For every AT&T Android user there are 15 iPhone users: What will be the ratio at Verizon?

The following chart uses comScore data to show the relative consumption of Android vs. iOS by the subscribers of the four major US operators. I modified an original chart published by Silicon Alley Insider.

A few observations:

  • As of November, the ratio of iOS to Android users was more than 15 to 1 at AT&T.
  • iOS at AT&T has twice the users as Android at Verizon
  • Although T-Mobile had the Android franchise to itself for all of 2009, it was overtaken by Verizon within four months
  • T-Mobile Android consumption has also been nearly matched by Sprint within a year

The rapid eclipse of T-Mobile smartphone penetration makes one wonder how effective Android is as a differentiator for carrier and device vendor alike. It also explains their new pricing model.

The data also gives clues to how iOS at Verizon will grow.

Since Verizon and AT&T have nearly the same number of subscribers, excluding RIM ,which is common to both, AT&T has a far larger penetration of smartphones (16.5 million vs. 7 million.) Is the cause iOS itself or the delay with the timing of Android launch at Verizon?

Other data from comScore shows that much of the gains for Android at Verizon have been at the cost of RIM, so Android has not been entirely additive. Will there be a similar platform switching going on or will iOS be additive to the Android base?

On one hand, the potential exists for a similar number of touch smartphone users at Verizon as at AT&T (15 million as of November). On the other, Verizon is “half-penetrated” with Android. How many will switch (as they did with RIM) and how many will be new users?

I’m not going to make any predictions yet but I would not be surprised if Android at Verizon will flatline if not drop while iOS at Verizon will jump quickly to make the sum of both equal to AT&T iOS in about twelve months. That would imply about 10 million new Verizon iOS users by 2012.

If Verizon users start to switch from Android to iOS, iOS could add as much as 15 million users. It seems that 10 to 13 is a reasonable estimate.

  • Narayanan

    the growth rate of Android in Verizon is getting steeper than the corresponding iPhone in AT&T, suggesting that Android is pulling away. But this is not clear in the case of the other companies. So more than the phone, it must be the Verizon customers or the Verizon marketing machine hat is significant. So if the Verizon attention turns to iPhone it is going to be huge, even that may be an understatement.

    • kevin

      On this chart, we don't see what the iPhone growth rate was in the days of iPhone 3G (after subsidy kicked in).

      Since the growth rate will usually slow as a market gets saturated, it's usually a mistake to compare the initial uptake with a later uptake. There's no reason to believe the Android-on-Verizon-growth-rate will continue.

    • qka

      The iOS rate at ATT and the Android rate at Verizon look the same to me, except for the drop in iOS in the most recent period. That follows historic precedent, in that iPhone sales usually drop off as the model is anticipated, only to grow at even faster rates once the model is available.

  • dchu220

    I winder if there is a way to estimate in the number of Verizon customer that jumped to AT&T specifically for the iPhone.

    "Over the last five years, overall churn has actually crept up at Verizon, from 1.1-1.2 percent in 2006 to 1.3-1.4 percent in 2010, with AT&T closing in fast, from 1.8-1.9 percent in 2006 down to 1.3 percent in 2010, according to Strategy Analytics."

    Even without the iPhone, Verizon has been an industry leader in quarterly churn rate. (Partially because everyone else was sooooo bad).

    With a subscriber base of about 90 million, a 1.3% churn is about 1.5 million subscribers a quarter leaving. Maybe somebody can do more with that data than I can. My guess though is that the iPhone hurt Sprint and T-Mobile more than Verizon and that Verizon will regain an industry edge in Churn Rate as soon as the iPhone is introduced.

  • Narayanan

    Sorry, re-post after proof 🙂

    The growth rate of Android in Verizon seems to be getting steeper in Oct-Nov than iPhone, suggesting that Android is pulling away. But this is not clear in the case of the other companies.

    So more than the phone, it must be the Verizon customers or the Verizon marketing machine that is significant. So if the Verizon attention turns to iPhone it is going to be huge, even that may be an understatement.

    • Sandeep

      I wonder why the rumours of iphone of verizon have not really stopped the growth of android phones on verizon.

      • FalKirk

        First, how do you know the rumors haven't slowed the growth of Android phones on Verizon? The smartphone market has been growing at a 90% clip for the past year. Even if a large number of potential customers delayed their purchases in order to wait for a rumored iPhone, it would be hard to detect their absence in such a rapidly growing market.

        Second, what choice did people have? Rumors are not devices. If they wanted to stay with Verizon and they wanted to buy a smartphone, their only choice was RIM or Android.

      • asymco

        Consumer do not react much to rumors or even to confirmed rumors. Not even the widely publicized leak of the iPhone 4 was enough to change purchasing behavior of the iPhone 3GS in the quarter preceding launch. The 3GS grew 61% that quarter.

