iPhone 5c Broadens Apple's Customer Base, but Android Continues to Lead in Smartphones

[AppleScruff1]

The amount of mis-information here is really bad.
1) APPLE has LOST market share over the last year
-BUT-
2) APPLE has sold MORE IPhones this year than last, about 25% more.

How is this possible? Because Market share DOES NOT DIRECTLY EQUATE to units sold. Apple's share has decrease even while selling MORE PHONES because the other brands have also sold MORE phones as well, causing the TOTAL amount of smartphones sales to INCREASE, in this current market EVERYONE COULD gain sales year over year.

So, given this decrease in market share, what BAD effects can Apple expect?
Well, their sales are UP, and so is their profit. They STILL make more profit selling mobile devices than any other company (and in some timeframes more than ALL other companies combined)

Now, there is some real concern about "relevance" in relation to app and accessory availability. HOWEVER, this is NOT directly related to market share either, and, SO FAR, apple is in really good shape here. For several reasons:

1) Higher market share of Handsets does not equate to higher market share in later purchases, i.e. accessories and apps. On average Apple users buy more apps than Android users.
Ex. Toyota sells far more Camry's than Ford sells Mustangs, but there are FAR more accessories available for Mustangs, because buyers of Mustangs are more likely to purchase accessories for their car.

2) Fragmentation; For app developers/accessory Manufacturers, Fragmentation affects these companies choice of platform to develop for:
Ex. Develop ONE app for IOS and you can reach nearly ALL of the Iphone install base. Develop ONE app for android, and depending on the specifics of the app, you may only reach 25% of android’s install Base. THEN couple that with the fact that, on average, android users are FAR less likely to purchase apps, and you could sell SIGNIFICANLY less on android than on IOS, OR you have to develop multiple versions for the multiple versions of android and differing handsets, incurring higher development costs.


The things Apple HAS to worry about are:
1) Keeping PROFITS up, and idealy increasing them.

2) Keeping relevent enough to keep a thriving app/accessory environment so as to not hurt #1, Profits.

3) Market share, only as it AFFECTS #1, and #2.

Excellent post! You get it.

 

[chillywilly]

So yes... iOS vs Android is exactly like Mac vs Windows. And once again... Apple continues to sell more than enough products to stay in business... while the rest of the industry is struggling in the race to the bottom.

You make a valid point here. The idea that marketshare matters not, but how companies like HP, Dell and others struggle. Yet have the bulk of the PC/Windows market. Yet, Apple, with much less marketshare, doesn't struggle at all.

Same with Android. We see companies like HTC struggle, yet Apple, less marketshare with iOS, is not struggling.

It's as if marketshare numbers are just numbers to make one's platform look like it's winning.

 

[sofila]

Really? What Innovations does Android have that iOS lacks? Cause one of my coworkers was showing off his Nexus 5 and there wasn't anything that my iPhone 4S can't do.... And some things my 4S can do that his Nexus can't.

I did the Android thing and it was such a poor experience I doubt I'll ever go back. And that was on a new, great, hot Android phone.

you clearly don't know what you're talking about

 

[KPOM]

Exactly. There is a very strong correlation between subsidy support within a country and market share. The carriers want to move away from subsidy models - especially those where they carry a higher percentage of the total. Look how synchronized the carriers have been about other big changes: dropping unlimited plans, adding family share plans, frequent update programs, etc. It wouldn't surprise me at all if the carriers move to a model where you pay for the whole phone and keep the monthly charges the same. That would force Apple's hand.

So far, no one else appears to be following T-Mobile's lead. Also, neither AT&T nor Verizon seem to be rushing to add back unlimited data plans. T-Mobile is a bit of an outlier since they need to do things to drum up market share, much of which is at the low end. Remember, their first strategy was to sell themselves. When that deal was blocked, they started with their "Uncarrier" strategy. I'm not sure how sustainable it will be. I tried the "$70" unlimited plan, and "$70" wound up being $98 with all the taxes and bundled fees (mostly bundled fees with descriptions to make them sound like taxes). Add $24/month or so for phone financing (either that or pay for the phone upfront), and it really doesn't work out to much cheaper than Verizon or AT&T except for people who use lots and lots of data (plus "unlimited" is throttled after some point).

 

[Max(IT)]

Really? Apple are fine with not having a significant marketshare...they didn't want it anyway? Sorry, that's a very quaint idea but believe me Apple would LOVE to dominate the smartphone market. Why wouldn't they? The fact that they don't and won't is a result of selling an expensive closed system when there is an open source, comparable alternative that costs less. It's an old lesson they still haven't learned from the Mac Vs Windows days. Apple's natural position is that of a niche player; a boutique alternative to the mainstream.

