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Reasons for iOS outperformance in the US

The comScore mobiLens survey for the US ending February 2013 shows continuing rapid expansion of smartphone usage in the US. Even though the 50% penetration threshold was passed seven months earlier, the rate of new smartphone users was second highest ever recorded with over 1 million new-to-smartphones users every week during February.

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Overall penetration increased to 57% with nearly 2% of the population switching in one month. Using the average growth rate for the last six periods, the US could see 80% penetration in another 19 months or by Q3/Q4 2014.

It remains to be seen if the consistency of growth which was preserved from 20% to 60% is maintained between 60% and 80%, but all indications so far are that it will be.

The growth in smartphones has been driven by the two dominant platforms: iPhone (iOS) and Android. Together they now make up 91% of the user base with about 40% for iPhone and 51% for Android.

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Android alone gained 17 million users in the last 12 months while iPhone gained 21 million users.

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iOS user gains have out-paced Android for the last four periods which resulted in a decrease in Android share of users. A reduction in Android share was also visible in the spring of last year but the current decline is not only longer but more pronounced.

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The reason iOS is growing more rapidly may be due to three factors:

  1. Broader distribution with three out of four major operators carrying the phone
  2. Availability of three product variants with $0 starting prices.
  3. Increasing awareness and use of apps and content ecosystems due to network effects.

As distribution is about to increase with T-Mobile being added to the carrier list the growth in iOS share is likely to continue even as the market expands.

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

    Since in the rest of the world the trend is different and reason 2 and 3 are equal, it is distribution that is blocking iPhone growth outside US.
    Any idea of why Apple is not expanding distribution abroad?

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

      I like to say that success in phone volumes depends on three criteria: distribution, distribution and distribution. The reasons Apple may not be maximizing distribution is that volume alone is not the primary criteria they’re going for.

      • Mark Jones

        Agree wholeheartedly. Always has been the case with Apple.

      • JohnDoey

        The reason that has been the case is that demand for Apple products increases at an outrageous rate. As fast as they increase production capacity, demand still outpaces them.

      • Mark Jones

        Production constraints is true for the first 6 months after a new iPhone launch. But during the next 6 months, Apple could produce more than demand, and then offer incentives to increase demand/sign up more distributors. My position is as Horace summarized – “volume alone is not the primary criteria they’re going for.” See my back and forth with Emilio on http://www.asymco.com/2013/03/28/how-many-iphones-will-t-mobile-usa-sell/

      • greendrawer

        Also factored into this though should be the fact that, of late, Apple has been designing products that are very difficult to build quickly and in large numbers.

      • simon

        I always wondered what would happen if Apple price iPhones higher at the launch and gradually lower the price every week. It won’t happen but an interesting thought.

      • Jocca

        Not just distribution, but production capacity is the limiting factor.

    • alandanziger

      I wasn’t aware that #2 was the case outside the US. I’m not an expert but my understanding was that most carriers outside the US do not subsidize cell phones.

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

        You are right I was thinking more to europe

      • claimchowder

        At least in Germany, phone subsidies have been the norm since day one. There are some carriers, typically the smaller ones, that offer free-of-contract phones and prepaid models, but it’s more recent and less common.

    • poke

      I think 3 depends strongly on territory. Ecosystem reach is small outside the US, most apps are produced in the US and are often US-centric, and the rest of the world tends to lag the US in both consumer and enterprise technology adoption all things being equal (where the US lags it’s usually for political reasons). Other countries are still more browser-centric than app-centric, so a phone with a web browser is fine, rather than an app platform.

      • JohnDoey

        That is part of why Macs are bigger in the US. Mac computing is Mac-centric — PC computing is Web-centric. If you are a Web-centric user, it is harder to see the value proposition in a Mac or iPhone. However, you are only one iMovie or iPhoto demo away from getting it. That is why Apple Stores are so demo-heavy.

    • JohnDoey

      Apple *is* expanding distribution abroad. Just not as fast as some people would like. I think the reason they are moving at their own pace is to maintain creative control and profitability.

    • stevesup

      The subsidy model in the US is a galactic cash cow for Apple. (We can thank the carriers for paying Apple to develop awesome phones, paying Apple $450 a unit. Remember what carriers used to offer? Agh.) Unfortunately it means that, beyond offering older iPhones, Apple has no incentive to produce a cheap world phone right now. As long as it’s selling as wildly well in the US as it is, Apple cannot put out a cheap world phone. Throwing away $450 a pop would be crazy.

  • Luis Alejandro Masanti

    quote:

    “The reason iOS is growing more rapidly may be due to three factors:”

    Another factor can be that users are becoming to appreciate the “value” inside the iPhone in the form of a “long lasting” device: you two/three years old phone has the last operating system update (albeit with hardware limitations).
    The “color mirrors” fantasy of Android devices… they shine for a couple of months and then lost any value… is being replaced by more “investment concious” buyers.
    My “600 bucks” will last for more years valuables.

    • http://www.facebook.com/tcrapts Terry Crapts

      The really interesting question is: why is the long-term value of the iPhone higher than that of other phones? Value is not something that just magically appears, it’s a reflection of a certain quality, and those qualities become more apparent in the long run. So, what are these qualities?

      1. The support of iOS. The iPhone 4 still has iOS 6, thus being able to run all most recent apps. The device maybe more than 2 years old, the software is brand new.

      2. Inheritely, the quality of the OS. iOS is build to be fast, efficient and intuitive. Thus, it is perfect for running on devices with older hardware.

      3. The build quality. An iPhone 4 consists of steel and glass, durable materials. It still gives a premium feel, even after almost 3 years.

      4. The three mentioned qualities are a direct consequence of Apple’s vision: to build the best phones possible. Even though the iPhone 4 is not the best phone on the market anymore, it was 2 years ago and today it still is a pretty good phone. Furthermore, because Apple only releases 1 model a year, the ‘iPhone brand’ is very strong, making it easy for customers to directly relate the iPhone with ‘quality’.

      My point: the long-lasting ‘value’ of the iPhone is not something that has magically appeared, it is the result of building great phones. Great phones remain great phones, even long after their releases.

      • Mohamed Ansardeen

        Well said…….
        Cant agree more

      • stevesup

        You can get a free iPhone and in two years sell it to Gazelle and make money. The carrier pays the subsidy, not the subscriber. That’s value objectified. Heck, you can even sell broken iPhones to Gazelle.

      • narg

        Whata dumb comment Subscribers pay and pay dearly Why do you think your required to have a data plan?

      • JohnDoey

        You are required to have a data plan with iPhone because it is an Internet communicator. There is also a Wi-Fi only version (iPod touch) for those who don’t want that.

        When you consider usage — the amount of time an iPhone user spends using their device — iPhone and iPad are by far the cheapest smartphone and PC. That is why they are popular with highly-engaged users, regardless of budget. In other words, you pay 25% more for iPhone but use it 400% more, making it cheaper per hour of use. You use it more because it does so much more. You use it more because it steals you away from PC’s. You use it more because it is fun and easy and productive to use.

