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Android and iPhone: Conquistadors or pioneers?

Picking up the discussion of vendor share, I used Canalys estimates of platform shares to visualize the effect of Android on the smartphone market:

Not wishing to belabor the point, but Android and iOS are less than 2 years old as platforms. In that time frame these two johnny-come-latelys have taken 50.2% of the most competitive technology market on the planet.

Here is the share data:

Since the market is not a zero-sum game, I prefer the first chart, but this second view stresses the transition away from incumbent “others” / Windows Mobile toward Android in the licensed OS market.

The final chart shows the competition against smartphone non-consumption. I like this chart best of all as it shows the effect of Android in growing the entire pie for smartphones.

What would have happened without Android is anyone’s guess but my bet is that the market would not have grown as quickly. Apple is producing iPhones at capacity and RIM is growing into new markets. Symbian’s strongest markets also do not overlap (much) with Android.

However, the trend seems to be for consolidation of platforms (fragmentation within platforms notwithstanding). This trend, however, is over a very short time span. The smartphone industry started a decade ago and the time frame shown in these charts is a mere 3.5 years.

The question remains whether the headroom visible in this chart still allows for new entrants or whether the platforms we see today are the last we’ll ever see in mobile computing.

I’m still willing to bet that there is room for innovation and for new platforms. Just like the two newcomers that came to conquer half the market emerged seven years after its inception, new contenders like Windows Phone, Bada, MeeGo, WebOS can still make an impact.

The conquerors came with new business models and a focus on computing not telephony. Can factor innovation and the ubiquity of mobile broadband keep this market open to newcomers?

  • Evan

    A positive android post, surprising. Android must be doing well. Just tongue in cheek :)

  • dchu220

    The market is open as long as you can attract quality developers to your platform. (Harder than it sounds). That's the only reason I wouldn't count Microsoft down and out yet.

    • Evan

      attract consumers first, developers will come later(in some cases kicking and screaming). Rovio did port their iphone game to android after all despite fragmentation, since android has now acquired a reasonable base.

      • dchu220

        I wish it was that simple. Quality developers want business models that they can rely on. The hard part of development isn't writing code, but to maintain and support it. A pure ad-supported model is not going to cut it in the long run. It's pretty early in Android so we will see if they can make it worth for developers. I'm sure Google will finally figure something out.

        In Rovio's case, I think they have much grander plans than simply making games. Porting Angry Birds was worth it to them from a branding standpoint.

      • jallia

        You've already seen a race to the bottom in the app market, the ad supported model is just the logical extension. Ad supported does cut it in the long run, because its about an ongoing revenue stream, which is what you need to maintain and support it.

      • http://twitter.com/judsontwit @judsontwit

        Ad supported is only one way to continually monetize the same product after the initial point of consumption.

        Is it the only way? Or could a superior method disrupt the paradigm of ad-driven software itself?

      • Evan

        ad-driven, subscription model, in-app payment models will replace the paid software model I guess

      • dchu220

        What race to the bottom? Look at the data. iOS users are buying more apps. It's up to an average of 10+ per device now. There are still new and innovative apps coming out.

        Ad support is hardly a logical extension. A lot can change during the three to five years you are waiting to make back your development costs.

      • http://twitter.com/aegisdesign @aegisdesign

        The race to the bottom refers to the pricing of the app, not how many are downloaded. Often it's the cheapest app that has the most downloads. That doesn't always make it the most profitable of course.

      • dchu220

        Good point Aegis.

      • jeremy

        Ad supported only lasts as long as people are viewing your app. Ad supported only works when millions and millions of people are _continually_ using your app. The less people you have using your app the less money you get per view. Angry Birds makes a lot because advertisers are bidding up the placement price per view. Also, the amount of money advertisers have available is finite so over time as there are more and more apps/devices the ad revenue will go down per app and per view. Which means developers will get less and less money over time.

        iOS paid app developers are in a much better position because as the number of devices increase the amount of revenue possible keeps increasing because you are getting more and more paying customers, rather than a proportionally decreasing number of advertisers. It's like having money from 150 million advertisers (iOS users) rather than a few 100k in a ad supported model.

