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Android’s Dirty Secret: Shipping Numbers Are Strong But Returns Are 30-40%

Posted: 26 Jul 2011 03:16 AM PDT

It’s generally accepted that, on the aggregate, Android device sales will far outpace iOS sales year after year. However, there’s a dirty little secret about Android devices that most manufacturers are facing: the return rate on some Android devices is between 30 and 40 percent, in comparison to the iPhone 4′s 1.7% return rate as of Antennagate in 2010.

As we learned yesterday, Samsung is selling 18 to 21 million phones this quarter. Although all of those won’t be Android phones – Samsung manufactures Bada phones as well for the low-end. We do know for sure that the Galaxy S II sold 3 million in 55 days, a strong showing.

However, on the ground, many return rates are approaching 40% said a person familiar with handset sales for multiple manufacturers. Why? Well, as Matt noted, consumer understanding of the platform and handset availability is massively bifurcated.

For us nerds, Android makes a lot of sense. It’s ostensibly open platform (but not really) that offers far more flexibility to the programmer, carrier, and, ideally, the user.

For the “average” phone user, however, Android is a maze. Anecdotally, I’ve heard of multiple examples of folks who bought an Android phone in order to “Think Different” and came away disappointed when faced with the glaring differences between Android and a friend’s iPhone or Blackberry.

Sure, the Android hardware ecosystem is more variegated and expansive and sure, Android is free for carriers to implement (in general) but clearly it’s the little differences that are driving sales and, more important, returns.

Google On The Nortel Loss, Patents As Government-Granted Monopolies, And Plates Of Spaghetti

Posted: 25 Jul 2011 05:29 PM PDT

Back in early April, Kent Walker, Google’s Senior Vice President & General Counsel, wrote a post on the Google blog titled “Patents and innovation“. The reason behind the post was clear: Google was feeling the pressure in the patent space after multiple attacks against them and their partners. And now they were going to do something about it.

In his post, Walker noted that Google had laid down the initial “stalking-horse” bid for over 6,000 patents that were up for sale due to the Nortel bankruptcy. “If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community—which is integrally involved in projects like Android and Chrome—continue to innovate,” Walker wrote.

The only problem was that Google wasn’t successful in the bidding. In fact, you could argue that the worst-case scenario happened to them. Instead of Google winning the patents, most of their chief rivals did, including Apple, Microsoft, RIM, and others. Ouch.

The following day, Walker issued a formal statement on the matter, calling the outcome “disappointing“. It obviously was, but as I noted in my post on the matter, I would have liked to hear more on the matter from Google. They wanted the press to know they were upset, but they didn’t want to speak on-the-record about it. Well, now they are.

I spoke with Walker earlier today about the Nortel case, as well as the patent situation in general.

Walker kicked things off by noting how vital it was that sites like ours cover the patent issues, because startups, entrepreneurs, and venture capitals all stand to lose if things don’t change. “We have the resources to fight,” Walker says of Google, but says that innovation itself is in danger.

“It looks like plates of spaghetti,” Walker says of the current patent situation, noting the everyone is suing everyone else. “This is new in the Valley. This has happened in the past 15 years or so. Now it’s a mess,” he says.

“A patent isn’t innovation. It’s the right to block someone else from innovating,” he continues. This is something Walker brings up again and again in our talk. Clearly, he thinks that patents, at least the way they’re being enforced right now, are a bit of a joke.

Speaking of jokes, I asked Walker about the reports that Google had bid mathematical constants (like “Pi”, for example) during some of the earlier rounds of the Nortel bidding. This led some, including myself, to wonder if Google was actually taking the auction seriously?

“No one bids that kind of money without taking things seriously,” Walker says. “We think of this situation as a very serious one. There have been questions about our bidding strategy. We did have one,” he continues.

“That said, the numbers being talked about were dwarfed by the amount finally bid. It’s all kind of moot,” he says.

“Of all the prior Nortel auctions [there were a few before the patents Google bid on], never had any of those gone for more than twice the stalking-horse bid. This went for five times as much,” Walker says. “It was the biggest patents sale in the history of the world.”

Along those lines, I asked if Google made a strategic blunder when they put down the initial $900 million bid, since many assumed the entire portfolio wouldn’t garner more than $800 million when all was said and done?Perhaps this big bid emboldened Google’s rivals?

