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When will the migration from PCs be complete?

IBM Digital Analytics Benchmark (report is here) has published, for the fourth year in a row, US online shopping traffic data with a split between mobile and fixed online traffic. It reveals a pattern of consumer behavior which is quite startling: people seem to prefer to shop using mobile devices.

The data is shown below:

Screen Shot 2013-12-02 at 12-2-6.45.34 AM

In terms of sources of traffic, mobile devices (including tablets) have increased from about 5% of all online traffic to 40% in four years. Last year the volume was 24% implying that 16 points of share were gained in one year. If that is extrapolated to next year then more than half of holiday shopping traffic in 2014 will be on mobile devices.

Put another way, next year less than half of users will hire a PC for the job of online shopping.

If this conversion from PC-based shopping to device-based shopping follows a logistic substitution curve then the conversion to devices will probably be 90% complete in another 5 years or by 2018 or 2019. I see no reason why this particular job to be done (shopping) should not be considered a proxy for other jobs as well. Therefore it’s not a stretch to imagine that the transition to post-PC consumption will also be practically completed by 2020.

Within the data there is also a significant amount of detail beyond the mobile/non-mobile split in behavior. There is a distinction drawn between tablet and phone traffic and a further distinction between Android and iOS devices.[1]

This more detailed view of the traffic is shown in the following diagram:

Screen Shot 2013-12-02 at 12-2-7.00.20 AM

A few observations:

  • The pattern of slowing tablet growth is likely due to the slowing growth in iPad sales. This itself is due to the lull in product launches as the shift to fall only iPad releases took place in 2012.
  • The consequence is that iPad traffic contribution only increased by 2 percentage points, from 10% in 2012 to 12% in 2013. Compare this with the doubling the previous year (from 5% to 10%).
  • Among phone users, both Android and iOS grew their contributions to traffic by roughly 100%. Android phone traffic increased from 4.2% of all traffic to 8.5% and iPhone traffic increased from 8.7% to 16.7%.

As we also know the approximate number of phone users for each platform (via comScore) then we can also determine the per user contribution of traffic of each platform.[2]

The measure is “basis points of traffic per million users” and it is the result of taking the traffic data (in percent of total online traffic) and dividing by the population of users of a particular platform. The result is shown below:

Screen Shot 2013-12-02 at 12-2-3.05.53 PM

The way to read it would be that each million iPhone users generated about 28 basis points of traffic while each million Android users generated about 11 basis points of traffic.

A way to compare these audiences would be to define the ratio between traffic usage by platform user. That ratio was

  • 1.83 (iOS:Android) in 2010
  • 2.16 in 2011
  • 3.15 in 2012
  • 2.51 in 2013

So, as far as phones are concerned, US iPhone users are about 2.5 times more likely to shop online than US Android phone users. The data is reliable: with the US population now over 65% penetrated with smartphones, these populations of users (totaling over 130 million) are vast and representative. As the technology is reaching deep into the late adopter segments the difference in behavior between iOS and Android usage is becoming easier to explain. We have to eliminate quirks of demographics or income or other possible causes.

The platforms themselves are becoming the last remaining suspects as causes for differences in the behavior of their users.

It may seem preposterous to suggest that a platform can affect shopping behavior but let’s remember that the PC, the subject of this article, is a platform in itself. The migration of usage away from the PC to alternatives can only be explained by the alternatives being superior at the particular job that needs doing. The argument is naturally extendable to each alternative individually.

Notes:
  1. The split between Android and iOS for tablets and phones was not published for 2013 but I extrapolated from previous years and assumed that 80% of tablet traffic was sourced from iPads vs 88% in 2012 and 99% in 2011. Note also that non-iPad traffic is assumed to be Android but that includes the Kindle and Nook products which are using partial and unsanctioned versions of Google’s Android. []
  2. Note that this is phones only. []
  • Chris

    what is the equivalent basis point for PC users ?

  • EW Parris

    The best shopping device is the one you have with you.

    • iObserver

      Unless you have an android phone and an iPad, then it’s the iPad.

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

      Unless you find too unpleasant to use it and wait for when you can use your pc. Internet shopping is not compulsive.

      • FalKirk

        “Unless you … wait for when you can use your pc.” – Emilio Orione

        It appears that a lot of online shopping is being done in the stores. This can only be done with a mobile device.

        Further, it appears that when people have a choice between a phone, a tablet and a PC, they choose the tablet for online shopping.

      • dicklacara

        @FalKirk said: “It appears that a lot of online shopping is being done in the stores. This can only be done with a mobile device.”

        Do you have any link for this?

        Do you think the shoppers are “show rooming” in the store, then ordering on-line from a competitor — for price, tax savings and/or convenience?

        By holiday season 2014 there, likely, will be many stores (including Apple Stores) who deploy iBeacons and streamlined “in-store” shopping (product selection, loyalty/discount offerings, checkout). One wonders if this will change the dynamic of both in-store and on-line shopping and purchasing.

      • FalKirk

        “Do you have any link for this?” – dicklacara

        No. Speculation on my part based on anecdotal evidence.

      • Tatil_S

        > “Do you have any link for this?”

        Last year when Best Buy expanded its in-store price match program to include Amazon, the executives were pointing to “show rooming” as the reason why they had to do it if they wanted to actually make the sale to the customer. I don’t remember them offering actual numbers and I don’t know whether they actually had reliable numbers for how many customers were actually quickly checking the price of items that they test drove in the store, but it makes sense it is a relatively widespread phenomenon. Besides, it is not that much of a revenue loss, as the customers who don’t check prices on their smartphones do not ask for and get the additional discount, so it could be a good way of gauging the price sensitivity of each customer.

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

        “t appears that when people have a choice between a phone, a tablet and a PC, they choose the tablet for online shopping”
        Yes they choose what to use not use what they have with them, my point was that these numbers means people are choosing mobile and not PCs because if they would prefer PCs they could wait for a PC to become available.

      • FalKirk

        Right. People seem to prefer mobile over PCs even when PCs are available. Huge shift in computing.

      • charly

        If the IBM data is correct that ipad has 4x more sales than iphone than the in store shopping, which i assume is not done with people carrying an ipad but with an iphone, is not that big a part.

      • charly

        Sorry, should be Adobe’s data

      • marcoselmalo

        I imagine a lot of “mobile online shopping” is being done in spare moments when the shopper is on the go.

        I started and finished the majority of my Xmas shopping today, some while I was out and about. Thank you, Amazon! Three out of the seven gifts were already in my queue, but not my cart, from previous browsing, which made it easier.

        I’d really like to see behavioral data on mobile online shopping.

      • Walt French

        This IBM data popped up the same day that Adobe published actual purchases by platform. Those data suggested that Android and iOS were VERY SIMILAR in their per-user purchases, once you account for the vastly greater shopping (purchases) on larger screens.

        A phone might be a great way to check whether Best Buy added new specials in the last half hour, while you’re out with friends or maybe in a brick&mortar store, but purchases, what with the fussy entry of credit card info, etc., much more wants to be done sitting down. So Adobe’s data showed 4X the purchases made on the iPad vis-a-vis the iPhone, while we know many more iPhones are in use.

        The Adobe data seems very sensible: for browsing, the iOS and Android platforms are about as good, and their clienteles are equally likely to look up info online. At least as measured by purchases, “engagement” appears the same per user.

        The Adobe data seems equally credible as the IBM data, and Adobe’s benefits from a very easy explanation (mobile is nice, but purchases really want a larger screen). I have some possible explanations for how to reconcile to the very different IBM data that Horace is reviewing here, but no data to cite as support of them.