        Another big problem with ad supported is that once your android app buyers are expecting things for free (with ads) they aren't going to pay for the type of apps that don't get downloaded in their millions and the developers who only get downloads in the 100k or so range aren't going to make any money. Advertisers usually only pay in the region of $5 for 1000 views, that means to make $5 on a Android app you'd need to have it dled at least a 1000 times. If you have a $1 iOS App dled 1000 times you've made $1000. Over time an Android app will generate continuing income, but only as long as it it's being used, mobile apps are not known for longevity, particularly games. You'll need your app run 1000 times to make another $5. And that pay per view rate will be going down over time.

        So any less than insanely popular, or expensive, complex, niche type apps will never make it to Android. So apps like Angry Birds are effectively sucking all the money out of the Android market.

        Advertisers are also fickle. If a another ad placement company comes along that has cheaper click per views than Google they'll change in a heartbeat. As soon as that happens the whole ad supported revenue model for Google just collapses. As developers start seeing their income decreasing over time they are going to look elsewhere. With less apps Android is going to be less desirable. A less desirable Android will mean fewer eyeballs so your advertising is going to dry up. That's Google's only income stream. Not a good place to be for Google or the long term survival of the platform

      • Evan

        chicken and egg right, sure microsoft can provide the best tools for developers, but if consumers don't buy WP7 phones, what will the developers do to earn money ? but if android phones are selling, developers have to develop and see what happens. Opportunity cost is too high and they cannot afford to miss it. This is exactly the same thing that happened with iOS platform, do you think any developer would care a fig about iOS if they were not selling well ? actually your angry birds comment proves my point I think. Rovio was kinda forced to develop for android phones. Rovio could not afford to let some other android game acquire fame, name and glory.

      • dchu220

        Total chicken and egg. Good thing it's not my problem.

        Rovio is pushing for a movie contract, making toys and T-shirts, etc. They are monetizing in untraditional ways. I would consider them an outliner instead of an example.

      • Evan

        "Good thing it's not my problem. " he he

      • Evan

        how about android has more apps than blackberry which has a bigger installed base.

      • dchu220

        Android clearly has a better app ecosystem than BB, but the number of apps is not as important as having a few really good apps for each market niche. Good examples are the music recording/editing apps for iOS. I myself couldn't live without InstaPaper.

        Google has clearly got the message as they have been on a hiring spree of mobile app developers.

      • Evan

        now I don't know what profession you belong to, but I don't think asymco readers is representative of general population. I am not too sure if many people have heard of instapaper. Lack of instapaper does not seem to be hampering android phone sales as of now.

      • dchu220

        The specific app is not important. What is important is that a user finds some apps that fulfills their niche. I have a friend that loves her Android because it has a Dave Chapelle sound board. She doesnt have a need for any sophisticated apps other than Facebook. She says her phone kicks iPhone's butt. For her, she is right.

      • Evan

        here are more example from android http://techcrunch.com/2010/12/03/angry-birds-andr

        Rovio expects to make 1 million dollars from ads per month on android phones. Nothing to sneeze at.

        And take a look at what Elop the CEO of Nokia has to say about android http://www.engadget.com/2011/02/08/nokia-ceo-step

        In short he is telling both Google and Apple are murdering and eviscerating Nokia and Google is successful with its android platform.

      • dchu220

        I'll wait for Rovio's to confirm the numbers before commenting.

        I'm not saying Android is going to fail. But I don't think anyone would argue that they need to come up with better support for developers. With Larry at the helm, i think they will be more flexible than Schmidt, who seemed to always want to leverage ad platforms.

      • Simon

        Rovio ported the game to Nokia's N900 and Palm's webOS first before Android.

      • http://twitter.com/aegisdesign @aegisdesign

        And they've still not ported to Windows Phone 7. Kind of telling.

        N900 and WebOS are pretty similar – both support SDL.

