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Update on Android growth

In February of this year MediaTek introduced an ARM chipset for Android smartphones targeting $160 end user pricing. I’ve heard estimates that this chipset will sell in the “hundreds of millions”.

The question is: are these units going to be “activated” as per Google’s definition of Android?

Historically, MediaTek’s chips have been used in “grey market” devices. These are typically copies of branded phones and are sometimes shipped without IMEI numbers and hence not even sanctioned by regulatory authorities. If hundreds of million of such Android devices are sold in the next few years then tracking Android will become even more difficult.

The current total is difficult enough. We just received an update on the activation rate (900,000 per day) and that allows us to create a picture of total cumulative activations.

We still don’t know the retirement rate so these are not devices in use, however most of these devices have been sold in the last two years implying they are (nominally) still functional. The following chart shows the ramp overlaid with an estimated 24 month product life cycle.

The one million per day Android activation rate has probably already been crossed with all the unsanctioned versions of Android available today. What will be the rate once the MediaTek chipsets are in wide distribution?

  • Sacto_Joe

    At some point in time the question has to resolve to “who is in business for the long run?”. It’s looking like that’s still an open question for all four contenders to me. RIM is still hanging in there, with a major upgrade coming soon, MS is about to make its big run, Android has pretty much sealed itself in as the low end dominant force, and Apple owns the high end. In the last analysis, the market is so huge that there’s room for all to survive indefinitely.

    Of course, there’s going to be a huge difference in which system prospers the most. Right now, the most prosperous appears to be Apple, with its huge margins driven by ever-growing demand. And considering that the whole world is still in the process of recovering from the Great Recession, it’s likely that demand for high-end, cutting edge products will keep Apple growing for years to come, as well as giving advantages for growth to Apple’s competitors.

    • BoydWaters

      Markets hate uncertainty. The Eurozone is facing the prospect of cascading failure, in the US we have a major election, chiefly a referendum on current fiscal policy, coming up in a few months. Are markets going to support new entrants? Will business customers take a bet on Windows Phone or go with iOS? Remember, no one ever got fired for buying Apple…

      • Walt French

        Unfortunately for RIM and Nokia, the “markets hate uncertainty” line applies most to the question of whether they can ever offer a competitive product to the current definition of smartphone.

        Never mind the obstacle for “new entrants;” if there were a compelling new smartphone paradigm, customers would flock to it (by definition, eh?). But Microsoft’s “asymmetric competition” offers only a rather modest leverage from their desktop capabilities; that’s irrelevant in most of the world and of no interest to the majority of consumers in the US. And that’s the closest we see to what could drive a new entrant.

        Even for those who treasure RIM’s still-highly-reliable and functional messaging, or its lightweight, low-power designs, buying a BlackBerry is a gamble as to whether it’ll be supported/bugfixed in the near future. Ditto, Nokia, which has also begun the cash hemorrhage (and Nokia’s current phones even abandon their traditional user base’s preference for geeky engineering, replacing it with “different” as their new marketing line, at least in the UK).

  • Mike Wren

    It’s hard to be sure from the third graph, but it looks like Windows Phone almost aligns with the early growth of Android.

    • vladostro

      WP is almost 7 quarters after launch. There is very little official data though. My guess is that it hasn’t passed 20 Mil yet.

      • simon

        Not only that but Windows Phone has much bigger initial launch than Android did. It involved 10 phones on more than 60 carriers over 30 countries whereas Android had only one with a few carriers involved over the world. It’s been a very disappointing tale.

  • DrewBear2

    “Android growth” looks very different depending on which lens you use to view it. The activations lens makes things look larger than they really are. The profit lens shows a much smaller reality. Google still profits more from ads on iOS devices. Few OEMs are profiting from Android device sales. We should hear an update at Google I/O on how much the app developers are profiting, but it’s not likely to be anywhere close to matching the activation numbers.

    Another lens is mobile browser market share. Safari is over 60% and the Android browser ~19%. Again, a very different image than the giant activation numbers. If anyone tracked time spent on the browsers, I suspect Safari would have even larger numbers.

    Horace has highlighted each of the above points in previous posts. Bottom line is that it’s very easy to measure iOS growth and strength. The Android reality is, like the platform itself, fragmented and nebulous.

  • http://twitter.com/Niilolainen Niilo

    I think you are overstating how much of MediaTek’s business is grey market these days. Most of their business comes from legitimate Chinese OEMs and they’re also used in e.g. Motorola’s featurephones for that market. Qualcomm has successfully taken the game to MediaTek in the last two years by introducing their own QRD turnkey solutions, so I wouldn’t expect them to have it all their own way.

  • mjtomlin

    I would be interested in seeing an OS version breakdown of those 900,000 activations per day. It would seem to me that Android has pretty much stalled at version 2.3. Surely 4.0′s installed percentage should be making huge gains, yet we’re not seeing that. Even with data from Google.

    • Walt French

      AFAICT, a user is just as likely to see Google ads with Froyo 2.3 as with ICS 4.0, so this is more a measure of how the OHA is falling apart due to horrible OEM economics, rather than some failing of Android per se.

  • kankerot

    Tim Cook last week said they have sold 365m ios devices to date. As the first ios device was the iphone in June 2007 there have been 20 quarters of sales of ios devices.
    Your graphs shows about 425m ios devices sold to date. Where have you these extra sales from?