“No, I don’t think so,” Walker responds, noting that the rivals likely had their strategies set as well. While he wouldn’t give specific numbers, he said Google had a number in their head for how high they were willing to go to get these patents. This is something that Google CEO Larry Page implied during their earnings call a couple weeks ago as well.

“We buy companies all the time — for both people and interesting technologies. This would have been north of $4 billion for none of those things. We were bidding on the right to stop people from innovating,” Walker says.

“You have to have the discipline not to overbid,” Walker continues. “Are there other opportunities out there? Of course,” he says, noting that Google is looking at all of them, but refusing to name specific opportunities. Rumors have pegged InterDigital as the next Google/Apple patent fight.

Or perhaps even Motorola patents will be on the table, as other reports have suggested. Following the massive Nortel result, unsurprisingly, a lot of opportunities are being put on the market now, Walker notes.

When I ask about the reports that Apple teamed up with Rockstar Bidco in the Nortel auction, effectively staking them, and leading to the win, Walker declines to talk about specifics of the auction itself, citing the NDA all parties had to sign. But at a high level, he says that Google knew there would be opportunities and risks for partnerships as a part of this auction (it has also been reported that Google teamed up with Intel for the final run).

I then ask Walker about the court situation. After the loss, Google seemed to imply that the courts may get involved to change the outcome by adding terms to it. Instead, the deal was approved by the Canadian and a joint U.S./Canadian court in just 10 days.

Walker says that there’s an important difference between court approvals and something like the Department of Justice getting involved. The court approvals essentially just said that the terms were beneficial for Nortel — and at $4 billion+, how could they not rule that, Walker jokes. (The Canadian courts also did more generally approve the deal, saying that it wouldn’t stifle competition.)

“The separate question is whether regulators from an antitrust perspective will engage,” Walker says. He declined to go any further than that, but it seems like a fair assumption that this is still very much a possibility. The deal is not fully closed yet.

“The great news is that there’s lots of interesting options out there. Lots of people with lots of patents out there,” Walker says, moving the conversation beyond the Nortel situation, to the broader issue.

Walker says that several times in history, even in the tech space, we’ve seen patent issues flare up and then settle down. In the microprocessor industry and the OEM industry, for example. “They settle into mutual assured destruction,” he says. “These fights are an arduous and expensive way to do it,” he says, implying that eventually, they’ll get there too.

“Patents are government-granted monopolies,” Walker then says quite matter-of-factly. “We have them to reward innovation, but that’s not happening here,” he says.

When I ask about Microsoft’s pressuring of Android OEM partners to sign licensing agreements, and the notion that Android really isn’t free, you have to pay Microsoft to use their patents, Walker declines to talk about Microsoft specifically.

But generally, he says that “it’s one thing to claim to have patents, it’s another for them to actually be valid patents.” “We have a number of partners. Samsung has 30,000 patents, I believe. Motorola has thousands more,” Walker notes, implying that they can fend for themselves even without Google having a ton of patents to help them.

We then turn to Intellectual Ventures, which has been in the news a lot in recent days as perhaps the best example of patent “trolling”.  Again, Walker doesn’t want to talk about them specifically, but says that generally, “it’s a sign of the challenges with the patent system.”

“When you see a lot of VC money flowing into the acquisition and holding of patents, it’s a problem. These are not companies doing new things, they’re buying them. You see hundreds of millions and billions of dollars flowing in to exploit others,” he says.

“An average patent examiner gets 15 to 20 hours per patent to see if it’s valid. It can take years to go back and correct mistakes,” Walker says more broadly. “It has become a kind of lottery.”

All of the above situations show the problem with the entire system, in Walker’s view. At the highest level, “patents are not encouraging innovation,” he says.

Still, Walker still realizes this is the battle Google must fight right now. So the hunt continues for some nuclear warheads to build towards mutual assured destruction, and eventually détente.

[image: flickr/sikachu]

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Boot To Gecko: Mozilla’s Open-Source, Mobile Answer To ChromeOS

Posted: 25 Jul 2011 02:35 PM PDT

Straight from the heart of Mozilla's developer newsgroup comes news of an ambitious new project: a standalone, web-based operating system. If that concept sounds familiar, I've also just described the core of Google's Chrome OS which we're beginning to see pop up on netbooks. The big twist?

It's currently being developed for mobile devices. And it's partially Android-based.

