Why Android Pay isn’t really about payments at all

PYMNTS.com wrote about why Android Pay isn’t really about payments at all.

Which means that it has a huge fragmentation problem staring it right in the face – a huge obstacle when trying to replicate an Apple-like strategy.

At its launch, Google announced that Android Pay would be supported on devices running KitKat and higher. That’s roughly 44 percent of Android enabled devices, and none of those that operate a forked version of Android, like the Amazon Fire phone, for instance or Samsung’s Tizen.

Device fragmentation. Android’s familiar foe.

In the U.S., as of March 2015, comScore says that 187 million people own smartphones.

Android has a 52.4 percent of that market – so some 97 million phones run the Android operating system.

That actually beats Apple by a whole lot – like 17 million.

But only 44 percent of those handsets run a version of KitKat and higher. Less than 5 percent run Lollipop, its most current version.

That reduces the number of phones with KitKat or higher to roughly 42 million phones.

A rough guesstimate of how many of those 42 million are NFC enabled – and therefore ready to rock it with Android Pay – is 6 million. (In 2013, 18 percent of all handsets shipped were NFC enabled – and 80 percent of those were Android. So, 18 percent of 42 million and then 80 percent of that number is 6 million.)

How does Apple fare then?

Kantar’s latest reports say that 18 percent of the 80 million iPhones in the U.S. are 6’s – that’s 14.4 million phones ready and able to enable Apple Pay. That doesn’t translate to Apple Pay usage, we estimate the number of active users to be ~600k – but simply estimates the size of the addressable market for Apple Pay.

That means that out of the gate, Google Android Pay has about half (57 percent) of the addressable market that Apple Pay has.

But being able to use a particular payment mode doesn’t translate to actual spending power. So let’s look at spending power analysis.

According to Pew’s latest study of smartphone demographics- which was done before the iPhone 6 was released – and before all of the stats about Apple’s ability to attract “switchers” were too – the differences were stark.

  • 31 percent of adults earning more than $75k owned a phone running an Android operating system, compared to 40 percent with Apple phones;
  • 28 percent of adults earning under $30k own Android phones, compared to 18 percent with Apple phones;
  • 29 percent of Android users are college educated, compared with 38 percent of Apple phone owners;

All of which suggests strongly that the commerce advantage goes to Apple.

Not only are there more Apple users in the upper income categories but more of them are concentrated in their peak spending years. In fact, we estimated a year or so ago, that roughly 66 percent of retail spend in the U.S. is driven by those who own iPhones.

So what drives Google to push for Android Pay then?

A New York Times article last week extracted data from a Goldman Sachs report on Google’s search revenue challenges. In it, it was reported that this year – 2015 – Google’s ad revenue will be split 58/23 desktop to mobile. In 2016, that’s expected to adjust further to 54/27. It isn’t hard to imagine that by 2020, those numbers will not only flip as “mobile” expands to become wearables, cars and a collection of other connected devices that consumers own and use but change entirely as search becomes less about using search engines and more about consumers using apps to find the things they want to buy.

That detail suddenly becomes pretty important since mobile ad revenue, on a good day, clocks in at a lot less than desktop revenues. More mobile search means less search revenue even if volume is increasing. All you have to do is review Google’s last couple of years of earnings reports to see the impact that it’s already having on its revenue.

The shift to mobile search poses a bigger threat when you look at the sources of these searches:

Approximately 75 percent of Google’s mobile search revenue is the result of people using iPhones and iPads to find things on their path to purchase. A search initiated via Safari is actually powered by Google.

I see it as a matter of when, not if, that Apple would replace the default search in Safari with another search engine, such as DuckDuckGo.

Why is Android still the second platform developers work on?

Droid Life reported on why Android is still the second platform developers work on.

Despite his love for Android, he and Martin were hesitant to launch on Android first:

“Everything we’ve read, every number we’ve seen shows that it’s really difficult to get people to pay for apps on Android. We didn’t think we could release a paid app on Android and create something sustainable enough to fund further development.”

But the bigger issue is getting the app to work on Android.

Dave Feldman, co-founder of Emu, a third party messaging app, actually bucked the trend of iOS first and launched Emu on Android in late 2012. By April of 2014 Emu was pulled from the Play Store and launched on iOS. Developing Emu for Android hit a lot of issues working with SMS/MMS, dealing with Eclipse, and, of course, device fragmentation.

Feldman told TechCrunch, “We were finding Android in general to be a slower platform to move on. There’s more time spent dealing with fragmentation bugs. There’s more time spent dealing with testing and debugging, and we would rather spend that time building new functionality.”

According to Feldman issues they faced with fragmentation were particularly perplexing:

“On a Galaxy S4 with Samsung’s Multi-Window feature enabled, Emu’s popup windows are squished by the keyboard. This doesn’t happen on the Galaxy S4 sold by Google, without Samsung’s software modifications; or with the Multi-Window feature on the Galaxy S3. We’ve investigated, but because it relates to Samsung-specific functionality, we probably can’t fix it without direct cooperation from them.”

