Microsoft’s Quarterly Profit Falls Below Apple’s for First Time in 20 Years

Microsoft reported a smaller quarterly profit than Apple for the first time in 20 years as the iPad ate into sales of laptop computers.

’s net income for the quarter was $5.2 billion compared to Apple’s $5.99 billion. According to Bloomberg, that’s the first time in 20 years that Apple’s quarterly profit eclipsed Microsoft’s. The milestone comes after Apple passed Microsoft in market capitalization last year.

Pat Becker, Jr., principal of Becker Capital Management, says there’s “no doubt” that the iPad is cannibalizing laptop sales, at Microsoft’s expense. Along those lines, revenues in its Windows segment fell 4.4% to $4.5 billion, which was “in line with the PC trends,” according to a statement from the company. Microsoft is banking on Windows 8, which is likely to appear in beta form this summer and hit the mass market in 2012, to revive consumer PC sales.

Happily for Microsoft, other divisions of the company are doing better. Revenues for the company’s Business Division grew 21% year over year. “The enterprise has been doing a refresh and upgrade and Microsoft’s been riding that wave,” Becker says. The Entertainment & Devices Division also grew its revenues 60% year-over-year thanks to the successful introduction of Kinect for Xbox 360 and continued strong sales for Xbox 360.

Android Nabs Third Of Smartphone Market, BlackBerry Plummets

Google’s Android now holds more than a third of the U.S. smartphone market share, eclipsing both RIM’s BlackBerry OS and Apple’s iOS with a growing lead, comScore reports.

Measuring more than 30,000 U.S. mobile subscribers through its MobiLens service from December 2010 to March 2011, ComScore found that Android now holds 34.7% — a solid increase from 31.2% in January, which was when Android jumped ahead of RIM as the top smartphone platform in the U.S. for the first time.

Apple held its own, growing from 25% in December 2010 to 25.5% in March 2011. It seems most of Android’s growth was at the expense of RIM, which dropped from 31.6% to 27.1% in that same period.

Microsoft and Palm, which hold the fourth and the fifth place on the list, also lost a fair share of subscribers, dropping to 7.5% and 2.8%, respectively.

On the mobile equipment manufacturer front, very little has changed. Motorola dropped from 16.7% to 15.8% from December 2010 to March 2011, and the only company that experienced significant growth in this period was Apple, which grew from 6.8% to 7.9%, largely due to the iPhone launching on Verizon in February.

Smartphone Sales Up 85% Year-Over-Year

Gartner’s mobile market report says 428 million mobile devices were sold in the first quarter of 2011, representing a 19% increase year-over-year. A lot of that growth is due to smartphone sales, which were at 100.7 million, a 85% year-over-year increase.

The big winner in this quarter was Android, which soared past Symbian to capture 36% of the market. Nokia’s Symbian is in second place with 27.4%, followed by Apple’s iOS with 16.8%, RIM’s BlackBerry with 12.9% and Microsoft’s Windows Phone 7 with 3.6%.

For comparison, at the end of 2010, Android and Symbian’s roles were nearly reversed, with Symbian holding 37.4% of the market and Android being far behind with 22.7%.

Recently, Gartner predicted that worldwide smartphone sales will reach 468 million units in 2011, with Android taking 38.5% of the smartphone market. With Windows Phone 7-based Nokias still being far on the horizon and iOS growing steadily but not as explosively as Android, Gartner’s prediction sounds about right (and perhaps even too conservative as far as Android growth goes).

Men’s Lifestyle Publication Thrillist Hits the iPad

Thrillist, a lifestyle and product-focused e-mail newsletter for men that has since expanded to the web and smartphones, has stepped further into the mobile space with the release of its first iPad app.

Unlike Thrillist’s apps for iPhone [iTunes link] and Android devices, which are designed for on-the-go discovery of stores and venues, the iPad app [iTunes link] is designed to accommodate a more leisurely reading experience. Users can rotate a wheel at the top to explore content by recency, popularity and proximity, and by experience (eat, drink or shop). A carousel of thumbnails at the bottom enables users to explore all of the venues in a given category.

The app’s primary goal is to encourage people to keep browsing, says Chris Steib, Thrillist’s director of product development, noting that it’s difficult to keep people moving laterally on a website. The site is not currently optimized for mobile devices, and although it lays out well in the iPad’s Safari browser, navigation is comparatively slow and laborious. (Steib says about 2% of traffic to comes from the iPad currently.)

In addition to browsing, users can opt to bookmark, share (via e-mail, Facebook and Twitter), pull up images and, where available, play video at the top of each listing. They can also click on the “Show History” button on the bottom right to pull up a venue they forgot to clip earlier.

Design-wise, it’s not the most beautiful iPad app we’ve seen — we wish multimedia was formatted in-line with the text, and otherwise more closely resembled a digital magazine — but it certainly does allow for a seamless browsing experience.

eBay Takes Local Shopping Mobile

Now that the PlayStation Network is back online, Sony is ready to launch the next phase of its Music Unlimited Powered by Qriocity service, an Android app.