      • Sandeep

        I wonder why android phone is still growin in germany despite Iphone being on all carriers in germany, strange eh

        And the question really is why do apple fans claim droid franchise was only growing due to non-avaiability of iphone of verizon, any hard proofs ? apart from subjective reasoning

      • dchu220

        Do you realize that he made a comment in support of your thesis? Reading comprehension buddy.

        Nobody said that Android is only growing because of the absence of the iPhone. The popular theory is that the majority of consumers base their purchase decision based on the carrier before the device. That's why we think the iPhone is going to sell a lot on Verizon.

        Verizon must also think so because they are not forcing Apple to load Verizon apps onto the phone.

        You've got to realize that the real battle here for the carriers are the postpaid data contracts. If they sell an Android phone with no data contract, they don't care. Everyone on Verizon can buy an Android, but if they don't hook up the data, Verizon is still in a horrible position. The margins on voice in the US have collapsed.

      • Sandeep

        but aren't carriers subsidizing smartphones ? so out of those monthly carrier bills, how much is going towards phone repayment cost. Those carriers have to pay a huge amount to Apple for the upfront costs of purchasing an IPhone.

      • dchu220

        I don't see why that's important. It's just a different way distributing the costs. It's just like buying a house. You put a down and then you make monthly payments. Sure, you will always pay a premium for not buying up front, but that's the customer's decision to make.

        In this structure, the fool is not the person who buys the subsidized plan but the person who doesn't upgrade after two years.

        I don't think the price difference between the high-end Android phones (relative to the US) and the iPhone are that far apart. About 500 for the Galaxy S and 600 for the iPhone. It's not much of a factor when you consider the data plans.

      • Sandeep

        Apple sells Iphone 4 for 600 dollars to the carriers, Samsung does not sell it at 500 dollars to AT&T, they sell it for less, this is where Apple makes it huge profits and is siphoning off all the industry profits , ever wondered why IPhone 4 is not available for outright purchase from AT&T for 600 dollars, but Samsung Captivate is available for 500 dollars?

        And you are comparing buying a house worth 500K with a measly phone costing around 600 dollars. You need to buy a phone on loan ?

        Customers are not aware just like how most customers are not aware that the first link of the google search is a highly targeted and personalized ad and just habitually click it, this is the secret sauce of google and apple's profits and the carriers profits, customers relatives stupidity to understand simple things.

      • dchu220

        I don't know what carriers pay for other phones, so I'm not going to comment.

        It's not that consumers are stupid, its just that the expectations of the market are different. Consumers in the US want things to be simplified. Coming from India, you might think it's crazy. That's probably why Apple doesn't do too well in India.

      • Sandeep

        it is definitely less than what Apple sells Iphone to AT&T. Yep outsiders can easily see the stupidity, for eg in US , people can see easily see the stupidity of Indians and Pakistanis fighting over a piece of land and they wish that both India and Pakistan come to a reasonable compromise and stop this ruinous fight destroying both countries, similarly an Indian like me can easily see the stupidity of US folks who earn a per-capita average of 45K in buying a 600 dollar phone on loan, so funny and most of them(at that time) actually believed in their US president when he said Al-Qaeda was in Iraq, so lets start a war on terror in Iraq and of course most of us Indians also foresaw the subprime crisis as well, customers chasing ever bigger loans in the pyramidal scheme of ever increasing house prices.
        Consumers are stupid at things, this is not what I have said, it is somethig that Scott Adams has said repeatedly.

      • Abhi Beckert

        How do you know it's less than what apple sells the iPhone for? Where do you get this $600 figure?

        Based on the RRP for an iPhone in countries where you can buy it outright from apple's website… $600 seems high.

        I don't see anything in the samsung phone that looks cheaper than the iPhone all the expensive parts (cpu, battery, display, wireless chipsets) are of similar specs on both samsung/iphone, and apple has mass-production on their side.

        Comparing the iPhone to all android phones combined is one thing, but when comparing the iPhone to a single phone model from a single android manufacturer, then you start to see just how much cheaper apple's manufacturing must be. The Samsung Galaxy X components are being manufactured in much smaller quantities than the GSM iPhone 4 (the CDMA iPhone will obviously have much smaller production runs, since it only works on ~1% of the carriers selling iPhones, but at least it shares most of the components with the GSM iPhone).

        I have no doubt apple's profit margins are bigger than samsung's, but the actual per-unit wholesale price? It's probably about the same and possibly cheaper.

      • Sandeep

        sorry for taking traffic away from asymco, since you asked for proof,

        "Wireless operators pay companies such as Apple one price for a phone and then sell them to consumers for less to encourage people to sign up for two-year service contracts. The iPhone subsidy, at $400, is higher than the $200 to $300 that carriers pay for most smartphones, said Tina Teng , senior analyst for wireless communications at researcher iSuppli Corp."

