Silicon Alley Insider reports that Facebook Chief Technology Officer Bret Taylor noted yesterday that he is “very confident” that his company will reach a deal with Apple for collaboration on the music-focused social networking platform built into iTunes 10.
At a dinner with New York media last night, Facebook CTO Bret Taylor said he is “very confident” Facebook and Apple will figure out a way to work together on Ping, Apple’s music social network.
Apple and Facebook were reportedly locked in negotiations for at least 18 months before Apple launched Ping earlier this month. Ping debuted with Facebook Connect integration allowing users to find friends via their Facebook accounts, but the feature quickly disappeared. A subsequent report claimed that the two companies had been unable to reach a deal for the usage of Facebook Connect but that Apple had gone ahead and deployed the functionality anyway. After Facebook disabled Ping’s access to Facebook Connect, Apple was forced to remove evidence of the functionality from the service entirely.
The two companies have reportedly continued their negotiations, but no agreement has apparently yet been reached.
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Credit Suisse yesterday released the results of a customer survey examining what current customers are likely to do once AT&T loses its exclusivity for the iPhone in the United States. Silicon Alley Insider shares some of the charts from the presentation, which suggests that 23% of AT&T’s iPhone customers could defect to Verizon if the phone were to launch on the carrier early next year.
A new survey from Credit Suisse says 63% of iPhone owners will stick with AT&T, even if it loses the exclusive right to sell the phone.
Where would AT&T iPhone owners go if given the chance? 23% will join Verizon, while 3% will go to Sprint, and 2% will go to T-Mobile.
Credit Suisse views AT&T’s surveyed retention rate of 63% as a positive, calling fears of the effect of the loss of iPhone exclusivity for AT&T overblown.
Following the same rationale as that used by Morgan Stanley earlier this year, Credit Suisse estimates that approximately 8 million current Verizon customers would move to the iPhone should it become available on the carrier. That figure is calculated by using the internal iPhone adoption rate for AT&T of 16%, multiplying it by Verizon’s customer base of 82.5 million, and accounting for nearly 5 million former Verizon customers who have already moved to AT&T for the iPhone.
Finally, Credit Suisse’s data predicts that AT&T will have 18 million iPhone subscribers by the end of this year, up from nearly 13 million at the end of 2009 and 6.6 million at the end of 2008.
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Anecdotal evidence from developer David Smith of Cross Forward Consulting (via Silicon Alley Insider) suggests, however, that the program may not be cost-effective for developers, as a test ad campaign resulted in low click-through and conversion rates for an app priced at only $0.99.
From August 19 through August 25 I ran a campaign on the newly released iAd for Developers platform for our Audiobooks Premium app. The results were, to say the least, disappointing. For all the promise of selling your apps directly within an advertisement, it appears that so far this is not a viable way to drive traffic and create an economically sustainable promotion. For $1,251.75, my campaign generated a total of 84 downloads, thus a Cost Per Acquisition (CPA) of ~$15. For a $0.99 app, those economics just can’t work out.
The remainder of the post details the process of signing up for an monitoring the iAd for Developers, and while Smith was pleased with the professionalism of Apple’s iAd staff and the ease with which he could monitor his campaign, the return on investment was simply nowhere near what would be required to be viable. While an application carrying a higher price tag or significant in-app purchasing content might stand a better chance of seeing a profitable ad campaign, conversion rates would likely be even lower for a more expensive application.
Given that the cost for the campaign is entirely based on clicks, we designed our banner to try and provide the audience with all the basic information they need to understand what Audiobooks is and whether they might be interested in purchasing it. This lead to a more textual treatment than a graphical one. Since we don’t pay for impressions we only wanted truly interested people clicking on the advertisement.
Smith’s banner ad for Audiobooks Premium
Apple’s iAd program utilizes a “targeting system” that helps identify which users might be most likely to respond to and purchase a given application, and for that reason, Apple’s staff encouraged Smith to continue the campaign beyond the first few unsuccessful days in hopes of refining that targeting and boosting yields. Improvement was non-existent, however, and the campaign was canceled after six days and only 84 downloads on over 2 million impressions.
Smith also performed a comparison campaign using the same banner ad on AdMob’s network, finding a click-through rate over five times higher than that for iAd, and with AdMob’s cheaper cost structure, Smith’s cost-per-click was over six times cheaper on AdMob than on iAd. The reason for the significant difference in click-through rates between the platforms is unclear, especially considering the widely-held belief that the iAd program would offer a “premium” branding that would be more enticing to users than traditional banner ads.
