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January 19, 2012

According to Nielsen Market Research, overall demand for the iPhone has increased by 19.8 percent in December alone, compared to three months earlier. But Android still managed to steal some of the spotlight, nevertheless.

Prior to the launch of the iPhone 4S, Apple's marketshare among recent smartphone buyers had been 36 percentage points behind Android's. Apple had about a 25.1 percent market share compared to Android's 61.6 percent.

But by November 2011, that gap had narrowed to less than 10 percent. In December, it closed to a mere 2.5 percent.

The bottom line: the iPhone and iOS are rapidly catching up to Android. And to no one's surprise, RIM's BlackBerry platform came in a very distant third, with less than a 14 percent of the market, followed by Windows Mobile, which held just 4.6 percent.

Platforms such as Palm, Symbian and Windows Phone 7 each claimed less than 1.5 percent market share. But when it comes to platforms, having a few hundred thousand apps isn't as important as having the right apps, Nielsen notes.

"The most surprising element about this report is that the bulk of time spent on smartphones is on a relatively small number of apps," said Don Kellogg, a Nielsen thought leader in the mobile segment.

"We frequently hear about the hundreds of thousands of apps available on different platforms, but in reality it's far more important for a platform to support the right 50 to 100 apps as opposed to hundreds of thousands," he insisted.

Additionally, some of the iPhone's fourth quarter sales came from delayed purchasing. The surge in iPhone sales in the fourth quarter was balanced by some weakness in the third quarter as consumers waited for a new iPhone.

"We expected to see a massive bump in iPhone sales in that quarter," said Michael Morgan, senior analyst for mobile devices at ABI Research. "The size of the hit was impressive but not out of reality."

There was a lot of pent-up demand, Morgan noted, which created a bad third-quarter for Apple. Also, some users were attracted to the iPhone by new features offered on the 4S model.

The iPhone 4S hit at an opportune time for buyers. "The incremental iPhone 4S refresh was just good enough to justify an upgrade for many Apple, Android, BlackBerry and Microsoft smartphone users as they came to the end of their contracts or started looking for an attractive Christmas present in the fourth quarter," said Neil Mawston, director of global wireless practice at Strategy Analytics.

"A combination of upgraders, switchers and gift-givers drove the iPhone to higher volumes in the holiday season," he added.

"But make no mistake, Android will come back in time," said Morgan. "This is part of the pattern for Apple. A new product and a really big bump-- it happens all the time."

Overall, iPhone sales will taper off when the device gets to the end of its normal cycle, he noted. Unlike Apple, Android sales are not dependent on annual upgrades or new product introductions by one single phone manufacturer.

Two phases will send Apple to a more-distant second place-- months between new iPhones coming out, and the inevitable drop in late summer as users wait for the next iPhone.

"We expect Android to lose market share to Apple in the near-term but then recover a bit of its market share around the middle of 2012 as iPhone buyers hold off and wait for the next iPhone upgrade in the second half of the year," said Mawston.

In other mobile news

In the never-ending saga over GPS interference issues caused by LightSquared's wireless network, now the company is saying that GPS industry insiders have rigged various tests which found its planned LTE network interfered with GPS receivers so badly that there was no practical way to fix the issue.

"We strongly believe that the testing was rigged to make sure that most GPS receivers would fail," LightSquared top lobbyist Jeff Carlisle said in a call with reporters this morning.

"The conduct of the testing can only be described as a total fiasco," added Carlisle.

LightSquared will not be allowed to move forward with its plans to build a wholesale mobile broadband network in satellite spectrum until it can prove the service won't knock out GPS services.

Over the past year, Wireless Industry News has extensively covered the events surrounding LightSquared's many GPS interference issues caused by its equipment. And you can read many of them here:

1) LightSquared admits its network places GPS navigation systems at risk

2) LightSquared is grilled by Congress over GPS interference issues

3) LightSquared says it has a solution to its GPS interference issues?

4) LightSquared steps up its offensive against the GPS industry

5) Sprint and LightSquared make a deal, share network spectrum

6) LightSquared has found another solution to its ill-designed network?

7) LightSquared becomes a MVNE, doesn't care about the interference it causes to GPS

8) Is FCC's Chairman Julius Genachowski in bed with LightSquared?

