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Where are the Android users?

Google occasionally reports data regarding Android. Very occasionally. The last time we had some data was in September 2012 when we learned that activations were running at 1.3 million per day and that a total of 500 million total activations had taken place.

As of today, being March 2013, the time between updates has reached five months. It’s the longest gap so far. Benedict Evans also notes that it’s been five months since the data regarding screen size stats has been updated on the Android developer site.

But we have to live with what we get and, in the absence of an update, the pattern of growth in Android, if sustained, looks like this:

Screen Shot 2013-03-10 at 3-10-11.05.14 PM

It implies that 800 million Android activations have taken place to date and the rate is about 2 million per day. One billion activations could thus happen by June.

There is however another set of data regarding Android which is updated more frequently. The comScore mobiLens survey covers the US and provides updates on a monthly basis. That data shows that Android users in the US reached about 68 million as of the end of January. See the updated data below:

Screen Shot 2013-03-11 at 3-11-10.26.01 AM

I included the install base and share of total users as reported. Combining the comScore data with Google’s activations gives the following picture of US as a percent of global Android (orange circles represent US base and blue circles the precent of total activations that the US might represent)[1].

Screen Shot 2013-03-10 at 3-10-11.44.34 PM

The data implies about 9% of Android usage is in the US. The more startling thing is the difference in growth: it implies that with a US growth rate of only about 13.3k/day, global growth is 150 times faster than US growth. In other words, that 0.6% of new users are in the US and that 99.4% of Android growth is outside the US.

That’s an interesting story. But it’s even more interesting that this is not the case with the iPhone. The iPhone is growing considerably faster in the US than Android. One can see this more easily with a graph of the US mobile platform net user gain rate as shown below:

Screen Shot 2013-03-11 at 3-11-10.32.23 AM

 

Looking at the the same contrast between global and US, from Apple’s financial reports, in the fourth quarter the global “activation rate” (i.e. sales rate) for iPhone was 525k/day (nearly one quarter of the extrapolated Android rate). The comScore data suggests the US gains are running at 106k/day. Therefore we can calculate that about 20% of iPhone growth is in the US and 80% is outside the US.

Even accounting for some potential error in the Android estimates, the contrast is quite stunning: 1% vs. 20% share of growth suggests something is very different about the US with respect to the two platforms.

My suspicion is that it has something to do with the fact that the US is one of the few (but largest) market where the iPhone is available as a “low end” offering. At a minimum price of $0 (with a contract) many consumers are finding the iPhone attractive relative to a $0 (with a contract) Android phone. This price parity (illusory as it may be) allows iPhone to grow even faster than Android in this particular market.

One wonders what would happen if such price parity were present globally.

Notes:

  1. Android activation data as reported by Google includes tablets but excludes many unofficial Android builds e.g. Amazon Kindle and many Chinese phones and tablets that don’t register with Google services. comScore data includes only primary devices used by consumers and excludes corporate purchases and devices whose primary users are younger than 13 years.
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  • capnbob67

    Fascinating analysis as ever, Horace.

    Does the eyewatering disparity in stats and the real world implications for the manufacturing and existence of discrete devices suggest that any of these stats are at all suspect?

    Who is making all these phones? Add up the solid or spurious (Samsung) stats from the traditional OEMs you track and does that come anywhere close to the total of new devices these numbers imply? Can anonymous Chinese and Indian manufacturers be churning out tens of millions of phones that have magically passed Google certification to make them count as real Android phones? If the activations exclude the non-Google Services devices (as Google suggest), can the implied device count be true?

    We’ve already discussed ad infinitum that Comscore seems totally out of whack with US sales numbers reported by carriers unless T-Mobile and the small 2nd and 3rd tier MVNO or regional carriers are selling an unholy number of Android devices. My spidey-sense is tingling that iOS can be selling well over 60% of devices across the top 3 carriers but somehow come out at 38% after the flotsam and jetsam of US telcos are added up. That kind of swing would imply that these dregs drive over 1/3 of the market. TMob+Metro PCS are <12% of total US subscribers.

    Back of the envelope maths using total subscribers as a proxy for sales, and assuming the same rate of sales of devices between Tier 1 and the other carriers (doubtful) suggests that:
    330M US accounts
    245M AT&T/VZW/Sprint
    85M TMob/MVNOs/Regional subscribers
    68.5% of Smartphone sales in the 245M were iPhones (2012 Q4)
    Assuming the other 85M subscribers bought non-iPhones at the same rate as the 245M, we would still come out to the total market being:

    50.5% iPhone vs. 49.5% Non-iPhone (Android/BB/WP7/8/etc.)
    I just don't see how it is possible that somehow, the 85M subscribers not on the big 3 can massively overturn the dominance of the iPhone? I call shenanigans on Comscore. I know it is a 30000 person sample not sales data but it is clearly the wrong sample delivering probably false data in representing the market.

    • JamesH

      I think it is much more likely that Google is lying about activations.

      • capnbob67

        Yes. And Comscore couldn’t pick a representative US sample if the prevention of the Zombie Apocalypse depended on it.

    • KirkBurgess

      The comscore survey measures active install base, not quarterly sales, so iPhones current sales dominance will take a few more quarters before it is truly represented in the comscore survey.

      • rattyuk

        But, but but but but… The Android activations have been so high for so long they should have shown up by now.

      • oases

        They have. See Samsung’s financials.

      • http://twitter.com/agencybird Gemma

        What are they?

      • capnbob67

        Good point but see my response below. My analytical gut (based on following the US sales for many years) says that it is BS. Comscore thinks that Android installed base surpassed iOS in 1 year (2010). That was the year that there were early Droids on VZW, EVOs at Sprint and some Galaxy 1 models for the last quarter. No way they outsold the iPhone on AT&T 3:1 all year to overcome iOS installed base since 2007. AT&T iPhone outsold VZW Androids 2:1 every quarter in 2010. http://www.asymco.com/2010/12/13/verizon-strikes-out/
        Are we saying that EVOs on Sprint and the Captivate on TMob somehow outsold the AT&T iPhone by a factor of 2.5. No, I don’t think so. Tier 2 carriers weren’t even selling smartphones in any volume in 2010.

    • obarthelemy

      Nice analysis. It might well be that the “not big 3″ customers are indeed skewed strongly towards Android though:
      - an iPhone w/o subsidy is very expensive, and most MVNOs don’t subsidise phones
      - on top of that, their customers are probably very price-sensitive.
      - plus I’m not sure all other carriers do offer subsidized iPhones, when they do subsidise handsets.

      For the “not big 3″, an 20/80 (iOS/Android), similar to worldwide figures, would surprise me less than the big 3′s 60/40 or 70/30.

      • capnbob67

        I agree that the not-big3 are almost certainly skewed more heavily to Android. I just don’t think they have the weight to so massively overturn the dominance of iOS in the majority of the market. This dominance was not only in the last quarter. It has been significant since Oct 2011 and close since Jan 2011. When AT&T was the only seller of iPhones, AT&T was also by far the largest seller of smartphones, almost all of which were/are iPhones. It took Verizon until it got the iPhone to even come close to AT&T total smartphone sales and they are still behind. I don’t believe that the small, Tier 2 carriers with their generally poorer demographics have been some hotbeds of smartphone sales (and many of them have had the iPhone for a year or so anyway).

        My point is that I doubt whether Android has EVER meaningfully outsold iOS in the US. AT&T led all US Carriers in smartphone sales since 2007. Android didn’t sell that well until well into 2011 and certainly not 3:1 as the Comscore slope implies through all of 2010/11. VZW got the iPhone in Jan 2011 which blunted its nascent Android sales and Sprint sold some EVOs through 2010 and 2011 until it too got the iPhone in Q4 2011. We would have to get the detailed data to see it but I cannot see a scenario where Android built up its US share based on early Droids and EVOs sold outside of AT&T to a point where it surpassed iOS installed base in late 2010 (when the iPhone 4 crucified all comers). I call Comscore as being consistently wrong for a long time (their sample is likely consistent) but I don’t have the time to gather the data to prove it. Sigh…

      • obarthelemy

        You’re probably right.

    • davel

      I saw a report where 2 chinese manufacturers had about 10% of the Chinese market behid Samsung and Apple. Together their marketshare exceeds Samsung in China by the report.

      As an aside it works to both Google and Samsungs advantage not to report any verifiable numbers and let analysts speculate as to market share. Look at what it does to Apple to report real numbers. They miss reported numbers by some value and the stock drops off. Samsung only reports sales and profits by category and Google only reports ad sales.

    • Chaka10

      Your suggestion that ComScore understates iPhone market share of news sales doesn’t contradict Horace’s analysis directionally, correct? If anything it agrees with it directionally, but “even more so”, right?

      • capnbob67

        Absolutely.

  • http://www.isophist.com/ Emilio Orione

    The same subsidized business model is available in Europe too. Perhaps the Android low usage data can be explained by localization. If Android flourish outside the richest nations it can explain why android’s users don’t use much their phones for buying apps, navigate, buying music, books, services etc… but they use them only as phones.

    • KirkBurgess

      There is a difference in Europe however, as there are usually a variety of plan rates to choose from, leading to clear transparency in handset pricing.

      For example, its possible to get premium android handsets on a cheaper monthly plan than a premium iPhone.

      Hence its probably one of the reasons why iPhone marketshare is lower in Europe .

      • http://www.isophist.com/ Emilio Orione

        Yes you are right that could be the reason, but nevertheless buying a subsidized iPhone is easier than full price and even if plans are different, entry price point makes more difference than monthly fee.

      • handleym

        Please be careful when you make statements like this, implying how wonderful “Europe” is as a cell-phone market, compared to the supposed horrors of the US.

        In the first place, there is not one cellular market called Europe; to take one example, 91% of SIMs in Finland are postpaid, compared to 18% in Italy.

        In the second place, the US cellular market grew in a very different direction from the rest of the world, and for reasons that are not completely unreasonable. The primary issue back then was a desire to maintain the existing long-distance market, while simultaneously allowing the freedom to move across the country that one expects from a cell phone; the need to reconcile these led to the US phenomenon of receiver pays rather than the more usual caller pays; this in turn led to the US offering substantially larger bundles of minutes than Europe; which in turn has led to people in the US using their phones a lot more than in Europe.

        To return to “Europe” as a market, Finns and Austrians talk the most on their phones, using about 250 minutes of talk a month per user — a number that in the US would be considered derisory, where the smallest minutes plan you can get is usually 450 min per month. At the other end, Malta and Latvia spend around 60 min per month per user.

        Point is — that European market that may seem so wonderful to you is mainly just structured differently from the US. People imagine what they will get, for European prices, is US level of services usage, and that does not seem to be the case.
        It is frustrating if you happen to be one of the pool of people that genuinely does want very few minutes, or a very small pool of data, or whatever, and wants a lighter-weight plan; but the fact does seem to be that such people are in the minority in the US.

