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Trouble with the robot?

Jun 4, ’12 2:09 PM
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The latest data from comScore showed a few surprises:

New smartphone users dropped to a very low level, below the trend line.

Slightly less than 300k new smartphone users abandoned their feature phones every week during the month. Compared with the 1.5 million per week in November, it’s quite a slowdown.

Penetration growth slowed as a result as well. Only 1.3 points of share were gained by smartphones.

It’s still likely that the penetration will reach 50% by the end of summer this year (as was predicted in 2010).

When looking at the picture above broken out by platforms, we see signs that the slowing in smartphone growth seems to be attributable to a slowing in Android adoption:

Here are the installed bases in users over time of the different platforms:

The share of users of the platforms is shown below, first as a stacked area:

And also as a line chart:

This last chart shows the first time when Android share dipped sequentially. It should be watched closely as an indicator of a change in market dynamics. As we reach saturation, the basis of competition will change.

Finally, the last chart shows net user gains for the platforms.

Here again we see the lowest user growth for Android since 2009 (and hence since it reached mainstream distribution.)

It’s perhaps too early to suggest that we’re seeing a slowdown in the US for Android. Perhaps there will be a return to growth in the fall. The concern has to be that rather than seeing the net adds growing–as they have for two years with only two contiguous months of decline–Android net adds have been falling for four months.

  • http://twitter.com/e_orione Emilio Orione

    I don’t understand why you say a slowdown for android. Both the market and android decreased, it could be a slowdown of the whole smartphone market.
    Maybe users are waiting for an alternative to android or maybe low end price smartphone appeal versus feature phone is decreasing. How is the feature phone’s market gone?

    • http://www.asymco.com Horace Dediu

      By a slowdown I mean the following sequence of numbers: 3.44, 2.93, 2.87, 1.96, 0.45 which represents the net user gains in millions of users per month for Android in the US according to comScore data.

      • Mieswall

        And numbers for iPhone?

      • http://www.asymco.com Horace Dediu

        iPhone data for the same periods: 2.75, 0.91, 1.52, 1.13, 1.15

    • http://twitter.com/pipequanta Dafydd Williams

      The figures do seem to show that iPhone gained users while Android levelled off and Blackberry fell down a lift shaft.

      I think that indicates that the market slowdown as a whole is the tally of everyone who won and lost.

      More interesting, I think, is that people probably weren’t defecting from Blackberry and Android to iPhone. Rather, those people who would have bought one of the former simply decided not to purchase anything at all.

      That’s not that surprising, actually, given the economic uncertainty right now: if you were a punter considering a low-price smartphone before the crunch, you’d be far more likely to buy nothing at all rather than splash out on an iPhone (which, despite the three models available from most carriers, is still seen as the expensive option).

      • http://twitter.com/e_orione Emilio Orione

        Or, depending on the whole market growth, less users bought a phone at all, android is only the first to feel the whole market contraction because it targets low cost and has lower repurchase rates.
        So again, to give full sense to the data, what are the numbers of the whole market?
        Because if it is the android appeals that is lowering something will substitute it, and apple could kill the market just lowering older models price in 10 days, if they smell the blood, otherwise if it is the whole marked that is contracting and android is only the first to get infected, the illness could spread and wall street is smelling the blood.

      • http://www.asymco.com Horace Dediu

        The numbers for the whole market can be obtained from the first three charts. The total number of phone users has held constant over the time period in the charts. This is according to comScore’s reports.

      • http://twitter.com/e_orione Emilio Orione

        Thanks, so could really be an escape from android back to feature phones, same use but less contract fee. We will see.
        Being in apple I will look very closely if a killing blow can be done.

      • http://www.asymco.com Horace Dediu

        There is no escape from smartphones into feature phones. Feature phones are becoming hard to find even if you want one.

      • Steve Setzer

        @Horace: Supporting anecdote. At the AT&T store in Orem, Utah, USA, you can find a few models of feature phones but the majority of phones are smart (several models each of Android, Windows, iPhone and RIM). There were maybe 7 feature phones for postpaid plans, and 3 more feature phones designated for prepaid plans.

      • http://www.asymco.com Horace Dediu

        I went to an electronics “mall” in Shanghai where there were dozens of phone sales kiosks/stands and it was hard to find any non-smart phones.

      • Canucker

        Beats me that RIM hasn’t actually fallen down the lift/elevator shaft (yet). There is remarkable stickiness given that they are still shilling 2010 technology. This is in part due to the willingness of RIM to sell at major discount and people still not appreciating how limited Blackberries are (current generation) and their total lack of future proofing.

    • Andrew

      The suggestion is that the smartphone segment’s slower growth overall is attributable to the much slower growth in Android, which is a large part of that segment. Apple, another part, looks not to have slowed in April.

  • Aenean144

    Perhaps Samsung’s Galaxy S line of smartphone is now so dominant that Android share growth now moves with the cycle time of that product.

    Or it could be one time confluence of events where HTC and Samsung were on the backed of their 2011 product cycle and consumers were waiting for the 2012 product cycle to start.

    • http://twitter.com/DigitalPoss DigitalPossibilities

      I’m not sure that general consumers are aware of the Galaxy product cycle; but certainly tech geeks that like Android would wait for this phone. Just not sure that tech geeks represent enough of the market proportion to make that size of movement.

      • http://twitter.com/thetradedotcom Josh Pritchard

        ask anyone with a android due for an HW update — they’re likely aware of the Galaxy S3 if they’ve done any research on what they should upgrade for.

