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Apple rose quickly between October and December, while Android fell in the U.S., RIM virtually out of the game

According to market research firm Nielsen Mobile, Apple, Inc. (AAPL) and Google Inc. (GOOG) have pulled into a neck-and-neck tie in the U.S. smartphone race, as Canada's Research in Motion, Ltd. (TSE:RIM) steadily loses market share.

I. An Apple Win

Globally, Apple's single smartphone -- the iPhone -- has been grossly outsold by Android of late, or at least was earlier in the year.  In October 2011, Nielsen says 61.6 percent of smartphones sold ran Android, versus 25.1 percent that were iPhones.

In December 2011, Apple took 44.5 percent of the market, while Android took 46.9 percent of the market.  Given its recent losses interspersed with Pyrrhic victories in court [1][2][3][4] [5][6][7][8] [9][10][11][12] [13][14] against Android and Android's market share domination in both U.S. and global sales, some had begun to cast doubts on Apple's long term prospects as a top player in the smartphone market.

Market share

But if Apple is going anywhere in the long term, it clearly has a good bit more life in its lungs.

II. Why the Shift?

While the most obvious cause for Apple's search is the release of the iPhone 4S, which broke with Apple's traditional annual cycle, taking a year and a half to launch, a host of other factors likely also came into play.

The iPhone 4S does not exactly amaze in the hardware department.  But it does fill a small phone (3.5-inch) space that Android has largely failed to market to, with Android focusing its high-end hardware on larger >4-inch smartphones.  Some consumers want a smaller phone.

Secondly, while the base operating systems of Android and iOS looks very similar as of Android 2.3 Gingerbread, the Apple operating system enjoys slightly more polished core apps (including the fancy Siri).  That's not to say that Gingerbread's apps are bad, merely that Apple's apps are that much better.  Of course Apple lacks some of the customization of Gingerbread, but ultimately this does not make a huge difference to the casual electronics buyer.

IPhone 4S

This situation could soon change with the release of Android 4.0 Ice Cream Sandwich, which takes Google's operating system in a somewhat "Windows Phoneish" direction.  It also has put a great deal of effort into polishing core applications like the browser, messaging hub, and email.  The results from ICS, upon initial examination, are equal or perhaps even better to their iOS equivalents.  However, the only ICS device on the market as of December was the Galaxy Nexus by Samsung Electronics Comp., Ltd. (KS:005930) which was only on one network -- Verizon Wireless -- a joint venture between Verizon Communications, Inc. (VZ) and Vodafone Group Plc. (LON:VOD).

It should be interesting how the monthly sales situation when ICS updates go from the realm of Android modders to the masses, and new ICS-optimized handsets go on sale.  Clearly this coming event will put pressure on Apple to overhaul iOS or risk losing its brief market resurgence.

Both platforms have an overabundance of apps, with hundreds of thousands available.

Outside of the phone's actual physical merits, another factor is that Apple continues to maintain a strong brand image.  While enthusiasm about Android, attack ads mocking extreme Apple fanboyism, and backlash against its lawsuit "crusade" have soured some on the Apple brand, among your average consumer it remains one of the strongest brands on the market.  To these consumers buying an Apple device is equivalent to buying "cool points" that some people would (literally) give an organ for.  

Android has become a household name and has a strengthening brand image, but it hasn't yet developed the sort of fanatical loyalty that Apple enjoys among many consumers -- significantly, many of whom are not technophiles.

III. Numbers Paint Bleak Picture for RIM

Android overall has a 46.3 percent market share and iOS has 30 percent, according to Nielsen.  RIM trails in distant third with 14.9 percent.  Amazingly, Windows Phone only has 1.3 percent of the market, compared to 4.6 percent for the ancient Windows Mobile. 

Among buyers in the last three months, Windows Phone crept slightly upwards to 1.4 percent, while Windows Mobile dropped to 2.4 percent.  RIM, meanwhile was in free fall, hitting 6 percent.  IOS grew faster than Android over the last few months, rising to 37 percent, while Android rose somewhat to 51.7 percent.

Overall it's important to take these numbers with a grain of salt, as Apple had one extremely good month that drew it into a tie, but Android holds the lead both for the last three months and for the estimated total market share for all active U.S. smartphones.  On the other hand, there is a clear trend in the last three months that's boosted Apple and sunk Android.

market share

RIM in October held approximately 7.7 percent of U.S. sales, but had faded by December 2011 to 4.5 percent.  RIM is doing decently in emerging markets like Indonesia, partially because its handsets are generally low cost, owing to their weaker hardware.  However, this also means RIM's profit margins are quickly eroding, and with only $1.5B USD in cash, an acquisition by a competitor appears increasingly likely.