  • http://twitter.com/strandev @strandev

    Apps present an investment into the platform for users. For users with a lot of apps, a new platform is going to be a hard sell without a comparable set of apps or some innovation that makes it worthwhile to forgo the investment. Without users, new platforms will have a hard time attracting third party developer support to create a comparable app market. Unless Windows Phone 7 starts gaining a significant number of users, I remain skeptical that there's room for newcomers in this market.

    • dchu220

      Windows7 has something that the other entrants don't have, which is a backer with a huge pile of cash willing to try to buy their way into the market. Microsoft is offering top developers cash to port their apps to their store. (I don't count Android as an entrant).

      • Evan

        in the PC era it was other way around, Microsoft actually attracted general consumers first. Their wordprocessor was far better than wordstar for instance. Developers came after that. I am just belaboring the point i know

      • dchu220

        I only said I wouldn't count them as down and out in a previous comment.

      • Simon

        Not that Apple is paying devs directly, but aren't they an even bigger backer with a even huge-er pile of cash? People forget how big Apple has gotten and how big their cash reserve is. They are no longer underdogs suffering financially.

      • dchu220

        The main discussion is not on Apple but if a new entrant can still enter the market.

      • http://twitter.com/strandev @strandev

        Throwing huge piles of money at a market doesn't equal success. Microsoft's online division loses hundreds of millions of dollars every quarter to what effect?

        Paying developers to create apps is not the same as having a third party developer ecosystem. Does Microsoft pay for maintenance of the app or will those developers abandon it if the revenue doesn't justify further time?

      • JonathanU

        'Throwing huge piles of money at a market doesn't equal success'.

        Actually, a great example of where it has lead to success is Microsoft's investment in its gaming franchise. Was exactly the same as their online division (losing hundreds of millions each quarter), however, Xbox 360 and Kinect are now earning approximately $1bn in profit in their latest quarter. So having deep pockets can, and does, sometimes lead to success.

      • noneatall

        Microsoft sunk 11bn in pushing xbox and is now successful because they made 1bn in profit last quarter?
        Sorry, I don't see your point.

      • Pieter

        Maybe they have $1bn profit now, but how long will it take until the cumulative losses have been earned back? And what other opportunities could they have created with that money if they had not done a game console? I think it was more of a defensive move, to protect the gaming platform of Windows, than a real attack on the existing game consoles…

      • dchu220

        The point is that they could waste $15B to buy themselves into a market. Very few companies could have done that.

      • http://twitter.com/aegisdesign @aegisdesign

        Well, it's not worked. Gaming on Windows has been in decline for years with most people shifting to consoles.

        They definitely did have to spend to get into the console market but it's cost them a lot and it's surely only transient. It'd only take a Sony PS4 or Wii2 that was better than the 360 to trash their profits again.

      • JonathanU

        I agree with your point that it will take a while for Microsoft to reach break even on the project, however, I think it is worth giving credit where credit is due. For a long time Microsoft has not come out with anything innovative. The Kinect has been a pretty good example of innovation, and created a multi-billion dollar new product range for Microsoft over night.

        My point is, is that Microsoft does have a significant amount of cash to burn on loss making enterprises, and now has a prime example within the company that justifies the strategy of spending what it takes to make a division profitable. I'd expect them to follow the same route on a number of other projects (online is a great example) in the future.

      • dchu220

        Money buys you time and the ability to make mistakes.

      • http://twitter.com/aegisdesign @aegisdesign

        It's like the good old days. I used to work for a compiler tools company and various OEMs and yes, even Microsoft, came to us offering money to port our tools to their platform and paid for lucrative maintenance contracts.

  • arvleo

    There is surely room for Innovation…Top of my mind WP7 should do the following
    1) Do MS Office related stuff well on WP7
    2) Do Xbox related stuff well on WP7
    3) Do 1) & 2)
    easier said than done…but i feel thats only way they can survive

    • Joe_Winfield_IL

      They can and should do both of those things. But as the overall market explodes, Microsoft would be well suited to make at least Office work on major mobile all platforms. Tablets seem particularly important, as enterprise customers would be willing to pay much more for productivity software that actually works and interfaces with their existing solutions. I'm not suggesting that Microsoft should throw in the towel on WP7, but they should consider the major new revenue opportunity that mobile prevents for their OTHER software package. Even as the OS struggles against newcomers, consumers are buying 100 million smart mobile devices each quarter.