        Value is not just a function of the lowest retail price. Especially not in devices that are carried 24/7 for 2–3 years.

      • Mark Jones

        It’s not dumb at all. In the US, among the big four, getting a subsidized smartphone requires a data plan no matter which smartphone you choose. So you might as well get one that has resale value. (It’s also impossible to buy a phone with no data plan that has wifi.)

        And among the big three, the data plan is the same price no matter which smartphone you choose, and even if you don’t get another smartphone at all. If you plan to stay for another two years, you might as well get one as soon as they allow you.

      • stevesup

        You are missing my point. Every carrier gouges. But they also pay Apple about $450 per phone. That fee comes out of the carrier’s end, out of profits, and doesn’t not add a penny to what the carrier would charge you if you got a cheap plastic phone that will break within two years. Carriers hate Apple; they love cheap plastic phones. And they love it if you keep your phone after two years cus’ that’s pure gravy to them. So hate your carrier, get the iPhone. Love your carrier, get a cheap or unlocked phone. They will send you back kisses and hugs.

      • http://twitter.com/snookasnoo Idon’t Know

        They also love phones they can shovel bloatware on like every Android phone.

      • http://twitter.com/snookasnoo Idon’t Know

        Your mommy is dumb.

      • Mark Jones

        You can get more than enough to buy the newest iPhone ($199). If you choose to break your contract in one year and sell before the rumored announcement, you can get enough to pay the termination fee and buy the newest iPhone.

        Even for people who wind up not choosing to sell it back, the option of doing so has value.

      • stevesup

        Interesting. Give me the math please.

      • Mark Jones

        In Sep 2012, I had a black iPhone 4 (2-yr contract ended in Aug) and my wife a white iPhone 4S (ten months into 2-yr contract). I checked trade-in pricing on Amazon – $420 for 4S, $250 for the 4. I could’ve sold the 4 and bought a 5 for $199 when it launched, and/or also sold the 4S and bought a 5, with $220 left to cover contract termination. We decided to stay with AT&T for another year, so I only sold the 4.

        RIght now, Amazon is offering $430/$400 for a like-new/good iPhone 5 (either color) and $280/253 for a white iPhone 4S. Amazon usually has better prices than Best Buy, Gazelle, etc, but not always – you can shop around.

        We’re considering switching to T-Mobile if they launch LTE where we live before the next iPhone launches, so I’ll check prices again in early June.

      • stevesup

        Nice. Thanks!

      • http://www.facebook.com/tcrapts Terry Crapts

        I don’t think that’s entirely true because Android phones are subsidized as well, not just the iPhone.

      • stevesup

        Maybe. I know what they carriers must pay Apple and, knowing Apple it screwed the carriers out of every penny. (I love how Apple hates carriers.) I doubt that other phones can claim the same. But if you have figures…

      • Mark Jones

        But iPhones reportedly get the largest subsidy; up to $450 per iPhone. The Galaxy S series may get high subsidies as well but reportedly less than $450; we know this with much less certainly since Samsung refuses to report units sold or average selling prices (ASP).

        Another consideration is who take the hit for discounts and sales, such as BOGO. Is it the carrier and manufacturer, or some combination? iPhones almost never get BOGO sales.

        Still another consideration is who pays for marketing and servicing of the phones. Apple pays for a large portion of iPhone marketing and servicing. That’s not the usual case for other phones.

      • http://www.facebook.com/steven.r.wilson.79 Steven R Wilson

        And they don’t resell nearly as well. Same issue with other apple products such as iPods and Macs. Resell for Apple products is vastly higher almost across the board vs other brand X products.

      • SSShu

        The numbers of models available also matters. I assume there’s a fair bit of choice paralysis happening and its driving the price of android handsets down.

      • Sebi

        I think you can compare it with car manufactures and may get more insights why the resell value of one is higher. Most of the things you mentioned can also be observed in the auto industry.

      • http://www.facebook.com/tcrapts Terry Crapts

        Maybe, but it is also quite different. For starters, cars usually have a much longer life cycle.

      • John Rich

        To your “quality/value” point an iPhone in my family has “three lives.” I get the latest iPhone then 12 months later it goes to my wife then 12 months later to our daughter. We’ve now lived through two and a half cycles (seven years, six months) and because of the build quality and iOS upgradability we’ve had no problem getting three full years of “value” from every iPhone purchased. Now if we could just get a network provider that delivered equivalent value…

      • Grahaman27

        did you really just call glass “durable”?

      • http://www.facebook.com/tcrapts Terry Crapts

        I did. Glass can break rather easily compared to plastics, but it’s (usually) scratch resistant and doesn’t show the wear and tear your average Android device or 3GS does.

    • Rybak

      I’m actually pretty happy with my 2 years old SGSII. It recentely got Android 4.1 update and will get 4.2. It’s true that the OS updates are a bit late but I still think that Android 4.1 is way more advanced than OS on iPhone 4 that I use in work so I don’t think I could get any better unless going with Nexus. The phone is very fast and responsive (never worked better actually).

      Perhaps what you say about Android applies to some other phones but clearly not to Nexus, Galaxy S and Note line. With great sales of SGSIII I think the support for that phone will be at least as good as for SII.

  • obarthelemy

    4th factor: high prices for mobile contracts in the US help dilute the high price of iPhones

    5th factor: Dominance of subsidized model in the US helps push users to high-end phones, and to 2-yr upgrades

    6th factor: relatively high incomes make pricing less of an issue

    7th factor: density of Apple Stores

    8th factor: home court advantage

    • Space Gorilla

      Interesting, so rolling your points together you’re essentially saying when price and availability are roughly equal, consumers tend to choose iPhone.

      • obarthelemy

        I think so. Why not go for luxury if it’s at the same price as workaday ?

        The issue is: unsubsidized, OK Android phones start at $150, good ones at $400, the GS3 is $680, and the iPhone 5 is $880. No wonder Apple is thriving in the US were subsidies are the norm, and were $880 is less than a year’s worth of unlimited mobile contract, as opposed to the almost 3 yrs it represents in France.

      • Space Gorilla

        So it becomes a question of whether Apple will go ‘down market’ or maybe the better question is when they will be able to bring standard iPhone quality to a lower unsubsidized price. If Apple can do that the future is not bright for Android. And I would guess Facebook Home is going to eat up a lot of the lower end market, which is still technically Android but is there much value delivered to Google on a phone that is primarily used to connect to Facebook?

        I’ve always thought of Apple as being able to buy a Mercedes for only a bit more than a Ford (it’s only an analogy, I drive mostly Fords). But what happens when the Mercedes and Ford are the same price?

      • obarthelemy

        The way I see it, if Apple goes to lower prices, we might move from the current situation (70% Android, 25% iOS). Unless other parameters change (importance of features, …)
        I’m not talking about the actual devices, I personally think Apple hardware and software is inferior in most cases and certainly in mine.

        As for the Facebook home and lock screen, it’s just another alternative home and lockscreen like there already 100s available for Android. Google don’t care a jot, as long as they get to display their ads and fill up their databases.