      • EW Parris

        Actually I think Internet shopping probably often is compulsive… though I’d agree it’s not compulsory.

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

        Shopping is often compulsive, internet shopping requires more action and more time, you have to search and choose between alternatives, there is more thinking.
        It can be compulsive too, but I think this factor is more attenuated in internet shopping than traditional shopping.

  • Sam Penrose

    “As the technology is reaching deep into the late adopter segments the difference in behavior between iOS and Android usage is becoming easier to explain. We have to eliminate quirks of demographics or income or other possible causes.”

    I think you overstate this hypothesis. America is a bimodal society: a wealthy minority with abundant disposable income and a strained majority with flat or declining disposable income. The former has proportionately more iOS devices, and does proportionately more shopping (and I suspect proportionately more of its shopping online). Some basic numbers on income and spending would provide valuable context here.

    • iObserver

      I like where you’re going Sam. However, you understate Apple’s target demographic. It’s not the wealthy minority, it’s America’s wealthy majority that Apple targets. Anyone in America who can afford a data plan can afford an iPhone, especially with carrier subsidies. The cell phone contract is by far the biggest expense when getting a smartphone.

      • Sam Penrose

        Thanks to both of you for the thoughtful replies. My assertion, which I expressed poorly, is that Horace would do well to gather general data about retail spending by income segment. For the specific point “We can assume that without mobile devices the shopping would have been carried out by PCs”, I am not willing to grant that assertion without evidence. People might have gone to the mall or used catalogs and voice ordering. Regarding “the cell phone contract is by far the biggest expense when getting a smartphone”, there is very strong evidence that consumers (foolishly IMO) give great weight to the $0/$100/$200 up-front device charge.

      • iObserver

        I think you’re right on the money. Consumer purchasing habits are shifting to online sales while not nearby their PC (for example, while out shopping) that wouldn’t be possible without an iPhone or iPad or their counterparts.

        Regarding the cost, I agree that the price tag thing affects many people’s behavior. I think though we often forget that Apple does not pay incentives for salespeople to sell its wares as is common in the cell phone industry. And additionally, carriers incentivize their salespeople to push android because they need to pay a smaller subsidy and therefore pocket a bigger profit. (what doesn’t happen, as many people falsely assume, is the carrier passing on the savings to the customer.)

      • marcoselmalo

        Don’t forget that manufacturers also pay bonuses directly to retail employees for selling their phones, in addition to any commission they might earn from their employers.

      • obarthelemy

        Indeed. Look what happened to T-mobile’s iPhone sales with the “uncarrier” (no more subsidies) programme:

        (source: http://www.tech-thoughts.net/2013/12/apple-samsung-profit-trap-mechanics.html#.Up0Yp0BKF-E)

      • simon

        Wrong cause and effect. The iPhone was released after the “uncarrier” programme came in effect, which was the end of Q1 2013. The more plausible explanation would be the combination of the bottled up iPhone demand in Q2 and the lack of iPhone 5s availability in Q3.

        For your reference here is T-Mobile’s Q2 report. http://newsroom.t-mobile.com/phoenix.zhtml?c=251624&p=irol-newsarticle&ID=1845964

      • obarthelemy

        Impacting only T-mobile ?

      • simon

        Yes for whatever reason, it seems T-Mobile wasn’t able to get a lot of first shipment allotment compared to AT&T and Verizon for the iPhone 5s.

        “uncarrier” was already in place when the iPhones arrived in T-Mobile and thus it couldn’t have produced the trend. If your claim was correct, the iPhones would have sold very little even in Q2. I even gave you a link to the statement from T-Mobile to read.

        When the evidence doesn’t fit your theory, maybe it’s time to examine your theory instead of rejecting the evidence.

      • Sacto_Joe

        Assuming that the numbers shown in obarthelemy’s chart reflect the sum total of iPhone growth on T-Mobile, they would signal that T-Mobile’s policy was an unmitigated disaster.

      • simon

        Sacto_Joe

        As I’ve explained to obarthelemy, there was no change in policy by T-Mobile. In other words the change was caused by other factors, not the change in the subsidy model because there was no such change.

        The iPhones arrived in the network only after T-Mobile implemented the new strategy so whatever change we saw between the Q2 and the Q3 wasn’t because of the “uncarrier” initiative, which is what obarthelemy had erroneously claimed.

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

      The number of purchases with mobile devices are 40% of total online shopping. We can assume that without mobile devices the shopping would have been carried out by PCs.
      Mobile devices have a 65% penetration in USA, how can you assume that the shifting from pc shopping to mobile shopping happened disproportionately?
      Let’s assume that the 65% penetration means, as it does, that both part of the bimodal society shifted to mobile devices to PCs proportionally, why should only the wealthy use mobile devices for shopping and not the strained?
      If we assume that a person that switched from a pc to a phone for shopping did that not for his wealthy conditions but for the convenience of the new device in doing shopping, than the wealthiness is not a factor in discriminating platforms, only the convenience in shopping with that platform is.
      Furthermore phones are more pervasive than PCs so the strained should have more possibilities of doing online shopping with mobile phones than PCs, but they didn’t in your vision.
      More than 50% of us customers use iPhones, I don’t believe the majority of these users is in the wealthy class.

    • Walt French

      I’ve long posted about income and demographics as drivers of purchasing decisions, and don’t understand why this “bimodal” concern (that I share) should be an overstatement.

      I’m pretty sure there’s at least another dimension or two to consider after we slice people up by age and income. Willingness to try new things; interest in tech as a learning area or hobby; who knows what else.

      It’s just that Horace has a strong commitment to data and we only get it sliced so many ways.

  • http://nmuppala.wordpress.com Nalini Kumar Muppala

    Can someone shed some light on how IBM collects this data? (tools, methodology, etc.,)

  • dicklacara

    How does “access to credit”, e.g. having a credit card, relate to the online purchasing by platform, if at all?

  • http://aaplmodel.blogspot.com/ Daniel Tello

    Last chart vertical axis number format is inconsistent with title and description. It’s not .28 but 28 basis points.

  • obarthelemy

    “We have to eliminate quirks of demographics or income or other possible causes. The platforms themselves are becoming the last remaining suspects as causes for differences in the behavior of their users.”

    Why ? Penetration of cars for example is also very high, yet owner of BMWs have very different economic, demographic, and behavioral profiles than owners of Toyotas. Higher penetration does not mean there are no sub-population segments within the equipped population.

    My explanation for the figures is that buyers of Apple products have more spending money (correlated with the fact that Apple products are 25-75% more expensive than functionally equivalent Android products), and a higher propensity to spend it (correlated with the fact that brand awareness is significantly higher for Apple buyers than for Android buyers), than buyers of Android devices. That’s a very nice “buyership” to have, but it’s in no way a reflection on the technical platform.

    • JimGramze

      iPhone users tend to be richer and better educated. I have an iPhone, iMac, and iPad. Maybe I’m odd, but I tend to make purchases from my desktop — particularly larger purchases. Apps I buy on the device I intend to use them on.

      I do agree that the demographics are skewed and serve to suit an agenda. Comparing “flagship” devices would be better since, arguably, Apple only sells flagships. But that is still one sterile and isolated slice.

      My best guess on what the grand situation is, is that most people are coming to the realization that they don’t really have any real use for a desktop or laptop computer and that a smartphone and/or tablet more than suits them. That option is relatively new and the $2,000 “deck of cards” for playing solitaire is rapidly becoming a thing of the past. Without the need for a good DAW (Logic Pro X) and the wealth of content on usenet, I would have little use for a proper computer myself.