        I think it’s funny that iPhone users assume they’re the only ones savvy enough to track product cycles and make informed purchase decisions.

      • TheEternalEmperor

        I don’t believe anyone said that. I don’t know anyone who can name a single Android brand. I haven’t heard of anyone every mention one by name and I don’t know anyone with an Android phone who as even mentioned Samsung.

        So now what?

      • http://twitter.com/thetradedotcom Josh Pritchard

        Well, pleased to meet you. I can name many Android brands and like many millions of other people, I’m aware that Samsung is a top Android manufacturer, and their Galaxy line is rivaling the iPhone in popularity/sales.

      • r.d

        that is because you are google plant.

      • marcoselmalo

        No need to be rude because someone has a different viewpoint (and expresses it in a civil manner, it should be noted). Josh is offering us anecdotal evidence and there’s nothing wrong with that.

        I think we should welcome all viewpoints here, so long as they are expressed civilly. An Android aficionado should be able to comment without being branded an astroturfer.

      • http://twitter.com/thetradedotcom Josh Pritchard

        Thanks, marcoselmalo. FWIW, I have both a 4s and a Galaxy Nexus. I’m a developer and an investor. In both capacities, I’m bullish on both Apple and Android (Google).

      • TheEternalEmperor

        Hi Josh, technically, I still don’t know you. Besides, this is a pretty self-selecting site, is it not.

        I doubt if millions of people know that Samsung is a top Android manufacturer(as opposed to tv or feature phone) let alone can name *many* Android brands.

        Nice to meet you though.

      • FalKirk

        “I’m aware that Samsung is a top Android manufacturer, and their Galaxy line is rivaling the iPhone in popularity/sales.”-Josh Pritchard

        While the Galaxy line is selling very well, all the Samsung smart phones put together, not just the Galaxy, equal or exceed those of the iPhone. The iPhone is still the top selling model of smart phone sold but the Galaxy is a smash success for Samsung and it definitely rivals, but does not yet match, the popularity of the iPhone.

      • vincent_rice

        It’s not black and white but there is a greater awareness of Apple product cycles in the populace as a whole.

      • vincent_rice

        It’s not black and white but there is a greater awareness of Apple product cycles in the populace as a whole.

      • Abhi Beckert

        Consumers aren’t aware of the galaxy line, but marketing departments are. I don’t live in the US… has there been much of a push for android phones lately? Perhaps they’ve been holding back a bit until the S3 comes out… combine that with Nokia’s recent push and Apple’s ongoing ads, and it might explain a dip in sales.

    • poke

      I think there’s some truth to this. Samsung has staged what looks to be a successful coup in the Android market. Today they announced the Galaxy S III will have consistent branding across all US carriers. That should give an indication of how much clout they have now. It’s probably not that buyers are waiting for Samsung; it’s carriers who are waiting for the next big Samsung product to promote.

    • http://twitter.com/WalterMilliken Walter Milliken

      That was also my first thought — the Samsung S3 launch is getting a fair amount of press. And the sudden drop looked very similar to the drop in October 2011 which looks likely to have been related to the iPhone 4S launch — i.e. people were waiting to see what was coming before buying. Both iPhone and Android had big surges in November 2011. The reason for the iPhone surge is obvious, but the Android one is less so (yes, it might be Christmas season buying, but I’d expect that to peak in December).

      I think this is a case where we need to wait a month or two before drawing any significant conclusions. The Android press routinely hails the drop in iPhone share before product launches as the end of the platform; the iPhone crowd should avoid the same mistake relative to Android.

      • Abhi Beckert

        I don’t think there is much of a “christmas” peak for smartphones. Anything with a 24 month contract is a terrible gift. This is something you buy for yourself, not something you buy for someone else.

      • Tatil_S

        Gift to kids by parents? Parents would still be on the hook for the contract, but timing the gift of a phone for the holiday season still makes sense.

      • FalKirk

        “I don’t think there is much of a “christmas” peak for smartphones.”

        The numbers clearly say otherwise. The holiday season is crucial for smart phone sales.

      • Tatil_S

        The problem with iPhone was the previous track record pointing to a summer release. A lot of early iPhone adopters bought phones in the first few months of a new release, so their 2 year contracts ended during last summer. Thus, lack of a new iPhone caused more people than usual from upgrading for a long period of time. Many figured they could wait for one more month, which turned into another and then another. I believe that is why the iPhone sales slow down was stronger during the quarter just before the last release than before the previous one. I am not sure Samsung is “late” with its upgrade schedule, so 4 months of sales drop may be a bit too much to explain by those who are waiting.

  • Pingback: Android Growth Declining in the US | Digital Possibilities

  • http://twitter.com/DigitalPoss DigitalPossibilities

    I suspect that the very low end of the market, ie. free, is now being service by the iPhone 3GS, and this has had an impact on Android. It’s harder to push an Android device as being a free equivalent to an iPhone.

    If so, this would be a good thing as Android can no longer compete on price, they have to up their game.

    • http://twitter.com/thetradedotcom Josh Pritchard

      isn’t that only at AT&T?

      • Joe_Winfield_IL

        So far. But with the release of the next iPhone, it’s reasonable to assume that the iPhone 4 will be made “free” to all carriers. The only reason the 3GS is exclusive to AT&T is that it does not carry a CDMA radio. If @DigitalPossibilities is right, we will see this effect dramatically amplified in six months.

      • http://twitter.com/fivetonsflax fivetonsflax

        Yes. There is no CDMA iPhone 3GS.