  • alex

    iPhone and Android ride on the app wave – computing centric devices with client-based apps, which are largely free.
    There is 100x more money in mobile services than apps. Currently, most of that money goes to the operators (carriers) – voice, texting, VAS – and some not-so-well-known service providers.

    So the next big opportunity is creating a great platform for mobile services. Many apps today are part of mobile services, but current app platforms don't facilitate the creation of services per se.
    Apple Facetime and Google Voice look like some baby steps in that direction, but that doesn't mean that Apple or Google will get it right. The opportunity for disruption is there, possibly by a new entrant or by one of the old incumbents, who knows.

    • Evan

      oh yeah google voice and facetime can become huge disruptors.

  • http://twitter.com/aegisdesign @aegisdesign

    Being pedantic here Horace but I presume the Symbian figures include the 5 million or so non-S60 Symbian handsets such as the N8.

    • asymco

      Yes, of course. I struggle with what to call "Nokia Symbian"

  • Omar

    I’m just curious about the symbian market share, are they including the dumb phones running their symbian os? I would think these charts are geared specifically towards the smart phone category.

    • asymco

      Any phone running Symbian is by definition a smartphone. Smartphones are phones running one of a set of operating systems. This is a convenient definition though not necessarily the most insightful.

    • http://twitter.com/aegisdesign @aegisdesign

      Nokia's 'dumb' phones run S40 mostly, some maybe still on S30, which is a totally different OS to Symbian.

      Arguably, some of their S40 phones, like the C3, are verging on smartphone capabilities particularly when compared to some of the less smart smartphones like any of the WP7 phones.

  • Nalini Kumar Muppala

    There is still room for new comers. Motorola comes to mind.

    There is probably room for a new entrant that is focused exclusively on the emerging market – may be on the lines of Ovi.

  • Ted_T

    I'm sure you've seen the surveys that 40%+ of Android users and a much higher percentage of Blackberry users currently on Verizon will switch to the iPhone.

    If true, and only time will tell if it is true, it will have a devastating effect on US based Android market share (it will certainly stop any growth dead in its tracks). It it will also damage Android mindshare — I think a certain portion of developers are assuming that the Mac vs. PC market share war will repeat itself with iOS vs. Android. This may well shake their beliefs.

    However many questions remain.
    1) (and far and away most important:) Will Apple be able to meet iPhone demand and if so how soon?

    2) When will the iPhone join Sprint and T-Mobile as well (being on all four networks will do further damage to Android.)

    If the answers to these two questions are favorable to Apple, than your second question becomes more important: how many of these Android "activations" outside the US are Android in any recognizable form and how many are from Chinese or other source forks that benefit Google in no discernible way (no Google search, ads, Marketplace, etc.)

    • davel

      I have seen these surveys and am interested how the consumer views the value proposition of Apple's offering vs other products. It is a nice case study of substitute goods. With the same network and at similar pricing will consumers choose Apple or another product? The same is true with ATT now that Android will have a bigger footprint there.

      Your point about demand constraint is a good one. If Apple sells as many as they can produce the consumer will be left to wait or just get what is available. Still if they choose Apple first this will have a negative effect on Android market share in the USA.

      For your second point, I get the feeling that we will not see Apple officially on the second tier mobile vendors this year.

      Your last point about Chinese and other sourcing and Google applications is a good one, but is it quantifiable?

      • capnbob66

        I agree about no 2nd tier carriers. With their lower-cost all-inclusive plans they probably cannot afford the $400+ subsidy they would have to pay to Apple to keep the iPhone at the same price as the big guys.

      • John

        On the other hand, didn't T-Mobile (US) just announce a deal to show up and get any phone you want for free? Clearly they can afford some hefty subsidies, or feel they have no choice.

        Anyone know if their GSM frequency is covered by the new "unified" hardware iFixit discovered in the Verizon iPhone?

      • capnbob66

        One weekend to try to disrupt iPhone on VZ is not a consistent ability to suck up at $400 subsidy.