      • charly

        Are you single? Especially large purchases need consent from the other unit and PC aren’t really shareable. So my guess is that for the researched purchases the research is done on the PC with its million tabs and the final approval and purchase is done on the tablet

        ps $2000 deck of cards? It is almost easier to find a $200 windows PC than a $2000 one even if it is one sold by Apple

      • JimGramze

        I’m married and a retired GM factory rat, age 56.

        I’ve never experienced my “PC” needing to verify anything I purchase on a mobile device. Is that a thing? The Apple ecosystem is pretty solid and secure. But, yes, I thoroughly research something before spending a lot of money and that is best done with multiple windows open, let alone tabs.

        I remember someone buying a new computer in order to have Windows XP so they could play the new Spider Solitaire (whenever XP was new). She paid about 2K for that computer, ignoring my insistence that there were freeware versions of the game that would work on her Windows 98 system. Buying a new computer seems to be the way a lot of people upgrade to the next major operating system.

        Lots of people only do the simplest things with their computer: solitaire, e-mail, surfing. I came to refer to people’s computer as their $2,000 deck of cards. Most computers are much cheaper these days.

      • obarthelemy

        What Charly meant is that when you’re married your spouse is usually informed/consulted/co-decider on not-insignificant purchases, and that’s better done over a tablet.

        “the other unit” is human ^^

      • JimGramze

        I completely missed that about the other “unit”. We are pretty good at budgeting money both for the household and for ourselves. When we bought a car 2.5 years ago we paid cash and immediately started making “payments” to a savings account for the next car. When I bought my Mac Pro 4.5 years ago I paid cash and immediately starting saving money toward my next computer which I recently bought — we each get an identical allowance for things the other person can’t bitch about unless it is illegal or physically harmful. We do discuss our separate decisions about big ticket personal items like a computer but ultimately we each get what we want with no veto power from the other person. No debt, stay ahead of the game, wait until the money is stashed for a specific purpose and then strike when the time is right. Simple.

    • handleym

      “That’s a very nice “buyership” to have, but it’s in no way a reflection on the technical platform.”

      If your concern is with the moral worth of the platforms then, yes, it’s of no interest.
      If your concern is with selling (SW or HW) to users of the platform, it is of intense interest.
      If your concern is with the future of technology and technology business models, it is of interest because more free money in this segment means more money available for innovation.

      Horace’s blog is (he is quite explicit about this) concerned with the latter two issues, not the former.

      • obarthelemy

        My concern is that saying people with an iPhone buy more because of an intrinsic quality of the iPhone is like saying that people with a Vuiton bag buy more because of an intrinsic quality of the bag. I’m sure both owners do spend more. But would replacing a random person’s bag (or phone) with a Vuiton (or iPhone), suffice to turn them into big spenders for as long as they’ve got the specific bag/phone ?

        I think much more probable that people with an ability and willingness to spend to start with get those 2 items, and also spend more generally.

        the phone/bag is not a cause, it’s a consequence. Again, correlation != causation.

      • Kizedek

        You may think that others are conflating causes and consequences. But, again, you are simply overlooking the basic facts.

        You seem to be thinking about “shopping” too abstractly: as though it’s simply about a person, his desire to buy something, how much money he has, whether he can afford it, and whether people who can afford more things, shop more. Your conclusion is: “naturally, people who have an iPhone shop more and buy more things.”

        However, many people of all sorts, shop al lot. And increasingly online. You can do your weekly shopping at Tescos supermarket online, and that is hardly the province of the rich and carefree.

        People will shop online. That’s a given. How they shop online is very much down to their tools. If the iPad makes it easier and more convenient, by golly, they’ll use it. Apparently, it does. Otherwise, people stick to their PC over their Android device.

        So, yes, it is down to some “intrinsic quality” — not that it has “quality”, which it does — but it is down to a quality: such as usability.

        People would very much “shop more with bags if bags were as comfortable and convenient as shopping trolleys. If that was the trend in shopping, because of mobility and security (bag hanging close to you on your shoulder), then their must be bags that provide a distinct advantage over trolleys.

        If Louis Vitton bags provided the advantage and were the only bags that were comfortable to carry any real weight in, and they didn’t fall apart at the seams when a bag of apples was placed in them, then you can bet that people will use them — and not just because they are fashion statements in some way.

        If it turns out that Louis Vitton bags account for 80% of “mobile shopping” (ie shopping with a bag and not a trolley), then you can indeed come to the conclusion that it is some innate quality of the Louis Vitton bag that makes the difference in “mobile shopping with a bag”.

      • obarthelemy

        So, you’re essentially arguing that people with Vuiton bags don’t spend more than people with no-brand bags, because there’s no functional difference between a Vuiton bag and a no-brand one ?

        But we know that to be false ?

      • Kizedek

        Umm, no, and here’s why. You brought up Louis Vuitton, and you clearly had an agenda in doing so. So, your reply to me is just begging the question. You always, clearly, want to empahsize the luxury, premium aspect of iOS devices. You always essentially argue that there is no possible reason you can imagine anyone getting an iPhone other than that.

        But we know that to be false.

        So, in order to make your analogy between iOS devices and Louis Vuitton bags useful, we need to extend their use into similar, and similarly pervasive, contexts.

        Did you read my post? It’s about “mobile shopping” (the subject of the article, after all). In the world of bags, it would be “shopping with bags vs shopping with something more substantial than a bag”.

        In order to make the world of the Louis Vuitton bag anything like the world of the iOS device (your fault, remember?), I sure used a lot of Ifthen we could conclude that something about Louis Vuitton bags drove the trend toward shopping with a bag.

        Discussions are only useful if you can listen to the other side. I listened to your, “My concern is that saying people with an iPhone buy more because of an intrinsic quality of the iPhone is like saying that people with a Vuiton bag buy more because of an intrinsic quality of the bag.”

        My concern is that you think people are saying that, when they aren’t. The article didn’t say that. My concern is that you only hear what you want to hear: iOS devices are luxury items, therefore they can be of no practical use; or people who buy them don’t buy them primarily for their practical use. That’s a real stretch, as well as a failure of logic.

        The clear and plain facts are that people who are similar in every way to other people, except that they have an iOS device are doing more shopping with their iOS device than others who are also shopping, but not using their mobile device to shop.

        You want to make it all about characterizing the people who have iOS devices, incidentally, as shoppers in any real sense of the term. Totally unwarranted, and only understandable if your agenda is to diminish the role of iOS devices in shopping.

      • obarthelemy

        “The clear facts are that people who are similar in every way to other people, except that they have an iOS device” … How do you know that ? Because 50/50 US share means every market segment is split exactly 50/50 iOS/Android ?

        That’s simply false: http://www.getelastic.com/android-vs-ios-demographics-and-mobile-commerce-activity/. iOS users are, compared with Android, more female, more white, more “not-tweens” (25+), higher income, higher education…

      • Kizedek

        Then that confirms that Android is the default OS on any manner of device and is merely today’s defacto “standard”.

        I would not presume to comment on relative education, as I find people all over the world to be more highly educated than myself, or than those who should be, or are deemed to be “educated”, given what they have spent on their educations.

        If education and jobs to be done — rather than some kind of sense of entitlement (or perhaps either listening to Apple’s RDF or Samsung’s 14B in advertising) — has anything to do with the stats right now, then I guess we can be comforted that education tends to catch up eventually. The truth will out, somehow.

