Linked by Thom Holwerda on Mon 10th May 2010 14:55 UTC
PDAs, Cellphones, Wireless When Apple sued HTC, and targeted Android specifically (news which came out of the blue), many people, including myself, were convinced this was Apple letting the world know they were afraid of Android's rising popularity. This notion was laughed away by many an Apple fan, but it turns out that this is most likely far closer to reality than many dare to admit: in the first quarter of 2010, Android conquered the number two market share spot from the iPhone in the US - and by a wide margin too. Update: Added a graph which better shows the trend.
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RE[2]: Did you read the article?
by kristoph on Mon 10th May 2010 15:33 UTC in reply to "RE: Did you read the article?"
kristoph
Member since:
2006-01-01

I take it your jobsian response indicates you understand the research so let's review ...

1) you understand that the iphone is available to ~35% of US subscribers while the Androis is available to 100%

2) you presumably understand that, at some point in the future - perhaps next month perhaps in 2 years - the iPhone will be available to a much large percentage of US consumers (lets say it will double)

3) you understand that a good part of Android growth is 2 for 1 pricing

4) you surelly recognize the iPhone has not been updated in 12 months while a slew of great android devices have been launched and have been heavily promoted

So from these facts you draw the conclusion that the iPhone is headed for 10% market share? And you don't think your biased at all?

Reply Parent Score: 10

Thom_Holwerda Member since:
2005-06-29

I'll just quote the relevant aspect of the article, which you clearly did not read:

Buyers can get capable Android phones on the cheap, and get a free one to boot (people prefer cheap), and they can choose from a multitude of models and carriers (people prefer choice). Given no encumbrances, a market will always strive for openness and choice - both on the consumer end, as well as the supplier end.


Your points are addressed in the article, and clearly too: people prefer cheap and choice, and the iPhone cannot deliver either. It doesn't deliver choice, since it's tied to AT&T, and there's only two models; it doesn't deliver cheap either (Android does: you can get cheap Android phones, or partake in a two-for-one scheme).

The two-for-one thing still means instead of just one, two Android phones make it onto the market - maybe for your partner, your children, a friend, whatever. You seem to think that the free phone somehow vanishes - which is nonsense.

As for the new iPhone coming out - the Android world isn't sitting still, and hasn't sat still either. The iPhone is currently playing catch-up to the top-notch Android phones (hardware-wise), so don't expect miracles there, and of course, new Android phones are coming out all the time. Apple simply cannot compete with the dozens of Android phone makers all at once.

While you want to discount things like the two-for-one scheme lack of carrier choice, it are exactly these things that are vital to Android's success!

Edited 2010-05-10 15:42 UTC

Reply Parent Score: 10

kristoph Member since:
2006-01-01

Buyers can get capable Android phones on the cheap, and get a free one to boot (people prefer cheap), and they can choose from a multitude of models and carriers (people prefer choice). Given no encumbrances, a market will always strive for openness and choice - both on the consumer end, as well as the supplier end.


Yes, well, except that if you compare Apple's to Apple's (no pun intended) then - from the article:

AT&T has 32% of smart phone market in the US. Apple has 21% of the US market, all of it from AT&T.

So 2/3 AT&T customers, who presumably have a choice and can purchase a much cheaper device, prefer the iPhone. Indeed, I am an AT&T customer, and AT&T regularly sends me offers for free or 2/1 smart phones.

My issue here is that your just offering your opinions and twisting the data to mean what you want it to mean.

Indeed, if you were to project Apple's market share based on the total market size it would only grow (dramatically), not decline. Now todays statistics are not a good indicator of future market conditions but, really, just pulling a number of the air is ridiculous.

Reply Parent Score: 2

JonathanBThompson Member since:
2006-05-26

You seem to think that 2 sold phones equals more phones used, when a large number of cases will be with Android phones being exactly like underwear: some people wear one, while they have others available for use, but not in use at any given time, while some don't wear any at all (don't borrow their pants!). It isn't the phone itself that costs a lot: it's the service plans, which is where the real money comes in. Now, if all those 2-for-1 deals require that you activate both phones and pay for the service, then, yes, there are twice as many phones sold to a customer at a time: otherwise, unless those phones are activated and used, the other phone is like spare underwear: available when you crap your first pair. Granted, it's not a perfect analogy, but analogies rarely are perfect. Until those phones are actually in use, those phones don't really count for much except for perhaps a longer time period after the initial phone purchase (where they get two) to buy the next one, unless they really dislike the phone they got, and think getting a later model of the same Android-based phone will solve that problem, even if the old one isn't "broken" otherwise.

Reply Parent Score: 2

David Member since:
1997-10-01

I think you can certainly accuse Thom of being incorrect that the market forces described in the article will push Apple's marketshare down, and it would even be fair to accuse him of being foolish to think that. (I also disagree with Thom in his analysis).

But jumping to the conclusion that his incorrectness is a result of bias really only makes you look biased.

