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iPhone Can Still Beat Android in Smartphone Market Share
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This is Sammy the Walrus IV (from SAI - if you even know what that is). I sometimes post on this forum, but not on a regular basis.
Along with posting on SAI, I also post on AAPL Orchard - topics include Apple (and Facebook).
I’m thinking that my most recent post: “iPhone Can Still Beat Android in Smartphone Market Share” is a bit controversial and wanted to get some feedback from all of you - some of the more learned individuals on all things Apple.
If you don’t want to link to the site, my basic premise is:
On smartphone battlefields where iPhone hasn?t yet arrived, Android is winning the battle.
Here are the reasons why I think iOS can still beat Android in terms of smartphone unit market share:
1) iPhone (4 and 3GS) is already outselling Android (dozens of models) in markets where both iPhone and Android are competing face-to-face on the same carrier.
2) Verizon. Android has received a ton of attention and mind share due to its strong hold on Verizon?s 90 million customers. While a few million Verizon subscribers have jumped ship over the past three years to buy iPhone on AT&T, the majority haven?t due to high carrier switching costs, including termination fees, sticky family plans, and differing coverage areas. (Same applies to China Mobile).
3) Interesting Android developments in recent weeks have actually supported my thinking that iOS isn?t in as bad shape as some may say. Re: Andy Rubin’s comments about Asia and South Korea and the success of the Galaxy Tab.if you agree, great; if you disagree, even better. I am posting this because I want to hear the arguments against my thesis. thanks.
[ Edited: 20 December 2010 08:24 PM by DawnTreader ]Signature
aka Sammy the Walrus IV
AAPL Orchard -
This is Sammy the Walrus IV (from SAI - if you even know what that is). I sometimes post on this forum, but not on a regular basis.
Along with posting on SAI, I also post on AAPL Orchard - topics include Apple (and Facebook).
I’m thinking that my most recent post: “iPhone Can Still Beat Android in Smartphone Market Share” is a bit controversial and wanted to get some feedback from all of you - some of the more learned individuals on all things Apple.
If you don’t want to link to the site, my basic premise is:
On smartphone battlefields where iPhone hasn?t yet arrived, Android is winning the battle.
if you agree, great; if you disagree, even better. I am posting this because I want to hear the arguments against my thesis. thanks.
Before you talk about smartphone battlefields, you need to answer how platforms compete for share of non-smartphones because in a market growing at 90% a year, rivalry between platforms is practically meaningless.
To put it bluntly, there are 4.6 billion mobile phones in use in the world. That number will be growing to 5 billion fairly soon. I am convinced that they will all be smartphones soon (and I’ll be publishing an article defending this opinion soon).
If we agree, then for iOS to “beat Android” you have to explain how much share “others” will have. Then you have to take the remainder and suggest how Apple will obtain at least half.
So here are some numbers:
Assuming Android and iOS together get at least half of the addressable market, that puts the minimum market penetration for iOS at half of half of 5 billion or 1.25 billion.
Assuming Android and iOS together get 80% of all phones, then iOS needs to get to 40% of 5 billion or 2 billion.
1.25 to 2 billion users are good bounding numbers to frame the discussion. To calibrate, consider that Verizon has 90 million total subs.
Either way, if iOS loses and gets to either 1 or 1.5 billion users respectively, I won’t be looking for a bridge to jump off.If you are going to argue that the addressable market for iOS is not the world’s mobile population then I’m afraid the argument is lost already because that is precisely Android’s addressable market.
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Read more at: Asymco Blog
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Asymco. I’d be interested to hear who of the handset vendors you think will be left standing when the market matures. I don’t really care about the so called Android threat mainly due to fragmentation. It would be more appropriate to call Android Kellogg’s in some regards. Frosted Flakes and Rice Krispies both sell by the bucket loads but don’t have much in common.
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I don’t mind being wrong…,I just hate being wrong so FAST!
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thanks for the comment asymco.
I don’t see all phones being “smartphones” anytime soon, therefore I am not too focused on if iOS or android can get 51% of the phone market. I care about smartphone (i.e. the high-end of the market). Along those lines, even if android wants to “dumb down” its OS to meet the low-end, I think they will still be labeled as smartphones.
I think most of the world is still unable to pay extra fees per month for internet and other access via a smartphone (in the U.S. at least, most spend $25-$30 a month for iPhone use and I don’t a sudden change where everyone can now afford these fees. Ouch. Can this situation change? maybe the carriers bringing down the cost? sure… and that is why looking out 5+ years is really difficult.
But thank you for pointing out the large scope of the mobile industry. I will keep it in mind going forward.