        Here is more from the link

        "While the smartphone will help Verizon add more subscribers this year than rival AT&T Inc. , currently the exclusive U.S. carrier for the iPhone, it will also crimp profits, said John Hodulik , an analyst at UBS AG. Hodulik said Verizon may sell 13 million of the devices with an estimated $400 subsidy this year, which would add up to a total of $5.2 billion."

        since IPhone will be sold for 199 dollar at Verizon, 199+400=599 dollar is the price at which verizon is buying Iphones. And I am pretty sure droid/blackberry/WP7 phones are not being sold at 600 dollars to verizon. No wonder they are much cheaper on the amazon website. You get a samsung captivate for merely 49 dollars on amazon.

        Apple buys a lot of stuff from Samsung & LG, so samsung will make more money even if they sell the samsung captivate at say just 350 or 400 dollars, rather than solely relying upon as commodity supplier to Apple Iphone, you know customers do not know anything about internals of the iphone, but people who buy a samsung phone enables samsung to establish to kind of brand presence with the end-user.

      • dchu220

        Thanks for the link.

        So the difference in wholesale pricing between the iPhone and other smart phones is between $100 – $200 dollars. Not a big deal when you factor in the data plan.

        The real value is in the service plans, not the phones. It's like how HP sells printers at cost in order to make money on the back end selling cartridges.

      • Sandeep

        not for the end-users, it matters a lot for the carriers doesn't it ? 200 dollars * 15 million IPhones(estimated amount of iphone sold at verizon in 2011)=3.0 billion dollars extra subsidy that verizon has to bear to carry the IPhone.
        Most of the end-users(not all but most) are not even aware that the phone is being subsidized.

        If Apple reduces the selling price to carriers, the margins of Apple will be hit, I wonder how they will make that up. Maybe buying factories and integrating more vertically to bring down manufacturing costs as asymco speculates.

      • dchu220

        Hey Sandeep. Got your reply on email but it hasn't showed up yet on the site.

        Yes. Paying $100 more on 10 million phones equals a difference of 1 billion dollars. But you are talking about a company that may hit revenues of $100 billion + in 2010 ($26B in Q3) and is likely to shoot past that in 2011.

        But to Verizon, their battle is not about Apple vs Android. It's about converting voice-only customers into postpaid (contract) data customers. These are the most valuable customers in the industry and they want any phone that does a good job of converting on their network.

      • Coward_The_Anonymous

        I am already tired of BS you spreading around, so I will give you real world example.
        I bought unlocked, no contract iP3GS in Europe, paid $600, then brought it to US and i bought service from ATT. I have to pay $39 + $15 every month and i did for 2 years. Same cost for one with ATT contract and $199 iP3GS.
        What is my advantage? I spent $400 more and exactly the same money for services. I did just stupid.

        For most people it is cheaper to get subsidized phone, they get discounted for the promise they will spend money with ATT (any carrier) for 2 years, that's all.
        BTW. Same cost if i buy BB (or virtually any phone) with contract or w/o. Much cheaper with contract.

        So please stop shitting around, everyone's case is different. I am happy for you there are cheaper no contract phones in India. Happy new year!

      • asymco

        Droid competes with several alternatives the biggest of which was non-smartphones. Since smartphone non-consumption is by far the largest competitor it tends to be everyone's target. Fortunately it's not a very strong competitor and it's losing share rapidly.

        You can see the share erosion here:

      • helpful guy

        Droid != Android. One is a phone, the other is an operating system.

      • kevin

        Umm, because the Android phones got cheaper and cheaper. Even in Nov (Black Friday), Android phones had begun the move beyond BOGO free to just plain free with contract.

      • dchu220

        Why are getting personal?

        Seriously Sandeep. You've got problems. You give Android fans a bad name.

      • Sandeep

        personal ? that guy does not know that there is no such thing as a 'free' phone and everything whether a 199 dollar iphone or a zero dollar droid phone has an accompanying heavy 100 dollar per month contract, I just informed him 🙂 over 24 months , it hardly matters whether you get the phone for free or pay 199 dollars upfront, so that is a lazy argument.

      • Abhi Beckert

        The iPhone is free with contract on nearly every carrier where I live.

      • dchu220

        Where is that?

  • Sandeep

    at&t is a dead duck, this is what happens when someone depends on Apple for growth 🙂 Free lunch is never good for anybody.

    • FalKirk

      Honestly Sandeep, why do yo bother to post here? Have you noticed the high level of discourse at this site. As brilliant as Horace Dediu's observations are, this may be the only site where I glean as much knowledge from the comments as I do from the blog posts.

      Let's examine your assertions. First, you assert that AT&T is dead. Debatable. Some think it will take a serious hit while others believe it will do just fine. Second, you assert that "this is what happens when someone depends on Apple for growth". What exactly is it that happened, Sandeep? AT&T – the most despised carrier in the States – made truckloads full of money while growing to within hair's width of becoming the largest carrier in those States? Is that the punishment that AT&T is enduring and the fate that others can look forward to for having the audacity to partner with Apple? Third, you assert that a "(f)ree lunch is never good for anybody". Well, that may or may not be true, but in this context, what does that even mean? So far as I can see, no one got a free lunch here.

