A few weeks ago, when Comscore’s mobile survey showed that Google’s Android smartphone platform had blown past BlackBerry and iPhone to dominate the US market, Apple fans temporarily panicked.It was the 1990s all over again!
But then Apple posted another monster quarter with great iPhone sales, and Apple fans rejoiced (and lambasted anyone who had murmured word one about Android.)
(How could Apple possibly be losing share, Apple fans roared. Apple’s US iPhone sales grew 155% year over year!)
Well, now the Nielsen numbers are out. And they show the same trend Comscore’s numbers did:
Android is gaining share by leaps and bounds, and iPhone share is dead in the water.
Specifically, Nielsen’s numbers suggest that, of all the smartphones sold in the US in the past six months, fully 50% were based on the Android platform. Meanwhile, only 25% of buyers bought an iPhone, and only 15% bought a BlackBerry:
Now, these numbers extend back beyond February, when Apple started selling the iPhone through Verizon (which helps). And another Nielsen survey, of purchasing intent, suggests that going forward the sales may be more evenly split. So Apple looks poised to regain some share, at least relative to RIM and other also-rans.
Here’s the purchasing intent of those who expect to buy a smartphone over the next year. Last year, iPhone was the big winner. Now, by a small margin, it’s Android:
As for current platform market share (phones in use), Nielsen’s numbers look very similar to Comscore: In March, Android had 37% of the US market, iPhone had 27%, and BlackBerry had 22%:
After the initial Comscore numbers came out, Apple fans also made the perfectly reasonable point that, if you’re assessing platform market share, you should also include iPod touches and perhaps even iPads when looking at Apple’s numbers. And, certainly, if you include both of those, Apple’s overall share looks better. But, globally, if you add up iPhones and iPod touches, Apple still lost share to Android year over year.
Why do Android’s gains matter? Can’t Apple just hold onto the “premium” segment of the market?
The Android gains matter because technology platform markets tend to standardize around a single dominant platform (see Windows in PCs, Facebook in social, Google in search). And the more dominant the platform becomes, the more valuable it becomes and the harder it becomes to dislodge. The network effect kicks in, and developers building products designed to work with the platform devote more and more of their energy to the platform. The reward for building and working with other platforms, meanwhile, drops, and gradually developers stop developing for them.
(This has not happened yet. Developers are certainly gearing up to develop for Android, but most say that they develop for the iPhone first. And Apple’s app distribution and payment mechanism is still far superior to Android’s. But lots more developers now develop for Android than they did two years ago.)
Importantly, it’s not a question of which platform is “better.” (This is irrelevant.) It’s a question of which platform everyone else uses. And increasingly, in the smartphone market, barring a radical change in trend, that’s Android.
So that’s why Android’s gains matter. And, yes, Apple fans should be scared about them.
As we’ve said before, Apple is fighting a very similar war to the one it fought–and lost–in the 1990s. It is trying to build the best integrated products, hardware and software, and maintain complete control over the ecosystem around them. This end-to-end control makes it easier for Apple to build products that are “better,” but it makes it much harder for the company to compete against a software platform that is standard across many hardware manufacturers (Windows in the 1990s, Android now).
As we explain here, two important things are different about the current Android – iPhone battle as compared to the Mac – Windows war in the 1990s. First, Apple is maintaining price parity (or better) with the leading Android phones. (Macs were always priced higher than PCs). Second, Android is still a fragmented platform, which significantly reduces the benefits of “interoperability” across multiple manufacturers.
Google is working to fix the second problem, though–enacting much tighter rules about how Android can be used. And if the platform is to become dominant and ubiquitous, it will likely continue to tighten these rules.
And Apple’s price parity certainly does not appear to have stopped the Android juggernaut so far. And the reported delay in the release of the iPhone 5 until September won’t help.
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