      • Darwin

        The iPhone doesn't cost them any more than the higher priced Android phones. This should be obvious. In some cases the iPhone is actually cheaper.

    • Fake Tim Cook

      40% of Android users on Verizon plan to switch to the iPhone.
      Another 40% don't plan to switch to the iPhone but will once they see everyone else using iPhones.

      • dchu220

        I don't think surveys are accurate. People always act differently from what they say.

      • Ted_T

        Evidence of Droid users *actually* migrating to the iPhone (not just saying they will): http://blogs.forbes.com/elizabethwoyke/2011/02/08
        "Now it looks like the Verizon iPhone may be a bigger threat to Motorola and its Droid phones than AT&T.

        That’s the early evidence from electronics reseller and recycler Gazelle. In the month since Verizon confirmed that it would sell the iPhone, the Boston-based company, which pays consumers for their unwanted gadgets, says it has seen a spike in the number of Droid phones people are trading in for cash. Trade-ins of AT&T iPhones, in comparison, have picked up but not as dramatically."

        Of course I agree that the survey percentages are wild shots in the dark. But the trend at this point is not in doubt. The Verizon iPhone will have a major impact on Android market share.

      • dchu220

        40% is a hard number to accept. But the fact that Gazelle is offering $350 for iPhone4s compared to $200 for Androids is telling.

        Thanks for the link.

      • darwin

        eBay, not a bigger, eBay, gave me $531 for my AT&T iPhone which I then put into a Verizon iPhone.

      • Evan

        US accounts for 25 percent of world smartphone market, and verizon accounts for something like 40 percent of US, so 40 percent of 25 comes to around 10, big number, but not really big enough to affect the worldwide share for android. One should not overestimate verizon factor and underestimate the worldwide impact of android phones.

      • rashomon

        The price and volume of Droid phones on eBay will be tell . . .

  • Hamranhansenhansen

    I think this speaks to the power of the Web.

    The little chiclet QWERTY brought email to phones. The full-face touchscreen and WebKit brought the Web to phones. The Web is much more important than email, which can run on the Web anyway.

    In this context, native apps are “tomorrow’s Web today.” Going forward, on iOS, both HTML5 and Cocoa evolve in tandem, with Cocoa always ahead in technology and the Web tracking behind, standardizing native features like geolocation and animation and audio video. Lack of native apps on Android (Java is just a non-standard Web app) and other platforms is going to continue to hurt them versus iOS, which is still the only mobile running native, PC-class C code.

    I don’t think there is another Web-level technology to bring to phones and shake up the market. I think other devices become more like phones now, for example the iPad bringing phone hardware into the PC market, AppleTV doing the same in set-tops, MacBooks getting more touch, Mac OS getting an App Store.

    The biggest thing that is needed is way better wireless connectivity. Lack of bandwidth is holding everything back. Telcos and cable companies are all run by salespeople. That is what needs shaking up. For example with WiMax beamed free out of Apple Stores to Apple devices, or some innovative peering of all Wi-Fi base stations, or the equivalent of 5G launched today. The Apple devices are much better than their networks. The biggest complaint about iPhone has been AT&T. The biggest complaint about Macs is Comcast. Somebody needs to do for the network what Apple just did for the phones.

    • Splashman

      I couldn't agree more. The network needs a visionary like Jobs. Unfortunately, clones are in short supply.

    • http://twitter.com/aegisdesign @aegisdesign

      It's just simply not true that iOS is the only platform that runs native apps and Java is not just a non-standard Web app. I can't think of a single smartphone OS that you can't develop apps in C/C++ for.

  • Hamranhansenhansen

    > sure microsoft can provide the
    > best tools for developers

    No, they can’t. Apple’s tools are not only better, they are focused on making the small developer more powerful, and they are complete, they include tools for selling. Microsoft is big developer focused, they make small developers weaker, they want MS Word to require 10,000 developers, they are not suited to mobile and Web, which is distributed, not monolithic. Microsoft is a brontosaurus and mobile is mammals.