        We’d all be better off if commenters spent less time telling us, in the abstract, how wonderful telcos are in “Europe” (or Japan, or South Korea) and more time providing exact details of exactly how they are more wonderful, what the FULL pros and cons are of what they offer, how their business model is faring against competition, etc. IE rather more of what asymco is about — honest data — and rather less of what we are trying to avoid — fanboi’ism.

      • KirkBurgess

        ???

        I never said anywhere that Europe had “Wonderful” networks/market.

        All I said was that it had more transparent handset pricing.

      • Babak

        There is no entity “European market”, tariff structures and prices are different, key indicators are different (e.g. smartphone penetration), technology evolution is different (e.g. 4G coverage). I don’t know how this is any more transparent than the US.

      • Laurent Giroud

        Here is practical information about European telcos offers (France to be precise).

        The following is from Sosh, the low-cost (read: no post sale support but same quality version) subsidiary of the biggest French carrier (Orange):

        (From http://shop.sosh.fr/forfaits-mobiles)
        For 24.90€/month you get:
        - Unlimited calls all over France.
        - Unlimited SMS/MMS in France, unlimited SMS in Europe.
        - 3GB/month (reduced bandwidth above that).
        - Up to 42MB/s (as stations allow).
        - Voice over IP and tethering allowed (no fees).

        - caller ID in/out.

        And this is the most expensive plan of the “low cost” category.

        As a bonus, the law forces them to:
        - abide by the dictionary meaning of the word “unlimited”
        - allow you to keep your phone number as you change telcos
        - provide you with a (universal, shared accross telcos) phone number which upon access will send you an SMS with details about how many months your contract ties you to your current provider and other useful information (the law dictates which information needs to be present and the SMS format forces them to be brief, hence understandable)

        Note that the “low-cost” carriers differ from the regular ones only by the fact that they propose much lower subsidies for the phones (maximum 50€) and the total absence of support, aside from that, quality and specs are the same. The three biggest operators (Orange, SFR, Bouygues) all propose these “low-cost” offers by means of differently named subsidiaries, probably in the hope that their regular non-knowledgeable customers will not realize that that they can switch to the same service (support aside) at a much lower price.

        One has to note that the regular offers aren’t actually that much costlier than the low cost ones when you factor in the subsidies.

        Here’s what you get with a 9.90€ iPhone 4 8GB for 69.90€/month from Orange (the biggest operator):
        - Visual voicemail (don’t ask me but I guess that means you call leave a video message if your phone has a camera).
        - Unlimited national calls (receiver never pays).
        - Unlimited national SMS/MMS (receiver never pays).
        - 5GB per months at LTE speeds.
        - 70 TV channels (no idea what that’s about).
        - Possibility to change mobile every year at an “exceptional price”.
        - Add 5€ of activation fees and you get an additional SIM cards to use in your iPad 3G on the same account.
        - Included mobile failure/theft/loss/damage insurance. In case of failure you get a new model within 24 hours.
        - caller ID (in & out), double call, incoming call signal.
        - conference call when supported by the mobile (ie, more than two phones communicating together).

        These prices are easily one third below North American (read: Canada in my case) ones for much better performance/bandwidth and services.

        Getting a phone + plan is as easy as:
        - enter shop, ask for the plan
        - give them your bank account number and sign them an authorization to withdraw directly from it (no fees from them or from your bank)
        - show them your ID
        - leave with the phone box and the SIM card and it’s going to be up and running within minutes (they say it could be take up to 24 hours but in practice when you plug it in upon leaving the shop it’s already active)

        When I went to France this winter I wanted a short term plan and hoped to find a 500MB one but I just couldn’t find any: the lowest one offered 1GB minimum at a price way lower than what I was used to in Canada. I was simply dumbfounded how low mobile communications prices were there (and probably in most of Europe). Coming back to Canada where I live I felt like leaving the civilized world for a backwater country.

      • Jarkko

        Hmm. For the last 15 years I’ve been taught that the U.S. Model of “receiver pays” had to do with the fact that in the U.S. there is no way to distinguish between mobile numbers and fixed line numbers thereby possibly forcing a high price on a caller without them knowing. In Europe the number’s prefix is different enough to tell you that the number is mobile so that if the caller cannot state “I didn’t know it was an expensive mobile number”. Feel free to shoot this theory down. It may well be false.

    • Walt French

      For decent build quality, isn’t the cost of having the “smart” (i.e., internet) features something like €150 plus some €10 per month?

      That’s a rather extravagant overpayment for unused features, especially as all the comments here are how price-sensitive European buyers are.

      How do you square this circle?

      • http://www.isophist.com/ Emilio Orione

        I don’t, usage data are a mystery.

        The numbers are so large that all kind of users should be present in both platforms.
        Today Horace, smart as always, show a new evidence, localization is different.
        Android grows outside US.
        I am supposing that if this is true for the majority of wealthy nations, the ones that make more use of subsidized business models, then there can be an explanation for the usage data.
        This very very interesting, it has been supposed before, but now we have some backup data that can correlate.

        Looking at European market, the medium phone you describe is not the answer I believe.
        For my experience European buyers are sensitive to quality and pay for it. The main fact is that 30€ per month is affordable and not so different from 10 or 20€ per month.
        I mean it is different if you consider the whole sum after 24 months, but the focus is on the spending of each month and if you can afford the monthly bill.
        The subsidy lowers the price differences between higher quality handset and buyers go for the highest quality.

      • obarthelemy

        I just checked, your prices are about right, a tad too high for both.

        The examples I have around me of people on cheap phones use them for: free texts, especially international ones (what’s app, chatON,… it’s amazing how many people have friends and relatives abroad), watch photos (from MMS or Email) on a bigger screen, take photos (smartphone cameras are usually much better), listen to music (smartphones have a lot more storage, and it’s easier to get music onto them), game a bit, and run a few despairingly silly apps (“vie de merde”, a website about life’s misadventures…). Also, Android tends to be easier to use than dumbphones, and it’s a bit more socially rewarding (NOT having a smartphone is being a dinosaur, even if you don’t really use it). **

        I just read an interesting analysis of the French market arguing that there is no “middle” smartphone market. People go either for the top-end iP5, GS3, HTC One… or for $200 discount smartphones, with nothing from $200 to $600.

        I think that’s because people either count pennies and go for cheap everything, which means unsubsidized cheap phone; or they don’t and use contracts and subsidies to finance a nicer phone, or buy a nice phone outright. Subsidies wipe out the middle of the market because once you’ve accepted the idea of higher monthly payments, the price of the phone becomes mostly irrelevant.

        EDIT: **Oh, and free phone calls via Skype….

      • Chaka10

        Perhaps the comparison that is most relevant (if not most rational) is against historical feature phone prices (not current prices in a cheap smart phone world)?

  • obarthelemy

    It’s not so much that the iPhone is at price parity in the US, but that the US have no price transparency for handsets:
    - almost all smartphones are bought with a contract, which is not the case worldwide
    - contract prices are so inflated that smartphone prices within the contract are mostly irrelevant, which is not the case worlwide.

    One wonders what would happen if such *price transparency* were present *in the US*.

    Example of off-contract retail pricing in France: (and comparison to GS3 price)
    - GS3: 16 GB = $600; 80 GB (16+64SD) = $715
    - iP5: 16 GB = $885 (+ $280 = +47%); 64 GB = $1170 (+$455 = +64%)
    - iP4S: 16 GB = $754 (+$154 = +26%); 64GB = not for sale.

    As a reminder, I pay $21/mo for unlimited calls, texts and data (throttled after 3GB, VPN, VoIP, Tethering allowed). The extra price for an iP5@16GB is more than 1 year’s worth of network service.

    And that’s for top-end phones. There are also “good enough” Android phones, that get 4/5 stars on review sites which give 5/5 to both the GS3 and IP4S and 5, for **a third** of those prices.

    Apple’s sales are very dependent on carriers’ ability to bundle phones with contracts to hide the iPhones’ cost (and to maintain high contract prices to soak up the iPhones’ extra cost). The US market is the exception rather than the rule in that regard: most countries are not only more price-transparent and with cheaper contracts, but increasingly so. Isn’t T-Mobile in the US moving that way also ? One wonders how long the US can buck the trend ?

    • Ymelehtrabo

      You can ignore the post above – Obarthelemy is a well known Apple hater.

      • KirkBurgess

        Whatever his previous comments, this one happens to be entirely correct – in terms of unit sales the iPhone performs poorly vs Android in international markets with small subsidies.

      • Walt French

        @Kirk, “small subsidies” are far from the only difference between the US and international markets where more users are buying Androids.

        In my mind, widespread 3G and especially 4G data plans make a huge difference in usability. Just as there’s little sense buying a Porsche in a region that mostly has dirt roads — it’s just a status symbol thing — buying an expensive smartphone that is choked for anything other than voice+SMS is really expensive for the value received.

        Of course, part of the reason that telcos haven’t invested the billions to build out LTE networks is that their customers’ income wouldn’t support the higher usage, and income also impacts the attractiveness of a high-end phone. That’s also consistent with the observation that a huge share of Android sales are off-brand non-Android™ products, “value engineered” to compete with featurephones.

        Hence, the attractiveness in those markets for very-low-cost phones.

      • Laurent Giroud

        I think “International” is too vague to adequately describe the markets available outside the US. You can probably group together Europe and Korea/Japan as far as prices and specs are concerned and both are probably respectively lower and higher than in the US (cf my post about French prices).

        I know nothing about the Chinese market so I won’t talk about it but I would guess that the European/Korean/Japanese markets have similar iPhone sales pattern as the US given that their network and prices make higher priced quality phones (read: iPhones) as interesting as they are made in the US by price opacity and lack of choice.

        In short it seems to me but that’s just pure intuition that Android is most successful in countries where lower standards of living dictate strong limits to how much you can spend on a phone/plan per month.

      • Walt French

        I commented elsewhere in this thread that understanding iPhone (and Android) takeup depends on a couple of factors, including country wealth and maturity of the local data networks. Openness, strength of business generally, Apple’s targeting, all obviously ALSO matter.

        And I also trifurcated the market into Apple, Android™ and Android Unbound. Maybe Microsoft, BlackBerry, Tizen or whatever else will matter, but I wouldn’t expect them to go North of a 10% share in any near frame. Apple needs, and has paced itself to the availability of, a mature data network especially, while other devices are much more appropriate to networks that deliver voice fine and data somewhat.

      • Laurent Giroud

        We are essentially in agreement.

        Although I’d like to see Microsoft come back on the phone scene (solely for the sake of putting more pressure on Apple) I doubt they, RIM or most of the other incumbents will manage to grab a relevant part of the mobile market profits in the short run.

        I do have higher hopes for LG though since their licensing of WebOS demonstrates that they have invested in a serious reflexion about the efforts required to achieve success in this arena. As Horace is found of mentioning it’s rare for companies to change their ways and they usually keep running toward the cliff even as all metrics indicate the danger. LG probably had to overcome quite a bit of internal resistance to allow this reflexion in the first place, then come with a reasonably good solution and proceed to put it into action.

        Although I’m a regular Apple consumer I really wish them good luck.

