Is Android’s growth showing signs of a major slowdown? One closely watched number would seem to indicate that it is.
The number of of daily activations points to how quickly Android devices are penetrating the global smartphone market. In September 2012, Google said 1.3 million devices were being activated every day, which was a significant jump from the rate of 1 million daily activations seen just a few months before.
Last week, as he announced the departure of Andy Rubin as Android’s chief, Google CEO Larry Page let slip that 750 million Android devices had been activated globally, up from 480 million in September. That translates to an average of 1.4 million Android devices activated daily during the 189-day interval.
Page’s announcement has been taken by some analysts as strong evidence that a significant slowdown has occurred in the Android market.
Why? Because 1.4 million Android device activations daily would mean activation acceleration has slowed. Analysts had expected Android to have reached a higher daily activation rate by now. Take a look at the flattening line at the right edge of the chart below:
So, can we say that Android growth is flatlining?
We think that to do so would be premature.
The 1.3 million figure released by Google in September was a snapshot — there was nothing said to make us think it was a long-term average.
The 1.4 million number released last week is an average over six months and would include many days where activations exceeded 1.4 million.
We believe Android is now running closer to a rate of 1.5 million activations daily, which means the same chart would look like this:
Again, it is clear that there has a been a bit of a slowdown, and a fairly extended one, but it is not a major cause for concern just yet.
After all, growth in the daily activation rate has momentarily flattened in the past, only to skyrocket again soon thereafter.
What explains the temporary slowdown?
We can think of a few likely explanations:
- The release of the new iPhone. The iPhone 5 undoubtedly had an adverse effect on Android sales. Apple saw its largest jump in U.S. smartphone subscriber share in the latest comScore numbers. The release of a major new iPhone is the ideal time to convert Android users to iOS. However, this effect has been temporary historically and Apple isn’t able to release phones quickly enough to maintain the surge. The recent release of the Samsung Galaxy S4 should give Android another shot in the arm.
- Emerging markets aren’t picking up demand slack yet. As we’ve discussed before, smartphone sales growth is starting to slow in major, developed markets as penetration tips past 50 per cent. We have argued that the next major wave in adoption is going to come from emerging markets. On paper, this trend heavily favours Android. It is possible that demand in emerging markets isn’t totally there yet to make up for slowing growth in developed markets.
- The Android manufacturer ecosystem is weaker than previously thought. Samsung has flourished, but other manufacturers, like HTC and LG, seem increasingly enfeebled. Android needs other manufacturers to step up, lest the platform lean too heavily on Samsung’s marketing department to deliver the Android platform into consumer hands. We have argued that Chinese manufacturers, like Huawei, ZTE, and Lenovo, are likely candidates to take up the slack.
These are real questions, but none seem to represent a long-term threat to Android’s growth and adoption. If you look at the overall trend in Android device activations, you’d be hard-pressed to find a real bump in the road:
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