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

[Michael Scrip]

Paying customers (app revenue) and eyeballs on screens (add revenue) are the metrics that really matter to a platform's success - not specific device model sales. Operating systems draw app makers, and apps ultimately determine success of a platform. When the Palm Pre was released, the hardware and OS were considered to be as good or better than the iPhone at the time. Palm OS is still being copied today (everyone, including iOS, now uses its multitasking UI). Nobody bought it because of the app ecosystem.

Apple made the choice not to license iOS to other handset makers, so they have to take the good (less handset options = less fragmentation) with the bad (less handset options = lower market share). Apple still does very well because the app and add revenue historically has been the highest. Those gaps are narrowing now. If/when that equation swings in Android's favor, you could see the market share numbers suffer even more. It's a tide that Apple needs to address.

If Android needs 85% market share to finally equal the app and advertising revenue of iOS at 10%... that's not exactly a glowing recommendation for Android. It just shows that a lot of people are using Android... but they spend very little money on average.

Developers know this... and that's why they're not swayed by Android's phenomenal 85% market share.

I think you'll still see developers focus solely on iPhone/iPad even when it's a tiny percentage of the mobile market. (it's happening already)

Hell... it happened with the Mac years ago. There are software developers who only make software for the Mac... even though Macs represent 5% of the computer market.

Sometimes it's just not worth it to spend extra resources to support the biggest platform... when instead you should be focused on the most profitable platform.

 

[paysdoufs]

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

That's very debatable. I, personally, have never seen any well-known service provider or merchant use Passbook OUS (or maybe they don't communicate it properly?). However, I'm pretty sure that the likes of easyjet, FNAC or Tschibo would embrace it if they thought that there customer base was into it...

 

[hummus]

Google does not really make much from Android except through maybe some services. Google actually makes much more money through iOS a money making platform.

It's true they make very little from Android directly, but given that over 90% of Google's revenue comes from advertising sales, Android is just another way for them to get their hooks further into peoples lives to capture ever finer-grained detail about their users in order to sell more highly targeted ads. User data is Google's product (sold to advertisers), not Android.

 

[Someyoungguy]

Yep, the Galaxy flagships are plug and play.

Nope. PC Keis on a Mac is completely unusable.

 

[lobeyonekenobi]

Apple had a nice monopoly on modern smartphones that gave them an edge early on but that's over. Apple's two or three iPhones can not compete with the massive amounts of phones produced, and sold at several price points, by the Android vendors or even just the variety of phones produced by Samsung.

That's just the truth. Not saying that's a bad thing, Apple can still make "record profits" or whatever and be the wealthiest tech corporation in the world, but I think the market share war is over (if there ever really was one). They're eventually going to be the Macintosh of the mobile world and sell goods with a high profit margin to 10-20% of the population.

All my opinion of course, this is a forum after all

I agree with you, what's the point in trying to gain market share, it's like a war between us (Australia) and China, not even worth it, and I don't think they should pander to the "Go after the low-end brigade".

If Apple again has a share 10-15% then cool, as long as their quality is still there and customer service is still world class I couldn't give a rats nut, I've always loved the underdog anyway

 

[chillywilly]

Nope. PC Keis on a Mac is completely unusable.

I can attest to this. When I did the ICS upgrade for my Samsung Captivate, I had to use my work PC running Win 7. The Mac Keis failed after 3 tries over 2 hours.

 

[EbookReader]

What would happen if AT&T, Verizon and Sprint ditch phone subsidies like T-Mobile and go with phone financing (24 monthly installments) instead?


See Germany (77.5%), Spain (90.1%) and Italy (68.8%)

 

[Poisonivy326]

I wish people would stop with the car analogies. The Ferrari vs. Toyota analogy is really ridiculous. Ferrari's are special made luxury cars, Apple makes mass-market consumer electronics. Upscale electronics, but mass-market nonetheless.

That being said, I think it's good that Apple tried the 5c. Even if sales were disappointing, Apple ought to continue to follow their very successful Mac model in having one line of high-end Macs (now the rmbp's) and one line of "entry-level" Macs (Macbook Airs now, used to be Macbooks).

I see the 5c as very much in that line of thinking -- great for people who just want a plain-vanilla smart-phone and don't need the latest and greatest.

 

[jjofc11]

Biger screen

Yeah, sadly Android is dominating the market but also sadly Google is not making any improvement on the operating system and its appearance, we (as android user)have to do a lot of workarounds to simplify it like iOS, I switched from iOS to Android thinking that I was going to leave the walled apple garden but I realized that is not as good as i though, specialty because the software updates has to come from the carrier and the phone manufacturer is really frustrating

 

[mib1800]

If Android needs 85% market share to finally equal the app and advertising revenue of iOS at 10%... that's not exactly a glowing recommendation for Android. It just shows that a lot of people are using Android... but they spend very little money on average.