According to Dr. Andreas Gal, researcher at Mozilla, the impetus behind the Boot to Gecko project is to "make open web technologies a better basis for future applications on mobile and desktop alike". A lofty goal to be sure, as the core underpinnings would ultimately extend beyond just mobile devices. Should Gal and his colleagues (and really anyone who wants to help) succeed, Boot to Gecko would have the potential to change how we interact with the web, regardless of platform.

Gal breaks the process down into actionable steps. First, the Boot to Gecko project aims to take the primary functions of a mobile device (i.e. "Telephony, SMS, Camera, USB, Bluetooth, NFC") and create web APIs to handle them. From there, they intend to develop a way for web pages and applications to safely access those components as needed. They hope that by doing this, they (and other intrepid developers) will be able to create native-grade apps that run directly on the web instead of only being available on certain devices.

As I've mentioned, the open-source project is based partially off of Android — nothing terribly high-level though, just the kernel and the drivers so as to ensure that whatever progress they make can actually boot. It also doesn't hurt that Android works (and in many case, has been made to work) on plenty of different hardware configurations, which is exactly what they need to see if the concept pans out. As it stands, development is in such a nascent stage that we have no idea what to expect visually, so no images yet folks.

Personally speaking, this idea has me on the edge of my seat. It will take a lot of work, and a lot of time, and there's no guarantee that we'll ever see a complete release. That's the funny part though: I don't think it really matters. If all they ever did was finish the API for telephony and SMS messaging, that would still signal a tremendous shift in how we use the web. Boot to Gecko will inevitably draw comparisons to ChromeOS (and I was guilty of this just a few paragraphs ago), but we stand to gain a much richer online experience if B2G comes to be. Only time will tell if these gentlemen succeed, but we'll be certain to keep you up to date during the ride.

Apple Releases Another Security Update With iOS 4.3.5

Posted: 25 Jul 2011 12:11 PM PDT

Apple’s none too fond of nasty security flaws lurking about in iOS, and they’re not above cracking out rapid-fire updates to prove it. Just 10 days after the release of iOS 4.3.4 (which existed almost solely to kill off a potentially nasty PDF exploit), they’re back with another one: iOS 4.3.5.

The main fix in this minor patch? A fix for a security flaw which might allow “attacker with a privileged network position may capture or modify data in sessions protected by SSL/TLS”. In other words, hackers on the same network could store or change traffic that would otherwise be rather intensely encrypted.

Unlike that last patch (which, due to the exploit patched, did away with the one-click-jailbreak site JailbreakMe), this one seems to have no affect on jailbreakers. According to Redmond Pie, the only jailbreak method that still worked with 4.3.4 (tethered redsn0w) still seems to get the job done here.

This one’s pretty hefty for a security patch, coming in at a whopping 666 megabytes. Once iOS 5 and its fancy over-the-air/delta updates (wherein only the stuff that has changed needs to be downloaded), these one-off security updates should be a whole lot less time consuming.

Anyone spot any new gems sneakin’ around in iOS 4.3.5? Be sure to drop a comment and let us know.

Hello! I’m Chris Velazco, and I’m TechCrunch’s New Mobile Writer

Posted: 25 Jul 2011 11:47 AM PDT

Man, this place looks different.

Before I get too lost poking around the new digs, I'd like to introduce myself — my name is Chris Velazco, and I'm joining the TechCrunch staff as your new mobile writer. Longtime readers may remember me as a hapless MobileCrunch intern from the days of yore, a position I only really landed because Greg happened to see me on television right after he read my application. Alas, though I learned tons and met some truly great people, I had scholastic obligations to deal with and stepped away last year.

I like to think my time away from the Crunch family was well spent: I picked up a few degrees in English and Marketing from Rutgers University, embarassed myself on Who Wants to Be a Millionaire, and popped up in a second Best Buy commercial. After all that, I was a bit … puzzled about what my next step would be, but when Greg offered me the chance to come back home I jumped at it. I have to say I'm truly very glad to be here doing what I love, and I'm looking forward to writing for (and learning from) all of you.

Feel free to drop me a line! I'm always available at christopherv [at] techcrunch [dot] com, and as @rocketlad on Twitter.

Sprint Intros First Phones With New CDMA Push-To-Talk Support

Posted: 25 Jul 2011 10:31 AM PDT

For Sprint, maintaining their aging iDEN network is proving to be more of a headache than it's worth. Even though their Nextel Direct Connect service still has footholds in certain markets (construction immediately springs to mind), their financial statements report a loss of 367,000 iDEN subscribers this past quarter. In spite of otherwise strong figures, it seems clear that iDEN is becoming more and more of a liability.