    Apple’s developer tools enabled a physicist to create the World Wide Web all by himself. It then took 5 years for teams of programmers to port the Web to Windows.

    Also, Windows is still mostly XP from 10 years ago, and Windows PC’s are almost all low-end, with ASP less than iPad or a typical smartphone. Smartphones are too high-end and modern for Microsoft.

    • Evan

      most of it is wrong, a physicist cannot build www with Apple's tools. Where did you get the idea that microsoft is big developer focussed, I see a lot of .net sites implemented by small and agile young companies.

      • John

        Read up on Tim Berners-Lee, NeXT, and CERN.

        So yeah, a physicist did "build www with Apple's tools" (although, admittedly, they weren't Apple's yet).

      • Darwin

        You are to uninformed to understand what he is saying.

  • Thomas65807

    I believe that apps are the key to success in this market. Apps transform a phone to a pocket (mobile) computer that just incidentally makes phone calls.

    Apple obviously dominates in the app arena, both because of numbers and quality. The superiority in numbers (400,000+) will probably remain in Apple's hands both because of its substantial lead and because apps created for one Android phone frequently don't work on another Android phone. Fragmentation is a real problem for them, since Android is free software that each hardware maker is able to customize for its own use. Related to that, Apple's apps are superior due to its ability to impose standards on apps that the fragmented Android market can't ever match.

    Because of Microsoft's history (and success) with open-standards PC's — and its mockery of Apple for rejecting open standards — it seems likely that Microsoft's mobile phone model will stick with open standards … so its success will be limited for the same reasons (i.e., fragmentation) as Android-based phones.

    As Apple ramps up its supply chain and is able to produce much larger numbers of phones (and iPads), I expect it to gain market share — to grow far more rapidly than the market as a whole. Again, this is because of Apple's ability to leverage apps to transform its phone into a computer. Even if Android software grows more rapidly than iOS, phone makers who adopt the software won't ever be as profitable and as Apple; they will essentially be producing commodity products. (As for Google, it won't ever be as profitable as Apple, either. In the most recent quarter, Google's REVENUES were about $6 billion while Apple's PROFITS were about $6 billion.)

    I expect the mobile phone market to continue down that path for several years to come … until the 'next' phase when phone/computer makers begin developing new ways for customers to interface more effectively with their phones/computers. Things like voice prompts, 'monitors' built into the eyeglasses of users, etc. will distinguish this next stage. Only then will other manufacturers have an opportunity to overtake Apple — though it seems more likely that an innovator like Apple will grab the early lead in that stage, too.

    • davel

      Because of Microsoft's history (and success) with open-standards PC's — and its mockery of Apple for rejecting open standards — it seems likely that Microsoft's mobile phone model will stick with open standards

      I disagree with Microsoft's history and success with open standards. My impression is Microsoft has always been hostile to open standards; Java, IP, Mail, etc. If it pretends to embrace a standard it only does so if it can try and use its monopolistic position to change it to be specific to the Microsoft platform. I cannot think of one technology that Microsoft embraces that it has not tried to hitch to its OS strategy.

  • FalKirk

    When Horace says "there is room for innovation and for new platforms", I do not think he means a newcomer like Windows Phone 7 or anything of its ilk. They're just minor modifications of what already exists today. I think he means something as radically different from today's platforms as the iPhone was different from the platforms that existed in 1997.

    The iPhone was a phone, an iPod and a web browser all wrapped into one. It later added Apps. What innovation might come next that will disrupt the current industry and be distinctive enough to allow its creator breathing room to expand before being copied? NFC? FaceTime? Voice communications? Virtual reality? Something we've heard of but haven't yet recognized its potential? Or something totally unheard of?

    • FalKirk

      Oops. In my previous post, I meant to say "…platforms that existed in 2007", not "1997."

    • dchu220

      My bet is that iPhones become more social with…. other iPhones. You saw the beginnings of this strategy with Game Center and FaceTime. PhotoStreaming is rumored to be coming soon. Leveraging network effects is going to be big.