Developers know this... and that's why they're not swayed by Android's phenomenal 85% market share.

I think you'll still see developers focus solely on iPhone/iPad even when it's a tiny percentage of the mobile market. (it's happening already)

Hell... it happened with the Mac years ago. There are software developers who only make software for the Mac... even though Macs represent 5% of the computer market.

Sometimes it's just not worth it to spend extra resources to support the biggest platform... when instead you should be focused on the most profitable platform.

Simple answer is this.

U.S users contributes to biggest spending in AppStore corresponds to the largest installed base of iOS users. iOS Appstore also is the ONE AND ONLY store that sells iOS apps which makes sales tracking and reporting a piece of cake.

On Android, other than the Playstore, there are virtually thousands of app stores (esp. in Asia) and there is really no way to track what kind of spending on those stores. On the whole I think it is still true that Android apps revenue still have some catching up to do with iOS but it is nowhere near the vast difference reported in this thread.

The other factor is piracy is also an issue with Android. Many developers chose the ad-supported or other revenue options like stickers etc which means a lot of paid apps in iOS are free on Android. But free apps do not always mean no sales revenue.

Personally, I dont mind apps appear in Appstore as paid apps first then come to Playstore for free/cheaper. To me, this just means iOS users are funding the developers cost/profit and cross-subsidizing the Android version.

 

[mib1800]

Yeah, sadly Android is dominating the market but also sadly Google is not making any improvement on the operating system and its appearance, we (as android user)have to do a lot of workarounds to simplify it like iOS, I switched from iOS to Android thinking that I was going to leave the walled apple garden but I realized that is not as good as i though, specialty because the software updates has to come from the carrier and the phone manufacturer is really frustrating

Are you joking?

For a dumb user point of view, there is really no different. Use the phone app for calling. Web browser app for surfing etc.

For a more typical to advanced users, iOS is such a pain to use and really needs workarounds. I can do hundreds of things easier and faster with less steps on my Note3 that I can do in iOS. There are so many limitations with iOS that's not even funny any more.

 

[Michael Scrip]

Simple answer is this.

U.S users contributes to biggest spending in AppStore corresponds to the largest installed base of iOS users. iOS Appstore also is the ONE AND ONLY store that sells iOS apps which makes sales tracking and reporting a piece of cake.

On Android, other than the Playstore, there are virtually thousands of app stores (esp. in Asia) and there is really no way to track what kind of spending on those stores. On the whole I think it is still true that Android apps revenue still have some catching up to do with iOS but it is nowhere near the vast difference reported in this thread.

The other factor is piracy is also an issue with Android. Many developers chose the ad-supported or other revenue options like stickers etc which means a lot of paid apps in iOS are free on Android. But free apps do not always mean no sales revenue.

Personally, I dont mind apps appear in Appstore as paid apps first then come to Playstore for free/cheaper. To me, this just means iOS users are funding the developers cost/profit and cross-subsidizing the Android version.

What apps are in those app stores? Any apps from high-profile developers?

Does Candy Crush have in-app-purchases in all those unofficial Asian app stores?

I'm just trying to figure out what exactly goes on in these random app stores... if anything.

Are you suggesting that there is actually plenty of money spent on Android outside of the official Google Play Store... but no one reports on it?

Somebody has to know, right?

 

[KPOM]

Image

What would happen if AT&T, Verizon and Sprint ditch phone subsidies like T-Mobile and go with phone financing (24 monthly installments) instead?


See Germany (77.5%), Spain (90.1%) and Italy (68.8%)

They'd probably lose a lot of sales in general. It isn't just Apple phones that benefit from big subsidies. So do Samsung phones, particularly the Galaxy S4 and Note 3, and the HTC One and Moto X.

Spain is a bad example. Their official unemployment rate is over 26%. That's Great Depression numbers.

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I wish people would stop with the car analogies. The Ferrari vs. Toyota analogy is really ridiculous. Ferrari's are special made luxury cars, Apple makes mass-market consumer electronics. Upscale electronics, but mass-market nonetheless.

Lexus/Toyota or Acura/Honda are probably better car analogies.

 

[MattInOz]

The strategy outside of the USA needs work, Apple.

Try reading MacRumors once in a while, we have all the answers.

Yes for one thing they could use the improving US dollar to lower prices in the US thus keeping the international prices closer to what they have been for the last few years.

 

[moderately]

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.

Come on, scruff. Here is how it is possible- I am making up the numbers.

Last year total phones of all types sold worldwide =10 . 5 smart phones, 3 iPhones. Apple had 60% of smart phones, 30% all phones.
This year sold 10 total phones of all types. 7 smart phones, 4 iPhones. Apple has 57% of smart phones, 40% of all phones.

I imagine the math will work out with the actual numbers especially as I expect that the total numbers of phones sold is also increasing year to year.

