A Cupertino Comeback: Apple and Android are Almost Tied in U.S. Sales
January 18, 2012 1:07 PM
Apple rose quickly between October and December, while Android fell in the U.S., RIM virtually out of the game
market research firm Nielsen Mobile, Apple, Inc. (
) and Google Inc. (
) have pulled into a neck-and-neck tie in the U.S. smartphone race, as Canada's Research in Motion, Ltd. (
) 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 [
] 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.
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.
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. (
) which was only on one network -- Verizon Wireless -- a joint venture between Verizon Communications, Inc. (
) and Vodafone Group Plc. (
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.
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.
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.
Nielsen [press release]
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