review – Apple, security and privacy, Amazon

by Irina Sandu

Apple had an unusual quarter, which resulted in record revenues for the company, due to the discontinuation of its regular sales cycle which begins with a new iPhone version launch in Q3 of every year. The iPhone 4s release at the beginning of Q4 maximized results for the quarter by its combination with the second biggest sales period of the year: the holiday season. Rumours to the cause of the delay varied, the one with the most pick-up being that Apple had initially designed the new iPhone version to not contain an operator-provided SIM card, but have the phone take over all of its functions; a move which was rejected by carriers and compelled the fruit company to keep the old standard in place. The main innovation of the iPhone 4S is Siri, a new iteration for voice recognition software that has the opportunity to become a new mainstream input method as the technology strives to mature while being developed by multiple players in different tech industries. Results placed Apple as the most probable top smartphone vendor for the quarter, with 37 million iPhones sold, only an estimated 0.5 million less than its closest competitor, Samsung. For Q1 of 2012, iPhone sales are expected to follow the traditional annual slowdown after the holiday season, but we will see a spike in iPad sales, as the new version is expected towards the end of the quarter.

Security and privacy has always been a sensitive topic on mobile and the increase in capabilities of the average device expands the interest for and possibilities to create concerns among consumers. The profile of the mobile phone as a closely personal device  demands for strong consideration of security and privacy and raises a lot of concern when breaches are discovered. Such was the case with the discovery of the Carrier IQ software on Android and iOS smartphones, an app which was typically installed by OEMs or carriers and had the ability to send  detailed information on phone activity to a third-party. The press coverage triggered several class-action lawsuits against phone makers and carriers and a bill concerning the installation of monitoring software on mobile phones to be proposed in the US.

Amazon launched its first Android-based tablet in the US, the Kindle Fire, which achieved impressive sales of 5 to 6 million devices in the first quarter after launch. Reviews of the device were mixed and positioned the tablet as offering an average experience in capabilities and user experience for the segment. Its success is partly explained by the affordable price, a lot lower than tablets with similar hardware specifications and which causes Amazon an estimated $50 dollars net loss per each device sold. The company’s strategy to make up for the low price and turn the venture into profit is through revenue for content on the device, a strategy which is still to be proven feasible, as increase in media sales for North America for Q4 was only 8%.