Consider the difference if Apple had made iOS open source to any smartphone manufacturer from the start.

As for me downplaying malware/viruses....I didn't think I was, anyone with the slightest know-how about computers can take the simple steps needed to avoid such problems. If they really can't, that's an educational issue.

I'm very very happy Apple didn't learn ANYTHING from Windows ... Very happy indeed.

 

[Mockenrue]

So far, no one else appears to be following T-Mobile's lead. Also, neither AT&T nor Verizon seem to be rushing to add back unlimited data plans.

No, they don't want to add back unlimited plans. Bu they DO want to eliminate subsidies, and they are already starting to ease consumers down that path with the early upgrade plans that have you pay nearly full price for both the phone and the plans. By keeping the up-front price low, they are masking the bad deal. Pretty soon, they'll try to push everyone that way. They'll be willing to give up 2 year contracts to get rid of subsidies, and they are already taking steps in that direction now.

 

[Max(IT)]

I have found the arguments about Android supremacy based on market share numbers to be interesting, but one thing stands out. It is Samsung that is having a "crisis management" meeting of its top executives, and spending $14 billion on advertising to try and keep up some demand for their phones, not Apple. Seems like Tim and the gang likely know exactly what they are doing.

It is Samsung that is cheating on common synthetic benchmark trying hard to keep their products on par or ahead of iPhone (which doesn't need an eight core >2 Ghz chipset to run an os smoothly )

 

[verpeiler]

I bet Toyota sells a lot more cars than Ferrari. I highly doubt Ferrari cares how much cars Toyota are selling. That's basically the analogy going on here. A lot of these people weren't going to purchase an iOS device anyways (assumption). Toyota sales don't imply a loss of Ferrari sales. Android sales don't imply a loss of iOS sales.

But this is nonsense.. iPhones are far from being Ferraris or even BMW.. They're all Hondas... and most Android phones are Hondas too. And stop those crappy car analogies ;-)

 

[Max(IT)]

"fandroids" Ha! I hadn't heard that one before.

It's a quite common joke

----------

The amount of mis-information here is really bad.
1) APPLE has LOST market share over the last year
-BUT-
2) APPLE has sold MORE IPhones this year than last, about 25% more.

How is this possible? Because Market share DOES NOT DIRECTLY EQUATE to units sold. Apple's share has decrease even while selling MORE PHONES because the other brands have also sold MORE phones as well, causing the TOTAL amount of smartphones sales to INCREASE, in this current market EVERYONE COULD gain sales year over year.

So, given this decrease in market share, what BAD effects can Apple expect?
Well, their sales are UP, and so is their profit. They STILL make more profit selling mobile devices than any other company (and in some timeframes more than ALL other companies combined)

Now, there is some real concern about "relevance" in relation to app and accessory availability. HOWEVER, this is NOT directly related to market share either, and, SO FAR, apple is in really good shape here. For several reasons:

1) Higher market share of Handsets does not equate to higher market share in later purchases, i.e. accessories and apps. On average Apple users buy more apps than Android users.
Ex. Toyota sells far more Camry's than Ford sells Mustangs, but there are FAR more accessories available for Mustangs, because buyers of Mustangs are more likely to purchase accessories for their car.

2) Fragmentation; For app developers/accessory Manufacturers, Fragmentation affects these companies choice of platform to develop for:
Ex. Develop ONE app for IOS and you can reach nearly ALL of the Iphone install base. Develop ONE app for android, and depending on the specifics of the app, you may only reach 25% of android’s install Base. THEN couple that with the fact that, on average, android users are FAR less likely to purchase apps, and you could sell SIGNIFICANLY less on android than on IOS, OR you have to develop multiple versions for the multiple versions of android and differing handsets, incurring higher development costs.


The things Apple HAS to worry about are:
1) Keeping PROFITS up, and idealy increasing them.

2) Keeping relevent enough to keep a thriving app/accessory environment so as to not hurt #1, Profits.

3) Market share, only as it AFFECTS #1, and #2.

Glad to see someone who can understand that market share not equals to profits but it's just a part of the equation.

 

[dBeats]

Are you aware that you have linked to smartphones that are not Android, some from 2010 and 2011?

Can you just link one Android phone that it is not an smartphone?

Do you consider the original iPhone an smartphone?

The Nokia turns out not to be a Android phone, you're right. The others are definitely android phones. It doesn't matter than they came out in 2011, they are running versions of the OS that still exist today.