Sony introduced its Music Unlimited streaming service to parts of Europe in December 2010. In February, the company expanded its reach to the U.S., Australia and New Zealand.

The service, which competes with similar offerings from Rhapsody, MOG, Rdio and Spotify, allows users to stream music albums on Sony devices such as TVs, Blu-ray players, the PlayStation3 and the PSP.

Because Qriocity is part of the PlayStation Network, the Music Unlimited offering was shuttered along with the the rest of the online game network after hackers broke into the servers and gained access to millions of user accounts and passwords.

The new Android app works on Sony Ericsson Android devices, including the Xperia Play, as well as third-party Android devices running Android 2.1, 2.2 or 2.3.

We decided to try out the new app on our HTC Sensation 4G review unit.

As with Rdio and Spotify, Sony is using software that will scan a user’s computer and automatically add those songs and albums to his or her online library. Apple will do something similar with iCloud, except iCloud will offer unencrypted versions of those files.

Music Unlimited’s distinguishing feature is its use of Channels. These are pre-programmed and personalized radio stations. This is, in effect, Pandora meets Rhapsody. We like the Channels approach, but most users will probably be more interested in on-demand track and album access.

The app performed well, though we did find it could be slow to load. The user interface is a solid experience, but it’s incredibly easy to accidentally start playing a song when all we really want to do is get a track listing for an album. This can get frustrating — fast.

Sony’s library of 7 million songs is impressive, but it doesn’t match the broader libraries of some of the other streaming services. Moreover, at this time, there is no offline listening support, at least not one that we could find.

Like most other mobile subscription apps, Music Unlimited does not allow users to edit or create their own playlists from within the app itself. Instead, playlist control has to take place on the web. This is disappointing. We hope Sony takes a cue from Spotify and offers playlist management on your mobile device.

Music Unlimited isn’t a bad offering, and the Android app is well designed. Still, we can’t help but wonder how many users will be willing to trust Sony with their credit card information. Premium service costs $9.99 per month, while the basic version costs $3.99.

4 Rules of Engagement for Mobile Marketing

Smartphones, the most powerful data-collection tools ever created, don’t just tell brands what consumers want but where consumers are. Sometimes they even tell brands what consumers are doing at different times of the day.

Location, activity and time are a powerful combination, however, many companies, in a rush to seize a toehold in the exploding mobile market, mistakenly focus on the technology instead of the people using it.

Their messages lack relevancy and consumers filter them out the mobile equivalent of telemarketing. To be relevant to consumers, and to slip past the filter, companies must shift their approach to mobile marketing.

Consumers no longer passively participate in campaigns. Instead, they respond in real time, influencing both the scope and direction of promotions. It’s a two-way conversation. It’s not enough to release a sparkly new mobile app. Innovative applications are important, of course, but brands have to do more.

Brands have to motivate people to act by designing campaigns as dynamic and flexible as the mobile market, which now includes search, social, video, music, gaming, payments, retail transactions, location-based services and augmented reality.

Brands need a deep understanding of how mobile apps can drive views, downloads and checkins, and how to schedule specific calls-to-action around release dates, product trials and related campaigns, both on and offline.

Brands need real-time information monitoring from mobile apps and social media to get a broad perspective. They also need to zoom down to ground level, tailoring the user experience on an individual level.

Further, brands must build these new mobile capabilities atop a solid strategic foundation. Rather than developing a series of one-offs, brands should consider how their mobile applications integrate with the mobile web.

The iPhone 5 Rumor Mill Kicks Into High Gear

Now that Apple has unveiled iOS 5, the media frenzy surrounding the next version of the iPhone is back with a vengeance.

We’ve written extensively about the yet-to-be-announced device already (proof here, here, here, here, here and here), but we’re not the only ones. There’s a cult-like fascination with Apple product rumors, and that fascination turns into an obsession when it comes to iPhones.
This week’s flurry of iPhone rumors started with a Boy Genius Report story claiming that the iPhone 5 will be a radical departure from the iPhone 4. BGR‘s source told the publication to “expect a radical new case design for the upcoming iPhone” and that an event to announce the device could come in August.

This report is a departure from the intelligence we’ve gathered thus far on the device. We’ve been told to expect something that looks similar to the iPhone 4 but faster (thanks to the Apple A5 processor) and with a better camera. We’re not the only media outlet that was skeptical of BGR‘s report.

It didn’t take long until Bloomberg decided to publish a report of its own on the iPhone 5, complete with its own set of anonymous source. According to its sources, the iPhone 5 will be introduced in September, have an 8-megapixel camera and include the A5 processor. Bloomberg says that the September release date is meant to coincide with the release of iOS 5.

To put the cherry on top though, Bloomberg also added some juicy tidbits about the iPad 3. Specifically, the news outlet reports that the next-generation tablet will have a one-third higher screen resolution and a “more responsive touchscreen.” Bloomberg also resurfaced old rumors of a cheaper version of the iPhone.

While we think Bloomberg‘s report is accurate, we want to stress this point: Only Steve Jobs knows what Apple is planning to do next. Besides, these reports fail to address rumors about the next iPhone having a brushed metal back, NFC technology or a wider screen. We’re much more interested in finding out more about