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AT&T and ‘The Switch’ Join the iAd Rotation
Monday August 23, 2010 04:16 PM EST
Written by Eric Slivka
Silicon Alley Insider provides a walkthrough of two new iAds that have just gone live, featuring Apple’s U.S. iPhone partner AT&T and “The Switch”, a new movie with Jason Bateman and Jennifer Anniston that debuted this past weekend.
The AT&T ad focuses on the carrier’s new $15-per-month Data Plus plan, carrying the tag line “Now your entire family can afford the mobile internet.” The various ad panels outline the carrier’s Data Plus ($15/200 MB) and Data Pro ($25/2 GB) plans and offer estimates and tools to help users decide which plans would be right for them given their mobile activities. The company also pushes its Wi-Fi hotspots, available to its cellular data customers free of charge.
The iAd for “The Switch” offers a variety of features, including a tool for finding nearby theaters showing the film, trailers and commercials, a photo gallery, character bios, and a humorous “quiz” to help users decide whether they are ready to be parents. The ad also features a mini-game called “Build a Baby”, which lets users assemble various combinations of hair, eyes, and mouths to create unique “baby” faces. The resulting images can be saved to the users’ Camera Roll photo folders.
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Silicon Alley Insider reports that Piper Jaffray analyst Gene Munster has released a new research note looking at NPD’s data for Mac and iPod sales for April and May. According to Munster, Apple is continuing to see strong growth of Mac sales ahead of analysts’ expectations, with little cannibalization by the iPad seen so far. The iPod, however, is still underperforming relative to Wall Street expectations, although sales seem to have improved since an earlier survey covering only April’s data.
Mac retail sales in the U.S. are up 37% year-over-year for the quarter through May, according to NPD Group data analyzed by Piper Jaffray’s Gene Munster, who just published the new data in a note.
That’s better than the 19% year-over-year growth (3.1 million units) the Street is predicting for the June quarter. So unless Mac sales hit a wall in June, Apple should have some Mac upside in the June quarter, plus all the benefit of the iPad.
The earlier survey covering only April had shown Mac sales up 39% year-over-year, with the new report adding in May data showing only a slight slip in overall growth for the quarter from the earlier data, but still nearly double that currently expected by Wall Street analysts.
The iPod line is a different story, however, as the maturing product line is being overtaken in sales and publicity by the iPhone as strong sales of the iPod touch are only just struggling to offset declines in the traditional iPod segment. NPD’s new data shows a decline of about 13% year-over-year in the iPod line, roughly in line with Wall Street expectations of sales of 9-10 million for the quarter and slightly worse than Munster’s prediction of a 9% decline. The 13% decline marks an improvement from the April data alone, however, which showed iPod sales down 17% year-over-year. Munster also notes the NPD’s data, which tracks only U.S. sales, is less reliable for iPods than Macs due to the higher mix of international sales for iPods.
July 10th grand opening of Shanghai Apple store
The Financial Times offers an interesting piece highlighting the views of Lenovo CEO Liu Chuanzhi on Steve Jobs and Apple’s efforts to penetrate the rapidly-growing Chinese market where Lenovo leads in PC sales with 30% of the market. In particular, Liu notes that Lenovo is lucky that Apple “doesn’t care about China” or else it could see itself being “in trouble”.
Speaking of Apple’s chief executive, Lenovo’s founder and chairman, told the Financial Times: “We are lucky that Steve Jobs has such a bad temper and doesn’t care about China. If Apple were to spend the same effort on the Chinese consumer as we do, we would be in trouble.”
Evidence is mounting, however, that Apple may be beginning to take the Chinese market more seriously, with the company announcing earlier this year that it plans to open up to 25 Apple retail stores in the country within the next two years. In fact, the company is planning a grand opening this weekend for its first store in Shanghai, the company’s second store in the country following the Beijing store opened in time for the 2008 Summer Olympics there.
As Silicon Alley Insider points out as well, Apple executives noted during the company’s most recent earnings conference call that revenue from “greater China” including Hong Kong and Taiwan totaled $1.3 billion for the first six months of fiscal year 2010, up over 200% year-over-year.