        Apparently all these shoppers who were so worried about how they looked as they did sooo much more shopping than everyone else, could have done so much more shopping if only they had been smart enough to use an Android in the first place — because an Android, any Android, as everyone knows is the smart choice, being as how it can do more, and more easily, and they could have spent the extra they spent on the iPhone. Why make it tough on yourself, right?

        If education is really important, and if there really is a “learning curve” to do with the things we purchase over our lifetimes and what they can do for us and at what cost, then Apple is doomed. And I totally see things your way: There is no net churn toward iOS, and Android has “earned” its place in the world rather than being the world’s free de facto mobile created by a company who trades in personal identities.

        I totally love your message, too: Education = money = poor judgement. At least, I guess it would if more of those same people also owned Louis Vuitton bags and used them everyday as, well, bags — bags for their gym gear, their school books, their bowling balls, their boodschappen, their comic books…

        So, to come back full swing to your analogy, and speaking of correlation, I guess I just don’t see the correlation between the educated / Louis Vuitton / iOS users, unless you are talking about finishing school.

      • obarthelemy

        You seem to be trying to open a whole philosophical / value system debate for what is merely a technical question: is it valid to say that the differing spending level of iOS vs Android users are due to iOS and Android themselves, rather than due to the users ?

        Horace asserts that the users of both are the same, so the extra spending *is* due to iOS itself. My link above says the users are markedly different in a number of ways, which means no conclusion can be drawn as to which way causality goes (if any) until we can control for other variables (age, sex, revenue, education, race, etc, etc) because those are different for iOS vs Android.

      • Kizedek

        Well, I was trying to limit the philosophical value system debate, though that may well come into it.

        However, I think you are being a little disingenuous here, because you often want to make the decision to purchase an iPhone something of a value-based or fanatical decision, and not one that is merely “reasonable”, thought-out, intelligent, or the like. Your bringing Louis Vuitton into it (and you often make such comparisons) only re-inforced my skepticism as to your motivation or agenda.

        OK, let’s take it that you were asking “merely a technical question”.

        I obviously lean toward Horace’s feeling that “the users of both are the same, so the extra spending *is* due to iOS itself”.

        I don’t think “shopping online” per se, or “shopping online with a mobile device” per se, is particularly limited by education or income or gender. Though a lot of specific spending habits would be. Basically, I think people are people.

        To recognize a trend (say, towards less desktop and more mobile use, more and new jobs to be done, more online shopping via mobile device, etc.), but to deny the thing that is at the heart of the trend has anything to do with the trend? To say that it is just incidental, well that seems a little weird.

        It’s really a confluence of things, and a confluence is what you see with the iPhone/iOS devices. Sure, there were phones before the iPhone. Sure, people bought stuff online before the iPad, etc. But Horace is good at identifying disruptions and trends and presenting them.

        I’d like to choose an analogy myself. One that has nothing to do with the luxury or exclusivity we think of when we hear “Louis Vuitton”. I hope this is merely a technical question (but I can understand philosophical or value-based judgements could leak into it, particularly for those who are vegetarians, or French):

        Do you think that more hamburgers have been sold in the world because McDonald’s exists, or not? Yes, or no? We could certainly posit that some people never eat hamburger’s, no matter what (certainly not from fast food chains), for philosophical reasons or otherwise; we could observe that a McDonald’s franchise is not available around the corner from every person in the world. We could assume that people who want a hamburger could do what people have always done: make their own at home or go to a restaurant other than McDonald’s.

        But, it is pretty clear the simple answer is that billions more hamburgers have been sold as a result of the existence of millions of McDonald’s franchises; and that it is not the case that McDonald’s, which just happens to make the purchase and consumption of hamburgers exceedingly easy, just happens to exist alongside an increase in the consumption of hamburgers to billions, without any correlation whatsoever!

      • obarthelemy

        But the question is not whether more Apple stores sell more Apple stuff, but whether when you change someone’s TV for (insert high-end brand here), they start buying more on QVC.

      • Kizedek

        I know analogies can be tough. I guess I should connect the dots. Yeah, OK, Apple Stores-McDonald’s Franchises: I can see how you could arrive there. But try digging a little deeper and thinking about things a little more…

        “Fast food chains” are mobile devices (as opposed to restaurants, which are desktops or laptops).

        The “millions” of McDonald’s Franchises are iOS Devices.

        Their marketshare and profit share can be fairly compared to any other chain on the planet, say Burger King. Or, McDonald’s can be somewhat unfairly compared to every other fast food chain on the planet put together — whether the main thing of all those others is hamburgers or not (if they even sell hamburgers), or whether or not you can sit down in the establishment, rather than leaning on the counter.

        (Incidentally, the reason in this scenario that comparisons between McDonald’s and every other fast food chain put together are made, is because all the others happen to use the same cash register and inventory system, while McDonald’s rolls its own).

        “Hamburgers” are online sales/transactions/page hits — whatever you want to measure.

        Not only does McDonald’s sell more hamburgers than any other 1 or 5 fast food chains, but more hamburgers are sold than ever due to the presence of McDonald’s.

        More sales/transactions/page hits are occurring using mobile devices because the presence of iOS devices on the market has changed the “eating habits” of the general public.

        It’s not a zero sum scenario. Horace is quite adept at identifying where value has been added, even if that goes against the common “wisdom”. People still eat three meals a day (or whatever they would have) — that’s the customers are customers aspect).

        …But they go “out” more (or at all) because McDonald’s has changed the eating habits of the world by creating a business in which it is quite easy to cater to billions of people and offer them the convenience of going out simply and conveniently with obvious cost-benefit value, with consistent and user-friendly expectations (which “feeds” into brand value and recognition).

      • Space Gorilla

        *slow claps* I applaud your patience dealing with the dense noggin that is obarthelemy. Good analogy. Sadly, obart just won’t get it.

      • Shawn Dehkhodaei

        Congratulations … you completely missed the analogy. And I’m sure on purpose. Whenever reason comes within a 100 yard radius of obarthelemy, he runs away :-)

        ” ….. What? Hamburgers, McDonald’s …. Hmmm, how can I twist this to fit my twisted logic and hidden agenda? ….. “

      • Shawn Dehkhodaei

        And what does this have to do with the discussion of shopping on iOS or Android devices. When was there any mention of a 50/50 split?

      • Shawn Dehkhodaei

        I don’t know HOW you ascertained that from Kizedek’s response, but your thought process is a thing to be examined by the medical community.

      • JohnDoey

        If using a bag analogy, the correct one is to say I carried more groceries home in my large, durable, name-brand North Face backpack than my friend carried home in the flimsy little backpack he bought for $10 at a bargain store. The flimsy backpack simply can’t hold as much. And it is ugly and hard to use so he leaves it at home a lot, while I have my North Face bag with me everywhere. End result: my North Face has brought home 2 years of groceries and changed my shopping habits and my friend’s $10 bag is in his closet and he is carrying home a small paper bag of groceries.

      • JohnDoey

        No, that is not true. An iPhone is significantly faster, more reliable, more secure, and much easier to use than any Android device. Each one of those points removes friction for the user. It leads to significantly more usage than Android devices. If I use my iPad 5x as much as my brother uses his Android tablet, then yes, I will outspend and outshop him.

      • obarthelemy

        Do you have any data to support those wild claims ?

    • sharrestom

      Arguably, iOS is a better “technical” platform in that it works optimally with its ecosystem; so much so that people of means prefer it. In fact, one could argue that as a “technical” platform, it is the most conservative choice with lowest risk.