  • Pingback: comScore: Android U.S. sales slow. The iPhone holds steady | News24

  • http://twitter.com/thetradedotcom Josh Pritchard

    Wasn’t Comscore completely wrong in the months leading up to the release of Apple’s October 2011 quarterly numbers, when the company missed iPhone targets by a mile? I’m not sure how much faith to put into these Comscore numbers (based on samples of 30K people).

    FWIW, As someone who’s long both Google and Apple, I think the global sales figures matter more (again, for both companies…. but more so Apple). Seems Apple’s June quarter will be made or broken based on international sales.

  • melgross

    I think it’s fairly simple. Polls have shown, for a couple of years now, that many users on networks that didn’t have iPhones would buy one if it was on their network. As both Verizon and Sprint have gained iPhones therefor, sales have increased, and Android sales have stalled. We see 78.5% of new smartphone adds on AT&T being iPhones, despite AT&T’s push to move people to WP7 and Android. We see that even Verizon, the main network for Android in the USA, having 52% iPhone smartphone sales, and the same is expected to be true for Sprint. Neither Verizon or Sprint have the free with contract 3GS, which is the third most popular smartphone on AT&T, after the 4S and the 4.

    If Verizon and Sprint had the 3GS as well, the numbers there would be closer to 60%, and iPhone numbers would be higher, and Android numbers would be even lower.

    Then, of course, T-Mobile still doesn’t officially have the iPhone, even though there are over a million iPhone users on their network forced to use 2G. It shows the demand for the phone, just as the numbers for China Mobile shows the demand there. How would the numbers change if the iPhone were officially supported? Likely the same percentages as on Verizon and Sprint. If so, the iPhones would likely be at a much higher number, and Android corresponding at a much lower level still. Then we have Metro PCS, etc.

    In other words, if the iPhone were available in the USA, and across the world equally to Android, the iPhones numbers would be significantly higher, and that of Android significantly lower.

    While the article is very good as it stands. I think that it’s really necessary to show an analysis showing the percentage given the actual official exposure to the user base. In other words, what percentage of the possible smartphone buying population, both here and abroad, can officially buy an iPhone for the network they’re on, and what percentage is that for Android. That would give a more accurate picture of what the percentage is among the people actually able to officially buy them.

    As it stands, we don’t know any of that, and the numbers, while accurate, supposedly, don’t reflect fully, buyers preferences.

    In addition, of course, some of Android’s numbers are suspect. Do we really know how many smartphones Samsung sells? They haven’t given official numbers for over a year now, except for some vague numbers for one model or two that have sold well over a several month period. Last month’s numbers guesses vary from 32 million for iSupply, to over 40 million from some company whose name has eluded me right now. But we do know Apple’s. In addition, the rest are properly numbers shipped, while Apple’s are sold. This is something that’s been discussed for some time. It seems to me that in making comparisons, we need to add the number of devices that Apple has in the channel to their sold numbers to come up with comparable stats. But that’s not done.

    • Or…

      You’re quoting iPhone sales from the month after the line was refreshed and assuming those trends continued. Clearly they didn’t.

      1. Look at the following months in the graph, were Android outsells iPhone x3, x3 and x2. How can you square your theory with that?
      2. Look at the month before iPhone launch. Everyone paused their purchases, even the half million that went on to buy Blackberries after they’d seen what Apple was offering.

      What this says to me is that Android went on a 4 month sales rampage after the iPhone was announced because once they’d seen the iPhone 4S they knew that Apple wasn’t going to announce anything for another year and the big Android announcements were 6 months away. This then split the market into those who could buy right now (which they did in record numbers over the last 4 months) and those who could wait for the next batch of phones that were rumored and pre-announced (HTC One, Sony, Galaxy SIII) at the time.

      So basically, Android sales slumped this month because Apple’s announcement 4 months ago wasn’t very impressive.

      • Rob Scott

        These are comscore numbers not actual sales. On reported sales at Verizon, AT&T and Sprint, the iPhones is outselling all Android phones combined. These numbers are still to show on the polls published by the likes of comscore. In short the numbers that make no sense are the comscore numbers.

      • Tatil_S

        Not necessarily on Sprint. I believe Sprint said iPhone was its most popular smartphone in Q1 2012, but it did not spell out whether it sold more than the others combined (unlike AT&T and Verizon). It is possible, but Sprint has not provided precise numbers.

      • melgross

        The assumption is that sales on Sprint mimic those of Verizon. With actual iPhone numbers having been given out by Sprint, and most of their new subs coming from iPhone sales, it’s very likely that iPhone percentage is at least as high as that on Verizon.

      • Tatil_S

        Yes, as you said, it is an “assumption” and I have not seen any evidence or survey to support that. Sprint customers may be flocking to iPhone en masse or they may not. (Doesn’t Sprint combine its numbers with Boost and Virgin before reporting them? If so, the most popular smartphone on its network may not dominate as much as the case in Verizon, as Boost and Virgin does not offer iPhone.) It is wrong and sloppy to bundle an assumption on Sprint with reliable numbers from Verizon and AT&T.

      • melgross

        I think you are looking for an excuse to believe that it’s not as successful on Sprint as on Verizon. There is no reason to believe that though. Reports have been comparing the two and seem to think that marketshare is about the same.

      • Tatil_S

        I have already given you a simple reason why it may not sell as well. Sprint is reportedly more dependent on pay as you go plans. Without knowing the answer to how many smartphones are purchased on pay-as-you-go plans that are only now starting offer iPhone, there is no reason to believe smartphone distributions are the same in all three networks.