That would certainly explain their move to a new Sprint Direct Connect service running on CDMA that is poised to launch in Q4 of this year. It's touted as offering a significant boost in coverage and you'll finally be able to get some worthwhile performance and data speeds on a Sprint Direct Connect device. Of course, it wouldn't be much of a launch without some star-studded handsets, and Sprint aims to please! With, you know… rugged flip phones.

The Kyocera DuraMax and the Kyocera DuraCore are slated to be the first devices to take advantage of Sprint Direct Connect. While both are built to MIL-STD-810G standards, the higher-end DuraMax classes things up a bit with a 3.2 MP shooter, a stereo Bluetooth radio, and support for up to 32 GB of expandable memory. Meanwhile, the DuraCore has been designated the entry-level model and makes do with such advanced features as a speakerphone. Still, they're nothing if not utilitarian, and they'll certainly find their niche in the workforce. Interestingly, a Motorola smartphone is in the works, but details will be sparse until we inch closer to launch.

[Sprint, via PhoneScoop]

All AT&T Android Phones Released In 2011 Will Get Gingerbread

Posted: 25 Jul 2011 08:02 AM PDT

The HTC Status might be a sort-of-weird, kind-of-gimmicky (with its dedicated Facebook button and all) little piece of kit, but it’s got at least one thing going for it: it’s the only phone on AT&T running on the latest (phone-friendly) version of Android: v2.3, or “Gingerbread”. Not for long, though.

AT&T has just confirmed that all of the Android phones they released in 2011 will be getting the Gingerbread upgrade treatment.

The phones AT&T confirmed:

  • HTC Inspire 4G
  • LG Phoenix
  • Motorola Atrix 4G
  • Pantech Crossover
  • Samsung Captivate
  • Samsung Infuse 4G

That sure looks like all of AT&T’s 2011 Android line up so far, to me. Anyone spot anything that’s missing?

For those of you whose pre-2011 AT&T Android phones didn’t make the cut: keep your fingers crossed. AT&T also confirmed that the non-4G version of the Captivate (which was released in mid-2010) will be gettin’ the bumpgrade — so at the very least, there’s hope. If all else fails, root that thing and get some CyanogenMod-goodness all up inside it.

And as for when these updates are coming: ATRIX updates start today, Inspire 4G updates start within two weeks, and, beyond that, your guess is as good as ours. AT&T didn’t give any specific timeframes for the rest — which, to be honest, is probably for the best. Missed launch dates = ragey customers.

SamsungDive: Apple’s “Find My iPhone” Just Got A Rival

Posted: 25 Jul 2011 08:01 AM PDT

Back in the day, the worst part of losing a phone was re-inputting contact information and coughing up the dough for another handset. With today's smartphones, losing your phone is like losing everything. Not only is your very expensive piece of hardware gone, but your banking and credit card info, contacts, passwords, and social networking accounts are all up for grabs out in the world. It's horrifying.

Samsung feels our pain, and has thus introduced SamsungDive, which lets you track and remotely control your handset when lost or stolen. GPS provides the user with exact coordinates of the device, and the user can then choose to either lock the device or wipe it clean.

The only devices currently supported by SamsungDive are the Galaxy S II, the Galaxy S, the Samsung Wave, and both the Galaxy Tab 8.9 and 10.1 slates. The service is only available in the UK and Germany for now, but should roll out to other countries soon. It's a free service, but it won't do you any good unless you register before your device is lost or stolen.

[via Phone Arena]

The Astroclip Is An iPhone 4 Clip For Astrophotography

Posted: 25 Jul 2011 07:33 AM PDT

Amateur stargazers and peeping toms, this one is for you. The AstroClip promises to mount an iPhone 4 to any telescope with a 1.25-inch eyepiece for easy astrophotography. An iPhone 4 simply snaps into the injection molded case and then three set screws secures the case to most telescope eyepieces. This opens up all sorts of fun photography projects: shooting the moon and stars, the lady in the next building and so much more!

The project launched on Kickstarter last week and seems to be having a bit of trouble getting off the ground. This is the designer’s, Matthew Geyster, third Kickstarter project. His first project, Rustic Case for iPad and Kindle 3, was eventually funded, but his second, a dual-tipped capacitive stylus, didn’t raise enough funds. This time around Geyster is asking for a reasonable $15,000, which will cover all the costs while keeping the manufacturing in the US.