      • handleym

        “Example of off-contract retail pricing in France: (and comparison to GS3 price)

        - GS3: 16 GB = $600; 80 GB (16+64SD) = $715
        - iP5: 16 GB = $885 (+ $280 = +47%); 64 GB = $1170 (+$455 = +64%)
        - iP4S: 16 GB = $754 (+$154 = +26%); 64GB = not for sale.

        As a reminder, I pay $21/mo for unlimited calls, texts and data (throttled after 3GB, VPN, VoIP, Tethering allowed). The extra price for an iP5@16GB is more than 1 year’s worth of network service.”

        The point is that what he is saying is misleading — he’s more interested in scoring points than in understanding the world.

        The plan he describes is limited to 3G and is analogous to something like Straight Talk in the US. So why has Straight Talk not taken over the entire US market?

        I imagine obarthelemy would be happy to tell us that it’s because Americans are 95% morons, whereas the French are all geniuses; but for those of us who demand a little more from our explanations of the world, this is not a satisfactory answer. It’s not even a useful answer in terms of understanding France — the big players in France are Orange, SFR and Bouygues, with Free as a small player.

        And those big players run the same sort of operation as the US — phone included with plan.

        OK, now that I have given you the ACTUAL information on the reality of telcos in France, ask yourself — did obarthelemy provide HONEST useful information about how the system works in France, which left you more knowledgeable after reading it than before? Or did he do his best to muddy the waters and piss in the well of knowledge?

      • obarthelemy

        Actually, you’re wrong and/or lying in several ways:

        0- You’re putting derogatory and impolite words that I never uttered in my mouth and in your posts. Which is saying more about you than about me. Keep your pissing moron talk to yourself, and own it, thank you.

        1- 4G is not there yet in France, it just completed test phase and is being introduced in a handful of cities. It’s irrelevant right now (though it won’t remain so for long)

        2- 2/3 of non-carrier handset sales are for unlocked phones (http://www.lesnumeriques.com/telephone-portable/3eme-trimestre-deux-smartphones-sur-trois-achetes-hors-subvention-n27490.html).

        3- All 3 incumbents have launched similar contracts, with a few extra limitations and dollars in the bill. Also, I never said that’s what everyone was paying, I said *I* was, people are free to pay more for less. I don’t have figures at hand (feel free to provide them, instead of invective), but the market has moved towards unlocked, unsubsidzed phones in a big way.

        4- Free is nowhere like Straight Talk: it is not prepaid, it is not a MVNO, it offers international calling (for free to most countries), it works with any phone, and works all over France, not only in “coverage areas”, it is not a retailer brand… I could probably go on.

      • KirkBurgess

        I agree with him because here is what it is like in my country New Zealand on the nations biggest provider Vodafone:

        There are a verity of different priced monthly plans to choose from, the higher the price, the more minutes & data, and the higher the phone subsidy. On the plans, the iPhone is more expensive than competing devices.

        Here’s iPhone 5 vs Samsung galaxy 3

        Prepay plan (no subsidy) – iPhone $1050 / galaxy S3 $849
        $80 monthly plan – iPhone $549 / galaxy S3 $349
        $100 monthly plan – iPhone $449 / galaxy S3 $249
        $120 monthly plan – iPhone $199 / galaxy S3 Free

        There no doubt that most people here choose a plan rate first, as they are quite expensive (nz dollar is around 83c to US dollar).

        And once people have chosen there plan, they then have to pay a $200 premium for the iPhone over the premier Android devices.

        This is obviously a very different market dynamic to the US, where most postpaid users are on the same voice+data contract where premier devices of each smartphone platform are usually priced the same rate $199

      • Laurent Giroud

        “It’s not even a useful answer in terms of understanding France — the big players in France are Orange, SFR and Bouygues, with Free as a small player.

        And those big players run the same sort of operation as the US — phone included with plan.”

        That’s incorrect.

        As I mentioned in a previous post all carriers propose plans without-or-way-lower subsidies via means of their “low-cost” subsidiaries. These are growing by the minutes and the Apple Store employees talk about them to anyone who comes to buy an iPhone and asks for available plans (they won’t go into details because of contractual obligations with the carriers but they’ll give you everything you need to find the information yourself).

        Also prices are way lower than in the US for the same service and performance. I wouldn’t be surprised if the lowest priced US plan with 5GB LTE speeds with caller ID, unlimited voice calls, unlimited SMS, free within-24 hours phone replacement upon failure, tethering and a subsidized phone with a national cover were 30% higher than the most expensive French one.

      • obarthelemy

        Ad hominem is always sooooo convincing ^^

    • ymelehtrabo

      You can ignore the post above – Obarthelemy is a known Apple hater.

      • def4

        He may well be, but he’s making perfect sense.

      • Bill_the_binman

        Is he? Why, then, is he comparing the most expensive iPhone to the GS3?

      • def4

        Maybe because just about everyone is making that comparison.
        Doesn’t it make sense to compare the most popular product with the most advertised product?

      • Bill_the_binman

        Sorry? I don’t understand your comment.
        The fact is he compares the 16gb GS3 with the 64gb iPhone, that surely is not a fair comparison…

      • def4

        Look again.
        He’s comparing the baseline 16GB versions and the 64GB iPhone with the GS3 + 64GB microSD card.

      • Bill_the_binman

        I did not miss that, I just do not think this is a valid comparison. Why not compare the two 16gb phones? I suspect the reason he did not do that comparison is it does not make his (biased) point. The concoction he creates is the least straightforward comparison that could be made…

      • obarthelemy

        Try and read my post: I compare both the 16 and the 64+ GB versions, both of the iP5 and the iP4S. Please do make another comparison if you find a more relevant and exhaustive one ?

      • Bill_the_binman

        So compare the 64gb GS3 with the 64gb iPhone…
        But that can’t be done, can it?

      • obarthelemy

        Yes it can, I’m actually comparing the 80 GB GS3 and the 64GB iP5.
        Can’t be done for the iP4S: no 64 GB version.

        Android phones (well, most of them) use µSD slots, which offer cheaper and removable storage.

      • Bill_the_binman

        No
        There is no 80gb GSIII just as there is no 64gb GSIII…

    • jawbroken

      That’s what “at price parity” means for the vast majority of people buying phones in the United States. Your objection doesn’t seem to make sense and is just repeating the point of the article.

      • obarthelemy

        Yes, but Horace’s reasoning is upside down: discovering that luxury items sell better when their price is hidden and competition hampered is really stating the obvious. And then wondering what if more markets get similarly skewed is spurious. The free market does ensure that over the long run markets become more competitive, not less. An interesting discussion would be whether telecoms markets are becoming freer or not.

        If gas were $100 a gallon with a free car, everyone would get BMWs and Exxon would rush to push the prestige cars. And we’d get plenty of soothsayers about how unbeatable BMW is ^^

      • oases

        You might be able to obscure pricing with subsidies but that doesn’t change comparative prices. Oops, just remembered that the iPhone attracts bigger subsidies than Android devices in the U.S. so maybe that’s part of it.

        Or maybe it’s just G.D.P. per head and disposable income.

      • Walt French

        Seems mileage costs, fully loaded (including gas), somewhere around 60¢ per mile. For a car that gets 30 mpg, you could rent a typical car by paying only $18/gallon.

        Just think what that’d do for the US energy usage if that became the norm!

      • Chaka10

        The crux of your argument is that the US market for telco svs is not efficient and competitive. What is it, do you think, that makes or permits such inefficiency and non-competitiveness? Surely AT&T, VZ, Sprint and others operate and compete in all the same markets?

      • Chaka10

        … and doesn’t your argument lose sight of the fact that in the US the iPhone has in fact been a very (maybe the most) effective competitive advantage that the carriers “must have”?

      • Chaka10

        And what do you make of Japan, which is the other sizable developed (rich) economy besides the US and Europe? Recent analysis by Counterpoint Point Research cites the iPhone as the main weapon used by Softbank (which is trying to buy Sprint) and KDDI to compete with the incumbent NTTDocomo. The strategy apparently has been so successful that, not only is the iPhone the top smart phone in Japan for 2012, but the “move sparked a battle of smartphones in which Docomo fought back with various new smartphone models, the majority of which were also foreign branded”. That apparently resulted in the combined market share of foreign brands surpassing that of domestic brands FOR THE FIRST TIME in the fourth quarter of 2012 in Japan, which has been notoriously hard to crack for foreign phone vendors.

        Is the Japanese market for telco svs also non-competitive?

      • obarthelemy

        I don’t know:
        - is it mostly subsidised ?
        - are there artificial lock-ins (technology, duration) ?
        - are most handset brands distributed by the relevant channels ? (ie, carriers and/or retail)
        - are contract prices stable or going down ?

      • Chaka10

        I don’t agree at all that those factors are necessarily indicative of a non-competitive market.

        In the US:

        – Data bandwidth (particularly 3G and 4G) is a scarce and valuable resource, as anyone who has had to deal with congestion can attest first hand. That’s why data plans continue to be quite expensive (in absolute dollar terms).

        – Carriers compete vigorously for subscribers. They do so in the way THEY find most effective, by incentivizing longer term contracts through subsidized handsets (this is nothing new to the US, by the way). They compete by providing the greatest subsidy for the handsets (iPhones) that are most competitive in bringing them new subscribers. The carriers financials are materially impacted by the subsidies (which are just customer acquisitions costs — perhaps not so different from Google’s TAC). The carriers have no incentive to pay the large subsidies just to benefit the phone vendors, and do so reluctantly BECAUSE IT’S COMPETITIVE TO DO SO. In fact, there are many reports of VZ sales persons favoring Android devices because they involve lower subsidies and greater commissions (Samsung below the line marketing spend?), i.e., if the carrier is going to get the customer anyhow, might as well get them for the least subsidy, right?

        – How is any of that irrational or non-competive? IMHO, regulations that dictate to the carriers how they may and may not compete (e.g, forbidding longer term contracts) are counter to free market notions.

        In citing Japan as another example besides the US where the iPhone is itself a competitive edge for telco carriers, my point obviously is that its too convenient just to assume these markets are not efficient and competitive because they are different from your experience in France.

        I would point out: a US subscriber who paid $199 for an iPhone 4 on a 2 year contract in 2010, can now sell it on eBay with prices during the first quarter of this year that range between $355 and $430 (for fixed price sales) and $280-300 (for auction sales). That’s a profit, after 2 years of usage. I have first hand experience with this.

      • obarthelemy

        1- if that’s so, why are prices going down in other developed, countries, often with denser populations ?

        2- Do they ? Or, because telecoms are usually a cartel, do they keep prices high and compete on other things ? As someone else said, high costs of switching are not an indicator of a free market, especially when those costs are artificially created. The focus on subsidies is a marketing gimmick because customers notice the initial outlay more than the total cost over the course of the contract.