  • poke

    I think it's a mistake to think the same forces behind iOS adoption are behind Android adoption. Android is essentially offering some subset of the capabilities of an iPhone at a lower price and on a wider range of carriers. But whether it is a viable platform is still open to question. Neither Samsung nor HTC want to be in the Android business. Samsung wants Bada to be its smart phone platform and HTC has expressed a desire to have its own OS.

    So the pertinent question is whether the Android platform and ecosystem is valuable to Samsung and HTC or whether just the Android OS is. If Samsung and HTC switch away from Android, will they suffer? Have Android users invested enough in the platform that somebody who has a Samsung phone would switch to a different vendor if Samsung dropped Android? That's why 'stickiness' is so important. The most questionable aspect of Android's continued success is the loyalty of the manufacturers to Android and that depends on how much Android users have invested in their phones.

  • Pasi

    Horace,

    Some already raised a point if the Symbian^3 figures were included in graph 1, I think that the answer was positive. But what about graph 3; the symbian S60 sales seems to decline at the point when S^3 came on line. Could you check if the Q4/10 figures are really right in graph 3?

    And what comes to consolidation of platforms, I think that on Feb 11th we will all know more (with reference to Stephen Elop's forthcoming statement).

    cheers,

    P

    • http://twitter.com/aegisdesign @aegisdesign

      It's probably right in graph 3 as it's market share not unit sales and everybody other than Android lost market share last quarter.

    • asymco

      The third graph compares smartphones with non-smartphones. The data I have seems to show that there was a surge in non-smart in Q4 which caused the growth in smart share to slow down.

  • Windsor Smith

    Wait a sec… by what definition of "platform" are Android and iOS less than two years old? Horace, did you mean four years?

    • capnbob66

      I think in the Asymco sense of "platform" – including an App Store etc. then they are about 2+ years old?

    • asymco

      App Store launches. The iTunes App Store launched in summer 2008, so maybe 2.5 years ago. If you were to measure the number of actual users, the vast majority are still using their first iOS/Android devices they ever bought.

  • capnbob66

    The Samsung data was that they had sold 10M Galaxy phones in 7 months. I believe it was Galaxy and Galaxy S combined across all models. I think only the US has multiple models but that is at least 5.

    The OMS and Tapas numbers would be very interesting. If that is where a lot of the stellar growth is, that would be instructive as to the real fragmentation of the platform (not Google version numbers). If ZTE and Huawei are pushing hard and shipping millions this is of little benefit to the platform and Google.

    VZ iPhone will probably create a large one time shift in share and then change the gradient of iPhone growth as the top end of VZ (and switching) customers move to iP4/5 over the next year or so. This will keep iPhone from plateauing any time soon but will not crush Android which will own the low-end market and get a lot of the growing numbers of dumbphone upgraders as they are doing now. Android has great distribution and more cutthroat competition which benefits carriers who will continue to push Android to anyone who doesn't want/can't afford an iPhone.

    • mike

      The interesting thing about Galaxy S – a top contender for title of "best Android phone" – is that over 65% of those sales were in US (4+ million) and South Korea (2.5+ million). Of course, those are also two markets in which iPhone is (or was) available on only a single carrier. Just goes to show how helpful universal carrier coverage is in generating sales.

      • capnbob66

        Good point!

  • cjackson

    While the market for smart phones is definitely young, it seems to me that apps and app ecosystems may have the effect of blunting the competitive power of new entrants in the space. Apps create a switching cost that largely didn't exist before iOS and any new entrants will face the chicken/egg dilemma that someone described for wp7. Need consumers to attract developers, need apps to attract customers.

  • Walt French

    Just a SWAG on developer REVENUES: Apple iOS must be running around $1 bil run rate while I’ve seen $1 bil estimated for ALL moblie ads and probably 3/4 goes to browser ads w/ Android devs getting half? the rest, or maybe $120 mil, a dime on iOS total app rev dollars.

    Microsoft will find themselves burning thru some serious cash to entice devs until they have a serious user base that’ll pay for 3rd party apps and or fall down stairs because they spend all their time looking at ads.

    WebOS, Playbook and the hypothetical Cisco tablets: how do they EVER build a consumer- or business-friendly collection of apps? Expect a tiny fraction of the titles at ultra-premium prices.

