I must admit, I am quite taken with the Palm Pre. The hype, predictably, has been enormous. And the handset itself is very well put together. Online reviews rave about it. After playing with my friend’s new Pre, I have to agree with them: it is one cool handset.

But before the Pre could bask in the media spotlight for long, Apple whooshed in two days later to announce its newest iPhone, the 3G S, and that the 3G would sell for as little as $99.

So how has this move affected overall interest in the Pre?

This chart shows the percentage of people viewing the Palm Pre who also looked at the Apple iPhone 3G S online in the same week. Interest in the Pre is defined here as anyone who looked at a Pre-related webpage hosted by Palm or Sprint (or both). Similarly, interest in the iPhone 3G S includes anyone who viewed iPhone 3G S-related web pages at Apple or AT&T (or both). Before the announcement of the iPhone 3G S, interest traffic for the iPhone represents the iPhone 3G.

Here we see that:

• Before the iPhone 3G S was officially announced on June 6th, only about 2.5% of people who looked at the Palm Pre online also viewed the iPhone 3G
• However, once the iPhone 3G S announcement was made, traffic to the iPhone 3G S by Palm Pre shoppers jumped 104%, signaling that the Pre definitely had to share the limelight with the new iPhone 3G S
• By the time the iPhone 3G S was available, just a week after it was announced, consideration of the device by Palm Pre shoppers dropped by about 25%

While the decrease in cross shopping seems to suggest that the iPhone 3G S will not continue to distract Pre shoppers, handset interest data shines a different light on the situation. Interest in the Pre predictably shot up during the week of its launch and the week after as marketing efforts and press coverage reached a fever pitch. However in the second week after launch, Pre interest dropped sharply to levels it had prior to launch, as shown in the chart below.

This suggests that the Pre may indeed have lost its thunder online, though it is unclear at this point if interest has transferred to the iPhone 3G S or simply faded away. Certainly, consideration of both models decreased after the initial excitement of the Palm Pre’s launch and the iPhone 3G S announcement passed, which could indicate that distinct fan bases have emerged for each phone.

Still, much remains to be seen over the next few weeks, as each phone works to establish and sustain its fan base. There are also more opportunities to drive online interest in the Palm Pre to counter the iPhone. Selling the device online is one possibility. Encouraging development of more applications to rival the iTunes App Store by releasing the software development kit more broadly (which Palm says they will do “by the end of this summer”) could also entice consumers.

Challenging the iPhone’s dominance is no small task, but we’ll be watching over the next few months to see if the Palm Pre is the device that will rise to the occasion.

Last week, Sprint and Palm released the Pre to rave reviews that praised the device for being the first true competition to the iPhone juggernaut.

Palm and Sprint drove substantial traffic to their web sites with the announcement of the Pre at CES in January, in a move similar to Apple’s unveiling of the first generation iPhone at MacWorld two years earlier. Nearly 400,000 people visited Pre-related pages on Sprint.com and/or Palm.com the week of the announcement.

After months of speculation from industry analysts and consumers, Sprint and Palm announced on May 19th that the Pre would be available for purchase on June 6th. As one might expect, visitors to the Pre pages on Sprint.com and Palm.com jumped after many weeks of flat traffic and jumped again the week the device finally became available for purchase.

This chart shows the number of people researching the Pre and the original iPhone, indexed to the device’s launch week. As you can see, the Pre may be getting a healthy amount of interest from consumers online, but it doesn’t rival the interest seen in the original iPhone launch. Likewise, Sprint and Palm’s traffic spike the week of the Pre launch didn’t match the massive jump Apple experienced upon the iPhone’s release.

• Aggregate traffic for the Pre from both Sprint and Palm’s web sites increased 84% the week of launch to over 475,000 unique visitors.
• Traffic to Apple.com’s iPhone content increased 102% the week of the iPhone launch to over 750,000 unique visitors. Note that this is just traffic to Apple.com – this number would be even higher if AT&T’s traffic was included.

Apple’s relentless hype machine and strong brand equity played significant roles in this major increase, but a significant factor may have simply been the relative sizes of the websites involved, as you can see in the following chart.

The truth is that Palm.com does not attract visitors at comparable levels to Apple.com, and, to a lesser extent, the same can be said about Sprint.com compared to Wireless.ATT.com. However, considering the relative sizes of these sites, Palm and Sprint did a solid job at driving interest in the Pre and are already reaping the benefits of this highly anticipated launch.

The next real challenge will be sustaining interest and sales of the device – one great sales week hasn’t propelled any of the previous iPhone challengers to the top of the heap.