        3- True, except when there is the risk of a cartel, which there is, strongly. People of the same trade…

        4- I would point out that when you pay $199 for an iPhone and then $100 per month for service over 2 years, the cost of your iPhone is not $199. It’s not $2599 either. You should calculate the difference between equivalent subsidized and unsubsidized contracts, and tack that on to the iPhone price. You’re kinda making my point for me, here.

      • Chaka10

        The monthly rate is the same, whether the user signs up for 2 years or goes month-to-month. The Telco is willing to subsidize for the 2 year commitment — it’s a competitive benefit they are willing to monetize and pay for. If Telcos are in such a strong monopolistic position (which is what you’re suggesting with the word “cartel”), how is it that they cannot negotiate a better deal with Apple, to lower or entirely eliminate the cost of the subsidy?

      • obarthelemy

        The second one is easy: because Apple have a monopoly on iPhones :-p

        The rates question I’m not so sure about, and a bit too lazy to research. I keep coming across US forum posts when guys state they pay $45 instead of $100 by going prepaid and/or MVNO, but can’t find an easy recap of prices for comparable features. Fro my faraway perspective, the trick that US carriers have down pat is having people to hunt for discounts instead of good prices :-p

      • Chaka10

        Appreciate the humor, but now you’re making my point for me….

        Apple can charge a high price of the iPhone (for now) because PEOPLE WANT IT, and for the same reason, its a potential competitive asset (or disadvantage) for telcos to offer it — one which they are willing to compete with each other to pay a very substantial subsidy (in the US and Japan, apparently).

        It makes no sense for a carrier to charge a lower monthly rate to a month-to-month user than a 2 year contract customer for the same data usage (a scarce resource). You pay for the flexibility to terminate any time (or on the flip, the carrier is willing to pay you to give up the flexibility). I gather in France that market mechanism is disallowed by law?

      • obarthelemy

        Yes. The question is, has been, and due to the lack of any meaningful answer seemingly always will be: why do people want the iPhone :-p

        Granted, it makes no sense for no-commitment prices to be lower than contracts. Fact is, that’s the case almost everywhere. It was the case in France even before any laws, it still in the case I’m pretty sure in the US too even today. That’s a strong indicator that sales tactics (subsidies, lock-in, complicated pricing schemes…) are hiding a non-competitive market. At least, non-price-competitve market, there usually is competition on gimmicks and discounts. But not on price.

      • Chaka10

        Many people have posted, here and elsewhere, many reasons the iPhone (iOS) is a superior product/platform. I suggest we just leave it that you just don’t (or won’t) get it, and Apple has lost your business.

        I don’t follow the logic in your second para. You seem to concede that it makes no sense to charge a non-contract customer more than a contract customer, but then say that that is proof positive of a non-competive market? I confess I’m getting a bit tired. So respectively, lets drop it.

      • obarthelemy

        not more, less.

      • Chaka10

        Thanks. Will correct by editing.

        I think the comparison on rates must be made within the offerings by the same carrier. Comparing non-contract rates with contract rates by different carriers involves so much more.

      • obarthelemy

        OK, found a nice article with detailed calculations for you:
        http://www.cnet.com/8301-17918_1-57547193-85/prepaid-or-postpaid-the-fight-for-your-cell-phone-dollars-smartphones-unlocked/

        Summary:
        Verizon Wireless — two-year contract: $2,915
        MetroPCS — No contract carrier: $1,820
        that’s over 2 years, phone included.

        Strange that the contract carrier ends up 60% more expensive than the no-commitment one ?

      • Chaka10

        Should compare VZ contract prices for VZ non-contract prices. So much more goes into choosing VZ vs. MetroPCS than just the price.

      • Chaka10

        Couldn’t help noting that the availability of MetroPCS competing on price goes to show a healthy competitive market, no?

      • M

        maybe this is too late to the party but,.. Here goes,.. Much as I would like for you to be right,.. You’re missing the obvious,.. Population density. The US and Canada are vastly more difficult and expensive to provide service to than France,.. Or any other single European country,.. Or all of Europe for that matter,.. So is it really surprising that the US is more expensive than Europe and Japan? No.

        Is it surprising that Canada is even more expensive? No.

        Metro PCS is about the cheapest provider in the US but only available in specific Metro areas,..

        I hate cell carriers as much as anyone,.. They are way too sneaky about the plans, here in the US at least,.. But there is no way it is fair to compare all of the US to all of France straight across. Much as I would love French rates.

    • def4

      The correlation between the high prices and margins of phones and plans made me suspicious long ago that manufacturers and operators are colluding to keep phone prices high enough for subsidies to make sense.
      Both sides win: manufacturers maintain margins and operators lock customers in and enjoy steady revenue and margins.

      Apple spoiled the party by squeezing the operators for subsidies. The pain must be very real if even American operators are looking to get out of this model.
      I think it’s naïve to think Apple would be caught unprepared by this change.

      • obarthelemy

        I too think that margins for phones are abnormally high because the market is still fairly uncompetitive due to contract lock-in, networks’ lock on distribution of new handsets, and subsidies. Both what is available, and the price of that, is pretty much under the networs’ control. One only has to compare the prices of tablets vs phones to spot the huge disparity: the category-busting Asus FonePad (a 7″ tablet that is also a phone) has just been released at $250, with up-to-date specs. The 3G version of the (outdated now) Samsung Galaxy Tab 2 7.0 has been available for 1+ year, currently at $330… Making things smaller to fit in a phone format must cost some, but not x2…
        I’m not sure *operators* are looking to get out of that model. I think *consumers* are, because it mainly means higher prices due to less competition, with a side effect of a less price-sensitive handset market. T-Mobile are breaking rank in the US because they are not very successful with the current setup, and examples in other markets show that lowering contract prices by stopping handset subsidies and offering them on the side with a consumer credit increases sales.
        The side effect is that the handset market becomes price-sensitive. I’m sure Apple have been planning ahead for the markets where that’s already the case, and the ones going that way. The current iPhones are very luxurious, there must be room for a cheaper version changing the finish only, even more if lowering specs. The iPods, laptop Macs all have a basic and a luxury version. Even if Apple choose not to pursue the upper-middle market for handsets, a 10-20% market share at 50% margin and with excellent lock-in is a very nice outcome. Especially if they manage to open up another growth market in the mean time, be it watches, TVs, or toaster ovens :-p

      • JamesH

        7″ is no longer considered up-to-date. iPad Mini is 7.9″, which makes a HUGE difference in the usability of the device.

      • obarthelemy

        By whom ?

        Screen size and format is not the sole factor to determine what’s up to date or not. Samsung have been covering all sizes (7″, 7.7″, 10.1″, now 8″) for a long time, so that particular size is hardly new. The FonePad has more pixels in both dimensions, more CPU (probably less GPU though), more RAM, more storage. Even the screen ratio is arguable: worse for reading, better for video.

        On a side note, how does the screen size argument translate to smartphones ? :-p

      • JamesH

        7″ is no longer considered up-to-date. iPad Mini is 7.9″, which makes a HUGE difference in the usability of the device.

  • Pingback: Android non cresce negli USA | Hymn to Future

  • Demo song

    In Hong Kong, there are both $0 iPhone 4/4S and high end android phones with contract. I can tell you android is winning here. More and more galaxy and less and less iPhone in public transport. People tends to pick a $0 phone with a larger screen.

    • Jake_in_Seoul

      But the next purchase? Surveys in South Korea indicate more Android owners switching than the reverse.

    • RationalC

      And people over there and up tend to pick Android for easier pirated content (music, video, etc.) consumption.

  • anamika

    “One wonders what would happen if such price parity were present globally.”. No. You should be asking what may happen if US carriers stopped subsidies.
    Without any subsidies would iPhone be able to sustain the growth. What is needed is a capitalist and competitive US mobile market.

    • Carpenter

      Why should one interpret Horace’s comment like that. He only states the obvious, what happens if there will be price parity. Most probably it will be the rumored “iphone cheap” that will bring that price parity. I expect the situation to be similar than in tablet market; Apple will have 20-30% market share in 200-300$ price segment. That would mean that Apple could sell more than 100 million iPhone Cheapo devices per year.

    • http://www.noisetech-software.com/Home.html Steven Noyes

      How is the US market not “capitalist and competitive”? Are you saying there is only a single model that is considered “capitalist and competitive”?

      • Will

        It’s not competitive because the cost of switching is very high. Isn’t it illegal to even unlock your phone in the US?

      • obarthelemy

        I do think the US mobile market is not very free, hence not competitive. France used to be that way, but then a few laws were put into effect to improve “customer mobility”, forcing 1- phone number portability (you can switch carriers and keep the same number), 2- free unlocking of phones after 3 months, 3- standard penalty of about 25% of the remainder for breaking a 2-yr contract after the 1st year.

        And we always had technical uniformity, ie any unlocked phone works on any network, it’s all GSM, HSPA, …
        And we got an agressive new entrant (4th carrier), that is being coddled with forced pairing while they build their own network.

        Prices for unlimited everything has been divided by about 4 over less than 10 years.

    • don108

      Respectfully, the question should not be whether there can be sustained growth, rather, the question should be whether there can be sustained profits. Growth without profits is not a successful marketing plan.

  • RobDK

    It is pretty obvious that Google has been lying about the nature and size of the so-
    called activation rates for Android. They have never given this data as part of their legally binding financial reports every quarter. It has just been Eric Schmidt mouthing off at a pr-event.

    The numbers just do not stand up to any rigorous analysis. Where are these devices, and who is manufacturing them?

    My guess is that Google have stopped issuing this data because of in-house legal objections. It will never be updated again.

    • rattyuk

      Hmmm. That leaves only one company reporting any numbers. The company that “wasn’t going to figure out the market” is the only one left reporting numbers. Android has won the Symbian market. Congratulations, Android.

    • http://www.noisetech-software.com/Home.html Steven Noyes

      I was once told a story standing in line to see Steve’s last presentation at WWDC. The story was from an engineer that had worked (recently quit to do his own thing) at Google for 5 years and most recently in the server activation team for Android. He said the logic for counting activations was really simple:

      Count an Activation when a user activates a new phone (by device reset or OS upgrade) when the devices unique ID is uniquely different than the previous phone the user activated.

      This kept OS upgrades from being multiply counted and kept a count of potential users. The emphasis was not on device count but user count (allowing a second hand device to be counted as a new user).

      Now, this was 19 months ago and it was 2 months old information when it was passed to me. The logic may have changed. Who knows? Google, but they really dodge the question as the exact logic behind “activations”.

      • Kizedek

        I realize you are getting this second-hand or third-hand, and you may not have expected each of your words to be parsed… but, if it is just as you say, then it is worse than simply a matter of treating a single user with two devices as two users:

        If Google indeed simply checks that the *current* “activation” by any given user is on a device that is uniquely different than only the *previous one* device activation they conducted, then the same devices could indeed be counted multiple times… as long as a different device was updated or reset in between. If Google keeps history of the user’s last activation only, and stops the check there, then upgrades that happen to be conducted on alternate devices would allow the same devices to be counted multiple times.

        Yes, this method would stop some bloating of numbers and keep it from getting completely out of hand, but there would still be a large number of activations being generated by fewer devices.