      • melgross

        Not according to reporting here over that time. IPhone sales overtook those of Android during the holiday period, and seem to still be higher. BB sales are dying. Holiday sales numbers were below even RIM’s projections, and they fell considerably last quarter.

      • orthorim

        The android numbers should be trashed. They are based on a poll of users whereas actual sales numbers from thr carriers show ios outselling Android for at least 6 months. So clearly the polls are wrong.

      • Tim F.

        I think there is something to the idea that Android sales are pegged to anticipation (and its opposite) of the iPhone’s release/sales, but the idea that this indicates the iPhone was unimpressive is absurd. I would say determining your purchasing decisions around a product you are not choosing to purchase is rather rare, quite absurd, and strongly indicative of something extraordinary going on.

      • tile00
  • Westech

    Are new subscriptions net adds?

    • http://www.asymco.com Horace Dediu

      The data is a sample of 30k consumers aged 13 or older and what phones they use as their primary handset. It does not measure subscriptions. It does not count business users, it does not count secondary handsets, it does not measure children’s use.

      • tele_c

        Horace,

        Do you know off hand if the enterprise(business users) mobile subscription market is larger than the consumer(household) mobile subscription market? If so, is that why you did not include the business users in the study due to a lower smart phone penetration for business users that could impact the overall average of smart phones installed base?

        Also, do you plan to provide another smart phone market study? If so, when?

        Thanks

      • http://www.asymco.com Horace Dediu

        Globally, enterprise mobile subscriptions are a very small percentage of the entire mobile subscriber market (my guess is that it’s less than one tenth of one percent). In the US the percentage may be higher but that is not the reason they are excluded from the survey. The survey is done by comScore and their methodology does not cover enterprises.
        Smartphone market study will be published as I get around to it.

  • http://dockyard.com Brian Cardarella

    Everyone that is shocked that infinite growth doesn’t exist surprises me. There is always a point when adoption tails off.

    • melci

      And yet iPhone adoption hasn’t – that is the interesting thing.

  • http://fahrenheit98.wordpress.com/ VrDrew

    Smartphone adoption in general, but for Android in particular, has probably reached the saturation point in the US.

    Simply put, the pool of potential customers – people willing to pay the additional $20-$50 per month for a smartphone data plan IN ADDITION to the cellular talk minutes is probably close to exhaustion.

    Whats worse for Android is that simply adding features is unlikely to change this. Due to Google’s Android distribution model, additional new features are likely to be of most value to existing Android customers. But a potential new smartphone user is unlikely to have the technical knowledge, or the inclination, to take advantage of additional – necessarily obscure – features.

    Its also possible that new entrants such as the iPad are siphoning off some smartphone sales. An iPad does everything a smartphone does, but it does it BETTER, and at the same monthly data cost. I’d imagine that at least some people are combining a feature phone (for voice calls) with a 3G-enabled iPad for their mobile data tasks.

    • orthorim

      There might also be a breakdown in the US carrier market – as it is phones are most expensive in the usa when considering 2 year cost including the overpriced plans.

      Its hard to imagine now but I there is the possibility that cell phone plans suddenly become competitive in the most competitive business environment in the world. All it takes is one carrier starting a price war, or some new regulations. Apple is doing its part making sure any carrier in the USA can sell the iphone…

    • http://www.asymco.com Horace Dediu

      There are more than 120 million people in the sample pool that do not currently use smartphones. It will be very difficult for those consumers to keep using feature phones as feature phones will become increasingly difficult to buy.

    • raycote

      @VrDrew
      “Simply put, the pool of potential customers – people willing to pay the additional $20-$50 per month for a smartphone data plan IN ADDITION to the cellular talk minutes is probably close to exhaustion.”

      If that is true then it follows that % Android sales should go up as that last 50% enter into smartphone ownership. They will be buying low end cheap Android phones as they do not care about the data functions?

      My wife and I both have cheap $89 LG smartphones on the prepaid option. We bring the iPad if we need data access.

      Life has a lot of varied opportunities for computation and data access. Sometimes it nice to just head out and enjoy the visceral world without the need to be touching the data 24/7. For me that 24/7 data access is more of an attention hogging $600 a year albatross than a must have value function.

  • http://twitter.com/qazwart David Weintraub

    A lot of Android growth had been due to the push by the cell phone service providers. For years, the basic phone service had been a loss leader. Before Android, the push had been for higher minutes, texting, ring tones, etc. The problem is that basic service has now hit the 500 minute per month range, and people aren’t paying for more minutes or ringtones.

    Thus, Android was a nice choice for the cell phone service providers. Push people to get a smartphone and have them pay that $30/month extra. You can see this by looking at the phones provided by each company. Verizon offers 9 basic phones and only three are free. They offer 48 smartphones and six are free. AT&T offers five free Android phones and no free smartphones.

    This explains much of what has been going on in the marketplace: Nokia’s rapid fall (no one is buying Nokia’s basic phones any more because they’re all buying Android phones). Android’s rapid adoption, and the reason why Android web penetration is so low when compared to iPhone users (most Android phone users are feature phone users who happened to have gotten an Android phone instead of a basic feature phone).

    However, not everyone can easily be pushed to a smartphone. There are just a certain base of users who want a simple phone for making calls. They don’t buy ringtones, they don’t want texting, and they certainly, don’t want to pay $30/month over the standard $40/month charge. They pick the few feature phones left.

