March 29, 2024

Bits: How People Shopped Online This Holiday Season

Shoppers spent much more money online this year than last year, and they did a lot of their shopping on tablets like the iPad.David Paul Morris/Bloomberg NewsShoppers spent much more money online this year than last year, and they did a lot of their shopping on tablets like the iPad.

Little time remains for online shoppers to have gifts delivered in time for Christmas, and sales numbers for online shopping this season are arriving. The trends are clear: shoppers spent much more money online this year than last year, and they did a lot of their shopping on tablets like the iPad.

So far this holiday season, shoppers have spent $32 billion online, 15 percent more than last year, according to comScore. Last week was the heaviest online shopping week on record, and last weekend was the second-heaviest weekend. Though most sales from now to Christmas will take place in physical stores, some Web sites are still offering expedited shipping and online retailers will most likely sell another $5 billion to $6 billion in goods through the end of December, comScore said.

Gian Fulgoni, chairman of comScore and an e-commerce expert, called it “an outstanding season for online retailers.”

Shoppers are much more eager to use their mobile devices to browse and buy this year, though the evidence shows that they are more likely to use their phones for product research and turn to their tablets or computers when they are ready to buy.

Twelve percent of online visits to retailers’ Web sites came from mobile devices, up from 5 percent a year ago, according to IBM Benchmark, which tracks e-commerce. But just 9 percent of sales came from mobile phones.

While 79 percent of shoppers use their cellphones for research, just 58 percent have made purchases on their phones, according to TechBargains.com, a deal aggregation site. Meanwhile, 75 percent have made purchases on their tablets and 94 percent on their laptops.

Holiday sales at eBags.com show this behavior in action. Of the site’s total visits, 7 percent came from tablets and 5 percent from smartphones, but 7 percent of sales came from tablets while just 2 percent came from phones.

“Shopping via tablet picks up in the evenings, indicating consumers are coming home from work and turning on their iPads and shopping as they watch TV,” said Peter Cobb, co-founder and senior vice president of eBags.

But when deals hang in the balance and computers aren’t nearby, people are more than willing to turn to their phones and type their shipping address and credit card number on the tiny keyboard. Mobile commerce peaked at 10 p.m. on Cyber Monday, accounting for 20 percent of all retail traffic in the last two hours before online deals expired, according to Akamai, an Internet content delivery company.

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Phones and Tablets Getting Game Power In the Cloud

We can shop on our phones and read magazines on our tablets. But playing high-end video games on a mobile device has been out of the question.

That might be about to change.

OnLive, a Silicon Valley start-up, on Thursday plans to release software that will let people play the richest, most graphically intense games on Apple’s iPhone and iPad, as well as on Amazon’s Kindle Fire and other devices based on Google’s Android software. In the past, these games have been far beyond the relatively anemic computing power of such devices, requiring the horsepower of a PC or a console. But OnLive runs all of the games on its service entirely on powerful server computers in its data centers and delivers them over the Internet, through so-called cloud computing.

Other companies are trying to do the same thing, including Gaikai, a start-up based in Los Angeles. If they succeed, a shift to cloud gaming could have big implications for the incumbent powers in the video game business, mainly the console makers Sony, Microsoft and Nintendo. That is because running games in data centers means that consoles in the home can be far less powerful, relieving consumers of the need to buy a new generation of hardware in the future.

At the same time, moving gaming into the cloud could help push the boundaries of what cloud computing can do, even on relatively low-powered mobile devices.

Everything from FarmVille on Facebook to data backup services like Apple’s iCloud to Netflix’s streaming movie service are considered cloud applications. But playing high-end games in the cloud presents a much bigger technical challenge because of the importance of eliminating any lag between the moment a player takes an action in a game on his or her device, and when the game responds on the screen. Even split-second delays can turn serious gamers off.

OnLive says it has solved this problem by figuring out a method of efficiently packaging video images of a live game that it delivers over the Internet, and that allows for instantaneous response to actions by players as they control the movement of characters within a game.

In a recent demonstration in Seattle, Steve Perlman, the chief executive and founder of OnLive, showed a collection of well-known high-end games, including L.A. Noire and Unreal Tournament 3, on an iPad, Android phones and a Kindle Fire.

Although the games were running on computers in an OnLive data center in Northern California, they responded immediately when a player moved a character around. Some games on the service have been adapted to respond to fingers on a touch screen, but many work better with a $50 wireless controller sold by OnLive. That’s cheaper than buying a traditional game console, which starts at about $150.