      • http://www.noisetech-software.com/Home.html Steven Noyes

        You parsed exactly right. We had several hours in line to discuss the impact of this “bloating” of the numbers. At the time, it was about only 10% and growing since most people were still under contract with the Verizon Droid at the time. I would have called this information mostly “first-hand” source. The guy had worked on the Android server side activation team at Google. It is old data and they may have adjusted their counting to reflect second hand devices and such.

        The logic at the time was to count the number of Android users (this is what Google cared about) so an activation of a phone by a child of a dad that just upgraded to a new Android device was still a +1 on the number of Android users. The query was simple, fast and cheap. He also said, Google really tried to stress query efficiency on all database operations.

      • Tatil_S

        That sounds like a logical way to keep track of user base, which must be a very useful metric for Google, but I have doubts whether that is what Google reports for its activations number just because of a cheaper query. It sounds like the query would be even cheaper and faster if it only searched through IMEI numbers, rather than IMEI+user IDs.

        The only reason to prefer this “algorithm” as the activation metric I could think of are the grey market phones with fake IMEI numbers, which are bound to match the legitimate ones, resulting in an undercount if counting is only based on IMEI. At one point these types of grey market phones were widespread in the emerging world and dirt poor countries, so the undercount could be substantial.

  • Ittiam

    Excellent Analysis Horace.

    I highly suspect that the activation rate has increased beyond 1.3 m/day… Otherwise there is high chance Google would have reported it. Probably it has remained same or slightly reduced. So the graph beyond the last update could be linear rather than exponential.

    You are spot on with the pricing thing especially in US. Outside US, Apple brand does not hold so much sway in all markets. In India, I am seeing more Apple advertisements than the entire Galaxy line as of now…However that might change with launch of S4

    • r.d

      Is Apple advertising on Indian TV?
      In Billboards?
      In Magazines? which ones.

      • Ittiam

        Billboards, TV… I don’t read newspapers / Magazines, so don’t know about that

  • Will

    Nice analysis :) I live in England and you can get high end phones heavily subsidised here too ( and with much cheaper contracts). The market is simply more mature and competitive compared to the US. Yet the iPhone is still going for around 15-20% of the marketshare I believe. It’s the same in other parts of Europe too.

    I think there’s another reason of why the iphone is doing so well in US, not just upfront price…

    • rattyuk

      “I think there’s another reason of why the iphone is doing so well in US, not just upfront price…”

      Which is?

      • obarthelemy

        I’d try:
        - home turf advantage. Maybe the design is more attuned to US tastes (all that metal, same as for SUVs), and the marketing-communication hits the mark better too. Also, negotiations with the carriers might be smoother, culturally and logistically.
        - more content. There’s a bunch of TV shows, movies, even music and books that is not available outside the US. That does cut both ways, as those are usually not available from other e-Stores either, but I’d hazard a guess that Android users a less adverse to getting content … from… other… sources…
        - availability of alternatives. Viable 2nd and 3rd-tier smartphones (Huawei, ZTE for 2nd tier, Tinno/Wiko and soon Archos for 3rd-tier) are just popping up in France in mainstream e-stores and retail chains, and in the media. The perceived risk or going with an unknown brand from an unknown and/or foreign shop for an expensive gizmo is too high; the risk of going for a semi-known brand from a known shop for a reasonably expensive gizmo, acceptable maybe ?
        - I’d be interested in a subsidized vs unsubsidized analysis, country by country, and the correlation to iPhone share. I’m sure that correlation is strongly positive.

      • obarthelemy

        I’d try:
        - home turf advantage. Maybe the design is more attuned to US tastes (all that metal, same as for SUVs), and the marketing-communication hits the mark better too. Also, negotiations with the carriers might be smoother, culturally and logistically.
        - more content. There’s a bunch of TV shows, movies, even music and books that is not available outside the US. That does cut both ways, as those are usually not available from other e-Stores either, but I’d hazard a guess that Android users a less adverse to getting content … from… other… sources…
        - availability of alternatives. Viable 2nd and 3rd-tier smartphones (Huawei, ZTE for 2nd tier, Tinno/Wiko and soon Archos for 3rd-tier) are just popping up in France in mainstream e-stores and retail chains, and in the media. The perceived risk or going with an unknown brand from an unknown and/or foreign shop for an expensive gizmo is too high; the risk of going for a semi-known brand from a known shop for a reasonably expensive gizmo, acceptable maybe ?
        - I’d be interested in a subsidized vs unsubsidized analysis, country by country, and the correlation to iPhone share. I’m sure that correlation is strongly positive.

      • http://www.noisetech-software.com/Home.html Steven Noyes

        Both Google and Apple are home turf in the US. Motorola (a US company using a US OS) is tanking in the “home turf”. For home turf, look to South Korea and Samsung.

        You are missing the largest reason IMO. There are tons more Apple Retail Stores in the US. If you walk into a carrier store, they push Android. iPhones are pushed to the back corner and the sales reps actively steer potential customers away from iPhones (I have seen this in Verizon and Sprint stores). Apple has in the US, however, an amazing network of retail stores (that no one goes to anymore because they are far too crowded:-) that offer only iPhones and no Android, WP8 or BB devices.

        But there is an interesting regional difference at play. Some countries like the UK, US, Australia, Sweden, Canada and Japan are hotbeds for the iPhone while Hong Kong, Germany, Brazil, India and South Korea are hotbeds for Android. Not all of this is a result of subsidized pricing.

        As for content, iOS offers more international content than any other platform. Only Kindle (available on WP, Android, iOS, OS X, Windows…) offers better international content but only for books. No one comes close to Apple for legal digital offerings of TV, Movies and Books to an international audience. In the absence of legal content, I think both iOS and Android users would be equally inclined to follow alternate sources.

      • obarthelemy

        Nice point about the Apple Stores. Indeed.

        About variations by country, I found that: http://www.tech-thoughts.net/2012/12/smartphone-market-share-trends-by-country.html. I wouldn’t call “hotbed” a country where the iPhone has 30% share, but I see your point. It woudl be interesting to do an in-depth study of a handful of countries to try and explain the difference, obviously GDP/head does not explain all.

        About content, I’m sure Apple’s AppStore also has the most international content. But no store, AppStore included, has reached “good enough” yet: local content is not on there, US content mostly not either due to rights issues. Or, at best, not in a timely fashion.

      • http://www.noisetech-software.com/Home.html Steven Noyes

        I have serious issues believing made up sales data from IDC, Gartner and Kantar when usage data is showing such a massive discrepancy:

        http://gs.statcounter.com/#mobile_os-AU-monthly-201202-201302

        Part of this is because I think these companies, given the lack of transparency of all Android handset makers, try to make sales data = to Google activation data. From what I have been told of “activation data” it is specifically not correlated to device sales.

      • obarthelemy

        It’s a bit hard to derive installed base from monthly sales, but I’d hazard from my chart that works out at about 55% iOS vs 35% Android.

        That’s not completely incompatible with your 70% vs 30% for web browsing. It just means Android phones are used a bit less for browsing the Web, and iOS devices, a fair bit more.

      • obarthelemy

        Sorry, forgot half of it, about the home turf.

        Google is not doing any marketing (not even for the handsets they do sell under their name), except maybe for carrier negotiations for the Nexus phones, and even that they might leave to their OEM partner (not sure at all).

        Motorola has generally made a hash of things, I don’t know if they count at all. The phone I got from them (E395) was the worst I ever had, not only was the software buggy, but the hardware too (flaky connectors) and the support non-existent (in France at least). Home court advantage would be RIM in Canada, Nokia in Finland, Samsung in SKorea, Sony in Japan…

      • http://www.noisetech-software.com/Home.html Steven Noyes

        I disagree about Google not marketing their Nexus line. They have been on the Google home page for months. There are ads all around the internet for the Google Nexus phones (I would say internet advertising of the Nexus 4 out does the iPhone by 1000:1). The kick is, this is almost “free” for Google. If they do not have an ad fill, they simply drop in one of their Nexus ads.

        Saying Google does not “market” the Nexus line is simply false. Google markets the Nexus line aggressively.

        Likewise, Google’s Motorola division markets TV advertising heavily with their Razr line at a level very close to Apple’s iPhone.

      • obarthelemy

        I might have missed it, or it could be different in France. I can’t remember seeing a single ad for the Nexus 4, or any Nexus for that matter. But then again, I don’t watch TV and I block most Internet ads, so maybe I missed them. I’ll ask around.

        Ditto for Motorola, though those I’m fairly sure are barely advertised here.

      • http://www.noisetech-software.com/Home.html Steven Noyes

        Motorola is heavily invested in the US market and does very little marketing outside the US. They are married to the carriers (specifically Verizon). It would not surprise me if you never see adverts for Motorola phones in France.

      • Will

        Ignorance I believe (no way to prove it so I’ll leave it at that). Why buy ‘cheap’ Androids, even if some cost the same or more. Why buy ‘plastic’ phones when I can buy shinny metal ones (which is a poor material for a communication device). Who cares about NFC or any new technology when I don’t even know how to use it? How could I show my social status to everyone?! I’m not saying you or anyone here bought it for these reasons. But the masses might be. Trust me, this is not a troll post, I love the iPhone. But it does seem like this to me every time I meet a random iPhone user.

    • oases

      British are considerably poorer than Americans.

      • Will

        Considerably poorer?! Typical arrogant American… did you read about the fact that the phone market is much more mature here and you get iPhones FREE for less than 50 dollars a month with unlimited data? Also unlocked…

      • handleym

        Oh for crying out loud. Income statistics are not a secret. Look at the numbers for UK vs US. No matter how you slice them, by median or by mean, before or after tax, the US is higher.
        This is simply a fact of life — denying it makes you look like a fool.

      • Will

        I didn’t… I said any high end phone is much cheaper to get. Meaning in the end tthey are more affordable

      • Laurent Giroud

        Another fact of life is that health insurance in the UK is mostly free, as is most of education (even if University fees have increased they’re way lower than what they are in the US).

        Coming from France and having worked in Norway then Canada I can tell you that although Europe supposedly has a lower standard of living than the US, it enjoys way better infrastructure, state services, health services and the prices for Internet and Mobile communications are *way* lower for way better specs than what is available in the US.

        Gas is more expensive but cars have way better mileage than in the US (Europeans just can’t believe how low the mileage per gallon of the US car most representative of the US market is when you tell them) and so on.

        Also don’t forget that US citizens are mostly indebted while Europeans ones have positive balance sheets. An important part of the US economy relies on important personal debt, remove it and that will push salaries down significantly. And if US citizens got as much healthcare as the Europeans do their personal debt would reach sky high levels (a government commissioned study found that US healthcare prices are 4x the French level when corrected for quality and quality is only slightly higher in the US).

        Add all these facts and you will come to realize that standard of living is not the sole variable to consider when comparing purchasing power.

      • oases

        Why do you think I’m American? Anyway, there are hundreds or Apple shops in the U.S.A. and Apple is a bigger cultural icon there than anywhere else. The Jobs legend is also bigger there than anywhere else.