    It is interesting that this slowdown is now happening just as the wide release of Android has hit the two year mark — the length of time for phone contracts. As people’s contracts expired, they were able to get a new Android phone. a large group when offered a cheap Android phone took it. A smaller group didn’t. Now, the two year cycle has started, and the only ones with basic phones but not Android phones are those who didn’t want an Android phone when they had a chance the last time their contract expired. Thus the slowdown.

    • Canucker

      Was looking into the upgradability of my sons iPhone 3GS on the Rogers network at the weekend. The only three options offered were an HTC Android phone a Samsung Galaxy II and a BlackBerry Bold. He’ll switch carriers before switching to another smartphone.

    • http://www.facebook.com/cristian.ditoiu Cristian Ditoiu

      been through Nokia, iPhone, Android, iPhone. I found myself looking at my iPhone and realizing that i have 5 (five) apps installed that honestly were available on nokia too (they sucked of course 5 years ago but they existed). So i’ll be back to nokia :) .

      • James Katt

        Wow. So few apps. So little potential used. A Nokia feature phone is probably best, then.

      • http://www.asymco.com Horace Dediu

        It’s interesting that you are comparing a company, a phone brand and an operating system as if they were equivalent choices.

      • jfutral

        Well, to your credit, you are one of the very few _analysts_ who don’t do that.

        Joe

    • Chandra

      Good points. I also want to add another user segment. People who do not want contracts but want some voice minutes and unlimited data. Virgin Mobile offers a plan for $35 a month. Unlimited text and data (so they say) plus 300 minutes of voice. It is quite popular. You will have to buy an Android device costing around $150-200. This is quite popular with those who are cost conscious but want the simplicity of contract-free service with data.

      • Chandra

        I just saw this today: “Sprint will announce this week it will offer iPhone on its Virgin Mobile pay-as-you-go brand starting
        as soon as July 1, according to people familiar with the company’s
        plans.

        Hope they offer it with the same $35 a month pay as you go plan. I have a feeling this is going to be quite popular.

        All someone needs to do is to offer an iPhone at full price that can be paid off on a monthly basis ( a phone loan ). This has to be separate from the plan.
        That should disrupt the NA pricing plans based on subsidy.

      • handleym

        I have to wonder if unlimited data (and the massively publicized fights over it, and the advantages some carriers get from claiming it) are going to morph into something rather different.

        Carriers have already started various sorts of tiered performance access. Right now what they are doing strikes me as technically idiotic, but what I would expect VZW (the one carrier that actually seems to understand technology) to switch to is something like this:
        What you are paying for now is not so much a certain amount of data as a QOS.
        Specifically: you’re always sharing the tower with other people (although the details matter — in some cases you’re sharing time-slots, in some cases you’re sharing OFDM frequencies). What you will pay for is 500MB (or 5GB or whatever) of highest performance service, with data over that limit dropping you so that you only get a third of your “fair share”of slots, and perhaps with tiers — once you hit double your allotment, your fraction of slots drops to 1/10th your fair share?

        Once you have something like this in place, you lose all the anger over “unlimited vs limited” plans, but you also lose the revenue from people going over their caps. VZW and ATT won’t like that, but they may have no choice, as their more desperate competitors have already latched onto “unlimited” as a way to compete.

        It’s also a way to hold onto those people who are essentially only interested in voice, and will abandon you if you refuse to offer just voice. You can have a minimal plan which provides for all data as immediately throttled at 1/10th “fair share” and charge nothing for it — that way you can offer everyone smartphones, and heck, some of them might even like them enough to want to upgrade to a better plan.

    • El Aura

      In most of the world, everybody can choose whatever phone they want, it does not matter what your carrier offers because almost any GSM 3G phone will work on almost every GSM network.

    • Oak

      When I read this, I stopped reading, because it makes no sense: “AT&T offers five free Android phones and no free smartphones.”

  • Mike Wren

    Being available on three of the four major carriers, the
    free iPhone 3GS and having the most and best apps and content is giving the iPhone
    dominant operating system market share in the US. But will Apple be able to compete with $50
    Android phones for prepaid plans in the emerging market? Speculation is that the 3GS will be around $300
    for prepaid. If Apple keeps making it
    the price will keep going down. The iPod
    Touch is $199. How much can the cell
    phone radio add to the cost? In China
    consumers tend to spend a greater share of their income on “luxury” goods by
    cutting back on necessities.

    • orthorim

      If Apple ca make a 3GS for $200 unsubsidized they will kill the low end. Low end android phones are around $150 right now – they are by far the best value at this price point, easily besting offerings from Nokia etc. but they are also in no way competitive with a 3gs, the screen is worse than the iphone one from 2007 amd dont even talk about software or apps…

    • FalKirk

      Just a clarification. the free iPhone 3GS is only available on AT&T since the 3GS was not made for Verizon. One would expect the iPhone 4 to become free for both AT&T and Verizon in the fall when the new iPhone arrives. If the pattern holds, Sprint will have to wait until 2013 before it can sell the iPhone 4S for free.

  • mealworm

    Maybe it’s just a momentary Osborne effect because people know that new Ice Cream Sandwich phones (HTC One, Galaxy SIII) are coming to the US?

    • TheEternalEmperor

      I’m not sure if I believe that one. You ask 10 people on the street what Ice Cream Sandwich is and they’ll talk dessert.

    • http://twitter.com/charlesarthur Charles Arthur

      These figures are about changes to the installed base. They are *not* about total sales.