“It’s amazing the performance he’s getting out of all these tablets,” said Richard Doherty, an analyst at Envisioneering Group.

Mr. Perlman said OnLive would also soon introduce a service that let people run a full Windows desktop on iPads and other mobile devices, including Web browsers that can show Web sites with Flash, an Adobe graphics technology that is not otherwise available on iPads.

Last year, OnLive introduced an earlier iteration of its service, letting people play games first on PCs, Macs and television sets through a small $99 device it calls the MicroConsole.

Mr. Perlman predicted that the growing capabilities of the cloud, along with the high costs of introducing a new console, would lead to big changes in the business. Hardware makers can lose billions of dollars on new game systems before eventually recouping their investments through royalties from game sales.

“It’s our view that probably there won’t be another console and that this current generation is the last,” Mr. Perlman said. “The economics can’t support it anymore.”

However, even people who believe strongly that cloud gaming will become an important part of the market say they think that prediction is an overstatement. Michael Pachter, an analyst at Wedbush Securities, said cloud gaming was still too new for serious gamers to switch their habits. Internet connections in some areas are not fast and reliable enough for gamers to depend on a cloud gaming service all the time.

“Realistically, there’s one more” generation of consoles coming, Mr. Pachter said. “It will take a while for people to trust the cloud and adapt.”

Nintendo has already announced plans for a new machine, the Wii U, expected to be released next year. But Sony and Microsoft don’t appear to be in any rush to introduce new consoles. It has been five and six years, respectively, since the companies introduced the PlayStation 3 and Xbox 360, and neither company is talking about plans for a new system. Console makers used to introduce new game systems every five to six years. “We’ve got a lot of life left in the current generation of PlayStation with PS3,” said Patrick Seybold, a spokesman for Sony’s United States games division.

Some cloud gaming proponents say they believe future consoles are likely to embrace the technology, rather than risk being replaced by it. “Anyone making consoles for the future would be crazy not to have cloud gaming support,” said David Perry, Gaikai’s C.E.O.

Support from game publishers can make or break OnLive and it isn’t clear how eager some of the more prominent ones are to join the service, which has a variety of payment plans for consumers, from a $10 monthly rental to an option for buying games for $2 to $50. The industry’s biggest blockbuster, the Call of Duty series from Activision Blizzard, isn’t available on the service, for example.

An executive of one publisher working with OnLive, Jason Kingsley, the chief executive of Rebellion, predicted that most game makers would warm to cloud gaming services over time.

“There will always be some people who say, ‘We don’t want to engage in this, it’s horrible,’ ” Mr. Kingsley said. “I can’t see why it shouldn’t be part of the mix.”

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DealBook: Momentum Builds for Blackberry Break-Up

Research in Motion's Blackberry.Oliver Lang/dapd, via Associated PressResearch in Motion’s BlackBerry.

The call for Research In Motion to explore a sale of all or part of the company is growing louder.

On Tuesday, the Jaguar Financial Corporation, a Canadian activist investor that is leading a campaign to agitate change at the BlackBerry maker, announced on Tuesday that it has the support of shareholders who represent 8 percent of RIM’s shares. In a statement, the firm advised the company to install a new chief executive and chairman and to explore options that will increase shareholder value, such as a sale of the company, a merger, or a split that would divide RIM into three separate businesses.

“Our game plan is to gain the support of shareholders representing a significant number of RIM shares,” Vic Albioni, chief executive of Jaguar Financial, said in a statement. “Our supportive shareholders approve Jaguar’s plan to negotiate, at this point in time, changes in governance and the pursuit of a value creation transaction.”

Jaguar, a boutique Canadian merchant bank, is far from RIM’s largest shareholder, but it is tapping into a base of investors growing increasingly restive. The stock is hovering at five-year lows. Since the start of this year, shares of RIM have plunged nearly 60 percent. The company has been troubled by production delays and an increasingly competitive environment, as more consumers buy mobile devices powered by rivals Apple and Google.

In September, Jaguar reached out to RIM in a tersely worded letter. The firm blasted the company for its corporate governance structure (which includes two chief executives that serve as co-chairmen) and a lack of innovation.

On Tuesday, Jaguar stepped up its rhetoric. Calling for a dismissal of RIM’s chief executives, Jaguar said the company has lacked focus because of its current governance structure. “The lack of board oversight and absence of an independent chairman allowed one of the two Co-C.E.O.’s to chase his dream of buying an NHL hockey team during the same period,” the company said in its statement. The appointment of a new chief executive, Jaguar continued, will “address the historical lack of attention and oversight at the board level, and the need for a laser beam focus by management on RIM’s business rather than distractions such as a professional hockey team.