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aka Sammy the Walrus IV
AAPL Orchard -
There will be a market for throwaway phones. (By comparison, there hasn’t been a market for throwaway TV’s.) That said, all the fun stuff is happening with smart phones.
Smart phone owners will move to providers with the affordable price and reasonable features instead of consumers being locked into providers. An uncooperative provider will face the feedback of consumers, or the consumers will walk away. The large majority of low end phones will be better than the ordinary phone in my pocket. So, the average feature set of phones is being dragged up by iPhone leadership.
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The Andriod OS will find its way down the cost curve much faster then Apple will take iOS, because any device manufacture can choose android at near zero cost. The definition of the smartphone will morph probably inline with moore’s law. The A8 ARM processor will be outdated in 2011 on the cutting edge, but we all know you can create a very capable device (iPad, iPhone 4) with the current technology. We are looking at A9 dual core in 2011, A9 at 32/28NM in 2012 and A15 at 28NM in 2013. Each of these is better then a double performance at similar power consumtion & less cost. The key Unanswered question IMO in regards to Apple will they offer a lower price SKU? If Apple wants large market share they need to deliver a SKU at the next tier, a $500 handset will not get us much past 25% market share. Once Apple introduces the A5 or whatever they call it, the options open. Incremental cost of producing the A4 are small so they could introduce a SKU at the low end maybe 400 to start the process. Apple can build the iPod touch and sell it at 229 so if we add the LTE chipset and royalties we can get to the 3-4 hundred range without huge margin compression. My only question is when Apple makes the jump. If you are seeing the current growth, you wait, but that doesn’t mean A design isn’t waiting production decisions. If I had to pick 2012 is looking for disruption.
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iOS apps not as private with consumer’s data as some had surmised. AppleInsider & Wall Street Journal
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The Andriod OS will find its way down the cost curve much faster then Apple will take iOS, because any device manufacture can choose android at near zero cost. The definition of the smartphone will morph probably inline with moore’s law. The A8 ARM processor will be outdated in 2011 on the cutting edge, but we all know you can create a very capable device (iPad, iPhone 4) with the current technology. We are looking at A9 dual core in 2011, A9 at 32/28NM in 2012 and A15 at 28NM in 2013. Each of these is better then a double performance at similar power consumtion & less cost. The key Unanswered question IMO in regards to Apple will they offer a lower price SKU? If Apple wants large market share they need to deliver a SKU at the next tier, a $500 handset will not get us much past 25% market share. Once Apple introduces the A5 or whatever they call it, the options open. Incremental cost of producing the A4 are small so they could introduce a SKU at the low end maybe 400 to start the process. Apple can build the iPod touch and sell it at 229 so if we add the LTE chipset and royalties we can get to the 3-4 hundred range without huge margin compression. My only question is when Apple makes the jump. If you are seeing the current growth, you wait, but that doesn’t mean A design isn’t waiting production decisions. If I had to pick 2012 is looking for disruption.
You can make the argument that smartphones will work down the cost curve, but what about phone features and the monhtly cost of these features? If I walked around handing out free iPhones, not everyone can use them. Some won’t be able to pay the monthly data plans. So we can plan all we want about iPhones getting cheaper (and more advanced) but at the end of the day a large segment of the population cant afford smartphones. I would think this is the biggest reason why millions of people in developing countries cant get their hands on smartphones…they cant afford the incremental usage costs..not the initial purchase cost.Are there android phones that are full smartphones with no monthly data costs? None that I heard of in the U.S., but not sure about other parts of the world.
Now maybe mobile carriers will go about this differently and you will eventually be able to use smartphones at no additional monthly cost, but will that happen in the next 2-3 years? doubt it.
I get the whole concept that feature phones will merge into smartphones, but at what point will feature phones begin to charge you monthly data plans?
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aka Sammy the Walrus IV
AAPL Orchard -
The Andriod OS will find its way down the cost curve much faster then Apple will take iOS, because any device manufacture can choose android at near zero cost. The definition of the smartphone will morph probably inline with moore’s law. The A8 ARM processor will be outdated in 2011 on the cutting edge, but we all know you can create a very capable device (iPad, iPhone 4) with the current technology. We are looking at A9 dual core in 2011, A9 at 32/28NM in 2012 and A15 at 28NM in 2013. Each of these is better then a double performance at similar power consumtion & less cost. The key Unanswered question IMO in regards to Apple will they offer a lower price SKU? If Apple wants large market share they need to deliver a SKU at the next tier, a $500 handset will not get us much past 25% market share. Once Apple introduces the A5 or whatever they call it, the options open. Incremental cost of producing the A4 are small so they could introduce a SKU at the low end maybe 400 to start the process. Apple can build the iPod touch and sell it at 229 so if we add the LTE chipset and royalties we can get to the 3-4 hundred range without huge margin compression. My only question is when Apple makes the jump. If you are seeing the current growth, you wait, but that doesn’t mean A design isn’t waiting production decisions. If I had to pick 2012 is looking for disruption.