Silicon Alley Insider‘s Dan Frommer reports that after a spate of corporate acquisitions late last year and earlier this year bringing such firms as Quattro Wireless, Lala Media, Intrinsity, and Siri on board, Apple may not yet be done shopping around for companies to acquire. In fact, Apple may be looking at somewhat larger deals than those undertaken in recent months, expanding deal values out to as much as $1 billion.
Apple’s shopping spree isn’t over, and the company is looking at all kinds of deals, even up to $1 billion. This is being led by Apple’s newish deals guy, former Goldman banker Adrian Perica.
The report appears to be based primarily on gossip coming out of CEO dinner moderated by Frommer last night, and addresses a number of topics beyond Apple that are currently the scuttlebutt of industry insiders. And with Apple’s iPad and iPhone 4 out the door, the time seems ripe for the company to increase its focus on some other areas.
Another tidbit of information coming out of the dinner is discussion of Apple’s next major move being into television. While Apple has clearly been playing a minor role in television with the Apple TV and its iTunes Store video offerings and there have been rumblings that it is looking to get a television deal done, it seems that Apple may finally be ramping things up. In particular, Apple’s renaming of “iPhone OS” to “iOS” is seen as setting the stage for the platform to move away from mobile and into other devices, as has been rumored for Apple TV.
Apple’s next big move is going to be TV. Besides the leaks of a supposed new Apple TV device, the company also renamed its iPhone OS “iOS,” foreshadowing a future beyond mobile devices. The company’s move into advertising — mobile, so far, but no reason it can’t extend into TV somehow — is another hint.
Possibly lending credence to claims of a significant push into television, a Bloomberg report today also notes that Jobs is set to attend the annual Allen & Co. media conference in Sun Valley, Idaho for the first time since 2005. The conference draws many of media’s top executives and is a common venue for networking and dealmaking.
Update: Ken Li of the Financial Times tweets that although Jobs is on the invitation list, he is apparently not attending the Allen & Co. media conference.
Silicon Alley Insider reports that Apple’s FaceTime video calling feature coming on iPhone 4 will not tap into customers’ allotments of cellular minutes. Although the feature operates only over Wi-Fi for the time being, a FaceTime session can be initiated from within a phone call, leaving some observers wondering whether the phone connection would be maintained in the background as a fallback in case the video call fails, but eating up cellular minutes while doing so.
“The voice call ends as soon as the FaceTime call connects,” Apple tells us. “The FaceTime call is over Wi-Fi so does not use carrier minutes.”
Apple CEO Steve Jobs noted during his introduction of iPhone 4 and FaceTime at the company’s Worldwide Developers Conference earlier this month that the company will be working with carriers to allow FaceTime over cellular networks but that it will remain Wi-Fi-only at least through the end of the year.
Once the feature does go live on cellular networks, today’s report points out that Apple and service providers will have to determine whether FaceTime sessions are billed as minutes, data, or both, or even a completely new category of consumption.
Just one day after beginning to accept pre-orders, the iPhone 4 seems to be a huge success. While Apple and AT&T server problems and a quick sellout of the iPhone 4 have suggested a huge response to the new device, we weren’t entirely sure if these problems were due to internal glitches and short supply rather than an actual increase of popularity.
But, as noted by Macerkopf.de, Germany’s Deutsche Telekom twitter account confirms that there was been a 10-fold increase in traffic on their website for the iPhone 4 launch as compared to last year’s iPhone 3GS launch. Also, in contrast, the AT&T’s allotment of iPhone 3GS pre-orders sold out in about 5 days compared to less than 1 day this time.
All of the evidence of strong demand is grabbing the attention of Wall Street analysts as well, with Fortune reporting that Piper Jaffray analyst Gene Munster has raised his estimate for iPhone sales for the current quarter from 8.5 million to 9.5 million. Munster’s increased estimate comes despite the fact that the iPhone 4 will only actually be available for the final six days of the quarter and with new pre-orders already being pushed into next quarter.
Update: As noted by Silicon Alley Insider, AT&T is also claiming a ten-fold increase in pre-orders over the iPhone 3GS.
iPhone 4 pre-order sales yesterday were 10-times higher than the first day of pre-ordering for the iPhone 3G S last year. Consumers are clearly excited about iPhone 4, AT&T’s more affordable data plans and our early upgrade pricing.
Given this unprecedented demand and our current expectations for our iPhone 4 inventory levels when the device is available June 24, we’re suspending pre-ordering today in order to fulfill the orders we’ve already received.
The availability of additional inventory will determine if we can resume taking pre-orders.