    Other SWAGs welcome as long as you don’t beg the question (start by assuming your answer as a given).

  • mrrtmrrt

    Horace,
    You're comparing OS platforms rather than individual manufacturers which is understandable as the app and peripheral platforms are what is most important in the mobile market. But you are only comparing half of iOS vs almost all of Android.

    Now almost all of the Android platform is represented in the graphs above (most Android tablets sold have cell phone hardware built in so are classed as smartphones like the Dell Streak and Samsung galaxy tab). As noted by others, the Android figures are also swelled by the Chinese Tapas and OMS forks of Android which aren't even necessarily app compatible and certainly are not Android Marketplace clients or Google services devices.

    However, only half of Apple's iOS is represented in those graphs as last quarter Apple sold around 10 million iPod touches and 7 million iPads in addition to their 16 million iPhones. That makes 33 million iOS devices sold, on par with the total number of Android devices sold (we won't go into how many of Samsung's 2 million Galaxy Tabs were actually sold on to customers).

    This is the real story that virtually every commentator ignores. The iPod touch is an iPhone without the phone and it completely owns the category, a category that is a third the size of the entire Android platform and nobody ever talks about it just because Android has almost zero presence there. The same concern applies to the tablet market.

    Until we get someone, (anyone!) to show *total* iOS platform numbers vs total Android platform numbers these marketshare figures are completely useless for comparing the real size of the app platform or the peripheral hardware platform or the web browsing platform.

    Of course, the elephant in the room that also doesn't get a look-in is installed base vs current unit sales. With 160 million iOS devices sold with the majority in the last 2 years, the size of the overall iOS market still far overshadows Android, but no-one ever compares those figures (beyond Comscore's smartphone subscriber market share figures).

    Please Horace, any chance you can dig into these other figures and shed some light on the bigger picture?

    -Mart

    • asymco

      What we choose to measure depends on what insight we seek to gain. I agree that from a developer perspective, iOS should be seen as a portfolio broader than just the iPhone. However, this analysis is more narrowly defined as the market for mobile phones. If you search iPod touch on this site you'll see plenty of material discussing its value. Take this for example: http://www.asymco.com/2010/09/02/the-race-to-a-bi

  • http://twitter.com/PXLated @PXLated

    Would be interesting to know what the breakdown is between android sets that include Google apps/search and those that don’t. Betting all those sets sold in China don’t at all.
    As a side to this – does one even consider the Chinese version of android “android” or is in reality a totally different “forked” version? If “forked, it probably shouldn’t even be included in share figures for android. And when talking Google/android, those sets not benefiting Google should probably not be included either.

    • Evan

      not sure about China, but in US, even kids know google, so if google is not default, they will download google search from the market.

      • John

        Except to be able to include Google's market, don't you have to meet some level of certification?

      • http://twitter.com/aegisdesign @aegisdesign

        The point being made was that the Chinese forks of Android do not include the Android Market app or ny of Google's service apps. The handset manufacturer has to pay a licence to Google for those so they are often left out.

        The rest of Android is free and open source. This is why Android may have huge unit sales but direct revenue to Google is small and the market for Android applications is not as large as the number of handsets.

        At this point, nobody seems to have published numbers on how many Android handsets are out there WITH the Android Market installed. That's the useful figure if you are a developer.

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  • RobDK

    Great article, Horace!

    Would love to read your analysis of Elop's memo, as reported today on Engadget. Especially in relation to your article on Nokia's response to disruption:
    http://www.asymco.com/2009/07/07/assessing-nokia&…

    • asymco

      There is nothing new in Elop's memo (except that it was written). It was designed to soften the blow on employee moreale that will come on Friday. I'll re-visit the assessment of response after the news on Friday.

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  • Darwin

    In the meantime Google has had to stop tp paying developers to write apps for Android just like Microsoft. Because developers aren't seeing a revenue model, short or long term, on either Android or Windows Phone 7. This is very telling.
    You will also never see major corporations adopt Android as it is a security nightmare.

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