The minimum pledge is $1, but $25 comes with an AstroClip and worldwide shipping. Pledge $40 and Geyster will ship you a special edition red AstroClip along with a AstroClip t-shirt. The pledge levels continue up to $500 with each netting the backer more AstroClips. A telescope isn’t included at any level.

Say what you will about phones replacing conventional cameras. It’s happening as more and more accessory makers begin catering to that market. AstroClip is just one of the latest.

Similar mounts have been available for years; the idea isn’t anything new. But other mounts are generally expensive, specific for a certain camera, and require a sturdier telescope tripod depending on the weight of the attached camera. The AtroClip solves all those issues by working with the very popular and light iPhone 4. The project just needs a bit of kickstarting.

Intuit Launches QuickBooks Mobile App For Android

Posted: 25 Jul 2011 07:05 AM PDT

Intuit, the same company that brought you QuickBooks accounting software, has today announced the QuickBooks Mobile app for Android. Now, small businesses that use QuickBooks Pro, QuickBooks Premier and QuickBooks Online will have access to their data from their Android phone.

The app has already been made available to iOS users, but Android fans will now be able to get in on the amateur accounting action. Features include access to customer and sales info, as well as customer balances, the ability to create estimates on the fly and on-site invoicing. Information added to QuickBooks Mobile is automatically synced with QuickBooks.

“The majority of small and medium-sized business owners feel that staying connected through wireless devices is critical to the success of their business,” said VP and Financial Management Solutions boss Dan Wernikoff. “As the demand for mobile access continues to accelerate, we're working to give customers the solutions they need most so they can save time and make money."

The app is currently available in the App Store and Android Market for free to all QuickBooks online subscribers and is available to QuickBooks Pro and Premier customers through a subscription.



The HTC Status/Salsa Facebook Phone Lands In China As The HTC Weike Sina Weibo Phone

Posted: 25 Jul 2011 06:15 AM PDT

Facebook is the largest social networking site in, well, the world. But not in China. Facebook and Twitter are blocked by China’s Great Firewall. The micro-blogging service Sina Weibo is the whip in China. HTC knows its market and therefore slightly retooled the Status/Salsa for the China market. Gone is the Facebook logo and a Weibo burning eye logo is on the dedicated button instead.

The rest of the phone seems unchanged. It runs HTC Sense 2.1 on top of Gingerbread and a 800MHz CPU. There’s a 3.4-inch 480 x 320 screen, aluminum body and a 5MP camera. HTC just changed that one little button for the different market.

Of course there are some difference within the OS as the tight Facebook integration was replaced with an equally tight Weibo integration. The micro-blogging service is baked into many of the phone’s apps. Sure, the hardware is rebranded, but the phone is built for Sina Weibo. [SinaTech via MicGadget]

Samsung May Trounce Nokia Once And For All… Is Apple Next?

Posted: 25 Jul 2011 05:45 AM PDT

We've been saying for a while now that Samsung is primed and ready to dethrone Nokia from its nearly 15 year reign as the top smartphone maker in the world, and it would seem the moment is upon us. We can't say for sure, as Samsung hasn't released official numbers, but research firm Strategy Analytics told Bloomberg that Samsung's official sales numbers should fall between 18 million and 21 million units sold worldwide.

Should Samsung pull in upwards of 20.3 million units sold, the South Korea-based company will also trump Apple's quarterly iPhone sales. Samsung is expected to take a 20 percent market share, while Nokia's feature phone division has kept the Finnish phone maker out front with a 26 percent share.

"Samsung's Android portfolio is selling strongly in most regions," said Strategy Analytics analyst Neil Mawston. "Samsung stands a reasonable chance of capturing the top spot on a quarterly basis if it can continue expanding its Android portfolio across high-growth markets like China and Brazil. Samsung and Apple will be at similar levels in smartphones by the end of the year."

Samsung also makes and sells "dumb phones" that run Bada OS, which of course contributes to these impressive quarterly estimates. However, talk of Samsung's recent success can't go much further without mention of the Galaxy S II, which sold over 3 million units in its first 55 days. That's one Galaxy S II sold every 1.5 seconds. According to analysts, the S II actually doubled Samsung's mobile operating profit in the second quarter, and still has yet to launch in the U.S.

Samsung’s flagship (the SGSII) is expected to launch on American soil in August, while Apple is expected to debut the next iPhone in September. Both phones should heat up the race nicely, as the Android vs. iOS battle rages on.

[via Android Community]