Jaguar also called on RIM’s board to follow the lead of several technology giants, which have recently pursued dramatic changes. For instance, the firm noted, in the last two months, Yahoo has ejected its chief Carol Bartz, Hewlett-Packard has dropped Leo Apotheker, and Google bought Motorola Mobility after it was spun out of Motorola.

“The path to negotiated change is precise and clear; it is not paved with uncertainty. It is time for meaningful and obvious change,” Mr. Albioni said.

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Common Sense: Worthy Rivals for the Crown in Smartphones

This week Apple said it sold 20.3 million in the quarter that ended June 30, 142 percent more than it sold during the same quarter a year ago and two million more than the previous record for a quarter. Apple shares hit a record high of $400 after its quarterly profit of $7.31 billion soared past estimates, giving the company a market value of $360 billion. It is America’s second-most-valuable company, surpassed only by Exxon Mobil.

Is Apple’s dominance insurmountable? Just over two years ago, when I was shopping for a new phone, nothing seemed close to rivaling the iPhone. It was available exclusively to ATT customers, so I reluctantly settled on a BlackBerry model (the Pearl) available to Verizon subscribers like me. A few weeks ago, I had to ask directions to a restaurant from a young woman I spotted on the street using an iPhone. She quickly obliged by producing an easy-to-read Google map while the Pearl, whose tiny screen made it all but useless for Web browsing and navigation, languished in my pocket.

Apple ended ATT’s exclusivity earlier this year, and this month I was eligible for an upgrade to a new device. During the years since I’d bought the Pearl, an array of new devices using the Google Android operating system had appeared, and Research in Motion had introduced several new BlackBerry models. Limiting the original iPhone to ATT subscribers brought Apple lucrative payments from ATT and heightened the device’s aura of exclusivity.

But I wondered: had Apple waited too long, given the pace of change in the industry, allowing Android and RIM devices to catch up, or even move ahead? I decided to compare three rival mobile devices: the iPhone 4, and Android and BlackBerry models.

The stakes are enormous. For all Apple’s recent success, a titanic battle is now under way among Apple, Google, RIM and a recent alliance between Nokia and Microsoft, with Amazon, Twitter and Facebook waiting in the wings. Even as iPhone sales soar, sales of Android devices are rising faster. The consulting firm Millennial Media estimated last month that Android devices accounted for 54 percent of the global market for smartphones, followed by Apple with 26 percent, RIM with 15 percent and all others with less than 4 percent.

This battle is only partly about the devices themselves. Google doesn’t make or sell them, instead licensing its operating system to pretty much anyone who wants to use it, including HTC, Motorola, Samsung, Sony Ericsson and most of the world’s manufacturers. Google makes money from advertising, and wants to use the Android platform to dominate search and display advertising on mobile devices. Apple makes a lot of money selling iPhones, but the devices are inextricably linked to applications and content sold by Apple, like products from the Apple App Store.

As John Jackson, an analyst who specializes in mobile and wireless technologies at CSS Insight put it, “At the end of the day, this is a battle between Internet giants for control of what you do and consume on your mobile device and beyond. It will all turn on the ecosystem.”

For my experiment, Verizon lent me an iPhone 4, a Samsung Droid Charge and a BlackBerry Bold. I immediately unwrapped the iPhone. Like all Apple products, the packaging was as elegant as the device. It fit comfortably in my hand and pocket. Voice calls were clear, with none of the antenna problems I’d read about when the iPhone 4 was introduced. Web browsing was a pleasure, with fast download speeds even at 3G levels. As an iPad and Mac user, I felt instantly at home, with familiar apps already installed and easy to use. My only complaint was the relatively cramped touch keyboard. I was spewing out typos and often fighting the aggressive auto-correction feature. I suppose none of this is news to the millions already using iPhones, but to someone like me, the device was a revelation.

After several days, I realized that I had to stop using the iPhone or this wasn’t going to pass muster as an objective test. So I turned to the Samsung Droid Charge.

