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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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RE: Pointing out the bias
By TakinYourPoints on 1/24/2012 1:25:48 AM , Rating: 2
LOL if you think that a -1 in a circlejerk of Android apologists means anything to me.

You seem to put a lot of value into those little numbers. Sad.

Funny thing while we're talking about numbers, the fact that someone like Reclaimer who's POV is so in line with the general bias here still manages such a low average post score speaks volumes as to how abrasive he is. You'd figure he'd have a +3 score instead of roughly 1.5.

You I don't have such a big problem with, you're not mean. You seem more like his lackey or apologist or something, jumping in to help. It's weird.

quote:
And I don't paint everyone who doesn't "jibe" with my POV as an Appletard, just the ones who can't face reality and facts


You may not, but Reclaimer is ridiculously fast to call someone an "idiot" with no provocation aside from the fact that he doesn't like their post. He's really abrasive and only sees things in black and white terms. His post the other day as to why anyone would ever bother walking when they could just drive a car got such a big WTF from me.

As for reality, I post hard numbers and facts to back up my arguments. I don't formulate opinions out of thin air. Hardware performance (most linked from the awesome Anandtech, which is the only reason I know this place exists), developer support, pros and cons of platforms, just pure hard facts. When I say that Android has inferior hardware, poor security, horribly inconsistent OS updates that screw over the consumer, and weak app selection, I'm not making it up, there are lots of hard metrics to back it up. If it gets a downvote it's generally because it hurts fanboys feelings, and there is rarely ever any rational argument going the other way outside of the availability of larger screens and keyboards.

I really don't care, I expect the same negative reaction if I go to a board primarily made up of console gamers and make a post about why FPS control better with a mouse and keyboard than with a gamepad. The negative reaction doesn't make the people who disagree correct, it makes them ignorant.

Facts aren't the main factor into getting upvotes here, the main thing that matters is if your rhetoric fits in with the circlejerk. It's the nature of specialized internet boards, sadly. I avoid Mac boards like the plague, and the only reason I'm here is because I go to Anandtech (the best!) all the time.


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