Device Fusion - Google’s biggest
An analysis of the browser page viewing behaviour of five European countries shows some
interesting variations about which device is used to connect to the Internet, and when that
connection takes place. This behaviour should be very carefully studied by Google, a company that
is supposedly driven by data. Perhaps then it will realise the importance of tight integration of
hardware and software in the future of their cloud services. At present they are poles apart and
this is a fundamental flaw in Google's long term strategy. As the company tries to develop beyond
being an advertising company which also owns a search engine, it needs to appreciate the
significance of hardware integration. Controlling software alone is not enough to provide a positive
customer experience with cloud (Internet) services, and this fact may well prove critical for Google's
future success. More and more mobile phones and other devices are becoming Internet
connected, and increasingly powerful in terms of computing power, and Google is losing ground.
Europe currently leads the US in the sophistication and depth of its Internet mobile phone services,
and the behaviour of European consumers today provides a strong indication of what is likely to
become US consumer behaviour in this area tomorrow.
In Europe's largest economies, at any time of day, access to the Internet is mostly made using a
computer. If we look at Spain, Italy, France, Germany and the UK we can see that 95.1% of all
browser-based page views are made from a computer (as measured by comScore). "Smartphones"
(mobile phones capable of Internet connection) account for 3.2% of traffic and "Tablet" computers
make up just 1.4% of browser-based Internet page views. So for the majority of people in those
five European countries a computer, whether based at work or in the home, is still the chosen
device for viewing web pages. This is an area that Google still dominates because of the
importance of search activity when a computer is used for Internet access. But, as you can see by
looking at the data in this chart, things are starting to change. I've been trawling through a recently
published report about Internet connections using smartphones and tablets published by
comScore (Connected Europe). This forms the basis for this month's analysis and provides the
basic data for the PowerPoint chart.
In some parts of Europe smartphone ownership now reaches almost 50 per cent of the mobile
phone population; with Spain leading at 48.4% and the UK close behind at 48.1%. In Italy
smartphone ownership has reached 42.1% and in France it is now 38.1%. Germany has the lowest
proportion of smartphones at 38.1% according to comScore. Looking at the data in the left hand
chart on the PowerPoint slide, it's obvious that the leading smartphone is still Apple's iPhone. At
present Apple holds the position of the most used mobile phone device to connect to the Internet
at 29.5%, but Google's Android platform is catching up in second place at 22%. Remember, this
data is based on people's actual usage of the devices and not on the sales data that is frequently
used to measure market share. The supremacy of Apple's iPhone as the dominant smartphone is
well-known, as also is the fact that in sheer sales numbers Google's Android is catching up. This is
primarily because the second largest global manufacturer of mobile phones after Nokia is Samsung
and an increasing number of Samsung's mobile phones are smartphones using Google's Android
platform. In sales numbers Samsung is by some estimates still ahead of Apple in the total quantity
of smartphones sold throughout 2011, although Apple was the winner in the last quarter of that
Samsung and Apple have a curious relationship best described by the word "frenemy" a term used
to describe a company which is both a friend and an enemy or competitor at the same time. On
one hand Samsung produces the microprocessors that power many Apple products, and on the
other hand Samsung is being aggressively pursued by Apple about a number of patent disputes in
various countries. These disputes are having the effect of blocking Samsung sales of Android-based
tablets in those countries. Looking at the comScore usage data, Apple's tactic seems to be proving
very effective in delaying the growth of European Android-based tablet usage. In Europe Apple's
digital traffic to web pages is split equally between their iPhones and their iPads with a smaller
amount of traffic coming from the iPod Touch. By comparison Android-usage in Europe is virtually
all derived from smartphone usage and only a tiny proportion comes from Android-based tablets.
This is the area of key weakness for Google because Apple is already forecasting that the volume of
tablets purchased will eventually exceed the volume of personal computers.