      These numbers *do not* show people who already have a smartphone who upgrade within the same OS. They show people who didn’t have a smartphone, but in the past month have upgraded to one.
      Now: people who are presently using featurephones have had the chance for the past two years, at least, to shift to a smartphone. It makes no sense that those 120 million or so presently using featurephones have been hanging on for the release of the Samsung Galaxy S3, which is on the same price plans as the iPhone 4S in the UK. The next 50% of featurephone users have already shown they don’t want to hurry to smartphones. They’re really unlikely to be waiting for a top-end one. So I reject that as a hypothesis.

      I think the next 50% will be very hard to shift to smartphones, and when they do, I think they’ll likely go for the lowest cost ones they can.

  • http://www.appleoutsider.de/ AppleOutsider.de – Sebastian P

    The way I see it is the November sales need to be offset. Simple as that.

  • Pingback: Android isn’t in trouble | News24

  • Kennedye

    It appears that only Microsoft showed a gain in net adds for the last two months.

    • http://info-tran.com/ Info Dave

      And in other news, Microsoft has obtained market share not seen since March of 2011. Or, looking at it another way, Microsoft market share grew 25% last month. It all depends on the story you want to tell.

      The Nokia 900 was a watershed moment for Microsoft Phone. Let’s wait a few months and see if this pony has any legs.

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  • Andre Richards

    I’ve said it many times before: Android is good at grabbing first-timers to the smartphone market (due to low costs and easier availability in various markets) but very, very bad and making long-term users of them. I know far more Android users who hate their phone and want to check out the iPhone than the other way around. Users are jumping ship from Android and going to iPhone. This year marks 2 years after Android’s big explosion in popularity. These number reflect the fallout of users with Android fatigue coming off 2-year contracts. My wife was one of those people. She was absolutely fed up with her piece of crap Android phone and couldn’t wait to switch to an iPhone. She’s been thrilled with it ever since.

    • orthorim

      Android never had this kind of market share. This is all bad poll data.

      World wide the number of activations reported by Google is certainly more accurate and its pretty high but the web surfing statistics make it pretty clear most of those are feature phones with an android OS rather than a real smart phone competing with the iphone.

  • OrakletiLund

    anticipation of SGS3 ffs – how on earth can Asymco miss that?

    • melci

      Usage stats say the mahority of Android phone buyers are not buying high end smartphones.

      25% of all mobile web traffic comes from the iPhone versus only 16% from all Android tablets and phones combined according to NetMarketshare. Chitika reports that 69% of all mobile web browsing occurs on iOS devices versus only 27% on Android, despite the availability of all of these big screen Android phones and “Phablets”.

      90% of all mobile commerce purchases come from iOS according I Rich Relevance. iPhone developer income is 4x higher than Android according to Distimo.

      Most Android buyers are purchasing cheap and nasty Android phones like my Huawei X1 and then are only able to use it like a glorified feature phone as it is too slow and resource constrained to do any significant web browsing or app usage.

      • AppleFUD

        WOW. . . you keep spitting out the same stats everywhere you go. . . no, you aren’t an apple shill ;)

      • melci

        You’re not reading this article are you FUD. Trouble with the Robot. Your hate blinds you.

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  • Tatil_S

    Survey based results look very unreliable in this field (see NPD vs. comScore data for Q1 2012), so I am not sure if trends are reliable, either. Differentiating garbage still gives you garbage. Survey results for Q1 seems to have overestimated Android sales, so the drop now may just be natural to adjust for the earlier miss.

  • JohnDoey

    The drop is because the idea of Android as a generic alternative to iPhone is over. They did not create that. They created something that looks like an iPhone but is not. They are about to introduce v5 and only 6% of users have v4. And the only significant version is still v2. The open source project had impact, same as WebKit has had impact, but a generic phone can change from WebKit to IE10 and Android to Windows NT because there is no iPhone-like consumer Android platform with user satisfaction and loyalty.

    At this point, it is pretty obvious that 5 years from now, ARM mobiles are 75% OS X and 25% Windows NT. There is not even a fantasy you can indulge in that it would be any other way. You can go right now and watch the software teams working at Apple, at Microsoft, and nowhere else. You can see Apple designing the hardware for 2015 and you can see Microsoft establishing with the generic hardware makers that they will pay Microsoft one way or the other no matter what software they use, so they might as well use Windows NT-on-ARM. You can see the 3rd party software development teams making iPad Retina apps and iPhone Retina apps with 10 year roadmaps, but everything else is legacy: Wintel app, Android 2.3 app, BlackBerry app, Windows Phone 7 Silverlight app. Microsoft is going to create the easiest platform to port apps from Apple, just like they did with Windows 3. However, Apple is not going to collapse and give Microsoft the market to themselves, and with 3rd party manufacturing Apple essentially “licenses iOS” just like Microsoft licensed Windows 3, so Apple can scale to meet the bulk of consumer demand.

    You can start wearing your Android T’s as retro, like the Pan Am logo. The software will be out there for a long time, running under Kindle and so on, but the logo part is done. That is the flag of a sunken island nation.

    • wolfgroupasia

      That’s clever speculation, but with respect it ignores about 75% of the planet’s total addressable market. Five years from now, ARM mobiles in China, India, Indonesia, Russia, and LatAm are not going to be, as you put it “75% OSX and 25% Windows.” Whatever travails Android faces in North America, the Apple experience does not travel well beyond North America, Western Europe, Japan, and Australia. While Apple will have large and excellent markets beyond that core, the economics of the iPhone for people in emerging economies vs. the hobbled version of the Apple ecosystem they’re being given opens a door for Android. Yes, the Android experience is beset by problems, but as someone who has used all three systems exclusively outside of Apple’s core markets, I’ll take the Android headaches over the Apple headaches any day.

