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.
When Apple sued HTC, I argued they did it out of fear – if you can’t beat them, sue them. It’s easy to liken the smartphone market to the PC world, a market in which people made a very clear choice, and continue to make that same choice to this very day: people want choice, and people want cheap. Apple is afraid that people in the smartphone market will make the same choices, and as a consequence, sued HTC.
As it turns out, Apple’s fear is spot-on. In the first quarter of 2010, Android phones outsold the iPhone in the US by a huge margin. Android smartphones accounted for 28% of the market, while the iPhone takes up 21%. The market leader is still Research In Motion’s BlackBerry, which held a 36% market share figure during the first quarter of 2010.
“As in the past, carrier distribution and promotion have played a crucial role in determining smartphone market share,” said Ross Rubin, executive director of industry analysis for NPD, “In order to compete with the iPhone, Verizon Wireless has expanded its buy-one-get-one offer beyond RIM devices to now include all of their smartphones.”
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.
“Recent previews of BlackBerry 6, the recently announced acquisition of Palm by HP, and the pending release of Windows Phone 7 demonstrates the industry’s willingness to make investments to address consumer demand for smartphones and other mobile devices,” Rubin added, “Carriers continue to offer attractive pricing for devices, but will need to present other data-plan options to attract more customers in the future.”
Sure, Apple will most likely still make far more money per sold iPhone device than competitors will per Android phone, but the trend is clear: as much as I love my iPhone, it will be relegated to a ~10% market share figure within a few quarters. Apple didn’t launch the iPad just because it wanted to – it launched it because it needs to. They see the writing on the wall.