      For families, it is quite common to “push” older iOS and OSX products down to the youngest, and in many cases, it is the teen/college age child that gets the newest iOS and OSX products; parents consider Apple products lowest risk for students in that there is ready support available with prepaid Apple care; often nearby.

      You have shown yourself beholden to tech specs when you should be looking at the lifecycle cost of an ecosystem including risk as value to a hardware purchase.

      • obarthelemy

        Being better technically can mean a lot of things. To me for example, it includes working well *outside* of its ecosystem, rather than working well within it, because going all-Apple is a very expensive and limiting proposition. Also, I really appreciate having widgets, replacing defaults apps (including launcher, keyboard, browser…), split-screen and PIP windowing…

        Ditto for “conservative choice with the lowest risk”: I think being locked into a single-provider ecosystem is very risky (see the issues with the new iOffice, the cost of upgrading to Lightining…), as I find having luxury devices as the only choice (some tablets around me are broken or stolen, it feels less bad when it’s $150 devices). Even for simple resale, the $$ loss (and often even the % loss) is lower with Android phones. And, last but not least, most (all Samsung, all rooted, most of the others) Android devices allow me to “remote” into them when asked to,which greatly helps me job as benevolent nerd.

        There’s not one tech spec in all that. Pens are nice, though ^^

      • JohnDoey

        Making a technical comparison of the virus-free native C/C++ iOS platform and the virus-laden, zero privacy baby Java applet platform of Android is absurd. Just making the comparison already shows a lack of technical knowledge.

        Even where you would think Android would shine — say, running HTML5 Web apps — it does not compare well to iOS.

  • Tatil_S

    >”The pattern of slowing tablet growth is likely due to the slowing growth in iPad sales. This itself is due to the lull in product launches as the shift to fall only iPad releases took place in 2012.”

    I don’t see how the changing launch schedule can be fingered as the primary cause of the slowing iPad sales growth. I can see people who were planning to buy iPads in 2013 may now want to wait for another six months for a launch that now takes place in the Fall, but some of that lot could just as easily make their purchases six months early during the holiday season of 2012, as a new launch just took place at that time. If the sales for this quarter is unusually high, that may support the supposed link between the launch schedule and slowing growth. As the sales of CQ4-2012 sales did not show an unusual jump due the new launch, I find that unlikely.

    Besides, last year’s iPad Mini launch should be bringing more people to the platform due to its lower price point and light weight and make up for the difference.

    • Sacto_Joe

      Actually, iPad unit sales did increase in fy “13, by something like 22% over fy ’12. And yes, that was primarily due to the Mini. However, sales don’t happen in a vaccum. There were competing full-sized tablets drawing users all through fy 2013, and so relatively speaking Apple left a lot of money on the table in order to move the release date of the full-sized iPad.

      • Tatil_S

        I did not say sales did not grow, but the growth rate slowed down quite a bit. A lot of analysts, bloggers here included, were expecting iPad sales growth rates to resemble the iPhone, with larger y-o-y jumps for a few more years.

        In any case, my whole point is about the unsupported assertion that the new release date is the cause of the slowing growth. You are just repeating the same assertion without much evidence to back that up. Spring to Spring comparison may not make sense as the year ago quarter had a new launch, but over the course of a full year (CQ4 2012 to CQ3 2013) Apple had the exact same number of full size tablet launches as it did the year before. The slowing volume growth despite iPad Mini getting added to the mix cannot be explained away by the new release schedule.

      • Space Gorilla

        In case you’re interested, here’s some iPad numbers and such.

        iPad sales by fiscal year:
        2010: 7.5 million
        2011: 32 million
        2012: 58 million
        2013: 71 million

        iPad fiscal Q1 sales
        2011: 7.33 million
        2012: 15.43 million
        2013: 22.9 million

        It took the iPhone five years to break 20 million in Q1 sales. The iPad did that in three years. And it took the iPhone five years to break 70 million annual sales. The iPad did that in four years. I wouldn’t count the iPad out just yet, it’s doing pretty well :)

      • Tatil_S

        In absolute terms it is doing fabulous. It only pales, slightly, in comparison to iPhone. :) Year 5 to 6 sales growth of iPhone was still 73%. iPad sales growth from year 3 to 4 is “just” 22%.

      • Space Gorilla

        Apples and oranges though, I’m not sure it’s terribly useful to compare iPhone and iPad, they’re doing different jobs.

      • Tatil_S

        Sure. It is not a useful metric to define the success of a product, but as a rough estimate for the future profit growth of the company. It changes the earning estimates quite a bit when sales go from mind boggling growth to incredible to very good within just 3 years. Then, the question is whether this is just the nature of the product category at that price segment (inevitable) or whether the growth was limited by some missing attribute or feature that can be improved upon for the next year’s model. The two common nags (non-retina screen for Mini and full size one is too heavy once you try the Mini) have been fixed this year. Will they boost growth by making them good enough for many more customers or will they merely sustain the existing trends?

      • Space Gorilla

        Seems obvious that unit sales of both the iPhone and iPad will continue to grow annually. There’s no evidence to suggest otherwise.

        I don’t worry too much about specific quarter comparisons, especially given the cyclical nature of both products now. I might compare Q1, but beyond that it feels too granular to be useful. Kind of like looking at your mutual fund too often.

        If memory serves Horace projected Apple’s 2014 unit sales to be roughly the same as the entire PC industry. It’s possible I’ve remembered his comment incorrectly, but it was something along those lines. Big, that was the main point.

        At some point Apple has to slow down, I would expect that as they approach a billion users in the next four-ish years. They’re already at or over half a billion users. Incredible stuff.

      • JohnDoey

        If you are dumb enough to think an iPad PC is going to outsell an iPhone phone when the phone market is 5x the PC market at least, then by all means draw conclusions from iPad versus iPhone sales.

        All you need to know about iPad sales is they outsell all of HP and always have.

      • Space Gorilla

        Hmm, I just noticed you picked different years to compare iPhone and iPad growth. If we use fiscal 2012 to fiscal 2013, both are in the 20-ish percent growth range (unless my quick math is off). Project that rate of growth out and Apple will be selling roughly half a billion iOS devices per year, four years from now.

      • charly

        and 8 billion in 20 years but i seriously doubt they can keep 20% up for 20 years (or 2 to be honest)

      • Tatil_S

        I was trying to show that over its product lifetime, iPad growth is plateauing earlier.

      • Space Gorilla

        The iPad actually ramped up much faster than the iPhone, so it would seem obvious that it should come to the end of incredible growth sooner and ‘settle down’ sooner.

        We’ll know more at the end of fiscal 2014. Fiscal Q1 2014 might give us a hint, but there also might be a lot of pent up demand, I wouldn’t assume because Q1 is huge that it signals a return to incredible growth.

        It feels like iOS devices are settling down growth-wise. I guess we’ll see. But ‘settling down’ is not doom, far from it. Apple is steadily marching towards one billion users, they’re already at or past half a billion. It’s mind boggling really.

      • charly

        Apple has three strong markets, US, Japan and Canada. Problem is that the total population there is half a billion and i don’t see the rest of the world being so Apple minded

      • JohnDoey

        That is what we here in California used to say about Apple. We didn’t see them selling much outside of California, which was their one strong market.

      • charly

        So the question is can they export that success? I personally doubt that as the rest of the world is much more distanced for the US than the rest of the US is from California

      • sharrestom

        2013 has been an anomaly for iPad sales; too many people waiting for the Retina iPad Mini version. I would expect Apple to get back on track to a near doubling iPad sales per year. I don’t see why 110M for FY2014 is out of the question.