“On some Galaxy Nexus phones, when you’re listening to Pandora and get a notification sound from Emu, Pandora’s volume drops. This doesn’t happen with other apps’ notifications, nor does it happen with streaming apps other than Pandora, nor does it happen on any other device.”

In other words, Android users are less willing to pay for apps and device fragmentation remains a big issue.

Google eavesdropping tool installed on computers without permission

The Guardian reported on Google’s eavesdropping tool installed without permission.

“Without consent, Google’s code had downloaded a black box of code that – according to itself – had turned on the microphone and was actively listening to your room,” said Rick Falkvinge, the Pirate party founder, in a blog post. “Which means that your computer had been stealth configured to send what was being said in your room to somebody else, to a private company in another country, without your consent or knowledge, an audio transmission triggered by … an unknown and unverifiable set of conditions.”

Google claims it is an opt-in, but it turns out to be an opt-out.

Falkvinge countered Google’s explanations saying: “The default install will still wiretap your room without your consent, unless you opt out, and more importantly, know that you need to opt out, which is nowhere a reasonable requirement.” He says a hardware switch to disable the microphone and camera built into most computers is needed.

One more reason not to use Chrome.

Apple versus Google

Om Malik wrote on The New Yorker about Apple versus Google.

Earlier this month, talking to an audience at an event organized by EPIC, a not-for-profit civil rights and privacy group, the Apple C.E.O. Tim Cook said:

I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information. They’re gobbling up everything they can learn about you and trying to monetize it. We think that’s wrong. And it’s not the kind of company that Apple wants to be. We believe the customer should be in control of their own information. You might like these so-called free services, but we don’t think they’re worth having your e-mail, your search history and now even your family photos data mined and sold off for god knows what advertising purpose. And we think some day, customers will see this for what it is.

Given the timing of the speech, just a couple of days after the launch of Google Photos, Cook was clearly criticizing his rivals in Mountain View. His statement shows an attitude that sharply contrasts with the one demonstrated by the Google vice-president Bradley Horowitz in response to a question about whether Google will mine personal photos for other things:

The information gleaned from analyzing these photos does not travel outside of this product—not today. But if I thought we could return immense value to the users based on this data I’m sure we would consider doing that. For instance, if it were possible for Google Photos to figure out that I have a Tesla, and Tesla wanted to alert me to a recall, that would be a service that we would consider offering, with appropriate controls and disclosure to the user.

How do the philosophies work in practice?

Google’s cloud-first approach:

For Google, Android—the operating system it built, which now powers a majority of the world’s mobile phones—is a means to an end. It’s a way to push Google’s various services deeper into our lives, collect as much data as possible, and then build intelligent and automatic experiences. Google Now—an algorithmic personal assistant—is an outcome of this approach. In order for the service to work, the company needs to send all the information it can gather to the cloud. Or, to put it more directly, the company must put all of your information inside Google’s gigantic server farms. Google then uses all of this data to make Google Now more personal and perceptive. If you’re texting a friend about dinner, Google will give you restaurant reviews and directions automatically. In the future, it might make a reservation and call a driverless car. The more repetitive you are in your behavior, the more the algorithms learn to automate things for you. Google’s approach has its benefits—the company’s products are free, and you can be fairly confident they won’t break. The cost is in your data, privacy, and lack of control. Someday, Google will want to make money from all these experiences, either through advertising or through transactions that are hyper-tailored to you.

Apple’s device-first focus:

Apple’s approach is entirely different. For them, future personalization will be done by using information already on a device. When you search your iPhone, the company’s new Proactive Agent will quickly find content inside the apps on the device and bring it to the forefront. Imagine that you’ve organized a trip on an app such as TripIt, booked flights on United Airlines, and made hotel reservations. The travel plans will be synchronized with your calendar, but you will also get alerts on when to leave for the airport (depending on traffic conditions) and what route to take. When you arrive, your phone will show you your boarding pass. Any flight delays should automatically show up as well. If you like to read certain magazines on the plane, maybe the phone will download them for you in advance. It learns your habits. Plug in your headphones and you’ll get music recommendations based on your location.

Why not Google.

Why not Google

Marco Arment wrote about Google.

We agree on the broad strokes, but the reason I choose to minimize Google’s access to me is that my balance of utility versus ethical comfort is different. Both companies do have flaws, but they’re different flaws, and I tolerate them differently:

  • Apple is always arrogant, controlling, and inflexible, and sometimes stingy.
  • Google is always creepy, entitled, and overreaching, and sometimes oblivious.

Exactly why I have been moving way from Google services too. DuckDuckGo instead of Google Search, Safari instead of Chrome, FastMail instead of Gmail.