      • Space Gorilla

        This seems more like a Facebook layer ‘on top’ of Android, and if that’s the case those ads are going to be Facebook ads, not Google ads. Granted Google should still get user data, but if the Facebook layer becomes dominant I can’t imagine that’s good for Google.

      • SSShu

        If it becomes dominant enough they’ll probably fork the ‘droid or license it to the OEMs. No?

        The Facebook home seems to me like a thinly veiled ploy to usurp Android grasps on its users. But i digress.

      • Mark Jones

        That “as long as” is precisely what Facebook Home is targeting to reduce.

      • JohnDoey

        Facebook Home only runs on maybe half of Android devices, and will be installed on far fewer than that.

      • Space Gorilla

        For now, but it seems like a play to build out a mobile platform and step in front of Google’s advertising. Every little thing like this chips away at Google’s ability to make money from mobile. I think Google is going to be a much smaller company five years from now.

      • JohnDoey

        Apple already has a down-market iPhone: iPod touch. All they have to do is put a basic 3G data rig in there this year and keep everything else the same and le voila: a cheaper iPhone for $299 (unsubsidized.) About half the price of a Galaxy S3/S4.

        They might be able to make room for the 3G rig by a process shrink, and keep the external device and existing specs the same. The price might stay the same as last year because the price of components has dropped.

        So I think the chatter about how Apple might have to warp space and time to make a cheap iPhone is BS. There has been a cheap iPhone since a few months after the first iPhone shipped. All it lacks is the 3G rig. No need to change the screen size or resolution or make it out of plastic when iPod touch with 4-inch Retina and aluminum enclosure is only $299, and has sold in the past for as little as $189. Apple has already shown they know how to make low-cost high-end quality hardware.

        iPod nano is also one step away from being a feature phone, if Apple wants to do that.

        So the rest of Apple’s complete phone lineup may just be hiding in plain site. They don’t have to radically change the company to be a down-market phone vendor. They just have to slightly change the iPod lineup to make them into phones.

      • Space Gorilla

        Yes, I’ve been waiting/wishing on the iPod Touch with 3G for a couple years now. The latest iPod Touch seems perfect to do this with. I have four kids, the iPod Touch with phone/data capability is their first choice, they love the look of it. I would also love an iPod Touch that was curved and fit into a bracelet form factor, great way to low jack my kids and give them a cheap phone/data device that they would lose less often.

      • stevesup

        Me too. Love my iPod Touch. Lean and mean computing machine. It’s like holding the future.

      • R Merrill

        Interesting – I bought an unsubsidized, latest iPhone a few months ago for around $550. Much less than $880.

      • obarthelemy

        http://store.apple.com/fr/buy/home/shop_iphone/family/iphone5, I’ll elt you Google the exchange rate.

      • steven75

        Why are we talking about non-US pricing in a US article? $880 is simply wrong for the US market.

      • obarthelemy

        Some are trying to sidetrack the argument. I’m on newegg.com right now, iP5 is $800, GS3 is $500, it’s all the same.

        Why are we even talking about Apple when commenters don’t even know the price of their product ?

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

        I see prices between $600 and $800 on Radio Shack. GS3 is at $550.

        Shop around. Save money?

      • JohnDoey

        It is important to remember that a Galaxy S3 does only about 25% of the things an iPhone can do (at most) and has a very low-end OLED pen-tile RGBG screen. The device is not equivalent to an iPhone.

        With Windows PC’s, you always ran the same software, so you could compare a $600 model with $400 model using a few hardware specs as a guide. Galaxy S3 only *looks* like an iPhone because it runs entirely different and much less capable software.

        The technology matters, even to users who don’t understand it. Look at the profound difference in work output quality between Instagram users who are on iPhones versus Android phones. The Android users do just as much work to shoot and edit but get much worse results because they cannot really see their photos. They are seeing their photo translated to RGBG (pen-tile) with no color management, on a display that degrades over time, showing worse and worse color. Users don’t have to understand graphics at the technical level to understand that iPhone makes much better work output for the same effort. Multiply by a few thousand photos per device and it is a dramatic difference if you upgrade to an iPhone.

      • Claude Hénault

        In Canada, where the dollar is roughly at par with the U.S. buck, and Appple goods are always just a bit more costly than down south, the iPhone 5 unlocked and unsubsidized is $699 for 16Gig, 799 for 32 and 899 for 64. You are not comparing similar devices in your pricing.

      • Richard Barrett

        Remember to account for GST or VAT and US sales tax when making comparisons. There may also be import duties which drive the cost up.

      • Claude Hénault

        GST, VAT, US sales tax are all the same for any phone, and so are not relevant. The prices I quote are the base prices posted on the Apple Canada website.

      • Mark Jones

        Why are you even looking on newegg.com when the manufacturer’s own website, store.apple.com, sells the same unlocked model for just $649? You get free next day shipping, and if you have good credit, 12 month interest-free financing.

        Some are trying to sidetrack the argument, but it’s not who you think it is.

      • simon

        To be fair, you’re arguing with a guy who compares the price of iPhone 64GB against an Android with microSD card even when there’s a 64GB version of that very Android phone. He’ll use any loop hole and local situations to fit his argument.

      • Ted_T

        Why would you buy from NewEgg for $800 when you can get it directly from Apple for $449 for an iPhone 4 and $649for an iPhone 5 — you are the one sidetracking the argument.

      • obarthelemy

        the $649 is GSM-AT&T only.

      • Mark Jones

        $880 or $650. Depends on the country.

        The $550 in the US could be partially subsidized. Most of the US pay-as-you-go or prepaid plans (MetroPCS, Virgin Mobile, etc) partially subsidize the iPhone.

      • Ted_T

        You can buy unsubsidized iPhones directly from Apple for less — we are talking about an unlocked no contract, no strings iPhone here.

      • Mark Jones

        A no contract, no strings iPhone 5 is $650 in the US, not the $880 obarthelemy found in France.

        If R Merrill sees one for $550, it’s likely subsidized via prepaid, and possibly not unlocked.

      • huxley

        iPhone 5 unsubsidized and unlocked starts at $649, the 64 GB model is the one that goes for the higher price.

      • JohnDoey

        iPhone is not a luxury product.

        If you work construction, buying the best work boots is not luxury. If you spend 6 hours per day using your smartphone, buying the best smartphone is not luxury.

        iPhone is not an expensive phone, it is a cheap computer. It will steal you away from a PC for many more hours each day than other phones, greatly increasing your mobility.

        If you buy an iPhone and do an hour of basic voice calls and SMS texts with it per day, only then is iPhone a luxury. But that is not how most iPhone users use their iPhones.

      • Space Gorilla

        Recent enterprise/business use numbers would agree with your premise, iOS is dominating, Android is a blip. Nice example with the boots, that’s exactly right. I spend a couple hundred bucks on my steel toe work boots, worth every penny.

      • Kizedek

        Good example with the work boots. I have tried to make this point before: using good tools for the jobs that are important to you. But, no doubt we will have to make the point in the comments of every article. I think there is some kind of short-term memory issue at play when someone acts as though the current thread is the only one that exists, or wants to ride a horse, such as the luxury horse, to death.