There are literally tons of these phones running Gingerbread and even Froyo that are selling in India and China that are basically feature phones. They are all very similar to what you see in my links.

Review this http://opensignal.com/reports/fragmentation-2013/

And you'll see that even in the beginning of 2013 about 65% of Android install base was equal to or lower than gingerbread.

My point being, that a large portion of Android installations are in free feature phone form factors with old versions of Android and these are always included in "Smartphone" comparisons to iOS.

Was the first iPhone a smart phone? That's a good question. I'd say actually no, but then again no one is selling them anymore and calling them smartphones and it wouldn't effect the comparison here.

So cut 65% of the android market share out as "feature phones" and then you'll get an Apple's to Apple's (pun intended) comparison.

 

[mdelvecchio]

I recently switched from iPhone to Android. I don't know why I waited so long - lots more innovation and choice on this side of the fence. Moved my parents over this weekend as well - they are also thrilled

I used to be 100% in the Apple ecosystem with laptop, phone, and tablet. Apple's lack of innovation (ever-thinner is no longer a suitable upgrade feature) is going to start to see the loss of a lot more people.

cool story bro

 

[osofast240sx]

49k is considered low income?

Depends on who your comparing it to. $50k puts you in the top 1% of the worlds income.

 

[fermat-au]

Some surprisingly high Windows numbers there. Especially GB. I've seen exactly one Windows phone in the wild yet they have 10%

We need to remember that these are recent sales number not phones in use. Most of the phone you see out on the street and on buses etc may be a year or more old.

Windows phone is selling better than I expected, up every where (other than China) Y/Y. Within a year Windows will, most likely, be number 2 in Europe, pushing iOS to third spot.

 

[Risco]

I see Android users as the bargain bucket searchers. Always looking for a deal, so long as it is cheap. Apple users actually use the phone and it's features and low and behold BUY apps and use the web browser.

 

[mdelvecchio]

iOS devices are priced at least double that of their Android competitors. In the US, this price difference is masked by carrier subsidies, which aren't given in Europe.

Either Apple can come down significantly on price to compete in volume, or they can continue to let iOS marketshare dwindle away and be happy being a premium brand. It's Mac vs. Windows again.

oh, ignorance is bliss, isnt it?

it's not Mac. vs Windows again. why? during the height of that era apple was *never* in the position apple is in today. today Apple eats the lions share of profit from both mobile and desktop sales. let that sink in. they are the most successful PC maker, and most successful mobile maker. when mac lost the windows market share game it produced crummy products -- they deserved to fail. today, iOS makes the single-best selling mobile device due to its outstanding quality and feature set. the majority of android market share are cheapie devices in asia and whatnot that apparently never see the light of day in usage, while iOS devices have more usage, more consumer spending on them, and a better pool of (quality) applications.

so many differences.

----------

developers are going to develop for the largest, most lucrative market first and foremost.

...key word being "lucrative" -- which remains iOS. iOS users spend more than Android, and thats a fact. as a dev, i dont care how many cheapie android randoms there are if people arent buying things.

I reckon that within the next 1-2 years we're going to be seeing people switching from iOS to Android driven by availability of must-have apps.

aannny day now... you realize people have been saying that for years now, right?

Take Passbook for example - if iOS was still the dominant mobile OS then we'd have every man and his dog supporting it and it would potentially have become an industry standard across the travel and entertainment sectors.

MLB? TicketMaster? all the major airlines? passbook. so...what are you talking about?

Instead, developers are not seeing the point of incorporating a legacy system that's unique to an OS with a reducing penetration.

again -- devs who make money dont care about market share. they care about profit share. where is my profit coming from? where are the users willing and documented to be spending more on apps and services? iOS.

 

[cycomiko]

How can you say that Siri is a joke when you no longer use it? Siri is amazing, especially after the iOS 7 upgrade she received. Way more natural and intelligent, and only getting better. You position your argument as if Siri is a static thing that's not changing, but she's getting better on a regular basis.

siri appears to work well for some, and garbage for others. So YMMV.

iOS7 did nothing for the utility of siri for me. Saying hte same command over and over and over should be left the xbox one, rather than my phone.

 

[Oletros]

The Nokia turns out not to be a Android phone, you're right. The others are definitely android phones. It doesn't matter than they came out in 2011, they are running versions of the OS that still exist today.

The Samsung phone was a Windows Mobile phone.

How doesn't matter that you have put phones from 2010? Why don't you put a phone from 2008 then?

There are literally tons of these phones running Gingerbread and even Froyo that are selling in India and China that are basically feature phones. They are all very similar to what you see in my links.