Who designed the packaging and marketing? Samsung takes the Android imagery to absurd lengths, with vaguely Star Wars packaging and sound effects that seem aimed at teenage gamers. My first impression was that it was an embarrassment to anyone over 30. But then I took a closer look at the device itself. It’s big (5.1” x 2.7”) but surprisingly light (5 ounces compared to the iPhone’s 4.8 ounces). Its curved edges made it comfortable to hold and it slipped easily into my pocket. The large screen is amazing. Even though I wasn’t familiar with the operating system, I found the instructions clear, the device easy to use and intuitive. I found life in the Google ecosystem surprisingly congenial, with seamless Gmail, Google search, calendar, mapping and navigation. The 4G Charge did everything the 3G iPhone did, only faster (in areas with 4G coverage) and bigger. Photos and video were especially impressive. And the touch keyboard was so big and tactile that my typos all but vanished. I can’t say it was flawless — searching for restaurant recommendations in Old Saybrook, Conn., I kept getting results for Old Seabrook, N.H. —but I don’t think I can blame the phone.

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Research In Motion Eyes a Rebound

WATERLOO, Ontario — In a rare interview last week, Mike Lazaridis, one of Research In Motion’s two chief executives, was the one asking questions:

“Why is it that people don’t appreciate our profits? Why is it that people don’t appreciate our growth? Why is it that people don’t appreciate the fact that we spent the last four years going global? Why is it that people don’t appreciate that we have 500 carriers in 170 countries with products in almost 30 languages?”

He wrapped up with “I don’t fully understand why there’s this negative sentiment, and I just don’t have the time to battle it. Because in the end, what I’ve learned is you’ve just got to prove it over and over and over.”

Mr. Lazaridis can point to numbers that back up his frustrated defense of R.I.M., maker of the BlackBerry, the phone of choice in the White House and a global totem of connectedness. During its last fiscal year, the company, which is based here, shipped a record 52.3 million phones — a 43 percent increase over the previous year — and its fourth-quarter income of $924 million exceeded forecasts.

Nevertheless, as R.I.M. prepares to introduce its first tablet computer on April 19, doubts about its future have arguably never been greater.

Some analysts suggest that R.I.M. has lost its momentum and may now be heading downward, much like Palm, which in better days was expected to rub out the then-fledgling R.I.M. Current BlackBerrys are hobbled with an aging operating system, and the company’s market growth last year seems less impressive when contrasted with Apple’s 93 percent rise in iPhone shipments.

In a world where applications have become a major selling point for mobile devices, the number of apps available for BlackBerry phones is in the tens of thousands, compared with the hundreds of thousands for Android and Apple devices. BlackBerrys are still prized for their e-mail capabilities, particularly among government and corporate customers who rely on the devices’ tight security. But it is increasingly common to find people who carry a BlackBerry for e-mail and an iPhone for everything else.

That has led several analysts and investors to question R.I.M.’s ability to hold its own in a market dominated by devices running Google’s Android software, as well as iPhones and iPads. “They’ve been caught flat-footed,” said Jean-Louis Gassée, a former Apple executive, the former chairman of Palm’s software spinoff and a partner at Allegis Capital in Palo Alto, Calif. “They’ve built a tremendous company; they are people with distinguished backgrounds. They are not idiots, but they’ve behaved like idiots.”

Jim Balsillie, R.I.M.’s other chief executive, vigorously rejected suggestions that R.I.M. was ill-prepared for the changes in its markets. But he acknowledged that if it had moved earlier to introduce its tablet, the BlackBerry PlayBook, it could have improved perceptions of the company. And he agreed with critics on one thing: Many companies will struggle to adapt as the industry makes the huge shift to a world of powerful mobile computers.

“No other technology company other than Apple has successfully transitioned their platform,” Mr. Balsillie said in an interview. “It’s almost never done, and it’s way harder than you realize. This transition is where tech companies go to die.”

Mr. Balsillie says the PlayBook will show that R.I.M. has joined Apple in making that move. The tablet is important in part because it will be running R.I.M.’s first all-new operating system since the introduction of the BlackBerry over a decade ago. That software will also be on new phones that the company will release in the coming months.

Richard Tse, an analyst with Cormark Securities in Toronto, said the new operating system might prove to be as pivotal to R.I.M.’s future as Apple’s decision to bring back Steven P. Jobs in 1996 and to base its future technology on software he developed at NeXT Computer.

The other historical lesson comes from Palm, the hand-held computing pioneer, which failed to build up enough momentum for its new operating system and had to put itself up for sale. Hewlett-Packard bought it two years ago and is trying to revive the software in its own tablet due later this year, called the TouchPad.

R.I.M.’s equivalent to NeXT is another Canadian company, QNX Software Systems, which it acquired a year ago. It specializes in highly reliable operating systems that are used, among other things, to control systems in automobiles and airplanes as well as nuclear reactors.

Jenna Wortham contributed reporting from New York.

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