 

[Michael Scrip]

What would happen if AT&T, Verizon and Sprint ditch phone subsidies like T-Mobile and go with phone financing (24 monthly installments) instead?

See Germany (77.5%), Spain (90.1%) and Italy (68.8%)

What's the mobile landscape like in those countries?

If Germany doesn't subsidize/finance phones... what phones are people buying there?

Are they buying $600+ smartphones? Or are they buying much cheaper smartphones?

 

[Rogifan]

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.

How does one objectively define what the "best" phone is?

 

[AppleScruff1]

Come on, scruff. Here is how it is possible- I am making up the numbers.

Last year total phones of all types sold worldwide =10 . 5 smart phones, 3 iPhones. Apple had 60% of smart phones, 30% all phones.
This year sold 10 total phones of all types. 7 smart phones, 4 iPhones. Apple has 57% of smart phones, 40% of all phones.

I imagine the math will work out with the actual numbers especially as I expect that the total numbers of phones sold is also increasing year to year.

I'm having a brain malfunction on this. I'm following your example. As more smart phones are sold, there are less dumb phones being sold. Smart phone share increases, dumb phone share decreases. Let's say someday 100% of phones sold are smart phones. Android continues to increase it's market share, Apple's share decreases. How does Apple's percent of total phones increase?

This has nothing to do with Apple or Android, it's math. And for some reason it's not sinking in.

 

[mib1800]

What apps are in those app stores? Any apps from high-profile developers?

Does Candy Crush have in-app-purchases in all those unofficial Asian app stores?

I'm just trying to figure out what exactly goes on in these random app stores... if anything.

Are you suggesting that there is actually plenty of money spent on Android outside of the official Google Play Store... but no one reports on it?

Somebody has to know, right?

Samsung App store has a wide range of apps. The whole of china does not use playstore and there are plenty of androids there. Store like getjar uses pyramid selling/recommendation to make money. Some Android developers sell apps directly too. I bet all these are not captured anywhere in the statistics.

I think nobody knows how much money are made outside of Playstore but it is definitely not insignificant. But what is interesting is this. If what the statistics said is true, then why developers even bother with Playstore. The reality is all the popular and mainstream apps in Appstore are represented in Android as well. Nowadays popular games/apps are launched simultaneously on both platforms.

I dont think there is any advantage to ios users with Appstore generating more revenue (according to the statistics ). Maybe the reverse is true (i.e. ios users are cross subsidizing Android users since a lot of paid apps in iOS are free for Android). iOS users can wallow with this "win" by paying more money.

 

[Michael Scrip]

Samsung App store has a wide range of apps. The whole of china does not use playstore and there are plenty of androids there. Store like getjar uses pyramid selling/recommendation to make money. Some Android developers sell apps directly too. I bet all these are not captured anywhere in the statistics.

I think nobody knows how much money are made outside of Playstore but it is definitely not insignificant.

If there is money being made... somebody must know about it.

I hate phantom dollars

I dont think there is any advantage to ios users with Appstore generating more revenue (according to the statistics ). Maybe the reverse is true (i.e. ios users are cross subsidizing Android users since a lot of paid apps in iOS are free for Android). iOS users can wallow with this "win" by paying more money.

There are many reports of the Android version of an app not being as good as its iOS counterpart.

It may be that developers put the majority of their efforts into the paid iOS version... and whatever's leftover goes into Android.

That might be what's going on with that scenario of iOS users paying more money.

 

[Oletros]

There are many reports of the Android version of an app not being as good as its iOS counterpart.

One or two years ago, yes, today? I don't think so

 

[Giuly]

So it worked! Congratulations Apple!

It also continues to face challenges in mainland Europe and China, where Android's market share is around 70% or even higher in many countries.

It's arguable on at least some levels.

 

[paysdoufs]

What's the mobile landscape like in those countries?

If Germany doesn't subsidize/finance phones... what phones are people buying there?

Are they buying $600+ smartphones? Or are they buying much cheaper smartphones?

It's very easy to answer this answer since Amazon.de publishes the list of their best-selling unlocked phones: http://www.amazon.de/gp/bestsellers/ce-de/3468301/ref=pd_zg_hrsr_ce_1_2_last

Observation (1): 300 EUR seems to be a psychological barrier that is hard to pass (and, arguably, phones for less than that browse the internet, allow you to read your emails and take pictures jsut fine...)

Observation (2): It's mostly the latest Android flagship phones that sell beyond the 300 EUR price-point.

 

[PinkyMacGodess]

I prefer the statistics that show ONLY quality flagship phones. Provides a much more realistic picture.

Someone actually does stats like that? Hmm...

 

[Oletros]

I prefer the statistics that show ONLY quality flagship phones. Provides a much more realistic picture.

Then put a link to those statistics