On Saturday, Palm released the Pre, the latest in a long line of potential iPhone killers. While the iPhone was not the first device to offer a touchscreen, its popularity has made the technology more common on major release Smartphones.

Many factors have an impact on consumer choice, particularly when buying something as complex as a mobile phone; price, network coverage, carrier, applications, and many others. But what about touchscreens? How interested are consumers in touchscreens versus a more traditional QWERTY keyboard? Touchscreens create a lot of interest, but are they top of mind for the average mobile phone shopper when they’re ready to buy?

This chart covers share of online interest in phones with a physical QWERTY keyboard or touchscreen on the “Big 4” carriers’ sites during the first quarter. Each bar represents one week.

Our data show that in the first quarter of 2009, touchscreens and QWERTY keyboards weighed in almost equally when it came to online interest. We’re also seeing that:

• Share of interest is trending upward for both features overall this quarter, although touchscreens have experienced a more consistent upward trend
• Share of interest in QWERTY phones averaged 37% and touchscreen phones 35% this quarter

But, according to our Q1 survey data, when it comes down to the purchase decision, touchscreens are not as important – at least not yet.

QWERTY keys were “important” or “very important” to 44% of those surveyed, while 37% said the same about touchscreens. We can see in the chart above, however, that 23% of respondents said that QWERTY keys were “very important”, compared to just 15% for touchscreens.

It’s not that touchscreens aren’t desirable for consumers – wireless shoppers on the web are clearly looking at phones with this feature, as we saw above. Still, they aren’t quite as influential as QWERTY keys when it comes to picking a specific phone to buy. Interest in these features and in Smartphones generally has been increasing.

It’s also important to note that while the data in the second chart shows us that QWERTY keys and touchscreens were important for 44% and 37% of shoppers, the corollary is that they weren’t important to 56% and 63%, respectively, when it came to their purchase decision.

So, even though a lot of the hype on advanced Smartphones is about touchscreens, QWERTY keyboards are actually a more important factor for most people when it comes to the purchase decision. Still, the majority of consumers don’t think either feature is important to their purchase decision.

In this tough economy where people are looking for value, the challenge for device manufacturers and carriers remains convincing consumers why these features are must haves for every wireless shopper, not just the early adopters.

Amazon’s sheer size (65 million unique visitors in April) gives it a powerful soapbox from which it can pitch virtually anything to its captive audience. Many of the tens of millions of U.S. consumers that visit its homepage each month have undoubtedly noticed the site’s ongoing, fervent promotion of its popular Kindle ebook reader. Since the original Kindle launched in late 2007, Amazon has marketed Kindle almost without interruption on its homepage.

Amazon continues to update and test new advertising messages for Kindle, and on any given day cycles a couple different ads on the site. In May, these Kindle ads generated over 60 million ad impressions and since the start of the year, the ads have seen steadily increasing clickthrough rates, with expected spikes corresponding with new product introductions. The highest clickthrough rates were reached the week ending February 14th following the introduction of the 2nd generation reader. In total, 3.4% of homepage visits that week resulted in shoppers clicking to see the new Kindle.

These efforts, coupled with largely positive reviews, have helped drive high consumer demand for Kindle. Kindle interest has grown steadily over the past 18 months, with recent jumps attributable to the 2nd generation launch in February and the announcement of the larger-format DX reader last month. Over a million consumers shopped for the updated Kindle during its first week on the market. Luckily for both consumers and Amazon, the company seems to have worked through production bottlenecks and accompanying stock-outs that plagued the original device’s launch.

The fact that the Kindle homepage ads have remained so prominent for so long is a clear sign that Amazon believes they are working in driving consumer interest. Given the value of the real estate the ads occupy (500 x 300 pixels), something else would have long ago replaced them had they not generated sufficient results for the company. From a broader perspective; however, how well are the ads performing relative to other referral sources such as search and email in driving interested consumers to consider a Kindle purchase?

In May, the homepage ads drove nearly 45% of all visits to the Kindle product pages, while another 26% of traffic was referred from other places within Amazon (banner text links, on-site search, category navigation, etc.). Search engines (such as Google) and Amazon’s email campaigns drove 6% and 5% of traffic, respectively.

From a post-click engagement perspective, search engines drove the highest level of Kindle engagement and purchase intent. Searchers averaged over 5 minutes on the page learning about Kindle, versus just 3 ½ minutes for consumers referred through the homepage links. Search also performed best at driving consumers to purchase. This is understandable given that searchers are by definition looking for the product to begin with rather than reacting to a marketing message placed in front of them. 4.3% of consumers referred via search engines added the Kindle to their shopping carts, slightly higher than homepage and other Amazon referred traffic sources. Email, on the other hand, fared poorly with consumers spending considerably less time viewing the product and relatively far fewer demonstrating immediate purchase intent

With Kindle, Amazon seems to have a created a product that corrects for many of the problems that slowed consumer adoption of earlier attempts at ebook readers. If consumers continue to clamor for these devices, I wouldn’t expect Amazon’s Kindle ads to disappear from the homepage anytime soon.