      • Kizedek

        In terms of these so-called headaches, what you are really comparing is two different trajectories going two different directions and just taking a snapshot in time where they kind of cross over in your experience.

        Android has had to deal with these issues concerning different markets and carriers and OEMs from day one. What are they doing about it? Addressing these issues ever more intelligently and satisfactorily? Not really. Seems they are doubling down on Motorola and getting less ‘Open’, etc. by the day. The OEMs are responding by putting more effort into their own exclusive variants with their own search preferences.

        OTOH, Apple hasn’t even really begun to address these issues, and by all accounts, they will. But what have they done so far? Made it possible to activate and update iOS OTA. Made it possible to have an iTunes account without a credit or debit card attached (in Netherlands, few people have credit cards, and there is the option to have third party payment processors link to your bank account and link to iTunes; many youth are doing this).

        Then there are rumors of Apple creating some kind of Wallet, and who knows what else. So, to paraphrase you, “I will take unseen what Apple’s got in their pipeline at any given moment over any headaches anywhere, and over what anyone may say is possible or what Apple’s competitors *say* they are doing about any issues affecting everyone.”

      • Kizedek

        To carry on my thought:
        Apple doesn’t remain “beset” by problems for very long. The constant refrain about Google, MS and others is what you echo: “the _____ experience is beset by problems, BUT…”

        But they get a free pass. Why? because apparently those problems are just the way it is and they can get away with delivering an experience that doesn’t deal with those issues.

        But who is really looking at these problems and issues for what they are? Horace is trying to get at this with his arguments about the big picture and innovation and disruption and that the problem might be the “network” and not the “product”.

        A disruptor and innovator can’t be content to live with and remain beset by these problems. It’s got to redefine the whole paradigm. That’s what Apple does. It’s precisely because there are these common problems in the common experience that Apple will work around them and deliver a completely different solution on completely different terms.

        So, you think there are some headaches with the Apple experience? Great, it means something is going to happen. I can’t wait.

    • http://www.facebook.com/nathan.hillery Nathan Hillery

      Maybe it should be “Palm-An”

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  • Sameer

    This analysis does not take into account that the android camp has seen no significant releases lately. Even the HTC One X didn’t get the required marketing push from AT&T because they were focused on the Lumia. You know how iPhone sales take a hit the quarter before a launch? Well, guess what, the most anticipated handset (9 million pre-orders) is launching next month on 5 carriers. Anyone predicting the demise of Android based on these numbers really needs to look at market realities first.

    • Tatil_S

      Here is a wild idea, why does not HTC “push” its own phone?

      Let’s see, HTC releases a flagship phone and it does not sell well because AT&T would rather market Lumia. Yet, this does not count as a market reality?

    • jawbroken

      I feel I need to point out that the 9 million pre-orders were from 100 global carriers, not users. So perhaps the “most anticipated” android handset by global carriers, but who knows what that means for users and specifically the US user gains that the above post concerns.

    • http://www.asymco.com Horace Dediu

      Why were AT&T focused on Lumia?

      • http://twitter.com/SirKneeland John Kneeland

        Because AT&T wants more than a 2-horse race…perhaps they feel it restores the balance of power to them. The more choices, the more confusion, the less certain a consumer is, and the more power ma bell has to influence which way they go. Remember that about 2/3 of consumers go into a US carrier store without having yet decided which phone they’ll buy..

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  • Diganta Sarkar

    What I see is Android adding more than any other platforms till this last quarter. Till last quarter, Android outsold iPhone. With slowing growth, I think Android will hold off to its lead, even if can not grow.

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  • Mayson

    As we approach smartphone saturation, the stat to watch will be churn: how many iOS users switch to Android, and how many Android users switch to iOS, when they update their phones. Every survey I’ve seen shows iOS loyalty much higher than Android.

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  • Claude Hénault

    A worldwide economic slowdown — if not worse — appears in the cards for the relatively near future: thank you overspent countries of southern Europe, under taxed Americans who refuse to support their governments, and tapped-out consumers everywhere. On a micro level, the shift from feature to data phones in the USA may have been performed by nearly all those who can really afford to pay for both voice and data. A time to choose one or the other may be at hand. Choosing to stay with a feature phone will not be a suitable response to this requirement. So, sometime around October, it may be incumbent on Apple to disrupt again: to disrupt some to its own most profitable sales; iPhone sales.

    Time for Apple to produce a data-only phone. It could do this by adding GPS and 4g radio to the iPod touch, and improving FaceTime by adding both easy audio-only and Skype-like access to other platforms. If Apple doesn’t give this a shot, someone else will, and then they and not Apple will profit from the Apple disruption.

    • http://www.asymco.com Horace Dediu

      Who might give it a shot other than Apple? Perhaps one of the iPod touch competitors?

      • Claude Hénault

        Samsung, perhaps with a vastly improved version of the Samsung Galaxy Player 4.2 that was recently approved with extreme sarcasm by David Pogue. Or one of the players with nothing to lose, HTC, RIM? Or one with an axe to grind, Motorola? Or how about the Zune warriors? Why did they buy Skype? Also note that yesterday’s WWDC showed iOS 6 will allow FaceTime to work on both Wi-Fi and cell networks: half way there.
        Edit fixes Motorola spelling, adds Microsoft and WWDC.

