Hey TechCrunch: what Android decline?
The posts of the legendary MG Siegler on TechCrunch have soared fantastically over the mundane landscape of technology news & analysis, reaching adulatory heights rarely matched by other Web publications while providing an interesting and entertaining (if occasionally slightly skewed) read.
But now a TechCrunch post by a different writer (Matt Burns) alleging the rise of an “Apple monopoly” in smartphones and tablets has left readers confused on some points, and not because of adoration in the classic Sieglerian style. The article, titled The Decline Of Android Foretells The Rise Of A Total Apple Monopoly, makes some surprising claims – among, it must be noted, some fair points. The first questionable claim is in the title itself, where an Android decline is alleged. There are a few others.
Android is faltering at the hands of the iPhone.
On the iPhone:
There isn’t a better universal smartphone on the market. This isn’t open for discussion and the numbers prove it. Smartphones are now outselling less expensive feature phones with the iPhone as the number one seller. That states above all else that consumers overwhelmingly prefer Apple’s take on mobile phones.
They want a phone that works and they’re choosing the iPhone.
On the competition between iOS and Android:
Android is the only hope to stand tall against Apple and it’s currently in a sad state…. Four years after Android launched, consumers overwhelming choosing the competitor within the last three months.
And so forth. We propose an explanation, firmly tongue-in-cheek: Morbus silicii vallis. It is a (fictional) condition found among some technology professionals in the Silicon Valley area, resulting from over-preoccupation with one’s immediate sphere of activity and leading to a geographical attentional deficit. [Offered with apologies to all medical professionals and students of Latin, plus everyone in Silicon Valley]
Hey, we did emphasize that it was tongue-in-cheek. On that note, we’d like to point out that the last part of the web address of the TechCrunch article is “apple-will-one-day-rule-the-world”. It may not be an entirely serious post but it does provide fodder for discussion. Read on for the full treatment.
Android’s trajectory appears to be a rise, not a decline
We borrowed this graph from another TechCrunch article reporting on the number of daily Android activations:
By the end of February 2012 (i.e., after this graph was made) Google was activating 850,000 devices daily, which put it, quite literally, off the chart. No Android decline is in evidence, certainly when it comes to reliable indicators like phone purchases and activations.
The Samsung Android cometh
There are many factors in favour of Apple in the smartphone market. It secured first-mover advantage when it produced the first viable and popular smartphone. It does make high quality products based on simplicity, style and ease of use. And it does have more money than absolutely anyone else. But let’s not overlook the other major smartphone and tablet player: Samsung.
Recent data indicate that Samsung is the world’s top mobile phone seller, having overtaken Nokia this past quarter. On the higher end, Samsung sold 44.5 million smartphones, giving it a 30.6 percent share of that market. Apple’s sales of 35.1 million iPhones gave it a 24.1 percent share in the same quarter.
Apple was the number one maker of smartphones for a time, but that is no longer the case. Although it’s true that tablets still struggle to compete against the iPad, Samsung’s lead over Apple in the smartphone market is clear.
The Korean behemoth boasted revenues of USD 41.76 billion against Apple’s 46.33 billion in the same quarter. What this suggests is not unquestionable Apple dominance but a race between Apple and Samsung, with HTC, LG, Microsoft and others lagging behind.
It’s true that Apple is more profitable and has considerably more cash, but Samsung’s treasure hoard of over 26 billion dollars is not exactly puny either. Samsung invests more in R&D, meaning it is pouring more money and effort into innovation than its competitor, and the broader smartphone and tablet product spread offered by the Korean at various price points means that Samsung’s devices appeal to a greater audience.
Samsung shipped more phones than anyone else and sold 26% more smartphones than Apple. And this is only one company out of several making Android devices – see the promising start of Amazon’s Kindle Fire, still available only in the U.S.:
The Kindle Fire, introduced to the market in November 2011, has seen rapid adoption among buyers of tablets. Within the Android tablet market, Kindle Fire has almost doubled its share in the past two months from 29.4 percent share in December 2011 to 54.4 percent share in February 2012, already establishing itself as the leading Android tablet by a wide margin. Samsung’s Galaxy Tab family followed with a market share of 15.4 percent in February, followed by the Motorola Xoom with 7.0 percent share. The Asus Transformer and Toshiba AT100 rounded out the top five with 6.3 percent and 5.7 percent market share, respectively.