To read up on the latest trends in online retailing, visit us blog.compete.com/retail.

Earth Day 2009 was a couple of weeks ago now, but the buzz around “going green” is still alive and well. Last week I counted that, during a commercial break from ‘My Name is Earl,’ 4 of the 5 ads I saw contained a green message or promotion.

In online advertising too, we at Compete have seen companies embrace green advertising across the board. All four major wireless carriers are currently heavily promoting paperless billing initiatives (my personal favorite: att-satisfaction.com). Motorola took going green one step further this year by introducing the Renew, a new cell phone made of recycled materials that uses sustainable manufacturing practices. When it launched, the Renew captured 6% of T-Mobile’s total handset interest, which is more than double that of the average T-Mobile handset at its price point. Still, most corporations have historically claimed that changing materials, manufacturing routines and shipping practices is too expensive and doesn’t add value for consumers. So what is changing? Why are companies starting to embrace going green?

It turns out that companies may not have to make a choice between helping the environment and increasing profits after all. As part of our quarterly Online Channel Effectiveness product, Compete surveyed over 900 wireless shoppers and asked them about their shopping and buying patterns. With regards to green products, we asked survey takers if they would be willing to pay more for consumer electronics products that were “green.”

As you can see, 59% of shoppers told us that they would be willing to pay extra for green CE products, and 10% offered to pay 50%+ more. Moreover, this survey was conducted during Q1, when most respondents were likely weighing the weak economy and their own economic circumstances in their answer to this question. You might be thinking, “but wait, everyone says they want to be green, but nobody actually pays for it”. Well, even if half of this 59% spends just an extra $1 on their next cell phone, companies would generate an extra $32M annually (roughly 30B cell phones are sold in the US every quarter).

So how can companies capitalize on this desire to go green? Appealing to consumers’ desire to be environmentally-friendly and save money are not necessarily mutually exclusive. Marketers have been successful at getting shoppers to pay more for environmentally-friendly products by clearly articulating what other savings the customer gets that should offset the higher purchase price. For example, high-rated Energy Star appliances typically cost a premium over comparable items but earn that money back in reduced utility usage. Similarly, replacing household light bulbs with compact fluorescent ones saves both electricity and having to replace the bulbs every year or so.

And that’s not just good for the environment – that’s good for business!

In the past, smartphones were synonymous with business - road warriors with Blackberries. But times are changing. Manufacturers are promoting their devices as tools for overall life management and fun as well as professional tools, like Research in Motion’s “Life on Blackberry” campaign. The iPhone has always been marketed as a multi-function consumer device, but do people really use it more for personal or business applications?

That was one of the questions that we set out to answer with the second wave of our Smartphone Intelligence product, released yesterday. The results of the survey show, once again, that the iPhone is used differently than other Smartphones, even as more similar devices go on the market.

In Q1 we surveyed over 800 smartphone owners, 102 of whom had an iPhone, and asked them questions about how they used their devices day-to-day. We found that iPhone owners are using their devices primarily for personal use, as shown in the chart below.

• 45% of these iPhone owners said a whopping 76-100% of their time on the device was for personal use
• Almost three quarters (73%) said that more than 50% of their iPhone time was for personal use

So iPhone owners are using the device to help them in their personal life. To learn more about what people are actually using their iPhones for, we asked them about what applications they added to their device once they took it out of the box.

According to Gizmodo, Apple announced this week that a whopping 1 billion applications have been downloaded. With Smartphone Intelligence data, we can break that down a bit and see what categories of applications iPhone owners have downloaded:

When we asked iPhone owners which 3 applications they actually USE most often, the answers were a bit different. The top 3 applications named in iPhone owners “top 3” were weather-related applications (39 percent); Facebook (25 percent) and Games (20 percent). Specific applications that iPhone owners highlighted were Shazam (7 percent), a music recognition application, and Lose It (5 percent), a calorie counting application. Both applications were featured in iPhone commercials during the time this survey was fielded, indicating the influence of media on consumers’ purchase and usage behavior.

When it comes to the iPhone, marketing and applications are some of the factors in how and why owners use it, and why so much of their time on the device is for personal use.

Apple’s iPhone has changed the game, and in 2009, it looks like more manufacturers will be stepping up to play.