      You're wasting a great opportunity here, Sandeep. The people who comment here are, on the whole, knowledgable, experienced, courteous and willing to share. That's a rare gift. Take advantage of it.

      • dchu220

        Hey Falkirk. I second the notion that the commenters on this blog are great. This is the only blog where I consistently read the comments.

      • barryotoole


        The readers of this, or any, site should self-police so we don't end up with trollish commentators who ruin the whole discussion/discourse experience.

    • kevin

      Apple gave AT&T 3 years to improve their network so that they could use all the capablities of iPhone but they moved too slowly and turned customer iPhone glee to disappointment and dissatisfaction.

      Video streaming, tethering, VoIP and more were delayed/blocked by AT&T. Facetime is still a no go.

    • thenewperson

      Always the antagonistic one, Sandeep is. Why even bother though?

      • Sandeep

        I like talking to people who have different view of things, I am sorry if I have offended you with my different mindset.

      • Sandeep

        so even this comment has been downvoted by one person, wow 🙂

      • arjun_

        Different mindsets are not the issue, Sandeep. A well-reasoned point of view is always welcome. Everything else, isn't. I've been a reader of this blog for about a year now and have never come across a deleted comment. Yours was the first one. Watch and learn, or there are several other sites where people will be happy to engage with you.

    • Sandeep

      I was just joking folks, don't take it so personally.

  • Pieter

    It seems that the single-carrier iPhone has about the same number of devices that Android has on these 4 carriers together? Interesting!

    I would think that the 1:15 ratio will not be reached at Verizon (That would imply that 7×15=105 million customers would choose the iPhone at Verizon, even though the total Verizon user base is now 90M…)
    I expect that the subscriber distribution of monthly bill total for AT&T and Verizon to be about the same:
    Both have about 90M subscribers and I expect that the subscriber distribution over the USA and income distribution will be about the same.
    This implies that the subscriber base can (will?) bear the same monthly cost.
    Still, it is interesting to have such a data point: The monthly fee for iPhone or Android will be about the same, both on AT&T or Verizon, but even then AT&T customers choose for the iPhone.

    What part of the Verizon subscriber base could pay the smartphone monthly bill but does not do that yet?

    I expect that a big part of the increased churn at Verizon and decreased rate was indeed due to the iPhone.

    • Actually, the Postpaid subscriber base for AT&T & VZ is quite a bit different. AT&T has 67.7M contract subs vs 82.3M for VZ. VZ also has much lower smartphone penetration- 19M subs or 23%. AT&T has over 30M smartphone subscribers, most of them iPhone users. Many of VZ Android users were former RIMM users. Android at Verizon hasn't been able to attract large numbers of new smartphone users unlike iPhone has at AT&T.

      • asymco

        Thanks for the details. This puts AT&T smartphones at a significant ratio of contract subs 44% vs VZ at 23%. Effectively, AT&T got double the penetration of smartphones than VZ since these devices are targeted only to contract subscribers.

      • Pieter

        So the (11 billion dollar?) question is this:
        1) The smartphone ratio of subs at AT&T is 44%, where iPhone is about half (16.5/30=55%), so about 22% of subs, with all other smartphones togerher taking the other half (so also about 22% of subs)
        2) Verizon has about 23% smartphones (but no iPhones yet)
        Is this ratio comparable? (23%@Verizon vs 22% non-iPhone@AT&T)
        I would expect it is, based on income, size of customer base, etc.
        (Although iPhone is a type of smartphone, so it won't be completely comparable…)
        3) Will the iPhone share at Verizon therefor also grow to about 23%? That would imply 19 million iPhones…
        4) Profit! 🙂 (19Mx$600 = $11.4 billion revenue for Apple)

    • Bob

      I think the real question is when will iOS surpass android users on Verizon? Pardon me if this question has already posted I don't have time to read the plethora of comments!

  • hahnchen

    Horace, do you have any Android vs iOS figures in the EU or the UK market – developed markets where Android and iOS compete across all carriers.

    • asymco

      The only way to get such estimates is to pay for reports. Canalys comes to mind. GfK also captures point of sale data and is a good indicator but again, the information is not public.

      • Rob Scott

        I always find GfK numbers interesting in the sense that they never tier back to what I know to be true.

      • Mark

        Comscore for UK. Free to all.

      • hahnchen

        Thanks Mark, interesting figures. Comscore says iPhone:Android is about 2:1 in the UK. iPhone is flat, Android is growing – but the question is, is Android going to eat into iPhone and RIM? Or just Symbian (which it seems to be doing right now)?

      • huxley

        Actually it's a slight share increase in a growing market. Even Symbian is probably selling more smartphones but nowhere near enough to make up for their shrinking share.