Back to Samsung: it generated USD 15.73 billion in mobile sales by selling more smartphones than Apple. Apple’s mobile revenues were certainly higher, but this is a result of Apple’s greater margins and price points. Samsung offers products ranging through all market segments, from the low to the high end. And it’s doing extremely well, especially at the high end, as this Reuters video summarizes:
A wider view
Living inside the buzzing hive of technology that is Silicon Valley, it can be easy to overlook the progress made elsewhere. And we recognize that – the Valley being American – there will always be a natural tendency there to consider U.S. stats first or even exclusively, as the TechCrunch article in question may have done.
According to recent Nielsen research, even if we look only at the U.S. market, Android seems to be doing well:
Overall, Android continues to lead the smartphone market in the U.S., with 48 percent of smartphone owners saying they owned an Android OS device. Nearly a third (32.1%) of smartphone users have an Apple iPhone, and Blackberry owners represented another 11.6 percent of the smartphone market.
Apple did see a boost in U.S. smartphone purchases in recent months:
Among recent acquirers who got their smartphone within the last three months, 48 percent of those surveyed in February said they chose an Android and 43 percent bought an iPhone.
Even factoring that in, however, Android still retains a commanding lead: more people buy Android phones than Apple phones; Android smartphones were the best sellers in recent months; and overall Android market share is substantially higher than Apple’s. The decline alleged by Techcrunch may be the result of focusing too closely on some specific and/or limited data.
comScore stats released this April also show that Android is doing well in the U.S. market:
According to comScore, Android U.S. market share grew 17 percent from February 2011 to February 2012, while iOS grew 5 percent in the same period. comScore data paint a picture of unequivocal Android dominance, with Google’s platform holding 50.1 percent of total smartphone market share, and Apple behind by a rather large 20 percentage points. Android’s gains in the most recent 3 months were more than double those of iOS.
The following graphic on U.S. smartphone data from Nielsen perfectly illustrates how Apple’s gains in the U.S. need not necessarily come at the expense of Android:
U.S. stats are, of course, just one part of the picture. Android’s dominance only increases when you look to other markets around the world. The TechCrunch article mentioned China and Apple’s promising future in that country. While it is true that Apple smartphones and tablets are perceived as desirable status indicators there, we should remember that Apple iOS severely lags behind Google Android in China and that Apple products are very expensive for the average Chinese. As things stand, Android is the platform likely to dominate in China, which activates more smartphones daily than any other country.
It’s not only emerging markets or developing nations that are choosing Android. Korea and Japan are technologically advanced nations years ahead of the rest of the world, where Android dominates and Apple is a weaker force than it is at home in the U.S.
Considering the positive indicators and Android’s prevalence across most of the planet, we think that the Android decline claimed in the TechCrunch article may be an artifact of data selection. It seems to have no basis in reality.
The TechCrunch piece does make some very good points, chief of which is the problem of Android fragmentation. On Animoca’s network, we counted well over 600 different Android devices used to play our apps (you can find our research here: Android Devices on Animoca’s Network Part 1 and Part 2).
This enormous number of devices presents consumers with an excellent range of choice, but it also results in a number of problems. You can probably appreciate the difficulty of QA’ing an app for all the different devices: hardware, associated OS tweaks and proprietary integrated software. But we believe - especially in the light of Samsung’s growing chunk of the pie – that many of these problems will be alleviated as the market consolidates and better compatibility standards are developed and enforced. And the Android user experience today is, on the whole, a good one.
It has to be said: both iOS and Android devices today are pretty amazing. Apple, Google, and various OEMs are producing some fantastic products that provide consumers with a good range of choices, but the data do indicate that Android is the dominant platform. We vigorously disagree with the TechCrunch post that claims we are in the midst of an Android decline or the establishment of an Apple monopoly.
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