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  • RandomPundit

    Question to ponder: Why does everyone care about the total market share for android and iOS? As we’ve seen on this very site, Apple controls all the profit. That’s what’s important. Ultimately Google will lose this battle, even if they “win”. This is not the “give away the razor and seel the blades” or the “make the architecture open and sell the OS”. This is Free OS, open architecture, low profit app store…. the ONLY thing Google gets out of this is their analytics. There’s some growth in that, but it’s really just the growth of the total market itself. iOS users, remember, generate most of Google’s mobile analystics profit. Google is just sweeping up the scraps with all the Android devices ( especially the low end ones )
    Now for Android itself…
    Fragmentation of OS, fragmentation of device manufaturer, fragementation of UI ( thanks to Carrier manipulation and even the manufactuer like Samsug ) all will do nothing to create brand loyalty, or find any room whatsoever to increase profits for Google anyway.
    So you’ll end up with a leader or two coming from the device manufacturer that will make some good profits ( above the rest of the OEMs, but not above Apple ) Samsung seems to fit that right now. They can compete with Apple. But ultimately the other Android device makers won’t be able to keep up. They will be reduced to competing against all the other also rans and each other..not Apple.
    So… what’s the point in looking at total Android marketshare?

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  • http://twitter.com/VenuSpeak K. Venugopal Menon

    This is by an Apple Fan boi :-) Check actual data after Samsung Galaxy S III release. After Steve Jobs iOs is as Dead as a Dodo. Basically a cartel of movie makers, record companies make Apple in its revenues. Once this Studio-Record Company-Apple Nexus is broken Apple is Dead.
    If you ask me I see Android as a major force in BRICS countries, especially India and Africa, where people do not have money to BURN !!!
    The sales in number of units is my analysis of success. sales in $’s and revenue is a 1% POV
    Come on Horace, even a blind man can see, that Grey dominates over Blue in the charts, a slight dip is inconsequential. I feel in India with cheaper tabs on ICS aand samsung phones, No one is buying iPhones anymore. I just bought a $21 basic made in china cell phone, assembled and sold by Micromax India. with basic features and dual sim. I also bought a . Micromax Funbook with Android ICS 4.0.3 AT $97 I even wrote a blog post about it
    http://youthentertainmentnetwork.blogspot.in/2012/06/which-low-cost-btablet-to-buy-micromax.html
    And look what I did with Nokia E 63 for 3 years :-)
    32 functions and it was neither Android RIM Winx or iOs but symbian
    http://thevenuradiomusicjambyvenug.blogspot.in/2012/06/vagabond-original-song-written-composed.html
    If you don’t have an iPhone, YOU DON’T NEED A BLOODY iPhone, you just need BRAINS..
    And commons sense Dear Horace, is very uncommon. People basically follow the herd mentality, and get fleeced, cheated and taken for a royal Ride. :-)
    You know it, there is no point in being an Ostrich, with its head covered in sand, and saying its too dark! Realise this, Emerging BRICS markets are where sales and revenue gonna be . The population of top 3 states in India is more Than US + Europe + Canada
    http://en.wikipedia.org/wiki/List_of_states_and_union_territories_of_India_by_population#States_and_union_territories_of_India_by_population
    Check this table and look at the untapped market in India and Brazil in %age and compare it with US %age of internet users
    http://en.wikipedia.org/wiki/List_of_countries_by_number_of_Internet_users
    Check this table and look at the untapped market in India and Brazil in %age and compare it with US %age of mobile phone usershttp://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_phones_in_use
    Now total of Mobile users in China, India, Brazil, Russia and South Africa is 1020+953+255+224+41 = 2.493 billion compared to 328 million users in US
    How is that ?
    Read These Too
    My hunch is Windows 7 will overtake iOs in 2016, I said this to @tomiahonen in AprilIDC: Android will ‘peak’; Will iOS hold on to second place?http://www.zdnet.com/blog/btl/idc-android-will-peak-will-ios-hold-on-to-second-place/79351
    Android Expected to Reach Its Peak This Year as Mobile Phone Shipments Slow, According to IDC
    http://www.edmontonjournal.com/business/Android+Expected+Reach+Peak+This+Year+Mobile+Phone+Shipments+Slow/6738047/story.html Android hits 900,000 activations per day – and Andy Rubin’s staying put
    http://www.guardian.co.uk/technology/blog/2012/jun/12/andy-rubin-google-android-activations?newsfeed=true
    Windows Phone to pass iOS by 2016, Android at 53%
    http://www.zdnet.com/blog/cell-phones/windows-phone-to-pass-ios-by-2016-android-at-53/7755
    Future of Technology as I see
    Windows making its own Tablet (leaving Intel)
    Google Making its own Phone with Motorola ( Leaving Samsung)
    Google Making Nexus 7 Tablet ( Leaving Samsung Tab )
    Microsoft may likely take over Nokia or Nokia will Part ways with Microsoft and rseume Symbian platformwhich will be a hit in India I am sure about it, a the 1st phone handset in India for any user was a Nokia 1100 I am sure about it.
    Samsung will go back to its BADA if Google continues with Google phone and Tab
    RIM Blackberry altogether dying
    Sony and LG also ran in others

    Horace feel free to react
    Here
    http://youthentertainmentnetwork.blogspot.in/2012/06/as-i-had-predicted-in-april-2012-to.html

    #Venuspeak@Venuspeak

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