    • Space Gorilla

      Tim Cook said they had sold 365 million iOS devices at the end of March. I believe Horace is simply adding his estimates for the next quarter. You can go back and watch the keynote video, he didn’t say to date. I wonder if he didn’t announce numbers because they have some really huge numbers to unveil in the next quarterly report. My guess would be BIG iPad numbers.

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

      It wasn’t Tim Cook but Scott Forstall who said that there were 365 million iOS devices sold through March 30 of this year which is the end of the second fiscal quarter. (1:09:01 in the keynote as available on iTunes). My estimate is for the end of June (as is that of Android since I am sampling the data quarterly). The estimate for iOS sales for the second quarter is published here: http://www.asymco.com/2012/06/07/estimates-for-apples-third-fiscal-2012-quarter/ (excludes Apple TV units and includes iPod touch units at about 60% of iPods). Adding this quarter’s iOS estimate to the end of last quarter’s actuals yields about 423 million.

  • melci

    Horace, this concentration on smartphone unit sales share ignores the fact that it is meaningless if it doesn’t result in OS and App platform, ecosystem, browser and revenue share as well.

    When you look at these metrics, the picture suddenly becomes very different:

    - 365 million iOS devices vs 300 million Android
    - 84% of mobile gaming revenue captured by iOS (NewZoo)
    - 90% of e-commerce revenue comes from iOS devices (Rich Relevance)
    - 97.3% of business tablet activations are iPad (Good Technologies)
    - 73.9% of business smartphone activations are iPhones (excluding Blackberries)
    - 63% mobile web browser share iOS vs 19% Android (NetMarketshare)
    - 25% of mobile web share is iPhone vs only 16% Android (NetMarketshare)
    - 69% of mobile web share is iOS vs 29% for Android (Chitika)
    - 80% of cellular industry profits captured by iPhone (Morgan Keegan)
    - iPhone developer revenue 400% of Android phone revenue (Distimo)
    - IOS developer revenue 6x Android dev revenue (Distimo)
    - New iOS app starts increased from 63% to 73% marketshare (Flurry)
    - Developer mindshare: 89% iPhone, iPad at 88%, Android phones 78.6%, Android tablets 65.9% (Appcelerator)
    - 78% of smartphones at AT&T, 76% at Sprint and 51% at Verizon are iPhones Q1 2012. These 3 carriers make up 80% of of smartphones sold in the USA
    - vast majority of 3rd party hardware peripherals, accessories, media and content target iOS devices 
    Etc etc.

    In contrast, like Symbian before it, all Android has to show is smartphone unit sales share and we all know what happened to Symbian…

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

      That’s a great summary of the consumption stats that are popping up with increasing frequency. I wish I could have all these data sets to plot and observe patterns for.

  • simon

    My question is if there is any data out there that attempt to show the product mix of Android.

    Samsung has recently announced that they have sold 50 million Galaxy S and S2 combined in the past few years and that seemed rather low considering Samsung sold almost 100 million smartphones just last fiscal year.

    We never hear about the non-Galaxy S Samsung phones except Note but those non-Galaxy S smartphone are the majority of phones sold by Samsung. Is there any data on Samsung or any other Android manufacturer’s data on what high-end, mid-end, and low-end phones they sell?

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

      The occasional activation rate numbers are the only data we have about Android.

    • http://financial-alchemist.blogspot.com Turley Muller

      Android is heavily skewed to the low-end. HTC & Motorola that sold high-end models on non-iPhone carriers in US (VZ & S) have seen their sales whacked when iPhone arrived on those carriers. For $200 and above phones, iPhone has 80-90% share for those carriers. Samsung sells a lot of low-end models, but even the Galaxy prices are attractive. May launch at a high price, but usually come down quickly, and when people aren’t willing to spend $200 or more for iPhone, then they probably don’t have strong preference thus will jump at whatever is cheapest which can be As low as $50 bucks or free given all the promotions they do, opposed to iPhone price never discounted

  • Arv

    Hello, When I see discussions like these, I think for a major part they are so US-centric. Android growth in raw numbers is unbelievable in lower-wage countries like Philippines etc. People always bring up ‘profit’, ‘browser share’ etc. where iOS triumphs. BUT, we are not talking about those. We ARE ONLY talking about raw numbers. A bulk of users who want to replace their ‘feature phone’ with something more modern, who like a big screen, probably do not even have a data plan. Remember, Android is used by a lot of folks without a data plan, as it appeals to people who cannot afford any other

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

      What many phone vendors and analysts were surprised by was the speed with which people switched from feature phones to Android. The obvious question is now what will they switch to when their Android phones wear out. What data do we look at in order to try to answer this question?

      • Vigilarus

        Maybe platform-specific app purchases per user per time period, by either revenue or quantity metrics? The greater the familiarization and monetary investment in platform-specific apps, the greater incentive to stay with that OS at replacement time.

  • onmypalm

    I find it disingeneous that the mobile OS adoption chart does not even have a passing comment about Symbian. Why? Because even if it is quickly retreating, it is the one who have sold the most globaly, setting the pace for the late explosion of smartphones in USA, even though it was almost completely absent there

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

      I don’t have data on Symbian during the first 36 quarters. The data I have would place it off the chart and make the Android and iOS lines too difficult to resolve. I’ve posted charts for all platforms before but this particular discussion is focused on Android. See: http://www.asymco.com/2011/07/16/the-frontiers-of-platform-adoption/