    • Turley Muller

      End of July 2010 for the EU5, iPhone had 19.2% smartphone market share and Android 6.1% according to comscore.

    • Abhi Beckert

      I read such a report recently, but cannot remember where. From memory, it varied widely from country to country.

      In some countries, Android is more popular than the iPhone, in others (like Australia where I live) Android is almost non-existant, and the iPhone by itself is almost outselling non-smartphones.

      In Australia, I think the iPhone has done so well because:

      – all carriers offer the iPhone for $0 upfront
      – the monthly plans for a free iPhone are about the same as if you'd bought your own phone and had no contract
      – we have a very minimum wage, leading to high salaries even for the lowest end of the workforce, so even unskilled workers just out of school can afford $60 to $100/month on their phone bill
      – the iPhone is a big status symbol (in fact, most of the young people I talk to who don't have an iPhone, specifically don't want one because 9 out of 10 of the people in their social circle have one, and most of this group own an iPod Touch and love it).

      • unhinged

        Note that Telstra has started charging upfront for the iPhone rather than spreading the cost over 24 months.

  • Sean

    Something important to consider is that ATT does not have a good, uncrippled Android phone, and that most of the times on that chart that a carrier sees a large increase in the growth is when a good phone is introduced, often for the first time.

    For instance, the verizon line starts off steep at the instance where the moto droid was introduced (granted it was the first android phone at verizon, but imo it was the first good android phone. the g1 and htc mytouch just don't cut it imo).

    The sprint line jumps up right around the evo 4g.

    Android is likely to see a slight loss on verizon as subscribers 2yr contracts expire, but those won't begin in earnest until the start of 2012 or so (perhaps dec 2011).

    The best thing ATT can offer is I think the Samsung Galaxy, but it is crippled in that the whole point of open android is lost when you cannot install apps except from the market and it isn't a great phone either so most of the point for it would be for people who want specifically ATT, and most people with a specific want for att just choose the iphone if they want a smartphone. If they have a specific want for android, they go for a different carrier most likely. The galaxy is just to pick up the few who want android and ATT specifically…

    • simon

      "(Galaxy S) is crippled in that the whole point of open android is lost when you cannot install apps except from the market and it isn't a great phone either"

      Disagreed on both points. I can assure you the vast majority of people don't give a hoot about side loading except the enthusiastic tech commenters on the internet who actively seek out APKs. Open and free don't really mean much when you have a proper market – just ask Nokia users how much they love side loading apps over having a good market. Also the Galaxy S is still the top dog in terms of hardware specs. Which currently available Android phone is really better than this? For instance it destroys the EVO in GPU speed, has a faster CPU and a much better display.

    • simon

      Just to add, the real point of "open" android has nothing to do with the idealized FOSS movement. It's a way for Google to provide makers a cheap alternative to the iPhone platform and monetize the subsequent subscriber base with Google's ads. Most phone buyers have absolutely no clue regarding things like compiling their own source code nor do they care about even something simple as installing 3rd party software not from the market.

      The freedom of open source is great for people with time and inclination to get their hands dirty, but for the mobile market it's completely meaningless other than the fact phone makers and carriers flocked to Android as an iPhone alternative because it's mostly free and much cheaper and better than what they can create on their own. Oh and it's "close enough" to the iPhone. If Android stuck to its root as a Blackberry-like OS, nobody would've cared about it much.

    • Sandeep

      yep those who wanted an android phone would have never gone to AT&T, as AT&T actively discouraged android phones, I mean till july 2010 when the samsung captivate was available, all they had was the laughable backflip. Hope the Atrix changes things and AT&T learns to work hard to retain customers instead of simply relying on a halo device like IPhone

  • Rob Scott

    I expect Verizon to connect between 12 – 15 million iPhone users in 2011 and AT&T to achieve a 100% growth on prior year, meaning a massive growth for iPhone in 2011 in the US. In this forecast I assume that Apple will address more price points (read lower price points and a discontinuation of the “previous model at a low price” strategy) in June, thus enabling AT&T to grow faster than they have been able to and Verizon to add an additional 2 – 5 million more customers than if it was business as usual (my business as usual estimate is 10 million iPhones).

    I expect Android in the US to achieve a 100% growth, which is the forecasted growth rate for the industry. Here I assume that Android is going to benefit largely from customers switching from feature phones to entry priced smartphones. If cheap smartphones do not materialize I expect Android to lose share together with Windows Mobile, WebOS, Blackberry, etc .

    Now there are customers who are not happy with AT&T, some of them will switch to Verizon but I do not expect this to be big, I think 5 – 10% will switch. I however expect about 20 – 30% of Android users to switch over to the iPhone. Android for a significant number of users on Verizon has been and is a substitute. Until today if a customer wanted to buy an iPhone on Verizon s/he had to settle for an Android device or a Blackberry. For these customers Android was never their first and real choice and now that they have a choice to choose their favorite device I expect that most will switch to the iPhone.