      • chris

        The Nexus 4 16GB is $350.00 unsubsidized in the US. The iPhone is tiny and not made for people with poor eyesight nor those with large hands.

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

        You might want to look into the history of the most popular phones of all time and get an indication of the size of those screens.
        http://conversations.nokia.com/2013/04/03/40-years-of-mobile-phones/

      • JohnDoey

        iPhone outsells Android on carriers that have both, so only availability matters.

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

      My observations are related to why there has been an acceleration in iOS during the last few months in particular. None of the factors you cite changed in the last few months.

      • obarthelemy

        I don’t think you can look at the acceleration w/o looking at the speed.

      • Mark Jones

        The iPhone 4 going to free (subsidized) was an enormous change as its steel-and-glass aesthetic design (and thus prestige) is perceived to be significantly better than the plastic 3GS (and better than most of the plastic priced-at-free competition). Only the very biased still believe that “antennagate” was an Apple-only problem.

      • Walt French

        Here are some changes that might be coming into play:

        I think the media — and the buying public — has become saturated with the iPhone Killer of the Week phenomenon that was an intentional consequence of Android’s basic business model. Instead of the tribal competition mentality, we’ve moved on to a more “what’s right for me” approach. Thankfully, less Fanboy-v-Fanboi shouting.

        The Android model, also per Google’s intentions, resulted in a large number of commodity devices. Great for “just let me get something that works;” lousy for helping consumers who are unsure about capabilities. As you know better than anybody else, the model starved out the profitability to all but two—manufacturers can’t afford to engineer in dramatic new features such as power-efficient LTE and Apple quality/level is again rising. New Androids are not striking, often not even on par.

        And maybe this is time to allege that the latest Flurry statistics are just the latest in a long run of “engagement” statistics that are too lopsided in favor of iPhone users being twice as active as Android users. Sure, there’s some likelihood of that, but another explanation is that we’re only now getting more accurate end-user sales for many Android products.

      • Davel

        I am curious to see what if any impact the tmobile model has in the US. They have lower prices and no subsidy.

        Now you will have the iPhone on all major telcos and several minor ones.

        What will the percentage of apple be in tmobile now that they upgraded the network?

        Will they steal the marginal user from other carriers and will that force the US more towards the plans that exist in Europe?

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

        My expectations are modest: The effect of T-Mobile will be the same as the effect of every other US operator. Estimates: http://www.asymco.com/2013/03/28/how-many-iphones-will-t-mobile-usa-sell/

      • http://geekfun.com/ Erik S.

        Perhaps you’ve addressed this elsewhere, but what is the evidence for an inflection point in awareness and use of apps?

        It seems to me that one persistent advantage in Apple’s favor which has a cumulative effect over time in their favor is that Apple’s user experience extends from cradle, to grave, and through resurrection, back to the cradle. iPhone users already tend to be more fond of their phones than Android users, and Apple makes upgrading to a new phone reasonably quick and painless. This is even more true when the device is running iOS 6, with iCloud backup, enhanced further by iTunes match. More and more iOS 6 devices are coming up for renewal/replacement.

        That is a hypothesis. A test: are there other indications that Apple’s retention rate has improved?

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

        I cannot point to any evidence which is why I say “may be due” to these factors. I’d like to get some data to support the hypothesis but it’s hard to imagine what it would even look like.

      • http://twitter.com/Yogi Jonas

        Could a factor be that American iPhone 4S users are getting close enough to the end of their contracts to upgrade without too high a cost?

        I expect the 5S to really benefit from the massive number of people locked to their 4S.

    • Mark Jones

      In the US subsidized model, the difference between any model of iPhone and a free smartphone is usually between $0 and $200 (since there is no adjustment in the price of a voice-and-data contract). In a non-subsidized model (even including the US), the difference between any model of iPhone and the cheapest smartphone is usually between $400 and $700.

      Mainstream consumers (and especially the late adopter segment, and parents buying for kids) are far far more likely to consider an iPhone and its perceived added value if they only have to pay $200 upfront instead of $400 upfront.

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

      Google and Motorla also have a “home court advantage”. I agree with your 4th, 5th, 6th and 7th factors.

      • JohnDoey

        And Motorola has been in the phone business for 5 times longer than Apple.

    • Walt French

      Why stop at 8? There is a set of reasons for every buyer.

      So an analyst has to use some combo of judgement as to which are more important. Allow me to make notes on the relevance of your points.

      4. Contracts dilute price. Horace has made the point that the iPhone is an effective “salesman” for higher-priced services, and in turn, the services are more expensive for having to “pay commissions” to the salesman. But Samsung’s high-end phones — the ones that you best like and that others say are the most directly comparable to iPhones — cost about the same and (here’s the important part:) have the same patterns of ups and downs versus the iPhone. So the subsidies/contracts may indeed favor more expensive phones, but I can’t see how that affects similar offerings. There should be good opportunities for Samsung, Nokia, HTC and others to sell higher-priced phones, yet only Samsung is anywhere close to Apple in actually doing so.

      5. 2-Yr Subsidy Same story: why does this favor Apple over other higher-priced phones?

      6. Higher income To clarify your point, some data culled from Wikipedia: median household income, adjusted for per-capita and purchasing power equivalence, finds the US at $31K, the UK at $25K, Germany at $21K and France near $20K. Spain and Italy both well below $20K. US consumers find it easier to buy higher-priced products — it’s hardly surprising that we’d actually do so. Perhaps that’s why we don’t squawk at the oligopolistic pricing of networks. But this has to do more with whether we are willing to buy ANY phone with premium features such as LTE data speeds and volumes, and speaks nothing as to why Motorola, LG, HTC and others have not found it possible to match Samsung and Apple in price levels. I personally think this is partly an Apple technical advantage: they coordinated closely with Qualcomm, waiting until they could release an LTE device that didn’t drain the battery in 3 hours. That means the premium pricing of Apple is actually earned in design merit.

      7. Apple Stores The huge majority of US phones, including Apple’s, are sold thru carrier stores that are on every street corner. The Apple stores may be a factor for service — here in the SF Bay area, I was able to choose from 4 stores tolerably close to my work/home so had my connection problems confirmed as hardware-specific and walked out with a new phone a half-hour later. (And my software, data, etc restored from backup another hour after that.) If stores matter, they matter because they are a valuable bundled service option. BTW, the Genius who handled my phone took a very clear “let’s get this right” attitude that made working with her a delight. No charge, of course.

      8. Home court This didn’t visibly help Motorola, nor BlackBerry (which most people here associate with Wall Street and Washington, not Waterloo). I see lots of partisans for Google and Microsoft, which seemingly counts for nothing when it comes to volume sales. Meanwhile, the #1 Android brand in the US, as is true world-wide, is the one with a most Asian-sounding name — second only to Huawei.

      In all, I think your points boil down to the fact that Apple offers a premium brand. Especially in parts of Europe where 25%–50% unemployment among the target demographics, the iPhone is more out of reach, perhaps ostentatious and a risk for subway theft. In China, people might settle for a no-name while an HTC phone might be the aspirational device; in Europe it appears that Apple is trying (I have NO idea how successfully) to position as the aspirational device even as people buy Androids in large numbers.