6 reasons to get excited about OS X El Capitan

Jason Snell wrote on MacWorld about 6 reasons to get excited about OS X El Capitan.

These improvements are on the top of my list of things to look forward to as well.

Spotlight – Cmd + Space is probably the key stroke combination that I use most often daily. I use Spotlight for tasks such as launching applications, finding folders and files, searching for snippets of text and code, making dictionary searches, and doing calculations and unit conversions. Really looking forward to natural language input. One feature I would like to see is the ability to add calendar events and reminders from Spotlight, like how Fantastical 2.

Notes – Great improvements to the app. Evernote has unfortunately stagnated and while I still use it as my primary note-taking app, I would gladly switch to Notes if it improves on how I can organise my notes and allow me to type in plain text so that I can easily use Markdown.

Safari – Pinned sites and muting sounds from tabs easily. Enough said.

Mail – The new swipe features brings me one step closer to finally stop missing Sparrow, which Google bought and killed. I tried Airmail and Mailbox. I like both but they don’t fit my workflow, and I have used Mail as my sole email app since OS X Yosemite.

Photos – I still swear by Lightroom. El Capitan might just push me to moving my massive catalogues to Photos. Or maybe not.

IMAX’s absurd attempt to censor Ars Technica

Are Technica reported on IMAX’s absurd attempt to censor it.

On June 16, Ars Technica was contacted by IMAX Corporation. The company said our story required a retraction because it included a brief reference to IMAX—included without IMAX’s permission. “Any unauthorized use of our trademark is expressly forbidden,” IMAX’s Deputy General Counsel G. Mary Ruby wrote in a letter (PDF).

The letter is surprising in several ways. First of all, the article isn’t about IMAX. The single reference to IMAX in the story is a quote from Alex Schwartz, a game designer interviewed by Machkovech. Schwartz predicted that SteamVR could take off with consumers despite the fact that the room-sized system takes up a lot of space. “It’s like saying, ‘I have an IMAX theater in my house,’” he told Machkovech. “It’s so much better that we can get away with a cumbersome setup.”

Ridiculous.

IMAX’s letter is part of a disturbing trend in which some companies believe that owning a trademark actually allows them to control any speech about their product. Too many examples abound already of trademark owners that believe they’re entitled to control how movies and TV shows portray their brand. IMAX has taken that to the next level here, believing it is entitled to literally silence someone speaking to a journalist because the name of a corporation happened to slip out of his mouth.

IMAX issued an apology but it should never have had to in the first place.

Trevor Bauer tweets from his iPhone in a Samsung PR move

Dave Mark wrote on The Loop about Trevor Bauer in a Samsung prank.

Enter Samsung fan (maybe) Trevor Bauer, pitcher for those same Cleveland Indians. He got hold of another milestone ball, the first hit for rookie Francisco Lindor. Bauer squirreled away the ball and sent out this ransom tweet:

https://twitter.com/BauerOutage/status/610232346885799936

So much for originality.

How the iPhone crippled BlackBerry

WSJ reported on how the iPhone crippled BlackBerry.

If the iPhone gained traction, RIM’s senior executives believed, it would be with consumers who cared more about YouTube and other Internet escapes than efficiency and security. RIM’s core business customers valued BlackBerry’s secure and efficient communication systems. Offering mobile access to broader Internet content, says Mr. Conlee, “was not a space where we parked our business.”

The iPhone’s popularity with consumers was illogical to rivals such as RIM, Nokia Corp. and Motorola Inc. The phone’s battery lasted less than eight hours, it operated on an older, slower second-generation network, and, as Mr. Lazaridis predicted, music, video and other downloads strained AT&T’s network. RIM now faced an adversary it didn’t understand.

“By all rights the product should have failed, but it did not,” said David Yach, RIM’s chief technology officer. To Mr. Yach and other senior RIM executives, Apple changed the competitive landscape by shifting the raison d’être of smartphones from something that was functional to a product that was beautiful.

“I learned that beauty matters….RIM was caught incredulous that people wanted to buy this thing,” Mr. Yach says.

Many companies do not realise that consumers care about the aesthetics of a product. If you show that you care about what you make for your consumers, your customers will care about what you make.

How NSA and allies exploit Google and Samsung app stores

Ars Technica reported on how the NSA and allies exploited Google and Samsung’s app stores.

In 2011 and 2012, the NSA and the communications intelligence agencies of its “Five Eyes” allies developed and tested a set of add-ons to their shared Internet surveillance capability that could identify and target communications between mobile devices and popular mobile app stores—including those of Google and Samsung. According to an NSA document published by the Canadian Broadcasting Corporation, the targeting capability could have been used to launch “man-in-the-middle” attacks on mobile app downloads, allowing the NSA and other agencies to install code on targeted devices and gather intelligence on their users.

Apple’s App Store is conspicuously missing.