I think you are running into definitional problems and trying to fit everything into the current buckets. I worked long range operations concepts for the military and we spent a ton of time looking at what tech might be and how we would use the new capability. I will tell you the pipe matters, but we ran the invasion of Somalia on a satellite feed with a baud rate of 1024 so you can adapt and I also believe people find uses for the extra bandwidth. Apple is delivering features at the rate of bandwidth expansion, what do I mean, you can’t deliver 1080p streams to the majority of devices so use 720p and hit the mass market. engineering is all about tradeoffs and I think Apple is exceptional, and I have been to most of the cutting edge labs and while the tech is interesting, the get to market scheme is difficult.
[ Edited: 20 December 2010 01:06 AM by Intruder ]You can make the argument that smartphones will work down the cost curve, but what about phone features and the monhtly cost of these features? If I walked around handing out free iPhones, not everyone can use them. Some won’t be able to pay the monthly data plans. So we can plan all we want about iPhones getting cheaper (and more advanced) but at the end of the day a large segment of the population cant afford smartphones. I would think this is the biggest reason why millions of people in developing countries cant get their hands on smartphones…they cant afford the incremental usage costs..not the initial purchase cost.
Are there android phones that are full smartphones with no monthly data costs? None that I heard of in the U.S., but not sure about other parts of the world.
Now maybe mobile carriers will go about this differently and you will eventually be able to use smartphones at no additional monthly cost, but will that happen in the next 2-3 years? doubt it.
I get the whole concept that feature phones will merge into smartphones, but at what point will feature phones begin to charge you monthly data plans?
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End of last week, I started playing around with the idea of a log book for airline pilots. I have a pilot friend who flies for a big airline who was telling me that there isn’t any good software that works with Android yet. I spent a couple days learning Flash and playing with trial versions of Flash Builder ‘Burrito” and Flash Pro CS5. I know many Flash developers who develop serious business applications with it (not silly web banners) and have been intrigued, especially since Steve Jobs declared war on it
.Anyway, after a couple of days, I had a pretty good mockup working on my Nexus One and I figured out how to make a web version from the same source that I can have interested testers play with. It’s a much easier programming model than iOS native applications, which lets me focus on the application, even as I’m learning the ropes with Flash and ActionScript.
Flash/AIR plus the freedom to do what you like, how you like are to mobile development today what HyperCard was to the Mac in the late 1980s and early 1990s. It’s an engine for inexpensive application development that will tilt the supply of apps toward those platforms that are most open to it. The UI of my project is pretty cool—it’s black so that if used in a cockpit at a safe time, it doesn’t light everything up. Guaranteed if submitted to the App Store, they’d want it that standard slate=blueish and heavy white that’s consistent with iPhone UI.
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Brad, Your prejudice against iOS is silly. I’ve seen several apps that have night-mode, including most GPS navigation and eBook readers.
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The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled.
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I have a pilot friend who flies for a big airline who was telling me that there isn’t any good software that works with Android yet.
Yeah, I hear that a lot. Did you suggest he look into getting an iPhone? You did say he was a friend.
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I don’t mind being wrong…,I just hate being wrong so FAST!
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Brad, Your prejudice against iOS is silly. I’ve seen several apps that have night-mode, including most GPS navigation and eBook readers.
Why the name calling? I can point you to developers of a few list-based drill-down apps that Apple asked the developer to revise because they used Flex widgets rather than that standard iPhone look. My main point is with Android, there is no risk of your app not getting approved or getting censored for some arbitrary reason, especially one that doesn’t account for the primary usage scenario. With Android, if all else fails and everyone is against you, you can make your app available from your own web site, just like with desktop software. Many developers look at those as legitimate business risk issues.
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Yeah, I hear that a lot. Did you suggest he look into getting an iPhone? You did say he was a friend.
Why would I suggest that? My 3GS sits in a drawer, replaced by a much more useful Nexus One. I’d give it to her if it really solved her problem and did all the things her HTC Hero does. But anyway, recommending an iPhone would be the equivalent of recommending a corn cob while I use Cottonelle.
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don’t feed the troll.
[ Edited: 20 December 2010 08:14 PM by bweels ] -
Classy Chas. I reported your post to the moderator. Name call all you like, but pictures of your underage animal sex partners are over the line.