      • handleym

        “(And my software, data, etc restored from backup another hour after that.)”

        I have to wonder how much this sort of thing really does help. Most of us are on our third or so smartphone (and even those new to the party have friends who have done a replacement or two). Apple seem to have their act far more together than anyone else in terms of more or less simply swapping in one phone for another without disrupting your life. Remember, it is a constant trope of TV comedies that people can’t figure out how to move their contacts info from their old phone to their new; so there is some sort of public awareness of the fact that transfer is an issue.

        I like to think (with no evidence!) that I’m responsible for this. One of the issues I railed about when I was still in Apple, many years ago, based on personal experience and talking to others, was that people were reluctant to buy a new Mac even when they could afford it and wanted the better specs, because the prospect of moving the entire world from one machine to another was too painful. A year or two after I went on about this, Migration Assistant appeared (and grew to a form I never even imagined, helping also import your Windows world into your Mac).
        We’re now so used to this that we just expect it is part of the Mac experience — you buy a Mac when it makes sense because it’s easy to pour your world from the old to the new. (Still not as easy as it should be, but getting better every year.)

        My suspicion is that this is actually bigger part of the issue than people realize.

      • Walt French

        If you use GMail exclusively, migration is a non-issue for contacts. But I don’t. Maybe, calendars, too? Again, I’m offline too much when I need calendars and nobody who knows the industry should be moving to rely on Google’s interoperability for anything, these days.

        Ironic, then, that it’s my web-based life that is hard to migrate off my laptop. Account names and passwords, esp. the cookies. Sure would be nice if Apple had a nice chat with Mr. Dorsey or Costolo so that the embedded browser in Twitter/iOS could share those with Safari/iOS, while we’re at it. Mr. Zuckerberg just showed us how big a deal a pervasive presence is for many people; one that is independent of whether you’re on your phone or laptop is nicer still, and one that tilts towards positioning you as the customer instead of as the product is better yet.

        Nice call on Migration Assistant.

      • JohnDoey

        I don’t think your point 7 is correct. Apple sells a ton of US iPhones through Apple Store. And even when the purchase is made at a carrier, many users decided to buy while using an iPhone at Apple Store.

        Also, anyone who has ever used Genius Bar for a Mac or iPod issue is more inclined to buy iPhone because of that. If you have a local Genius Bar, it becomes the hub of your I-T life.

        But I certainly agree that the other factors should favor other manufacturers equally. I think the fact is that there are no other high-end phones. iPhone is in a class by itself. Galaxy is mid-range, everything else is disposable — users have not shown they will even pay for anything else in enough numbers to make the devices profitable.

      • Mark Jones

        Excellent refutation for 4, 5, 6, and 8.

      • obarthelemy

        The point about subsidies and high-price contracts is that they skew the market to higher-end phones in general. Apple only have high-end phones, to that helps them more. I’m sure Samsung has a higher-end skew in the US, too.
        Even though people still buy from their carriers a lot (probably easier to get subsidies there), Apple Stores still serve as a marketing/sales relay. I’m sure lots of people go play in a AStore, then buy from their carriers. AStores a vastly more pleasant than your typical Phone House or carrier hole-on-the-wall.
        As far as aspirational goes, I’ve always been a bit surprised at how the middle-class/middle-aged still see as aspirational a brand that’s a mainstay of poor teens. That goes for Apple, Adidas, Lacoste, BMW… but I guess that’s still working.
        I’m trying to not go into the whole “features” discussion in this post, but at some point, customers who are results-oriented do realize they could do the same things on a much cheaper device, too.

  • David Olson

    “Three factors.” I’d suggest it is four factors. Number 2 on your list is two things. As Emilio Orione pointed out in his comment here, the trend in the rest of the world suggests aggressive pricing for the US –starting at $0 — may be very significant. I have asked some friends why they bought that cheap Android phone when they could have had an iPhone for the same price. Only half really wanted Android over an iPhone and about a quarter would have gone with an iPhone if they had known. (The people in the other quarter were more interested in the carrier’s promotions than which smart phone they bought.)

  • Gregg Thurman

    I think you are seeing backlash effect from those that bought Android something two to three years ago. The version of Android in those models cannot be upgraded, and as a result, are severely lacking in functionality. Further, during the past two years they have repeatedly heard how the iPhone OS (even for older models) is routinely updated at no additional costs. Add in the “feel” differences between cheap plastic cases and finely machined aluminum, and the perceived cost differential between iPhone and Android “XX” is greatly lessened.

    • Rybak

      “Backlash effect” that magically applies only to the US and works in reverse worldwide?

  • Brian Loftus

    I would add Halo effect of iPad. The uptake of iPad has been faster than iPhone. There is some percentage of buyers who were android users who got an iPad. If you like the iPad, it makes sense to switch your smart phone at your next opportunity to an iPhone.

  • SouthAustin

    The iPhone is doing better because it’s being subsidized and aesthetically it’s much nicer than the competition . I know lots of people that signed up for an iPhone 4S because they cost 1c (with 2 year contract) when the iPhone 5 came out. Once people get hip to the scam they look at it in whole new light though. I have a Nexus 4 with unlimited talk, text and voice on TMobile. A friend has an iPhone 5 with AT&T – over the 2 years of his contract he’ll be paying $1100 more than me (and it doesn’t include unlimited talk, text and voice for him). He’s counting the days to the day his contract ends and will be going unlocked after that. As my friend pointed out , getting a subsidized phone is like getting a payday loan – because you’re paying outrageous interest. What’s surprising to me is how many otherwise intelligent people who manage their money well and never carry a balance on their credit cards are willing to fork out outrageous “payday loan like:” interest to the likes of Verizon and ATT for a subsidized phone.

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

      But you are on TMobile. I have had TMobile and AT&T and Verizon and Sprint. TMobile is the bottom of the barrel if you need any coverage outside of major metro areas. AT&T is not great (Verizon is better but still not great). TMobile is simply bad.

      So you cannot relate costs in the same way.

      • SouthAustin

        Just went to AT&T’s website. A plan for an iPhone 5 with unlimited talk, text and 300Mb of data/month will run you about $2915.76 over 2 years (not including the $200 for the phone).. Unlimited talk, text and 1GB/month of data with no contract costs $65/month at AT&T which is $1560 over 2 years . So a difference of $1355.76 over 2 years. The cheapest iPhone 5 is $650 and ATT charges you $200 up front so essentially AT&T is charging you $1355.76 in interest to loan you $450 over 2 years. That’s 301% ! 10 times the rate of even the most high interest credit card.

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

        At the end of the day, what good is a phone if I can’t use it 50% of the time? For my usage and how I travel and how my mother travels, TMobile could be $10/month and it still would not be worth it. My two sisters, however, would do OK with TMobile.