      • Will

        Well good for you for speaking English, like that’s relevant here…

    • http://www.noisetech-software.com/Home.html Steven Noyes

      I suspect iPhone market share in the UK is higher than 15-20% given they get about 50% of the Web Traffic on mobile OSes. The UK smartphone market seems closer to the US than the rest of Europe.

      • Will

        True… my mistake.

      • KirkBurgess

        Doesn’t mobile OS usage include the iPod touch and iPad n iOS figures?

      • http://www.noisetech-software.com/Home.html Steven Noyes

        Depends. On StatCounter it includes iPod Touch just like Android includes any PMPs. Tablets are tracked as desktops and not mobile.

  • TDC123

    It would be interesting to see if Apple do come up with a “Iphone nano” model, it would definitely be competitively priced and would compete with mid-range androids, that would be the real test for android

  • http://sumocat.blogspot.com Sumocat

    I concur with the volume conclusion. By weighing volume against Google’s monthly Android version distribution numbers and assuming slow attrition of Android 2.2 and older, I tracked Android activations to 790M last week, which would put them at 800M this week. The method is not precise, of course, but you work with the tools you have. I’ve also found that it reflects expected fluctuations around and through the holiday season.

    • r.d

      Only Google can track activations.
      Outsiders can only track usage in niche environment.
      So far none have been able to verify Google’s numbers.

  • sbono13

    Horace, I think there’s an apples-to-oranges aspect to this comparison. Comscore’s data represent a metric of user base size in the US, which you are comparing to unit sales rates (and cumulative unit sales). This problems most glaring if you consider the known sales rates in the US during the last Comscore report. Your calculations show that iPhone users in the US had net adds of about 9 million, while we know from carrier reports that iPhone sales during the Dec quarter were upwards of 15 million. Similarly, you show that Android had net growth of about 1.2 million in the Dec quarter in the US (400k/ mo), but if you believe market share reports like Kantar and such, Android sales in the US are only slightly below the iPhones, say 10 million for the Dec quarter for instance. All 10 million sales count as activations (call them gross adds), but only 1.2 million resulted in net adds for Android in the US. Why the discrepancy (and especially why did churn affect Android more than the iPhone) is an article for a later date.

  • rarecomment

    I wonder how much of the variance (almost certainly not all but perhaps some meaningful portion) is due to availability of the full suite of related services (iTunes video, music, match, etc.). in the US. Would be interesting to see the US vs. other markets based on availability of related services and how long those services have been available.

  • Walt French

    Nice summary of what we know (versus what we can only guess).

    And intriguing: these data, plus some of @BenedictEvans’ other posts, suggest to me that sales are following a country-by-country adoption model.

    In the US, high-end phones can perform lots of service beyond feature phones. Personally, I note a quantum difference between my old iPhone4 and my new 5′s rapid page-loading times over LTE. The premium functionality is valuable and the iPhone competes effectively against other phones that can deliver that quality.

    In Europe and other wealthier countries, average data speeds might be lower, and the better-off consumers are perhaps older, more conservative about usage patterns. Both lead to high-end phones conferring less of an advantage versus a phone that can keep up against a 3G data plan.

    And in countries where a large fraction of the population earns less than the equivalent of US $10K/year, data networks may be very slow — 2G in much of India, amirite? — so there is very little benefit to a phone with high-end performance and features (“a Porsche for dirt roads”).

    The last category is also the most numerous in terms of potential users. Ben ran a post highlighting how a ZTE that we’d look down on, was the “aspirational” device that people framed their choice with…before buying a rock-bottom, no-name Android (utterly devoid of anything Google). This category was first pioneered by big Android OHA partners Samsung, LG, HTC and ZTE, leading to the sharp rise in activations. But as Android cannibalizes itself, it cuts the financial support out from under them, in favor of ultra-low-cost assemblers. It is quite amazing how, in well less than a decade, the intricacies of a combo cell-radio and ultra-compact computer, have been mastered by “a couple of guys in a garage” who can build devices out of interchangeable parts, as predicted by the maturation of an oh-so-recently disruptive change.

    So there’s a different “job to be done” in each region, leading to different products bought. I presume that inside of a decade, the planet will be mostly covered in 4G networks, and higher-quality phones will be sought.

    The challenge for the Android™ companies, just as for Apple, will be to bring more than a combination of commodity functionality.

    • obarthelemy

      Personal anecdote, I’m sure it’s relevant somehow… or not…

      I’m middle-aged and middle-income, and up until 2 years ago when data got cheap ($25/mo for unlimited everything, used to be closer to $100), I used nice smartphones, but w/o a data plan. Wifi at home, at work, and pretty much everywhere in between was quite enough, and for the few black holes, I had music, books, games and videos on the thing, so I really didn’t miss data at all.
      Now that I do have data, the main change is that I read RSS feeds instead of books. Probably *not* better ^^ It might be a generational thing though, I used to have a PDA and a phone, I guess I’m using the smartphone as a combination of both, and missing out on whatever came after. The social web sure went over my head.

      What I’m saying is, as long as you have wifi (admittedly, a big if), a smartphone even w/o a data plan can be very useful. Unless you *need* real-time updates that texts can’t handle. I’m sure there’s a market opportunity for software that works that way, with wifi+texts instead of data, in developing countries.

      That might be an age thing though, the teens and young adults seem to have moved from compulsive texting to compulsive facebooking or whatever has come next. Seniors mainly need Accessibility, all the 70+ I know are utterly overwhelmed, and keep missing buttons.

      • Walt French

        I’m a bit closer than you to that 70+ category — friends are in it and I get to be their tech support type — and while you’re onto something, methinks the defining issue is the need/desire for updates on the go. My commute isn’t that long, but I’m often out, taking a break at the museum, having a coffee, etc. Some Wikipedia-class question (what was broccolini hybridized from?) or friendly note (Jeff & Abby are back from trip w/ photos) pops up, and it’s Instant Gratification time.

        Yes, I might better batch these inputs and spend less time trying to get them on my phone, better manage my time overall. But the recent high speed means it feels increasingly like purely incremental.

    • Chaka10

      Ever visit HK and see all the Porsches and Ferraris driving around the narrow hilly roads on Mid-levels? I just read a Reuters piece (http://finance.yahoo.com/news/china-mobile-4g-next-iphone-214058074.html) reporting that China Mobile already has 10 mm iPhones on its network even though the devices aren’t compatible with its brand of 3G. The article cited the wifi effect (described by obarthelemy below), but I think there’s also a bit of the Ferraris in HK effect too.

      I offer this as supplemental wrinkles to your analysis, with which I otherwise largely agree.

      I would also note a strong personal belief that a key part of Apple’s “innovation magic” is a keen grasp of WHEN technology is ripe for mass introduction/adoption, and strength of conviction to act by that insight (rather than just putting the latest. I was an early buyer and user of the iPAQ “Pocket PC” — beautiful aluminum case, touch screen, master button on the bottom, even the name now seems familiar, but alas that device was 6-7 years early and failed to be the disruptive force that was the iPhone. I think AAPL will know when and how to attack the various countries in which it sees opportunity.

  • http://twitter.com/gnomehole The Gnome

    Android… great for nerds and cheap phone buyers who don’t really use most features. Most Android owners I know either don’t know they even have an Android phone, or they are fanatical Fandroids with anti-Apple to the core (read: dinks)

    • obarthelemy

      That’s true of iPhone users though, too.

  • Mark Jones

    A few points:

    - Since using an unlocked, unsubsidized phone does not get you cheaper cellular rates at the US Big 4 carriers, it makes sense, in terms of value, that people would buy the phones that get the biggest subsidy (except for those with specific niche needs). The big subsidy also leads to a higher resale value so that trading-in the old iPhone oftentimes yields enough to pay for the new iPhone. Because iPhones are launched first in the US, this trade-in benefit is probably much less in other countries.

    - Apple has exploited this subsidy to its advantage, but from a strategic point of view, I think Apple would be glad to forgo all subsidies if it could get competing commoditized pipes in return. That would potentially shift even more of the handset’s value from the network provider to the handset’s OS/ecosystem provider, and bring customers closer to the handset maker.

    - In today’s emerging markets, Apple has only just begun to fill out its iTunes/iCloud/iMessage/etc ecosystem, though it has the lead for most content (excepting ebooks) in most countries (except countries like China that have good carrier-run ecosystems). Without the ecosystem, the iPhone loses many (but not all) of its advantages over other smartphones, and is much less likely to be worth any premium in price. The silver lining for Apple is that as users start to use their smartphones more like smartphones, instead of as feature phones, they could begin to place more value on the ecosystem.

    - Although Apple is still increasing its penetration in countries like Germany, Spain, and Italy (where Apple does have an ecosystem), it is growing at a much slower rate than Android-based smartphones. These are the countries where I’d like to get further insights into what is happening.

  • Tim F.

    What is being discussed is not price parity. In the US, the iPhone at $200-400 dollars is beating comparably-equipped but cheaper Android phones and the older models are beating equally-priced (can’t beat $0) Android phones with better technical specs (debatable, usually just the screen).

    The questions being asked is: what is the price threshold for other markets to see greater iPhone adoption even if they have lesser specs than an Android phone at a similar price. Apple may offer a cheaper iPhone; they will never offer a comparably spec’d phone at a price which is the same as the cheapest Android OEM.

    My guess is that the secondary markets networked to the device ownership (primarily apps and content) have a strong effect. As someone mentioned, it’s far easier to pirate apps and content on Android when a standard video app may be able to playback .avis and .mkvs for example. (Of course, you can easily see a rise in mpeg formats in the piracy community because of the impact of Apple as well — it’s still just not the de facto as yet for sharing. And this is not because people still don’t have access to free or cheap encoders of mpeg formats — but rather these people are still trying to squeeze every last advantage out of compression because they do have real bandwidth constraints.) This extends beyond merely piracy. We see a huge disparity between market share and usage share. Ubiquitous 3G and wifi are key. Broad usage of credit cards is key.

    Largely, the willingness to adapt to the Apple ecosystem and find it preferable isn’t tied to just the financial means to buy the device, but it’s also tied to the financial and infrastructure means to make the device more useful.

    This may be a hard theory to prove, but I actually think there is data to support it. I’d bet, rather than looking at market share correlated to subsidies or other contract features, you’d find a stronger correlation between iPhone market share and domestic markets which “respect” content and app ownership/sales, where broadband (and more importantly wifi) is the baseline for the average citizen, where credit cards are commonly used even when credit is not required, etc.

    • iObserver

      “comparable specs” is murky water. if by specs you’re only speaking of number of pixels, amount of ram, amount of cores in your processor and nothing at all about quality of those components: performance, reliability, picture quality, color saturation, durability – then yes, apple offers lower specs for comparably priced phones. However, if you take value into account and not just a smattering of numbers of pixels and ghz of dubious quality there are no android manufacturers that offer comparable specs to iPhone or iPad.

      also, look at resale value and total cost to own

      • obarthelemy

        Indeed, it’s hard to compare intangibles. That goes both ways though: I know of a lot more broken iPhones than broken Androids for example, probably because glass phones are intrinsically more fragile, and because people who paid more for a nice-looking phone are loath to hide it in a silicon sleeve . Also design and social value count for a lot too.