        An iPad Pro would add to this; how much would depend on how Apple markets the use case, but it certainly wouldn’t improve the PC market downtrend.

      • Space Gorilla

        I also expect 2014 to be stronger. Really we’re just debating how good Apple will do. In no reality is Apple doing poorly or in any trouble. It boggles my mind the trolls that come out of the woodwork proclaiming Apple doom. I guess trolls can’t do math :)

        I hope the iPad Pro rumors are true, it makes sense, there’s so much I could do with a larger screen iPad, 13 inch would be ideal. Long term I want to tilt my 27 inch iMac down like a drafting table and use touch on it.

      • sharrestom

        The 13 inch iPad Pro would be a very interesting device. There’s a use case “parked” as both an additional screen and a touch interface for Mac Book Pro’s.

        Somewhere in the mix, Apple would have to have either a TB2 to Lightning adaptor (Lightning would have to have been designed to grow to that bandwidth) or a mini DP on the iPad Pro.

        Great rumor bait.

      • charly

        Apple’s share of the tablet market is dropping and it is not dropping slowly so yes they are doing badly. Other issue is that the premium tablet are going pen and with that wintel has the big advantage.

        Apple is in a tough spot in the tablet market. The cheap tablets are getting good enough and wintel owns the really expensive market and that one is dropping in price and become good enough, especially with pen

      • JohnDoey

        No that is wrong.

        Apple’s share of the tablet PC market is over 90%. Sane as the Mac’s share of high-end PC’s.

        Lumping tablet PC’s with tablet media players is as uninformative as lumping high-end PC’s ($999 and up) with low-end PC’s ($300–$500).) It is done to confuse consumers into thinking a $100 video player is the same as an iPad or a $300 notebook is as good as a Mac.

        In the real world, markets are defined by how much an item costs and what jobs it does, not by the inclusion of “tablet” in their names. Apple is literally making more than 50% of the profit in all of its markets. Not just with iPad, iPhone, iPod, and Mac but also with Final Cut and iTunes and App Store and other products.

        The negative story on Apple is they put their hardware designer in charge of their software quality fell off a cliff. But there is no economic bad news yet.

        I can prove this. If Apple were actually being hurt by Android tablets, Apple could just stretch an iPod touch into a 7-inch video player. They don’t do that because they don’t have to.

      • charly

        High end PC market is gaming, specialist and Mac. Mac is a large share of that but it isn’t 90% which is obvious if you look at the number of $500 video cards sold

        Making a profit matters somewhat but profit share doesn’t matter at all and is absolutely not a sign of longterm health

        You are comparing the bottom end with apple stuff, which is clearly high end in price. But you are not comparing it with the middle end and if you do that Apple stuff isn’t that much better, especially considering price

      • JohnDoey

        Before WWDC 2013, I would have agreed with you. But I am totally disinterested in everything Apple has done since, and I used to be the most loyal Apple user, and have used nothing but Apple computers for 20 years. I know Apple has no legitimate competition, but if they did, I would go. As it is now, I’m already moving away from Apple mail and apps and not buying anything more from iTunes. Over the years, I turned a lot of people onto Apple, and I caught hell from every one after they installed iOS 7.

        All of this feels very negative to me in exactly the same way my PowerBook G4 with Mac OS X and original iPod and iPhone felt positive. I wasn’t surprised when people wholesale bought into Apple after those products in the same way that I wouldn’t be surprised to see people wholesale run from Apple after seeing the 2013 products — especially the software, which will be bad for years to come.

        Right now I’m waiting on iTunes support to translate the Nerdtastic error message that iTunes Match gave me yesterday. iTunes Match — not Xcode or Final Cut. iTunes Match has error messages that are inscrutable to me and I’m an audio engineer who can write code in 6 languages.

        The trends right now at Apple are opposite to the 2000′s trends that got them where they are. How can that not affect sales at some point? I know I was planking to buy 2 new iPads in 2013 but passed on both. Also had a Mac planned and put that off as well because my Mac is an iPad accessory since 2013.

      • Space Gorilla

        Everyone I know really digs iOS 7 and has no problems with it. But I can see how the change could upset some people. I’m not worried about Apple. Maybe that’s because I started using Apple gear in 1984 with the very first Mac, this kind of hand wringing comes and goes, it’s nothing new. Apple has been ‘going in the wrong direction’ since back in the 80s.

        BTW, Mac OS X was no different, it was widely criticized and people pissed and moaned about the look of it. Reminds me a lot of what’s happening with iOS 7. The original iPod was also criticized and viewed as a failure. It’s only in hindsight now that many people look back and say those things were positive. At the time a lot of people thought Apple was making a huge mistake.

      • http://www.tumblr.com/blog/his-divine-shadow His Shadow

        I’ve been following you for a while John and I agree with you almost 100% of the time. But you need to let this iOS 7 thing go. The adoption rate alone indicates that consumers have moved on, and iOS 7 has allowed developers more freedom than ever to put their stamp on their iOS apps. The clutter and chrome of iOS 6 had to go. The mobile OS GUI paradigm was shifting. Apple could either ride round buttons until their GUI really was a cluttered anachronistic kludge that detractors were claiming, or they could break out with a brash new direction and reinvigorate the GUI. There were elements of iOS that didn’t get implemented or even rise to a level of good until years after the first version, and the OS itself is less than 7 years old.

      • JohnDoey

        iPad is not a big iPhone — it is a small Mac. So it sells in the PC market and follows PC growth rates. No surprise at all if you know technology.

      • Tatil_S

        You are just repeating the same assertion that the new release schedule is somehow making the competition look artificially and temporarily better, without any evidence. Spring to Spring comparison naturally will not look flattering due to the new launch in the year ago period, but over the course of a full year (CQ4 2012 to CQ3 2013) Apple has released the same number of full size tablets as it did during the prior 12 month period. 22% is a substantial slow down compared to iPhone during the same year of its lifetime, considering iPad Mini is also added to the mix.

      • Sacto_Joe

        1. “…over the course of a full year (CQ4 2012 to CQ3 2013) Apple has released the same number of full size tablets as it did during the prior 12 month period.” To my knowledge, Apple doesn’t break out the number of full size vs Mini tablets. Not sure where you’re getting your information from.

        2. “22% is a substantial slow down compared to iPhone…” Why are you comparing tablets and smartphones?

        3. The lack of a full-sized iPad release in fy ’13 Q2 (unlike in previous years) obviously impacted comparative sales of full sized tablets. Why are you finding that so hard to understand?

      • Tatil_S

        1) I was not clear, sorry: iPad 4 is one full size tablet launch during CQ4 2012 to CQ3 2013 (or FY2013). iPad 3 is one full size tablet launch during CQ4 2011 to CQ 2013 (FY2012). Each 12 month period has experienced one launch, so if the growth rate seems slow, it is more likely due to the product itself that the launch schedule.

        2) What should I compare it to? Dune buggies?

        3) See item 1. Spring quarter may be misleading, but full year sales is enough to make a fair comparison.

      • JohnDoey

        There is a ton of evidence that Apple’s annual release schedules make their competition sometimes look artificially better.

        Sony Walkman MP3 player was tge best-selling MP3 player in the world during August only, year after year. Why? iPods launched in September every year.

    • JohnDoey

      If the next-gen product is 6 months late, just that 6 months will see a slowing of sales. Maybe 2 years from now it is balanced out, but during that 6 months with no new product, sakes will slow compared to last year’s new product launch in those same months.