        It is simply silly to compare the price on two different carriers or even the same carrier on different plans and think neither has any advantages. Compare the cost of an iPhone 5 to a GS3/GS4 on TMobile with the same plan. Compare the cost of an iPhone 5 to a GS3/GS3 on Verizon with the same plan. Compare the cost of an iPhone 5 to a GS3/GS4 on AT&T with the same plan. Comparing costs across carriers and assigning the entire cost to ONLY the phone is wrong on so many levels I don’t know where to start.

        The sad reality is, the cost difference over 2 years is negligible when only the phone changes.

        For example, on Verizon, I am paying $250/month (including taxes and fees so don’t forget to add those in on your fiction) for 4 phones, 8GB shared data, tethering on 2 phones and unlimited text/messages.
        This is actually cheaper than 4 Verizon pay as you go plans. So you look at what you need and price the different options. It is not a hard concept.

      • handleym

        We have tried to be polite to you. We have tried to explain why what you are saying is adding nothing of value to the conversation (since regardless of which carrier is “best”, that has nothing to do with Apple).

        One more time. There are MANY MANY websites devoted to the idiotic issue of why my carrier can beat up your carrier. Please take your T-Mobile jihad to one of those sites and stop wasting our time.

      • JohnDoey

        But the US carriers are equally broken for Motorola, Sony, LG, BlackBerry, Samsung, and Nokia. How is any of this a reason to choose or not choose an iPhone?

        US residents expect things to be broken because so much of what is done here is done for political reasons (i.e. non-functional private phone carriers and private medical system) and most people do not even understand that there are functional phone carriers and medical systems elsewhere. US residents are not passing on iPhone because the carriers suck.

    • handleym

      Please, you are not adding anything to the discussion with ridiculous claims about “payday loans” and outrageous interest rates.

      If people are choosing carriers that are inappropriate for them, that has nothing to do with Apple (especially with iPhone on all 4 major US carriers).

      Beyond that, you might want to be a little less insistent that the metrics by which you choose a carrier are the one true metrics which everyone else should use. I’m no fan of anecdotes and rambling posts about a particular situation, so I will just say that when I revised the decision as to how to buy my last iPhone, I considered all issues and there were very good reasons for sticking with ATT. My brother had very good reasons for sticking with T-Mobile. Both smart people, both aware of the variables, but both WITH DIFFERENT NEEDS.

      • TheEternalEmperor

        AT&T LTE is fast where I live. I have the lowest AT&T phone plan with 450 minutes, a figurative metric ton of carryover minutes from the Cingular days AND oh yeah! I’m grandfathered into unlimited data with LTE on my iPhone 5. Even if they throttle me back at the 5gb mark, that’s FAST LTE with at least 5gb for $30 a month. And that’s with AT&T’s better than Tmobile coverage.

        Who beats that? And since, my wife and I have two separate plans staggered, we are (meaning I am) eligible for a new phone EACH year at the subsidized price. I can move my wife to my old phone, pass the others down the line to my kids and sell the oldest one for a couple of bucks.

        I feel scammed.

      • jamiek88

        That’s exactly how I do it. Except I give away to extended family/friends the ‘old’ phones, which this year has been two very grateful people getting iPhone 4. Two new people to the apple eco system who have since bought iPad mini’s. My fiance is on a 4s, when the 5s comes out I’ll upgrade, give her my 5 and within minutes due to icloud we’ll both be up and running. Friction free.

      • observer1959

        So true, I have ATT and a friend has TM who lives 25 miles away. TM has no reception at my house. Guess what carrier he would use if he moved next door to me?

      • JohnDoey

        iPhone is also on many regional carriers in the US.

    • JohnDoey

      iPhone is not just asthetically nicer than other phones — iPhone does much, much more. It has a ton of Mac and iPod and iPad features in addition to what you get with a competing phone.

      If you are a musician and you buy something other than an iPhone, you lose 100,000 music production -related features. Same for video producers, photographers, writers. Same for gamers, music listeners, movie/TV buffs.

      iPhones are almost always carried in some kind of case. I don’t think aesthetics has very much to do with it. People always though that Macs sold because of aesthetics, but if you asked a Mac user why they bought a Mac it would be because it was a thousand times better at music or art or video or Web programming than competing PC’s.

      In 2007, the iPhone pitch was you got an iPod and Safari/Mail from the Mac in there. Now that has expanded to every kind of Mac app. People buy more iPhones because of App Store than because of aesthetics.

  • mieswall

    I’ve been crunching comScore data too. Sadly, it is not easy to plot exact conclusions on this, but it seems that a big part of Samsung growth is at expense of their own marketshare at non-smart devices.

    Since sept 09, the net gain of smartphone market has been 98.5m (at the expense of non-smart, with the whole market frozen at 234m). 52m of them by iphone alone (from a base of . If you add to that the net loss of Rimm and others non-samsung (a shocking -13.3m less users), the smart market growth has been 111.8m.

    Inferred from comScore data, Samsung had a total of 47.8m users in sept 09. Last common smart/non-smart data is in november 12 (total growth smart: 88.10m, Apple:34.7m), when Samsung had a total of 63m. Gains (both smart-non smart) since 2009: 15.2m (44% of Apple). But in the meantime, their smartphone growth was 25.0m. Conclusion: Almost 40% of Samsung growth on smartphones was at the expense of their own non-smart marketshare, perhaps a rate higher than the whole non-smart shrinkage.

    Since that november, the growth of Iphone has been spectacular (iphone5 effect, plus 0 cost of older models): from dec-feb, iphone net gains has been 8.9m, the whole smartphone market 10.4m, thus iphone responsible for 85% of last Q smart growth. Adding rimm market loss (-1.8m) and taking away others gains (0.4m), we have that Galaxy line should have had net gains of 2.9m. Less than a third of Apple. And maybe 40% of those 2.9 at the expense of their own older non-smarts.

    Summing up, for the whole sept09-feb13 period, Iphone have increased in 43.5m users (last 3 monthly trend: +2.95m), Samsung 18.7m (smart, non-smart, monthly: 1.15m), rimm has lost 7.8m (more than their current users, monthly:-0.59m), and others has lost 5.5m (also to half of what’s left; monthly: gaining 0.14m). Android as a whole has gained (from zero) to 68.4m (last 3 monthly trend: +1.0m). If Sammy smart/non-smart is gaining more than Android as a whole (that has reached its plateau it seems), where are they getting their users? From themselves, is my guess.

    One additional issue here is to clarify if these statistics are users of units. I found strange that the whole mobile market is flat 234m since 2009. If the measurement is done through traffic analysis, I would point out that there is a tendency of android users to have more than one phone. Not the case of iphone users. That would mean that the numbers are even more unbalanced towards Apple. A trend that would probably increase in the future, given the acceptance of iPhone/ipad in enterprise environments, that would lead to many users having more than one iphone.

    All these numbers, taking in account the higher loyalty of Apple users, should indicate that Apple has a sizeable volume of iphone sales assured for the next years, even without expanding its markets. For sure, numbers much higher than the current 6.5 P/E (less cash) that WS is valuing the company.

    • Mark Jones

      Comscore says “MobiLens data is derived from an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older. Data on mobile phone usage refers to a respondent’s primary mobile phone and does not include data related to a respondent’s secondary device.” Thus, the 234m refers to only primary mobile phones. Though I still have the question of why no change in population.