9) The GPS Coalition forces LightSquared to be on its best behavior

10) LightSquared in the news again, claims it has fixed GPS interference issues

11) LightSquared is rapidly running out of cash, files petition with the FCC

12) Did the FCC screw up when it licensed dual-mode communications next to GPS?

Those news stories will help you better comprehend the scope of the whole issue, and how critical it is to the public's overall safety.

A federal committee said last week that LightSquared's network would be problematic even if it moved to a band farther away from GPS spectrum and recommended further tests be halted.

LightSquared claims that officials in charge of the most recent round of testing allowed GPS manufacturers to cherry pick outdated devices that would be particularly susceptible to the GPS interference.

The receiver manufacturers then signed non-disclosure agreements with the government to prevent "any input from independent groups," Carlisle said. The company said it had to make repeated requests to obtain a list of devices used in the testing, which it is required to keep private.

Agencies in charge of the testing could not be immediately reached for comment on LightSquared's allegations, and an FCC spokeswoman said the agency was waiting for recommendations from NTIA.

"As we have said from the outset, the FCC will not lift the prohibition on LightSquared to begin commercial operations unless harmful interference issues are resolved," she said.

Additionally, LightSquared also claimed that the tests used a "very conservative" threshold to define failure – just one decibel above the noise floor – and didn't report on whether that limit actually affected the accuracy of GPS receivers.

LightSquared says independent tests prove that its network is compatible with GPS, claims that have been repeatedly refuted by the government's findings. The GPS industry says those tests have been skewed in favor of LightSquared and wants the U.S. government to block the company from moving forward with its launch plans.

When asked whether LightSquared would sue the U.S. government to get clearance for its network, Carlisle said "we will move forward to defend our legal rights" but stopped short of saying the company had immediate plans to file a complaint.

LightSquared has called on the FCC and the National Telecommunications and Information Administration (NTIA) to conduct a second round of tests on high-precision devices at an independent laboratory "to ensure objectivity and transparency."

The current allegations made by LightSquared are broad and specific. It will be interesting to see what the short term outcome will be, given all the controversy surrounding the company's several GPS interference issues caused by its wireless network that uses spectrum located too close to GPS frequencies.

In other mobile news

The HTC EVO 3D smartphone, which runs on Sprint's network, will get a new firmware update that will totally remove the now very controversial Carrier IQ software from the device. HTC says that the maintenance software update would completely wipe out Carrier IQ's software and provide security enhancements and bug fixes beginning next week.

On December 17, Sprint confirmed that it had disabled the software in devices running on its network. Sprint also said at the time that it would not use any of the information collected from Carrier IQ.

"We have weighed customer concerns and we have disabled use of the tool so that diagnostic information and data is no longer being collected," spokeswoman Stephanie Vinge-Walsh said in a statement in December.

The Carrier IQ software came under scrutiny late last year when Android developer Trevor Eckhart discovered that the software running on many smartphones was collecting data without consumers' knowledge and without the ability to opt out of the data collection.

There had also been speculation that the content of the messages and keystrokes was being logged, but Carrier IQ denied those claims. And independent security experts also found no evidence of keylogging by the software.

Overall, privacy concerns over Carrier IQ software have prompted several lawsuits. And the Federal Trade Commission is also investigating. But wireless operators and Carrier IQ say that the software has been used as a diagnostic tool.

It's still unclear for now what tools Sprint will use now that mobile handset makers are removing the software from their products.

But it's highly likely that the company will find other methods to collect data that can help them improve the quality of their wireless networks.

On Dec. 2nd, the U.S. Senate has called on Carrier IQ to explain why its diagnostic software, buried in the bowels of 141 million smartphones, isn't a massive violation of U.S. wiretap laws.

An Android mobile application developer has wrote about what he thinks could be a conclusive proof that millions of smartphones all over the globe are secretly monitoring key presses, geographic locations, and received messages of its users. If true, this is a serious security risk, and one that needs to be rapidly addressed and corrected by all phone makers.

Trevor Eckhart demonstrated Monday how software from a Silicon Valley company known as Carrier IQ recorded in real time the keys he pressed into a stock HTC EVO mobile handset, which he had reset to factory settings just prior to the demonstration.

Using a network packet sniffer while his device was in airplane mode, he demonstrated how each numeric tap and every received text message is logged automatically by the software without the user's consent or even him or her knowing about it.

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Source: Nielsen Market Research.

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