In Q4 2011 46 percent of Americans with cell phones had a smartphone, and for those who purchased phones during that quarter, the total rose to 60 percent.

Nielsen uses a very strong multi-component analysis that looks at over 65,000 cell phone bills monthly (volunteer based); surveys of 300,000 users yearly; and iOS and Android apps that offer metrics from volunteers.  Together these methods allow Nielsen Mobile to reduce its margin of error when assessing trends like different kinds of usage and market share by company/platform.

Sources: Nielsen [press release], [methodology]



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This article is over a month old, voting and posting comments is disabled

By GotThumbs on 1/18/2012 1:40:05 PM , Rating: 0
While I think this story confirms what many of us already knew...it helps point out to the Apple users the reality. Basically, Apple sells one phone. They may sell older versions (old hardware), but it's just one phone. Android based phones come in many shapes and sizes. As the general community becomes more tech savvy...then I think some long time Apple users will seriously look at other options. Not necessarily an Android one.

The point I wanted to make is that many current Android powered phones will receive the ICS OS update. This will be a huge number.

Best Wishes.




By BrgMx5 on 1/18/2012 1:56:50 PM , Rating: 2
quote:
The point I wanted to make is that many current Android powered phones will receive the ICS OS update. This will be a huge number.


Will they? You hope they will. The problem with Android updates is, you never now when.

It's carrier, manufacturer and model specific. The downside of a flexible OS.

Not that it's a big deal, if your current phone works (you bought it) let it be.


By JasonMick (blog) on 1/18/2012 2:20:59 PM , Rating: 2
quote:
While I think this story confirms what many of us already knew...it helps point out to the Apple users the reality. Basically, Apple sells one phone. They may sell older versions (old hardware), but it's just one phone. Android based phones come in many shapes and sizes. As the general community becomes more tech savvy...then I think some long time Apple users will seriously look at other options. Not necessarily an Android one.

The point I wanted to make is that many current Android powered phones will receive the ICS OS update. This will be a huge number.

Best Wishes.

Thanks, didn't forget, though...
quote:
It should be interesting how the monthly sales situation when ICS updates go from the realm of Android modders to the masses, and new ICS-optimized handsets go on sale.

The subtle "and" refers to that there will be rollout to ...existing models... "and" ... new models ...

Of course as the other op pointed out results may vary on a per handset basis, so don't hold your breath...


By Rasputin814 on 1/18/2012 2:39:11 PM , Rating: 5
Most apple users don't care about the iOS or Android operating system. They just care about the iPhone. I think this just doesn't apply to apple users. Most people buy the iPhone because it is the iPhone or they buy the Samsung galaxy because it is the galaxy. They don't buy it for the operating system.


By TakinYourPoints on 1/22/2012 7:57:36 PM , Rating: 1
quote:
The point I wanted to make is that many current Android powered phones will receive the ICS OS update. This will be a huge number.


The two questions you need to ask are "if" and "when". If it happens, when will it be pushed out? Froyo and Gingerbread updates were very inconsistent, and good luck if you happened to buy a Samsung phone. If an update happened, then it was often 3-6 months after the OS was "officially" released.

Carriers and manufacturers still have way too much control over OS updates on handsets, and often time totally capable devices are passed over so that they can force the sales of new handsets for people who want a new OS.

We already know that the Galaxy S, one of the most popular phones of 2010, will be stuck on Gingerbread or Froyo because Samsung would rather sell new phones than support older ones that are more than capable of running a new OS. Motorola is only guaranteeing the Droid Razr, and HTC will have ICS for the Rezound next year.

Meanwhile Apple is supporting devices from mid-2009 and Microsoft is also committed to making sure that every single WP7 device gets 7.5.


By TakinYourPoints on 1/22/2012 8:22:13 PM , Rating: 2
Whoops, I should have reordered some of the sentences here. This quote can be misleading.

quote:
Froyo and Gingerbread updates were very inconsistent, and good luck if you happened to buy a Samsung phone. If an update happened, then it was often 3-6 months after the OS was "officially" released.


This implies that Samsung is late on updates, when they're actually among the worst in terms of not updating their phones. The 3-6 month wait on updates mainly refers to HTC, LG, and Motorola.


"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997














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