The patent disputes between Apple and Samsung are only part of the explanation for the difference
in European tablet usage. The primary, and to me obvious, reason for Apple's success is that it
provides consumers with a highly integrated and holistically positive customer experience that
unifies Apple's hardware and software products tightly into their cloud-based services. This easy
fusion is something that Google's Android system has yet to effectively replicate. At present it is
nowhere near the rapidly maturing Apple eco-system. The real question now is whether it is
actually possible for Google to develop and build a competing system which will combine its
hardware, software and cloud services to produce a system that is a pleasure to use. One industry
insider argues that Google's Android platform is so fragmented that Google has already lost control
of it. It is the tight control of all the elements of hardware, software and services that Apple has
used from the beginning (thanks to Steve Job's vision and Sir Jonathan Ive's design genius) to
successfully create the high levels of positive customer experience that Google's Android lacks.
Google has a poor record of visual interface design and little experience of hardware product
design. This lack of hardware design capability is one possible explanation, beyond the acquisition
of patents, for Google's recent purchase of Motorola's mobile phone division for $2.5 billion.
Indeed, as I write this, Motorola has just won an injunction in German courts against Apple. This
may help to justify what looks like an increasingly dubious purchase by Google. In fact we are not
many days away from an EU Commission decision about whether to allow Google's takeover of
Motorola's mobile division within Europe. But regardless of the outcome of the legal battles, and
whether the EU Commission blocks or doesn't block Google's purchase of Motorola's mobile
division, the digital traffic figures from devices clearly shows that consumers favour the easy to use
integrated hardware, with its strong aesthetic design, and services created by Apple.
This seamless fusion of product didn't happen overnight: Apple began its path towards this service
integration over 12 years ago, back in January 2000, with the launch of iTools, and it followed on in
January 2001 with the launch of iTunes. Apple's latest incarnation, iCloud, incorporates all types of
personal content and synchronises this content easily between different Apple hardware devices.
iCloud merges computer, smartphone and tablet, and audio and visual files, relatively easily and it
is highly likely that TV content will soon be added as well. This is exactly what consumers want
which is shown very clearly by the data used in the right hand chart on the PowerPoint slide. This
data is taken from the European share of device traffic on a typical weekday, in this case on
Wednesday 7th December 2011.
As I've previously mentioned, in absolute terms computers represent 95.1% of all browser-based
web page traffic. But the figures used to produce the right hand chart are the percentage by hour
for each device of the overall traffic from that device. This has the effect of collapsing the data to
make comparisons easier. The chart clearly shows that having a seamlessly integrated service is
becoming increasingly essential for many people. All three devices: computers, mobile phones and
tablets, are used throughout the day but their peak usage times vary to fit consumer lifestyles.
During the morning journey to work the three devices are used fairly equally, but just after 9am the
level of access to the Web by mobile and tablet drops and computer usage rises, and continues to
rise to a lunch-time peak. It then gradually falls away during the afternoon. By mid-afternoon
mobile, and then tablet, Internet browsing increases. Then, as the working day ends at around 6pm
and people are travelling home, mobile Internet usage peaks. Tablets are also used during the
evening commuting period and their use rises, and reaches a peak, just after 9pm in the evening.
What all this usage data demonstrates is just how perfectly Apple's product and service strategy has
come together over the last dozen years, and how well this meshes with consumer behaviour. If
and when Apple launches its new TV service expect a graceful integration with its iPad tablet.
Already tablet usage peaks exactly when TV viewing peaks. In a few months it is likely that many
people will be using their iPads to control the content they watch on their TVs. And, according to
rumour, some may even be using an Apple TV. Will Google's Android platform ever be able to
match and exceed Apple's tightly integrated eco-system? Until I start seeing reliable behavioural
data showing that Google's Android tablet usage approximately equals mobile phone use, just like
the Apple data in the left hand chart, then, and only then, will I believe it's possible.
...with analysis & insight...