  • Jamie

    Traffic is only part of the consideration. The bigger question is the effectiveness and efficiency of these different means for shopping. I would like to see the correlations to how much was being spent and where the money was going. That provides a better picture into a company’s digital strategy.

    • handleym

      I’d agree with this in the sense that I wonder how much of this shopping was non-representative; specifically it was communal — everyone commenting and making suggestions as someone drives the iPad, while a TV plays in the background. A Thanksgiving “tradition”, but not representative of the far more common case of “I need to buy a good gun for shooting down drones; let’s head over to Amazon and do some research” which I am guessing is still usually done on a PC will likely continue to be.

      As always, I’m intensely skeptical of claims that mobile devices will supplant PCs rather than merely augment them by being better for certain tasks (and not others). Even radio, for god’s sake, a medium I have zero interest in, appears to have a place in a world of TV, audiobooks, and podcasts…

      • pk_de_cville

        FWIW. I’d use my iPad to search for the best anti-drone gun to buy. It would depend on which one I was working on at the time of the search, PC or iPad.

      • Sacto_Joe

        I really hope you folks are joking. A bullet fired into the air has to land somewhere. Innocent people have been killed by spent shot, not to mention the effect of a ten pound object full of combustible fuel.

      • pk_de_cville

        Never owned or shot a gun. Just theoretical.

      • sharrestom

        I’m guessing that UPS and FedEx already have drone gunships on the drawing board. Get a good stabilized binocular and popcorn.
        /snark/.

        These Amazon drones will fall out of the sky on occasion or otherwise crash. See helicopters.

        Bezos wants to be Elon Musk in the worst way.
        /not snark/

      • JohnDoey

        He’s quite correct. You have to kill drones on the ground at their base obviously. No special gun is needed.

      • JohnDoey

        Why wouldn’t communal shopping also work on an Android tablet with a TV running in the background? I don’t see why you think that scenario artificially favors iPad.

    • JohnDoey

      That is part of this study also. The iPad shoppers also spent more money. I think the average iPad purchase was around $125 and the average Android purchase was $80 — something like that.

      As far as efficiency — iPads are more than twice as fast as Android tablets and have many easy native shopping apps with iBeacon integration so they react differently when used in the store itself and other shopping features. I don’t think anybody would argue that Android will help you shop easier or faster.

      • charly

        At least there is an Android app for it unlike ios which will come next year or so (we are obviously speaking about non-american markets) so i do think people will (correctly) argue that android makes shopping easier

  • pk_de_cville

    Hi Horace,

    My two cents. Although you’re a great researcher and analyst, I think you consistently overlook something that you and others have already pointed out:

    There are two distinct segments in phones and tablets:

    1 – Premium or “Fully Capable” phones and tablets

    2 – Cheap Fakes or Somewhat Capable phones and tablets

    Do you think you’d write a different article if you could get or estimate your data for and within easy of these segments.

    My WAG is the shopping power of segment 1 will be remarkably high (80 vs 20%) and since Apple almost owns segment 1, we might conclude that Apple’s devices are powerful selling machines because they’re all fully capable as are a much smaller percentage of Android devices.

    • Sacto_Joe

      Good point, only I’d say 10% AREN’T in segment 1….

      Oops. I meant segment 2. Which is what you said….

    • charly

      There is a third segment. The (young)kids tablet which is big on Android but i doubt they shop much. One can claim that they belong to segment 2 but
      with the speed that chips etc. become cheaper and the real advantage pen have for kid’s tablets i would say that they form a different segment.

      ps. Pen is the an easy definer for “premium” on Android

      • JohnDoey

        An iPad pen costs $8–$15 and iPads have real apps to exploit the pen.

        One thing I hate is the idea that crap is fine for kids. Kids have MORE needs than adults, not less Kids need real touch PC’s, not video players that run a few phone games.

        Adults have 1 or 2 fields of interest. Kids have to try everything to discover what their interests and talents are.

        One really bad feature of the tech industry is all the counterfeit products. It is sad to think of a parent buying a $100 tablet every year for their kid instead of a $300 iPad every 3 years, simply because computer nerds take advantage of the consumer’s lack of technical understanding — their inability to understand that an iPad and Android tablet look the same but do not perform the same functions. (The Android device performs a 10% subset of iPad functions.)

      • charly

        You see the development of tablet brands dedicated for kids with their whole appstore etc. If they want to stay successful they can’t keep selling crap so they wont.

        ps. $100 still buys you crap but $150 are nice tablets so i assume parents buy the $150 instead of the overprice $300 ipad

    • charly

      If i remember correctly the no-name tablets where around10% of the tablet market so a fifth of Android. I don’t know if you consider the the nexus 7 segment 1 or 2 but i doubt that “segment 1″ Android is 10%. I think it is much higher.

    • Shawn Dehkhodaei

      Well, that would be skewing the stats in favour of Android …. if we use double standards, in that we handicap 90% of the Android installed base, because it’s not “fully capable” and yet count that 90% towards its marketshare, then I don’t think that’s fair.

      You cannot argue that Android has a 52% market share in the US, and yet, if we want conclusive and detailed data, we should ignore 47% of that installed base, for serious things like online commerce, web usage, engagement, etc. …. well in that case, I guess Android really only has 5.2% of the smartphone market !!!! Meaning that the other 47% “non fully capable” devices cannot be counted towards the smartphone marketshare.

      The reality is that when you bundle up these numbers (as the Android community routinely dos), then the downside is the article above …. when it comes to the REAL test of usability/engagement/spending money, then all of a sudden the marketshare argument goes away, and we’re told that we should compare apples to apples.

      By most accounts, every usage stat has shown that a very large majority of Android marketshare (you suggest 90%) is basically one that can be ignored. Specifically, they’re limited devices or “feature phones” wrapped as Android, and only counted to boost the numbers for Android. They don’t generate any mind share or commerce or strength for the platform.

      So to answer your question, NO, Horace is NOT overlooking anything … he’s simply being consistent in counting engagement RELATIVE to “advertised marketshare”, hence the basis points.

      • pk_de_cville

        Shawn,

        Perhaps I’ve weakened the idea by that 10% number, maybe it’s 20% or 30%. Yet, I still think there’s an Apples to apples view here that makes a difference.

        In other markets we compare premium brands to premium brands. BMW vs Mercedes vs Lexus. We do this even though premium cars are much more similar to non-premium cars than premiums vs non-premiums in the smartphone market.

        Look at iOS vs Android tablets and smartphones. How many Androids under $200 aren’t web browsing capable or are extremely jerky? Almost all, it’s conjectured are only free multimedia viewing machines with poor battery life, extreme UI jerkiness, or inoperable browser functions.

        So, the conundrum is are we being wise by treating this like a race with 100 participants where 40 are in wheel chairs, 20 have sprained ankles, and 15 are disoriented? The 15 healthy contestants are ready at the starting line. The race is about to begin. Although this may be politically incorrect, but why are the disabled 85 even allowed to race? Why would CBS Sports report on how they’re looking? Seems preposterous.

        Analysts keep counting and reporting on the growing number of limping contestants. Doesn’t this always lead to “Apple’s Doomed”?

        I think there’s a place for this //broad// reporting; sometimes it’s useful. But, I’d be interested in focusing now and then on the race between the ‘healthy’ contestants.

        This ‘healthy’ race view is almost non existent today. Reporting on the 100 is legitimate in some ways, but I’m astounded that it’s the view that informs almost all of our daily headlines.