    Lastly I do not expect nor do I think it is realistic to expect a 1:15 ratio on Verizon (even on AT&T over the long term) between Android and the iPhone, but I do expect the iPhone to outsell Android in the long run in the *developed world*.

    • barryotoole

      The 3GS, at $49, is an entry-level smartphone. At this point, it is still an AT&T exclusive, but with the arrival of iPhone 5, the price of iPhone 4 (now available in both CMDA and GSM) should drop down to $99, and if Verizon and AT&T really want to rope in customers, they could further subsidize the 16GB iPhone 4 down to $49.

      With this pricing, the UI experience of this iOS device will be miles ahead of any similarly priced, or free, Android handset.

  • yet another steve

    I certainly don't believe the ration will be anywhere near 15:1. But once again you show what a dramatic point a chart can make. A very different picture than if you just add the number on all the carriers together.

    The future may be brighter for iOS than anyone dares to believe.

    There's an assumption that as low end phones become smartphones, that'll be Androids territory. But what if Apple finds a way to pursue an ipod strategy not a mac strategy?

    Furthermore it's clear here that the rise of Android is based on the walls between carriers. But in tablets, Apple has sensibly pioneered in such a way to make carrier boundaries much less important. I don't see carriers being incubators allowing Android to grow by shielding it from iOS in tablets. Tablets absolutely could look like the iPod market.

    • Sandeep

      your point would be valid if android phone growth is stagnating worldwide, but that is not the case, android is experiencing phenomenal growth worldwide outside the US. When android activations go from 200K to 300K, do you think all 100K growth is coming from verizon ? More and more a multi-platform mobile world is looking likely to materialize which is good for everybody except for the lazy and poorly talented developers who complain about fragmentation to hide their lack of knowledge and of course Apple shareholders who would no doubt want a mobile phone monopoly like how Microsoft has had one in PCs.

      • dchu220

        Are you a developer? I hear you naming off different platforms, but I'm interested to see how much experience you with them.

      • Sandeep

        I am a J2EE developer, back in the old days we had different J2EE servers like websphere, weblogic, oracle appserver, Sun one etc that was indeed good for the industry due to intense competition between the different vendors who used to add a lot of features quickly to one-up competition, and it was good for the employees too as companies worked harder to retain talent, nobody complained about so many different app servers, now the legacy J2EE is down to just IBM and Oracle and development and innovation is dead and it is starting to resemble the PC industry no innovation, slow pace, customer price gouging, only top line/bottom-line oriented thinking, more outsourcing to cut costs, looking at employees as just paper pushers etc

      • dchu220

        Okay. I understand where you are coming from now.

      • Sandeep

        I would hate the same thing to happen in smartphones too, but yeah I guess the industry settles down on one or two platforms just so things are easier in the short-term for developers/carriers/marketing budgets etc, but in the long term a heavy price is paid for a monopoly or duopoly market unless of course something else comes along to 'disrupt' them.

      • dchu220

        I also think the industry settles down on one or two platforms because the customer is not willing to pay a premium for further improvements. Investment in the sector cools down and only the big players can survive. It's unfortunate, but it happens in every industry. One day it will happen to smart phones. And after that, the smartphone will get disrupted as a new paradigm shift emerges.

        I just think you've got to have faith. These things take time. Microsoft was once the most feared company in the world. It took 10+ years for them to look weak. Same thing will happen to Google, Facebook and Apple.

      • Sandeep

        I love the intense competition between google, apple, facebook and microsoft which is trying so hard to reinvent itself, this is when things get better for consumers as all these platform companies battle so hard to retain customers.

    • Abhi Beckert

      "There's an assumption that as low end phones become smartphones, that'll be Androids territory. But what if Apple finds a way to pursue an ipod strategy not a mac strategy?"

      That's a very interesting notion, but I don't see how it could work. I don't see anything on the iPhone where apple could cut costs without killing the product.

      Predicting the future is hard work, but I think many years from now there will be two iPhone models, one that's really cheap, and another that's a little bit more expensive. The cheaper one will do everything the average person wants (just like the current iPhone), while the more expensive one will be able to run more serious software with ease (think MacBook vs MacBook Pro, $200 price difference but one of them can run professional video editing software, while the other is only good enough for consumer video editing).

      I think if apple sells a cheap iPhone this year, it will be more like the iPod Shuffle than the iPod nano. Cheaper because it doesn't do anywhere near as much stuff.

  • timnash

    While Android phones are not significantly cheaper than the iPhone, more Verizon postpaid customers will choose iOS. For most people a smartphone is only a better phone and should just work. Apple offers better customer service for the phone, a better way for customers to get iOS updates and more apps sooner. Until Verizon and the Android manufacturers provide guaranteed timely updates for at least 2 years this will continue.