        Concerning resale, it’s hard to know what actually sells or not, but asking prices on ebay.fr for a used iP5 are 500€ (down from 680 new = -180€), and 300€ for GS3 (down from 450 new = -150€). About the same loss for both.

        And don’t forget that in the Android ecosystem you can switch suppliers (ie, go from Samsung to HTC) and keep your apps and content, which you obviously can’t with Apple-only iOS and iTunes.

      • Kizedek

        Hmmm, you forget another factor: could be that iPhones are just used tons more. Besides being our primary phone (we ditched landlines), mine is passed around and sees hours and hours of constant use per day: games for kids, media player, photography and videography (the kids are making a stop-animation film right now), note-taking, several business apps and web-services, shopping list at the supermarket, maps…

        Quite often (in this and numerous other posts) you want to portray the situation as one of an iPhone user brashly and unwisely going for a cool, expensive product to show off, that is nevertheless fragile.

        Since this is your long-term, obstinate premise in the first instance, and nothing seems to dissuade you from clinging to it, your logical conclusion is that the poor misguided iPhone user shouldn’t have bothered. Makes sense, non?

        Well, the average iPhone user is actually quite practically minded — he doesn’t want merely to tinker or play with wallpapers and ring tones, or show off the color of his phone. It’s a precision tool. He wants to get work done! He expects to get constant and reliable use out of his phone and its software, in a variety of situations, for at least three years! 24/7. Then he will sell it to someone who appreciates the life left in it! (and, no, 75 percent resale value is a little different than 66 percent resale value, so it is not “about the same loss for both”).

        Personally, I do happen to protect my iPhone: because it is a work-horse instrument that is indispensable to me; this is like putting eye-glasses in a case when they are not on my head, even if they have a scratch-resistant coating or were they a “cool” brand. In fact I sometimes forget how nice looking my iPhone 4S is.

      • obarthelemy

        Interesting uses.

        My point is, though, that all you’re doing is also being done every day with a number of similar other smartphones; none of these capabilities is unique to the iPhone.

        I’m arguing design and brand perception are factors when choosing an iPhone, as can be a number of other things (no price difference w/contract, previous experience, investment in the ecosystem, size…). In the end, no one has ever been able to show me actual things an iPhone can do that justify a 50% premium. But it’s a good phone, and the only high-end small phone. If you’re Ok with the size and price and iTunes/AirPlay/iCables, it has no glaring defects, an outstanding screen and camera.

        75% to 66% resale value is a negligible difference (we’re not talking houses here ^^), especially when the 25% loss turns out to be more in absolute terms than the 34% one.

      • Kizedek

        “My point is, though, that all you’re doing is also being done every day with a number of similar other smartphones; none of these capabilities is unique to the iPhone.”

        Yes, that is always your point. So?

        You’re French; perhaps you like to take your coffee? Could I interest you in popping a bit of instant coffee in a cup and pouring some boiling water over it like the Brits? Can I interest you in having a huge filter pot of weak but burned filter coffee made from freeze-dried crystals, as they tend to drink in the US? Why not? It’s coffee, isn’t it?

        Personally, I use an espresso machine and fresh ground beans, or my Cafetière on occasion. But “coffee” is being made every day all over the world, using any number of other methods and types of apparatus. However, if I am faced with other “coffee”, I will just take a pass.

        How about you? Are you telling us there is no area of life in which you are particular about the tools or methods you use to achieve certain goals? Surely, there are such areas in your profession?

        Good grief, you are French aren’t you? What do you do in the kitchen? I am sure any old pan will do for crèpes, non? Hey, if you are going to be snobbish at all, at least be snobbish about something that actually is superior in some way to the thing you are constantly denigrating.

        I think you could show a little more discernment over your preference for Android over Apple, even though there are a lot of intangibles involved; let me appeal to your superior Gallic nature and sense of good taste. (Also, you do know that Google is an American company, right?)

      • obarthelemy

        Again, mostly ad hominem. I’m not ragging on you for using an iPhone… I just don’t really understand why. Don’t take it personal, this is not what this site is about.

        The whole point of the discussions is to work out why and how Apple are so successful, and if/how they can keep on being so. This site is heavily slanted pro-Apple, so even establishing the basics is an uphill battle:

        - iPhones are premium items, 50% more expensive than similar competing smartphones, except when subsidized.
        - they don’t offer unique functionality neither in hardware nor software, apart from their connector. One can argue they commonly offer less functionality (SD slots, keyboards, choice of sizes, NFC, wireless charging…) and typically use non-standard hard/soft interfaces (AirPlay, partial BT and USB, proprietary connector…)
        - the reason for their success are the devices themselves (design), the marketing around them (ease of use, distribution, communication), and maybe the ecosystem (see note below)
        - logistics also plays a role, allowing Apple to push the envelope on industrial design while getting huge volumes at low costs.
        - at one point, the talk was all about innovation, though that has died down, for obvious reasons.

        Arguing you have a right to prefer iPhones the same way you have a right to prefer instant coffee is fine. It just does not lend itself to much analysis nor generalization. Don’t feel threatened ?

        Note about the ecosystem:
        On the software side, I don’t know if iOS apps are that distinctive; I think not, but I’ve been repeatedly requesting counter-examples… never got any.
        On the content side, iTunes has more, though I think Android is not far, and both lack in many areas (local content, US content abroad…)
        On the hardware side, I don’t know how many iPhones are using their connectors for peripherals that are unavailable in competing ecosystems. The main example of that is loudspeaker docks or alarm clock docks. Android broadcasts sound and video over Wifi (dlna) or BT or HDMI, not via the charging/synching connector, so does not really have docks. Even Samsung who do use a proprietary connector on tablets don’t seem to have docks (beyond basic desktop and keyboard). I don’t know if the connector can’t do it, customers don’t care, or Samsung is missing an opportunity.

      • Kizedek

        Oh, I’m not taking it personally. I was trying to communicate a concept.

        And yet, again, “… I just don’t really understand why”

        So, obviously, I failed. May I ask why you use or don’t use particular tools for particular purposes? A good workman doesn’t require particular tools, and he must not excuse his work based on his tools… however, he will take delight in good tools and he will take of his chosen tools.

        Allow me a final attempt: you could well be proficient at making crepes on a hot rock, but is that something you want to keep around the kitchen for every day use? I think not. Android and Windows are just crude tools.

        Now, back to this site. Yes, indeed,”The whole point of the discussions is to work out why and how Apple are so successful”. I am glad you are professing to be in tune with that, though that is rather rich coming from you: we usually have to drag you back from your “what’s-so-good-about-the-iPhone-meme.”

        Well, let’s put that one to rest, then, shall we? I have answered that some people prefer particular tools for particular purposes because of a perceived value and superiority that may have little to do with fashion or coolness (hard as that may be for you to imagine and “understand”). You should be able to relate to that if you think about your own tools. Apparently hundreds of millions of people agree with me. Now, let’s move on: about Apple’s success as a business…

        …part of the answer is, of course, that Apple understands this concept, even if you, Google, MS and Samsung do not.

      • obarthelemy

        “because of a perceived value, utility and proficiency”. OK. the question is what “perceived value, utility and proficiency”, and whether it is real or indeed just perceived, and how Apple achieved either or both.

        Then maybe I’ll understand, and be convinced it’s not (purely) mainly design and image.

      • Kizedek

        OK. I am flattered that you ask. I am even tempted to believe you are asking sincerely. But who am I to you? Personally, I think you are the perpetually doubting Thomas; and in any case I shall not be finding out every other way I could possibly perform the jobs and tasks I am performing now, nor evaluating every possible tool I could use to perform them and anaylse and record them, just so that you can be “convinced”. I am completely satisfied.

        Why am I satisfied? Because I have done my due diligence for myself. It goes back to the concept of a craftsman and his tools. Part of it is past experience; part of it is confidence in AppIe and its products; part of it is self-education and application of knowledge; part of it is in listening to the right people.

        If I was serious about making crepes (sorry), I would not try every pan on the market, nor would I listen to every market vendor who happens to make crepes. Waste of time. I would simply take Michel Roux’s word for it that a heavy, 60-euro pan is better than a light, 6-euro pan.

        Real vs perceived? Quite the dualist aren’t we? Try asking Michel Roux if there is any “real” difference between the pans and their outcomes (other than what you can see and taste in the end product of course), or if he just “perceives” that one “feels” better to him. Then tell him that is not good enough for you, that he doesn’t know what he is talking about.

        If they are two distinct things, then Apple achieved both, as I said, by being uniquely concerned about both.

        The Perceived is Real. Whether or not you can *effectively measure it to your satisfaction* is the question. Whether the “barriers” to adoption that YOU “perceive” (and have in some measure constructed around yourself) are insurmountable, that is the question. I can’t help you with that. Good luck.

      • obarthelemy

        I was looking for specific characteristics, features, and fucntionnality, not more ad hominem an fluffy prose. Never mind.

      • Kizedek

        Goodness, you really do want to be spoon fed, don’t you? Only to spit it out.

        My point was, you have been given many, many, many morsels over the months you have been here. At some point, one begins to regard you as a troll.

        But let’s take one, again, just to indulge you.

        UI Responsiveness. How’s that?

        The general perception is that UI Responsiveness on iOS vs Android is “better” — be that “faster” or “smoother” or whatever. All these perceptions and adjectives just add up to “better”, OK?

        Now, is UI Responsiveness a significant factor to YOU? I don’t know. It is to me. Then one could wonder, do I enjoy using my iPhone so much because of its UI Responsiveness? Or, do I use it so much more than I thought I would “because” the UI Responsiveness is so good? (sorry, rabbit trail)

        But, can I tell you with certainty *how much* faster iOS is than Android? No. Do I care if it the average UI transition is 2 or 20 or 200 milliseconds faster? No. Until it gets noticeable.

        The perception is that Android is laggy. Do I care how laggy and when? No. I just care that it is noticeable enough to arouse comment.

        Why should that be, given the specs of the hardware?

        You see, all the “little things” add up. And no-where do they add up so much as in general UI Responsiveness, and all those “little things” that Apple thinks of.

        It’s probably a case of *not* noticing the Apple UI at all! But this is testament to all the hard work that Apple does behind the scenes. For something to appear simple and intuitive, a lot of hard work was done by some dedicated people.

        Now, before you ask, I have never seen an article that definitively records how much faster iOS UI transitions are than Android ones. Have you?

        So, here’s a thought, why don’t you go find a techy site somewhere, do a bit of search, and report back? Better yet, why don’t you do the scientific research yourself, write the article, and then come back? We may read it; maybe we just don’t care.