      Why do you think “that there is a tendency of android users to have more than one phone. Not the case of iphone users.”?

  • BGC

    If affordability is important to increase the sales volume, Apple might as well just provide the financing themselves – they easily got the means to do so.
    A typical phone contract runs 2 years, but the difference between iPhone or not included is more than 1/24th per month.
    It’s worth thinking why Apple is not doing it already.
    Carriers, as far as I know, have to buy large qantities of iPhones directly from Apple. I cannot imagine they would continue to do so if Apple would provide better financing conditions, therefore degrading the carrier to a mere service provider, exposing them and their business practices to ultimate commoditization and a price race to the bottom.
    Any carrier claiming to have the desire to get rid of phone subsidies is just pretending.

    • Mark Jones

      Apple already offers financing at the US Apple Store (retail or online) if you have credit that qualifies. 12-mo financing is interest free. I haven’t checked outside US. I’ve heard financing in India caused a surge in iPhone sales- not sure if financing was through Apple or distributors.

      T-Mobile just got rid of phone subsidies, and continues to offer lower prices. Of course, the network isn’t that great outside of major cities.

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

      I think the main reason Apple doesn’t push financing on iPhones in the US is that the carrier subsidies are generally still included in the plan pricing, so the user simply winds up paying more that way. The exceptions are the new T-mobile plan, and a couple of the pre-paid MVNO carriers — for them, it might make sense.

      Personally, I’m eyeing the new T-mobile plan, though I’m concerned about the quality of their coverage — I don’t live in a metro area, though they claim to have at least a couple towers in my town. It’s a moot point for about another year, when our AT&T contracts wear off. But since we both kept our first iPhones longer than two years, we were handing free money to AT&T, something I’m not happy about.

  • Robert Cerrillo

    Apple products are great. However, I still choose Android over iPhone because of the flexibility it provides. It fits my needs. The average user typically doesn’t tinker with their phones and they have a specific need or needs that are met by the apps IOS provides.

    I, however, get way better value and performance from my GSIII than I would an iPhone. Samsung makes a great product in their flagship devices and beats iPhone hands-down in innovation. That is my opinion and my take on it.

    • Mark Jones

      Agree totally on flexibility. Disagree on Samsung innovation. How has Samsung been innovative in Galaxy besides AMOLED? (Larger screen sizes started with HTC.)

      • simon

        It’s pretty interesting that many equate Android features to Samsung’s features. Quickly the name Samsung is replacing Android and that has to be worrying for Google and other OEMs.

      • obarthelemy

        It should be. I think there’s a basic miscalculation that because Apple is so successful, OEMs should try to emulate it (luxury phones, see HTC One), and a weird holdover from the winphone 4/5/6.x days that custom homescreens are a good idea.
        We’ll see if Huawei, ZTE and Acer make a mark with less fancy phones, it depdns mostly on price transparency I think.

      • simon

        Of course custom home screens are a good idea if you judge it by Samsung’s success and the lack thereof by Nexus phones.

        Acer has already failed over and over with less fancy phones. Huawei and ZTE will go with the Samsung style mainly because it allows them to lower the pricing.

        HTC has been on the higher end PDA/phone devices for a long time. It’s not because they want to emulate Apple. They had a metal unibody phone a few years back, before Apple.

      • obarthelemy

        Homescreens used to be a good idea, when default homescreens sucked: Windows Phone 4/5/6, early Android, today’s iOS (I troll, I troll ^^). Today’s Android doesn’t need custom homescreens, maybe a set of widgets and a custom lockscreen, if that. Advanced users can get any lockscreen/launcher/iconset they want off the PlayStore, non-advanced users are perfectly served by the standard ones.
        HTC used to be “technophile high end”, then they started to take away features and to focus on looks and marketing (Beats Audio, really ?), aiming at the “consumer high end”. I know the technophiles are a small market, but it is under-served, while consumer high-end is way over-served.
        I think HTC would have fared better if they had kept the HD2 design and features updated, dumped Sense, focused on updates…
        You can’t use Samsung’s success as proof that custom homescreens are a good idea, since *eveyrbody*, including today’s losers (HTC, Sony, LG…) has them. Judging by its non-availability, Nexus 4 must be a runaway success too (more probably, a mild industrial failure… it’s been sold out since launch, either way)

      • simon

        Do you have any evidence as to the regular users actually prefer the default Android launcher over skins or that the preference is significance? I think you’re just arguing out of your own preference without any evidence.

        Nexus 4 was severely underpriced compared to its equivalents. If it wasn’t successful, then it would’ve been a massive disappointment.

      • obarthelemy

        So the Nexuses have been successful finally ? You said the contrary 2 posts up ?

      • obarthelemy

        Screen size still (they really went for broke, and keep increasing it: the bigger smartphones these days are always Samsungs, except right now and until GN3, if you’re willing to go 2nd-tier), pen, going for cheap+durable+unremarkable instead of expensive+fragile+good looking. On the software side, multiple user accounts, split-screen multitaksing, picture-in-picture multitasking.

        I don’t think it’s a lot, only screen size, pen, and AMOLED are really biggies; But also, they keep getting the basics right: durability, SD card, modular battery. And above all, price.

        I keep trying to buy something else, but there’s just no equivalent. I thought I’d never use pen, find myself writing on my Notes (1 and 10.1) half the time. I keep hoping to come across a cheap Tab 7.7, or that AMOLED will be back in tablets.

      • simon

        None of that rings true.

        1) Screen size:

        – HTC first went well over the 4″ mark with the HD2, a 4.3″ phone and that was back in 2009, a year before the Galaxy S with a 4″ phone.

        – 5″+ Phone? Dell already had the Streak 5 in June 2010, more than a year before the Galaxy Note.

        The only reason Samsung seems the size king is Galaxy Note was the first major success in the phablet market after Streak’s failure and a number of Chinese cheapies. However it’s hard to call that an innovation. Not to mention LG’s Optimus Pro which has been on sale for sometime is already bigger than Samsung’s Note 2.

        2) Pen: HTC already released their Flyer Android 7″ tablet with an active stylus in May 2011, preceding any Samsung Android with an active stylus.

        Besides, most consumers do not care about the stylus. If it was that important, Note would’ve been outselling Galaxy S3 by a big margin, and the same for HTC Flyer or any other tablet with a stylus.

        3) Going for cheap+durable+unremarkable instead of expensive+fragile+good looking: So Nokia is the biggest innovator in the world here and have been for decades?

        I mean if AMOLED and the pen fits your preference, that’s fine and all, and I still don’t see any particular innovation that you have offered for Samsung’s Android phones’ success over others.

      • obarthelemy

        that’s true, but

        – HTC then just stopped. Samsung went on with sizes. The Dell Streak was flawed in many ways. I had an HD2 and was monitoring the forums, there was a massive exodus to the Note 1, the Streak barely registered. Samsung really re-ignited the screen size inflation.

        – There were pen tablets and computers even before the Flyer. Not phones though.