    • arjun_

      To support your point somewhat weakly, the latest iOS 4.3 beta hint at mobile hotspot capabilities. Imagine this. You bought a phone in 2009 and in 2011, it can become a hotspot. Even though other Android phones offer this capability, there are scores that will never be able to get that sort of feature boost (bought in 2009 or early 2010). People don't explicitly list this as feature they appreciate, but somehow, somewhere the market recognizes the value of iOS' updates.

  • a really interesting question is what happens to iOS adoption on AT&T once Verizon has the iPhone?
    I would think that the iOS will be come the top OS (for new sales) at Verizon instantly and throughout 2011.
    But I would think it will slow quite a bit on AT&T and Android will get more attention.

  • Fred

    Assuming the average contract length on VZW is 1.5 years and there are about 84 million contract subscribers, then there will be about 56 million contract device upgrades in 2011.

    Assume 2011 smartphone share of purchase is 45% or about 25.2 million smartphones.
    If iOS gets 50% share of smartphones, that’s about 13 miliion iPhones on VZW in 2011.

    If Android gets 35% share of smartphones, that’s about 9 million Androids – split mainly between Motorola Mobility and Samsung.

    Of the remaining 15%, RIM gets most of that – about 3 million.

    Assuming net additions are in the same proportions, then the ratios of 2011 smartphones are as follows:

    iOS /Android = 1.4
    iOS/Samsung Android = 2.9
    iOS/Motorola Android =2.9
    iOS/RIM = 4.3

    Because of iPhone at VZW, RIM will be the big loser, while Samsung and Motorola rate of growth flattens in 2011.

  • davel

    These are all very good questions. I am interested to see what happens on VZ/T and the US market in the next 6 months and the full year.

    How does the iPhone affect ATT's subscriber gains over the past 3 years? What effect does this have on Android in the US? If the rumored $50 price differential is true is this enough to push people away from iPhone?

    This is a very interesting test case as Verizon has been the big muscle behind Android uptake in the US. What will their marketing approach be following 11am today? ATT initially was hostile to Apple until management saw the numbers. ATT in their reports cite the iPhone as being the number one contributor to wireless growth.

    I wonder if come June Apple produces a combo cdma/gsm phone. I don't see Apple producing LTE until next year.

    • barryotoole

      "I wonder if come June Apple produces a combo cdma/gsm phone. I don't see Apple producing LTE until next year."

      Now that is a great thought.

      Lately, Apple has shown that it wants to merge systems (like the slow confluence of iOS and OS X), and it is entirely possible that there will be one phone that operates on all carriers (including T-Mo?). It appears to be against SJ's DNA to have multiple similar devices.

      I bet similar thing will happen to the iPad, probably starting iPad 2.

      Time to go buy QCOM stock?

  • Correcto

    Horace, is there any reason to expect Verizon (or ATT) to continue to offer BOGO or subsidies for Android phones (at least, higher-end ones)? Wouldn't that alone affect sales?

    • asymco

      Carriers maintain a device marketing budget which does not increase or decrease much (it's probably a fixed percent of sales.) That budget goes toward all promotions and commissions and advertising for devices. I suspect that whatever is being allocated to the iPhone will be taken out of another device budget, unless the iPhone is strictly additive (which I don't think is the case.)

      So yes, I would guess that promotions for non-iPhones will drop.

      • Sandeep

        but aren't android OEMs selling android phones for a lesser price to verizon ? I know that Apple sells IPhone 4 for 600 dollars to carriers, so the incentive for carriers is there to offer the android phones at a lower price.

      • asymco

        OEM pricing is part of the data tracked on this site. Suggest you look through last quarter's data here:

      • dchu220

        I'm not an expert, but I would expect the carriers to concentrate their marketing/promotion efforts on whatever device is the most efficient at selling postpaid data contracts. So far from all of the analysis on this site, it seems like the iPhone performs the best in this metric.

      • Sandeep

        so are you suggesting AT&T will not push non-IPhone devices hard as AT&T makes most of its money from Iphone? really ? Blackberry torch was promoted heavily, windows phone 7 handsets were promoted heavily by AT&T. We have to wait and see what a proper AT&T promotion of android phones does.

      • dchu220

        I don't know if the iPhone will continue to lead in this metric. The texture of the market will change once Verizon starts selling the iPhone. But if the Galaxy S performs well in selling data plans, then I expect AT&T to push it very hard.

  • poke

    What I think is safe to assume is that the majority of Android customers were potential iPhone customers. The supposed advantages of Android (openness, customisability, etc) have little mainstream appeal. Since there's little to differentiate Android from iPhone, that leaves availability on multiple carriers and cost as the major determining factors of its adoption. If the iPhone proves to be a success on Verizon, as it surely will, it doesn't make sense for Verizon to keep promoting Android the way they have in the past and cost is likely to go somewhat up as promotions end. In the long run, Android is likely to retain a cost advantage though. On the other hand, it has a major deficit in brand awareness, especially if Verizon stops promoting it as strongly as it has been. For these reasons I expect Android adoption to be significantly reduced.