        The “perception” out there, is that Apple gets lots of “little things” right. You have been given a shed load of examples over the last months. The perception is, that no-one notices these little things are even “things” until Apple turns its attention to them.

        Even the things that Apple gets “wrong” (iCloud, Maps…) hint at a plan/direction/vision. How much a user puts up with as they weigh the little things that are significant to him, is personal. Even within iOS, there are alternatives.

        UI Responsiveness is a biggy, and is significant to many. That’s because you are interacting with the OS constantly. “Smoothness”, “consistency”, “intuitiveness” are all important and add to a perception of seamless speed. You go measure them if you want.

        Web loading times? Not such a biggy. Why? Because web pages load differently all the time. We expect that. Depends on the server much of the time. Do I care if a page loads a few milliseconds slower on mobile safari than Android? No. All I know is that it gets better with each iteration of iOS, webkit and Apple’s devices.

        Now, I trust this wasn’t a case of “pearls before swine”. Geez, try and teach a man to fish, and he still wants the fish.

      • obarthelemy

        Funny how asking to be shown where the beef is makes some people aggressive.

        No, I haven’t been given any morsels despite repeated requests over many months.

        And your morsel is both conveniently unprovable and probably outdated. Since 4.1, I have seen numerous mentions that Android’s UI is “buttery smooth” too, and no more mentions of an Apple advantage in the area. As for smothness being important in the OS, but not in within the apps such as the browser, I’ll let you live with your own contradictions. I personally spend way more times in apps than in the OS.

        The segue into “perception of lots of little things right” is fluff, again. I’ve given the example of lack of fixed back and menu buttons as lacking both in consistency and in ease of use.

        I do read reviews with care, and play around when I come across an iDevice. I’ve just never taken anything from that apart from “nice design”, “nice screen”, “hou that’s cute. And small”, “gosh that’s expensive” “what, no widgets” and “what a messy interface”. And the smoothness thing, but that was before.

        Anyway, never mind. This swine will go on doing its swiny things while you lord go on doing your lordy things.

      • Kizedek

        “Funny how asking to be shown where the beef is makes some people aggressive.

        No, I haven’t been given any morsels despite repeated requests over many months.”

        Ah, perhaps you are not the open-minded adventurous gourmand you would like to believe yourself. You have already decided what the “beef” is, and what form and shape it should take.

        Just chew over what you have been given and don’t look a gift horse in the mouth.

        Apparently, you want numbers or something? Are you constructing a giant spreadsheet so you can grade Apple devices against Android ones and come up with a Consumer Reports score? Have you got a pre-determined set of metrics drawn up against what mobile devices “should do” or how they “should behave”?

        Hey, rest easy. You can proudly cling onto your Android device secure in the knowledge that, after adding up a thousand specs, it gets a composite 8.7 against the iPhone’s 7.2 in someone’s book!

        Ask for why someone uses an iPhone and what’s so good about it, and be prepared that you won’t get numbers. Capiche? Such has been offered to you time and again, about as many times as you have asked. That you have so thoroughly rejected such responses time and time again in the past, is what suggests to me that you are in no position to judge what is relevant or significant or not — you just don’t want to know!

        Continue to be mystified, since Apple and its products obviously inspire a large degree of mystification out there. Continue to consult your numerology and gnash your teeth. It is obviously the critics of Apple that are angry, because a lot of this stuff does not bear conventional quantifiable analysis as applied to other companies and products.

        Hence this site and why it is so popular — Horace is redefining the questions to ask. So, don’t predetermine the kind of answer you expect or accept. Ask about the job to be done and what we hire our devices to do.

        Now, can we move on?

      • NoName

        I have a Nexus 4. Updated with the latest Android. It is not buttery smooth. And it is not just me.

        A coworker asked to try it. She pressed on an icon on the home screen a few times before it popped up.

        It is annoying as hell.

      • http://twitter.com/fivetonsflax fivetonsflax

        As long as you consider design something to be discounted, you will never reach a meeting of the minds with Apple fans.

      • Tim F.

        I agree, but I’m just using it in the most basic, average-consumer-perception sense. Even in 2007 when the iPhone was so far ahead from a hardware technology perspective (but lacked many software features), you could find umpteen thousand articles about x, y, z phone that had a, b, c better specs. These comparisons never factored into my decision making (or they did and didn’t compute), but the average consumer who just reads a placard in front of a phone and listens to a sales person does. I don’t put much value in it, but it’s this sense that I am using the term.

  • poke

    I think it’s platform strength. The US is where the majority of globally-relevant software is produced. I don’t think a platform can survive long without having the US market. The iPhone is much healthier as a platform and is starting to push Android out in the US. 3rd party software is becoming the determinate factor in selling phones. Other countries lag because they lag in technology adoption. An app usually becomes relevant in the US market first and then spreads to other markets.

    It’s obvious that Europe and most emerging markets will look more like the US over time, not vice versa, once you think about it in terms of platform strength.

    • obarthelemy

      That’s true. But it has been true for a while, and still Android has made huge inroads. Apart from very specific vertical stuff, both platforms have all the apps needed (if you don’t agree, please give examples, I’m looking for them). There is some hardware/OS-related stuff (I’m told real-time sound handling on iOS devices is better, accessibility is easier to tweak on Android, etc, etc).
      Even if we accept iOS devices have a software advantage (which they don’t), I don’t think that very important given that 99% of users are served well by both platforms anyway. Pricing is more important, and here the contagion might go the other way, with ROW’s model of less to no subsidies being imported to the US, and making device price relevant.

      • poke

        What’s important isn’t that I can find an app that does the same thing, it’s having the same apps from the same brands with the same up-to-date features. As far as I can tell, most of the big names are still iOS-first and often iOS-only. Notable start-ups are usually on iOS first too. Think of the collective marketing clout behind iOS and the perception it creates.

      • obarthelemy

        Can you provide examples ? I’m getting fairly out of touch with what the New Thing is. The taxi-like companies seem to have apps on both, what else new is there ?

      • igor_kamintsev

        iTunes. Google Play is garbage.

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  • stevesup

    Apple will do a world phone when it makes sense. But why now? The telcos have to pay Apple about $450 a unit. If it put out an inexpensive, plastic phone right now, it would be guilty of product mismanagement big time.

    I’m amazed that many phone buyers in the US don’t know that they do not repay the $450; they can get a new iPhone for $150 with the same contract as if they bought a cheap piece of junk. The iPhone wrecks telcos profits; they hate Apple cus’ Apple calls the tune.

    Telcos are trying desperately to drop subsidies simply and only because of the iPhone. And as they do, Apple will present its world phone as a $200 offering. Don’t believe for a minute Apple doesn’t have one in the pipeline.

    Hate your carrier, buy an iPhone. But yes, if you love your telco and two year contracts at exorbitant rates, buy a $200 unlocked cheap phone; your carrier will be delighted. You just saved them $450.

    • KirkBurgess

      The market opportunity is simply huge globally, whereas the best apple can do in the US is perhaps double unit sales if everything went their way. The global opportunity is an order of magnitude bigger in unit sales possibility.

      Why release a “cheap” world phone now? Because now is the time that the global market is making the switch from feature phones to smartphones . It is far easier to gain platform users from feature phone converts (current smartphone non-consumption) than it is to switch someone who has already adopted a competing platform.

      • stevesup

        Assuming you know better than Apple just when to introduce a world phone is a losing game. You have no data points to work with. Huge. Now. Easier. Best. These are not data points.

      • KirkBurgess

        How about the simple data point that Apple is losing smartphone marketshare globally?

      • stevesup

        Sorry. You didn’t get that right. Apple can’t lose what it never had. It’s still growing.

      • KirkBurgess

        It may still be growing, but if its growing less than its combined competitors then its losing marketshare.

  • Deepak Shenoy

    I don’t think the price parity is even possible in a place like India, where average revenue per phone user (for a mobile company) is as low as $2. Even at the high end, my usage – with 1GB data and reasonable voice traffic, I pay less than $20 a month. Even with double that number they’d find it difficult to recover costs, even for an iphone 4, over three years.

    Android phones seem better – I can get a Note 2 (and soon an S4) both of which will serve much more of my travel needs than any iphone, and seem far more interoperable with other things. But that’s a secondary thing; the main point is that I doubt Apple can ever get price parity in countries like India the way they have it in the US.

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  • Android user is here

    Who cares?

  • Chaka10

    Beautiful analysis. I had wondered about the global android growth, vs the frequently reported comscore numbers — how to reconcile and implications…. Thanks for sorting it out with the usual clarity.

  • Chaka10

    I have long wondered if the issue is one of perspective and market definition, … if the EM android phones are not much more than feature phones, in cost and effective usage. I see it sometimes mentioned, but not sufficiently focused upon IMHO, the state of EM user adoption of 3G and 4G (rather slow rate thereof). I do not believe true smartphone usage is effective without, and really ramps only with, 3G and even more so 4G. I also believe that a key ingredient of AAPL “innovation”, including with Steve Jobs, is timing their products for when the technology and markets are ready. The focus on a cheap phone for EM market share (ref Misek today) is way wrong IMHO.

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  • Chaka10

    Horace, doesn’t this tie into, potentially even explain, how Samsung rather than GOOG is earning the bulk of the profits from Android (your earlier analysis)? GOOG doesn’t earn ad revs on EM android units nearly the same as it does in developed economies.

  • mjtomlin

    It’s my belief that Apple doesn’t give a damn about “phones”. In a few years time everyone will wonder just how in the hell Apple overtook Microsoft to become the world’s largest computing platform.

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  • yetanothersteve

    When I go out to any slightly upscale event: a bar, baseball spring training, I am stunned by the great unreported story of the iPhone’s dominance in the US. Big Samsung phones stand out because they are such a minority. My thesis is that in the US the iPhone is headed for iPod status. Phones in use, with a real data plan, the smart phone as we know it, in the US, is an iPhone market. And when you talk to people about their smartphone you can just say iPhone.

    It’s why I laugh more than ever at the “Apple is doomed” meme currently in vogue (again!) Because the US is not exactly a niche market, and iOS is certainly a stickier platform than an iPod…

  • Ittiam

    Boom… Google just released latest activation number… 750 million… So the activation rate has stagnated at 1.3 million

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

      I estimate 1.4 million current rate. A decrease in acceleration to be sure.

      • Ittiam

        OK… I crudely calculated… Also, which date are you considering for 500 million? I used 11th step not 5th

  • http://twitter.com/jonathanoberg jonathan oberg 

    So Mr. Page says 750M activations. That’s 15% less than Mr. Dediu’s estimate of +300M. Looks like growth curve is decelerating. Still be first platform to 1 Billion.

  • Claude Hénault

    Google today pegged its international android activations at ‘more than 750 million.’ A little off the pace.

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

      I have updated the model to reflect this new data. It’s a modest adjustment implying 1.4 million daily activations (up from 1.3 million in Sept.) I’ll post a follow-up.

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  • Antonio D’souza

    http://googleblog.blogspot.co.uk/2013/03/update-from-ceo.html announced the latest activation numbers a few days after this post was published: 750 million.

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