Reply Parent Score: 1

kristoph Member since:
2006-01-01

Thom what do you think? Do you think your biased?

I can accept that this is just poor reporting but I actually think that Thom is a smart guy who has a specific 'agenda' (and let's be honest, who doesn't) and he is twisting this research report to fit that agenda, making no attempt to maintain balance.

An unbiased author would have looked at this and pointed out both the growth of the Android in the broader US market but also the dominance of the iPhone OS among AT&T customers and then offered an opinion - this is a blog after all - on what the mix might look like when Apple, Microsoft and Google are all available across all providers and what might be the driving purchasing influences.

(If it were me I would also reference more mature markets - like Japan or Germany say - and use that as a guide on what might happen in the US).

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Reply Parent Score: -1

hazydave Member since:
2010-05-11

This one was premature, sure... there was lots of Android momentum going into 1Q2010, and nothing particular pushing the iPhone. Then again, the iPhone was and is still far more established than the Android platform. Macs don't outsell Windows PCs even in a bad quarter for Windows (or a bad era, such as the Vista years).

The simple fact is that, just as on the desktop, it's being set up as Apple vs. nearly everyone else. It's foolish to believe that everyone else will not collectively outsell Apple on a regular basis at some point. I wasn't expecting it to start until 2011, nor become a regular thing until 2012.

Also, the 10% number is unlikely... the iPhone will probably stabilize at 25% of the smart phone market. Apple will never even try to replace the Blackberry (their insistence on selling only via iTunes is enterprise hostile... businesses don't buy their apps that way, and they won't bend for Apple), nor will they try to match the variety of Android models that will exist, just as they only offer a handful of different Mac models at any given time.

Even the simple fact that, currently, more than half of all smart phone users want a real keyboard, at least as an option, will drive people away from the iPhone. Apple's not going to cut prices enough for iPhones to be "free with contract", but that's completely possible with entry-level Android phones.

Simply put, there is no possible way that Apple will remain as strong as they are. Yes, multiple carriers would certainly help. To double their availability, they need to get Verizon and/or both Sprint and T-Mobile. Either Sprint or Verizon requires their building a CDMA2000 version... we'll see.

When the new iPhone ships in June or July, Apple will absolutely be back on top, though because of that, I'll bet 2Q2010 is even worse for them in phones, not to mention the distraction of the iPad. But the new iPhone sales will be nearly all upgrades by existing iPhone users. A large majority of the Android phones are being sold to users who did not use smartphones previously. If Android fails to deliver, Apple could get a nice bump in two years, and the whole Android thing falls apart. But if the users are happy with it, the Android market will see the same virtuous circle effect that Apple has... existing users upgrade, those on the fence get pulled in by friends and coworkers, etc.

I know from personal experience that there were quite a few of my iPhone-toting buddies drooling just a little over my Droid. The Droid is better than the 3GS in nearly every way, yet at this point, six months later, it's no longer a leading edge Android device in terms of performance and cool features. There's a bigger, better Android device every month or two. This is a problem for Apple, who do this only once a year.

Also, while I've been predicting Android wins eventually, I was looking at the global market. Android phones are just starting up on China Mobile, for example... they have more customers than there are people in the USA. They have the Lenovo OPhone now, and one of Dell's new models Real Soon Now; others are being actively sought by China Mobile (they use a proprietary Chinese 3G technology over GSM, so you have to develop your phone for China).

Reply Parent Score: 1

tomcat Member since:
2006-01-06

1) you understand that the iphone is available to ~35% of US subscribers while the Androis is available to 100%


Part of the reason why Apple slipped to #3.

2) you presumably understand that, at some point in the future - perhaps next month perhaps in 2 years - the iPhone will be available to a much large percentage of US consumers (lets say it will double)


That speculation is not based in reality. There's no evidence that Apple is planning on expanding the set of carriers for the iPhone.

3) you understand that a good part of Android growth is 2 for 1 pricing


Something which Apple will never do. Which means that the iPhone may, in fact, slip to 10% or less of the market over time. Because it doesn't want to compete on volume. Which was the original poster's comment.

4) you surelly recognize the iPhone has not been updated in 12 months while a slew of great android devices have been launched and have been heavily promoted


Android is being rev'd at a faster rate than iPhone. If you're counting on the new iPhone to take significant market share, it would need to be an order of magnitude better. Which it won't be. Hence, incremental technological improvements aren't going to help.

So from these facts you draw the conclusion that the iPhone is headed for 10% market share? And you don't think your biased at all?


I agree with his analysis. Apple tends to squander leads in technology because it values high margins more than market share. The iPhone was revolutionary. It combined top quality hardware and software in a well-integrated package. But Android and many other competitors have those same capabilities now, and any improvements that are being made are incremental, not revolutionary. Furthermore, Apple's attempts to charge a toll for every single piece of media that we consume is going to fail.

(I have and use an iPhone every day. My next phone will be either Windows Phone 7 or Android.)

Reply Parent Score: 2