  • Is this really subscribers or is it e.g. monthly page views? I thought comscore tracked consumption not the subscriber base.

    Page views across device platforms are not uniform. Check the latest Meeker/Morgan Stanley internet trends deck for an example of relative consumption per user by mobile OS. In the deck she released in the summer page views by iPhone users was way ahead of Android.

    • asymco

      In this case the survey asked 13 yr. or older Americans what phones they used. "The report ranked the leading mobile original equipment manufacturers (OEMs) and smartphone operating system (OS) platforms in the U.S. according to their share of current mobile subscribers ages 13 and older, and reviewed the most popular activities and content accessed via the subscriber’s primary mobile phone"

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  • John

    To what extent do customers see the choices as iPhone vs Android? Do they not see it as iPhone vs Doid, HTC, Galaxy, etc.

  • Mark

    The situation in the UK where the iPhone is available on all carriers doesn't back up your analysis, Horace:

    There will be an initial increase but I think you're being optimistic at even 10 million. Android handsets are picking up the pace, mainly absorbing trade from WinMo and Symbian.

    • asymco

      Symbian is a big fat and easy target in the UK, but at Verizon it's RIM that's been successfully targeted by Android. However, iPhone is an entrant at Verizon where RIM has been decimated and Symbian is non-existent and WinMo very weak. My guess/estimate is that Android would hold steady in terms of consumption while iPhone would gain share. Of course, RIM still has a way to go to zero.

      • Mark

        I agree to a point, Horace, but the UK position is interesting because the iPhone went from one provider (O2) to all providers. Did it absolutely increase share and numbers? Yes – about 20% more iPhones were sold.

        But here's the thing: Most people who wanted an iPhone had already moved to O2 with the others holding off. Therefore I think the iPhone will increase numbers in the US, however a lot of the iPhone sales on Verizon will be cannibalised from AT&T.

        So, yes, Verizon may shift a lot of iPhones at AT&T's expense but will the net amount of total sales exceed 10 million? I'm not so sure.

      • arjun_

        Mark, not too familiar with the UK market. Can you point me to a source which provides overall customer figures by network?
        I'm assuming they're all GSM,

  • Edwin

    Your point is premised on the notion that after 4 years of iPhone availability, there are still millions of Verizon customers who held their nose and bought Androids because they just couldn't bring themselves to get their beloved iPhone on AT&T. Seriously?

    • dchu220

      Can you re-phrase your comment? I am having a hard time figuring out what your point is.

      • Sandeep

        those who wanted an iphone desperately or were enamoured by it switches to AT&T and got one.

      • dchu220

        We will see in a month.

        I don't think Verizon thinks so or they wouldn't have made such a big deal about it. Apple seems to think there are also a lot of hold outs or they wouldn't have freezed vaction time at their stores. These guys have access to more data than we got.

      • Sandeep

        in that case verizon would not have bothered to release so many new android phones at CES 2011. Carriers know better than to rely on one vendor, it is in their interest to ensure as much as possible a multi-platform world.

      • dchu220

        Your right that carriers want to keep a multi-platform world.

        I don't see where the number of new Android phones released at CES by Verizon correlates with pent up iPhone demand on Verizon. I think Verizon looks at it as two different customer bases. Not everyone wants an iPhone.

      • Sandeep

        and all carriers in UK are promoting android phones quite a lot, despite all of them having IPhone 4

    • asymco

      I think the article speaks for itself. There is no "point" to it. It asks a rhetorical question and offers a possible answer. The reader is invited to answer it themselves.

  • mike

    The methodology behind the Comscore numbers is unclear at best. Their data comes from tracking software (some would label it spyware) installed on PCs. How they are creating smartphone market share numbers from this, I have no idea.

    A much more transparent – albeit still imperfect – measure is mobile web share usage by country. You can see the UK data here:

    Of course, this is a measure of total installed base rather than quarterly sales.

    • Mark

      Err… no it doesn't. It comes from MobiLens.

      That's probably why you have no idea how they're doing it.

      And Statcounter? Seriously?

      • mike

        MobiLens is an online survey – arguably even worse than Comscore's primary data source.

        Like the Comscore data, Statcounter also has the issue of being a nonrandom sample. But at least it measures real usage. Is there another problem you have with it?

  • Sandeep

    I believe statcounter collects data through cookies ?

    • mike

      It's just tabulating data on browsers and OSes that visit the 3 million websites it's installed on. The main issue is that this is a nonrandom sample of websites – if it were a random sample of websites (or the entire universe of websites) then it would be a great data source. I wouldn't put too much stock in it, but I'd still take it over Comscore (whose methodology is so bad that they won't even volunteer a description of it in their marketing material). Choose to believe whichever you'd like though.

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