Review this http://opensignal.com/reports/fragmentation-2013/

And you'll see that even in the beginning of 2013 about 65% of Android install base was equal to or lower than gingerbread.

My point being, that a large portion of Android installations are in free feature phone form factors with old versions of Android and these are always included in "Smartphone" comparisons to iOS.

Was the first iPhone a smart phone? That's a good question. I'd say actually no, but then again no one is selling them anymore and calling them smartphones and it wouldn't effect the comparison here.

So cut 65% of the android market share out as "feature phones" and then you'll get an Apple's to Apple's (pun intended) comparison.

I'm still waiting an example of one Android phone that it is not an smartphone. And no, using Gingerbread doesn't make it a feature phone.

Cut a 65% of android marker, do you really know what are you talking about or you just put the first link you have found on google even if it is an Windows Mobile smartphone, a Nokia phone or a high end Android smartphone from 2011?

 

[tooobe]

iOS devices are priced at least double that of their Android competitors. In the US, this price difference is masked by carrier subsidies, which aren't given in Europe.

Either Apple can come down significantly on price to compete in volume, or they can continue to let iOS marketshare dwindle away and be happy being a premium brand. It's Mac vs. Windows again.

Subsidies are given in lots of european countries. Here in Sweden for example, the price of the latest iPhone is about 30$/month (on top of the cellular plan), the same as for any flagship Android handset. That comes to a total of about 731$, which is significantly less than the retail price of the latest iPhone which is about 914$. The cellular companies simply has a larger margin on their Android handsets.

 

[sixrom]

I buy what I enjoy, currently that's Android first, IOS second.

 

[gnasher729]

Yes! It is Mac vs Windows again!

And how did that turn out? Apple is still selling the Mac after 30 years and dominates the lucrative high-end computer market. (that's exactly what Apple wanted)

Meanwhile... huge PC makers like HP and Dell were actually toying around with the idea of leaving the consumer PC market because there's no money in it anymore. Cheap PCs have driven down the value of Windows machines so low... that it's barely a viable business. (that's NOT what those companies wanted)

The last time that estimates were published, Apple accounted for 45% of all profits from selling traditional computers, Dell was second at 13%. That was before Dell's profits collapsed. Microsoft isn't counted in these numbers because they are about computer hardware sales only.

----------

So how does Apple's market share fall if their share of all phones has increased?

1. Market share of all smart phones.
2. Market share of all phones.

The percentage of phones that call themselves "smart phones" has been growing and is getting close to 70% now.

 

[PadreQuevedo]

I am wondering what's going on in Japan....maybe an unconscious anti-Korea sentiment for Samsung products?

 

[gnasher729]

You can say what you want, but you're not correct.

Well, the guys in the Apple store near my home are definitely not running scared of Android (although I've seen one guy who looked like he was going to use a Samsung phone to hit someone, and there you would run scared); they _might_ be running scared some days of the amount of people in their store.

But I have the impression that Samsung is definitely scared; or why would they hire people to post false negative reviews of competitors phones (they have been convicted and fined for that), why would they cheat at benchmarks (Futuremark has banned their phones from all graphics benchmark reports).

 

[AppleScruff1]

1. Market share of all smart phones.
2. Market share of all phones.

The percentage of phones that call themselves "smart phones" has been growing and is getting close to 70% now.

So Apple's share of smartphones is shrinking. Percentage of smart phones is increasing, non smart phones are decreasing. But you're saying that Apple's percentage of all phones is increasing? Please explain that.

 

[paysdoufs]

I used to work in Apple Retail and I can tell you categorically that they are running scared from Android. They're desperate to chain you into a two year iPhone contract any which way they can because Android is eating into their marketshare big time - and the iPhone is their biggest revenue earner.

Unfortunately for Apple, Android has caught up and is now a cheaper, and equivalent alternative.

Your first paragraph: couldn't agree more. And I'm amazed at how few people seem to realize the importance of the iPhone for Apple's financial health as a company. There was that graph on MR not that long ago: I believe the iPhone brought in 70% of all revenues - probably much more in profits (Just compare the price tags of an iPhone 5s with that of an iPad mini).

Your second paragraph: I'd supplement that with "...for what 90% of users actually do with their smartphones" (me included).

 

[thehustleman]

Well android is on the best phones out so it will be high.

Nexus 5, Galaxy s 4, galaxy Note 3, LG G2, HTC one are the 5 best phones out there at the moment.

Next up is the 5s, 5, 5c,etc.

Apple should open up a little in terms of letting a user install whatever they want on their phones.