      • obarthelemy

        I think the lower end is more important than the high end.

        First, it’s not as limited as it’s being said here. A well-chosen $150 tablet can satisfactorily run everything you throw at it. Satisfactorily, not delighfully, but many people aren’t really looking for delight in those very ephemeral gizmos, all made in sweatshops anyway. This ain’t no watch to pass on to the grandkids, or handbag that’ll become vintage at some point. Of course some people want the social value of a premium tablet, but most people are happy with anything that gets the job done.

        Second, cheap tablets are the ones opening new markets for content (content = apps and media), even if no one’s tapping that market for now. Everyone around me with a $300+ tablet also has a laptop and a desktop (and TVs, and console if boys below 25, and DVD or BR, etc, etc); expensive tablets do increase usage and consumption, and at the margin create new uses, but they don’t create from scratch a whole new market the way cheap tablets going into poor homes that didn’t have a TV/computer/VCR/gaming console per person before do.

        Last, I’m not sure the ecosystem is that important. I’m sure it is very important, but only for a small portion of power users. Most people around me use 20-ish apps, from a dispiritingly unsurprising list. Web, mail, Skype/IM, handful of games, handful of apps for favorite websites, and book/music/video. And that’s across the price spectrum, actually, buyers of well-known brands seem often to buy the brand as a insurance against their own incompetence.

        As for the app revenue generated by Android, I’m endlessly amazed by the breadth and deepness of stuff I can get for free. I don’t think it’ll last though, at some point devs need to make money, and punters will tire of ads and freemium. Needs strong brands, maybe more than 15min testing period, and certainly for-pay updates.

      • charly

        I just recently bought a tablet and during shopping i was surprised how good the $130 tablet were so i don’t think you even have to choose well to get a good $150 tablet.

        One of the cheap tablet markets is the one targeted at (young) kids. One could claim that those tablets are taking over the Nintendo handheld market.

        Ecosystem is important for those market in which users use apps other than the 20. I can only think of two big ones: Kids and workplace. Workplace is complicated with even room besides the big three (wintel, ios and Android) but kids is a market divided between the Nintendo and Android

        Problem with free stuff is that they stay free. If you looked at the app market in the 90′s at “app-stores” like tucows than the clear message was that for windows most apps categories (as in smalll application) were dominated by freeware and that was less true for a smaller competitor. This is also the reason Apple actively discourages gnu type software.

      • charly

        Cars are very public unlike tablet so luxury and image is a very important distinction. Tablet are much more something to use at home so image is less important.

        Above $150 and all the tablets are good enough. Your assumptions that they aren’t is based on the past. Problem for Apple is that this will be true for tablet that cost $75 next year (or the year after that) and competing with that is hard while the pc makers are opening a whole new front with their $300 winTEL tablets which are arguable more serious devices than ios

        Real tablets have a pen. No ios device has a pen so there are no SERIOUS ios tablets.

        ps. I can also make ludicrous claims. Brand name Android tablets have a much higher market share than 10 or even 30%. Also the archtype of tablets is the lenovo ideatab yoga and it started out on Android

      • pk_de_cville

        OK. Thanks for the discussion.

      • equanimous

        Is charly charbax? I thought there could only be one, but perhaps there are really two of them!

      • mark

        > ps. I can also make ludicrous claims.

        I can see that.

      • JohnDoey

        No, tablets are used on buses, trains, planes, and other public places. But I don’t think that is the main issue. Mobile devices travel with you and can be used in many contexts throughout an entire day. A bad tablet will fail you 50 times a week. People but a $100 tablet and it goes in a drawer based solely on letting the user down. What other people think of the tablet doesn’t come into it.

        Also, you can’t program a tablet on a tablet, so if there is no app for that, the tablet simply does not do that thing. That is a huge failing of every tablet other than iPad. So users are driven to iPads by actual necessity, not by The Shiny. iPad is not a $100 tablet with bling, it is a $300 Mac with mobility features.

      • charly

        Microsoft will come out with an easy programming language on win8 so i wouldn’t say that that is true in the future.

        The same is true of the real linux tablets (mostly intel tablets)

        On android you can program, is it advisable is something else

        IOS, simple answer NO

    • pk_de_cville

      Horace,

      This is TechOpinions’ Ben Brajarin’s take on the two segment idea. He’s comparing low cost sub premium tablets to the PCs formerly known as NetBooks.

      It might be a good idea to distinguish the category of low cost tablets as “NetTablets” going forward!

      Ben Barjarin: http://techpinions.com/low-cost-tablets-are-the-netbooks-of-the-tablet-category/25438?utm_source=feedly

    • JohnDoey

      The cheap tablets are essentially next-generation DVD players (taking the opposite approach to Blu-Ray and ditching the disc for low-quality convenience like an iPod.) But they are still replacing PC’s because some users only use their PC for Netflix and Facebook.

      So you have people going from Netflix and Facebook on a PC to Netflix and Facebook on a $150 tablet, another group of people going from MS Office on a PC to iWork on iPad, and another group of people going from coding tools on PC to coding tools on Mac. Their are many tiers of PC replacement.

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

      I am aware of the possible segmentation you refer to. I am not aware of specific data that can be published to reflect differences in behavior. Guesses are not something I offer free on this site. Guesses are however available for purchase.

      • pk_de_cville

        OK.

  • twilightmoon

    Where are you pulling the data for this, and is it possible to see how online sales compares to overall retail sales in the US?

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

      See the first sentence in the first paragraph.

  • JohnDoey

    The fact that this continues to surprise some people is incredible. Most people hate PC’s and always have. As soon as there is an alternative, you lose those users in a steady stream. Graphic artists and other creative users have used Macs instead of PC’s for many years, and now we see the mainstream consumer moving to iPads and iPhones for basically the same reasons: ease of use, reliability, better experience, lower cost of ownership, less downtime, no viruses.

    But I don’t think it is all good news for Apple. I think another reason iPad sales have slowed recently is iOS 7 is truly awful on iPad. I think it is horrible on iPhone also, don’t get me wrong, but on iPad it is ridiculous. I spent an hour at an Apple Store trying to find some enthusiasm for iPad Air or iPad mini with Retina Display and I just couldn’t do it and stayed with my old iPad and older iOS. The new hardware is really great, but so is some stuff from Sony or Lenovo or Toshiba that I also don’t use exause it also ships with embarrassing and unusable software.

    • Space Gorilla

      What is it that you don’t like about iOS 7? Must be something specific that bugs you. My kids especially dig it. Sure there’s some UI stuff that needs to be honed, but that’ll come. We’ve got iOS 7 running on six iPad 2s, runs great. I like how fresh and crisp it feels.

      Also, the “slowdown” in iPad sales happened before iOS 7, if you believe it was really a slowdown rather than simply a shift in buying patterns. If you’re right about iOS 7 on the iPad then we will have to see poor sales for fiscal Q1 2014. So we’ll know soon enough.

  • aditya55

    I want to ask a question about ” iPhone users are 2.5 times more likely to shop online than android phone users” . Why do you think this is? In terms of features I don’t see much difference to be honest. Of course user experience might be argued as better in iPhone but I don’t see logical reason why that alone will result in this difference. Can you pls elaborate on that?

    • charly

      Richer, more likely to spend money and more female. Also a small part of Android uses have low resolution screens that don’t invite to shopping and the average Android user is a less experienced smart phone user.

      ps. iPhones have smaller screens so i doubt that the shopping experience is better on IOS.

      • aditya55

        Would love seeing demographic data on this.