        – Well, Nokia did have success, before they disqualified themselves by picking Windows.

        I’m really a bit confused about what counts as innovation these days. Since Skype clones and voice recognition seems to count as innovations, I’m guessing the biggest screen, the only pen, and a distinctive design also do.

      • simon

        - HTC didn’t stop. There wasn’t a “massive” exodus to the Note 1 in the real world.

        – Pen tablets and computers were repackaged PCs running Intel processors and Windows. Flyer was a true Android device through and through, a 7″ one that ran phone apps. If Samsung’s active stylus is innovation, HTC should be commended for bringing that first to a true mobile device.

        I think you’re trying too hard to credit Samsung’s success to their “innovation”. I believe Samsung’s true secret is execution and marketing.

    • simon

      What innovation Samsung exactly brought over HTC, Motorola, LG, Sony, etc?

    • claimchowder

      I wish to congratulate you for being such a sophisticated person. However, you are missing the point of this blog, which is to analyze the success factors in mobile computing.
      You are cordially invited to join the discussion if you want to contribute anything of value.

  • JohnDoey

    Also, the US market is the most mature iPhone market (1 or more years older than anywhere else) as well as the most immature pre-iPhone smartphone market, with almost no 3G before iPhone. Many US people either go feature phone to iPhone, or feature phone to Android to iPhone.

    You just don’t hear regular people talking about “smartphones” in the US. There are “phones” and “iPhones.”

    There are also Apple Stores everywhere here in the US. I think that is a huge factor. More than half of US home PC’s are Apple-branded, and CompUSA does not even exist in California for some years now. Other similar stores are gone, too. Many US residents simply get their computers of all kinds from Apple Store. Including their handheld computers.

  • Koss Kesh

    Death to Samsung, death to Android, long live Apple!

  • randomdude

    it would be interesting to see how this smartphone growth splits between pre-paid and post-paid phones going forward, especially with the big moves from Tracfone and T-Mobile this year

  • OviP

    Wait until the iPhone 6 comes out and the iPhone 5 becomes free.:)

  • claimchowder

    Couldn’t it be (in part) a matter of increased available quantities for the US due to the current economic weakness in Europe? Or is Apple no longer production-constrained on the iPhone5?

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

      I don’t think Apple’s been production constrained on iPhone 5 since sometime in January. I’m not so sure about 4 and 4S, and Cook said they were selling better than expected, and several other bits of data seem to confirm that a lot of iPhone sales are actually the older models, this may be especially true for new users, who are the subject of the charts here. What we may be seeing is the $0 price point on VZ adding a lot of new customers, though that’s sheer speculation on my part. But the iPhone sales share at VZ has been going up a lot in the last few months, apparently. We may be seeing a lot of people coming off 2-year Android contracts and moving into the iPhone there.

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  • http://www.facebook.com/honkj Honk Jhonk

    your charts need some serious work, first of all, it looks like in one chart that Android started 2009 with 97% of the US market? hello?

    that is not the correct way to layout a chart, just because you can use solid and bright and pretty colors, doesn’t mean you should… you could easily of put line graphs using the actual data points instead of solid.. it’s like someone found a new function in their spread sheet software……

    if you did use the proper graph the effect would have been a stark contrast to what the chart you did put up implies. and have been far more accurate.

    also your facts are way off, in fact iPhone has more than 50% share in the US, not Android. you appear to be using someone’s “guess’, in reality that figure is way off, because samsung does not release it’s actual unit sales, nor any other type of sales, so they simply make up the numbers… because samsung and the others are embarrassed by the actual sales. heck Samsung doesn’t even separate out smartphone sales sometimes in some quarters….

    where we know exactly how many sales Apple has down to the unit.

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

      Luckily, we have more than line graphs to represent the world and look for patterns. Think of the second graph as a mix between a stacked area graph and a pie chart. It excels at allowing you to find pincher movements where the growth of one (or more) parameter puts competitive pressure on other parameters.

      As for the source of the data? ComScore is sampled data that presents its own issues but does not relly on guesstimates like Gartner and NDP.

    • Walt French

      Honk Jhonk wrote, “…that is not the correct way to layout[sic] a chart.”

      When you visit this site, you’ll find it much more interesting if you expect to expand your horizons. Horace goes off in his own directions, cares about topics that others haven’t noticed, and slices and dices somewhat differently than we used to do.

      (Although Steven’s reply is also correct: the chart you find confusing (which actually shows about a 3% share with the others at 97%) is in the standard chart library of Excel; apparently Numbers, too. Probably most packages for business graphics.

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  • fstein

    Thanks Horace. It’s comforting to see the actual numbers. And more so that the data shows seasonality is less of a factor – so far, for Apple. Very curious, it looks like Apple lost subscribers in May 2010. Might there be a glitch in the data?

  • clarence

    http://www.kantarworldpanel.com/Global/News/Android-Sprint-and-Samsung-Increased-Share-In-Early-2013 indicates a decidedly different recent trend than comScore mobiLens’ survey — admirably delineated – indicates. Which, in your view, is more likely to be more accurate? Why? Thank you in advance for your perspective.

    • http://jmmxtech.wordpress.com/ jmmx

      The difference is in the comparison period. Kantar compares to 1 year ago, the ComScore data compares to last quarter. In other words, it is marking a more recent trend.

      http://seekingalpha.com/article/1309501-android-is-dead-part-8-the-s4-fights-back-but

      • clarence

        Thank you. The data in the comScore chart above, I believe, indicates an increasing ios marketshare compared to 1 year ago. However, the Kantar data in the link above apparently indicate the opposite (a lower share over that same period). Any further thoughts? Thank you again, in advance.

  • KirkBurgess

    There is a 4th possibility that is possibly having a significant contribution to an increasing iOS install base: Device Longevity.

    The iPhone 4 is now well into its third year of release. Those that purchased the device in its first 9 months of release after mid-2010 have now most likely done one of two things: Either upgraded to a new iPhone, or – crucially – continue to use their iPhone 4.

    Compare this to what purchasers of Android smartphones from mid-2010 have most likely done: Either upgraded to a new Android device or have switched to a non-android platform.

    If the above is true, then its entirely possible that even if Android matches or exceeds iOS in future US unit sales, Android will still slip in the user install base surveys as its average Device Longevity and platform loyalty remains less than iOS.

  • obarthelemy

    My main issue with your 3 factors is: they also apply to a lot of other countries, where Apple is not “outperforming”.

    • listme

      A list of such countries would be helpful here.

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  • clarence

    Thank you. The data in the comScore chart above indicates an increasing
    ios marketshare compared to 1 year ago. The Kantar data, however,
    apparently indicate the opposite (a lower share over that same period).
    Any further thoughts? Thank you again, in advance.

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

      The surveys are very different. comScore measures current users (older than 13 years, primary use only and personal use only, i.e. not company-assigned devices) through a survey. Kantar measures purchases through another survey (different n). Usage and purchase are different measures. You might also want to check data from mobile network operators. Verizon just published their smartphone sales data. Benedict Evans tracks this information: http://ben-evans.com/benedictevans/2013/4/18/us-smart-sales