
Android now powers 75% of all smartphones sold - 11031a
http://www.extremetech.com/computing/139458-android-now-powers-75-of-all-smartphones-sold-are-we-heading-towards-a-google-monopoly
======
dquigley
Clay Christensen in the Innovators Solution lays out an explanation for what
is happening here. Apple used vertical integration to make a giant leap
forward with their iPhone that you couldn't have made in a non-integrated
company. They ended up overshooting the typical consumer's needs though in the
following iterations of the iPhone. And the technology that was at first
difficult for competitors to reproduce became easier to replicate (thanks in
part to Android). Samsung, HTC, and others were able then to provide good
enough devices (and in certain ways, better devices) to consumers at a lower
price point.

Apple's response has been to move up market towards tablets, and have been
able to use their vertical integration to produce devices that no other
Android manufacturer could match at first. Microsoft is building their own
device to have similar quality, but they are doing it as a vertically
integrated company. Amazon showed you could do a partial vertical integration
(heavily customized Android and integration into their own media resources) to
take away the low end of the tablet market from Apple. And slowly the Android
tablet manufacturers are catching up to Apple.

So what this makes me ask is what will be next for Apple? They haven't been
good at playing the high-volume, low-profit electronics game, so they'll need
another "blockbuster", highly innovative device, and I am excited to see what
that will be. It drives the industry forward, and creates exciting new
technology we all get to benefit from eventually.

~~~
cloudwalking
You are absolutely right in what you say regarding integration.

I disagree with your final analysis of where this leaves Apple. I think Apple
will continue to hold a significant chunk of the "high-end" luxury market. iOS
will maintain high price points and Apple will maintain its polish--and
consumers with expendable income will keep their sales strong. I suspect their
market share in Europe, USA, Japan, and wealthy Chinese won't drop too much
(30% of market? 45%?). Android will claim the entire low-cost market--the rest
of China, India, South America.

I think Apple will maintain its profits, but Android will secure the majority
of the _world_ market. Apple is trying to maximize _percentage of industry
profit_ rather than percentage of _industry sales_.

~~~
nestlequ1k
Sure, Apple is trying to maximize profit. But how does that help me?

We're developers right? We need to find the market with the most potential. If
I'm developing for a platform where the platform holder is laser focused on
maximizing their profit, but not their marketshare... it seems like I've made
the wrong choice.

I see a lot of iPhone devs (not you specifically) try to justify Apple's
shrinking marketshare by saying it's fine since Apple is still taking the
total profit in the industry. Either they've heavily invested their earnings
into AAPL, or they're trying to pull any stat they possibly can to justify
their platform choice.

~~~
enraged_camel
Simple: people who have the kind of income to pay a premium for Apple devices
will also be more willing and able to pay a premium for good apps. There lies
your profit. (Not to mention your costs will be lower since iOS ha no
fragmentation.)

~~~
akmiller
> iOS has no fragmentation

I think the correct statement would be iOS has "less" fragmentation. They
still have fragmentation though. Not only through the devices but also the
version of iOS running on the device. It can get pretty hairy trying to
maintain support for multiple iOS devices with versions of even just 4.3 and
up.

~~~
veemjeem
If you think iOS is hairy supporting 4.3 and up, you probably have no
experience supporting Android apps. The fragmentation extends beyond the
Android version. The differences between handsets are so big that one pretty
much has to ignore the users who own phones that are impossible to test with.
You'll get some random complaint from a user running your app on a device from
a manufacturer you've never even heard of.

Look at Google's own wallet app -- it only runs on only 6 android devices. If
you want to run google wallet on your Nexus S, you'll have to run a 3rd party
"hacked" version of Google Wallet.

~~~
myko
I've certainly had issues supporting iOS 4 vs 5/6. Most of the Android issues
I run into have to do with WebViews behaving differently on different OEMs
devices. Both forms of fragmentation can be a pain in the ass.

Probably games developers have it harder on Android, but for the average app
it seems just about the same to me as a developer.

~~~
shinratdr
The key difference is if you cut out iOS 4 only users you're eliminating at
most 2-3% of your market. If you were to try and do the same thing with
Android and require ICS or higher you would be blocking off 50%+ of your
market.

There is little expectation of iOS 4 support at this point, because users who
purchased an iPhone in the last 4 years don't have to use it. The same is
hardly true for Gingerbread. Most of the phones that shipped with that half-
baked OS will have it until they're retired into a drawer somewhere.

------
neya
This is seriously good news. What many people don't realize is how powerful
Android is. Open Source doesn't mean shitty quality software, contrary to
popular belief. Android can do so many things that other Operating systems
still cannot provide. All Android needs is some time, and some iterations and
no one can even dream of killing it (like many plan to). Because, if anything
history has taught us, Open Source will eventually win the war.

I own a 42" Sony Bravia LCD TV. When I first purchased it, I got a hard copy
of the GNU/GPL license. Wondering, I did a quick search and found out that my
TV runs on Linux! Now, here's the sad part - Since I'm somewhat techie, I know
my TV is powered by Open Source software. But the average end consumer doesn't
know and doesn't care much, he just wants a good TV. So, the main area where
open Source is weak at is marketing. And this too, is only a matter of time,
till it catches up, I believe.

Imagine if the Linux foundation advertised on TV like Apple did, for their Mac
vs PC commercials? Then the average consumer would probably care. If you have
a good product, you should let people know about it. Sadly, even the Nexus 10
and Nexus 4 have poor marketing in this context (Michael Arrington wrote a
wonderful article on this[1]).

One day, Android will reach 95%+, and I will live to watch it happen and I
will tell my kids and my grandchildren without hesitation - "This is the
future."

[1] [http://techcrunch.com/2012/10/31/hey-google-your-
nexus-7-mar...](http://techcrunch.com/2012/10/31/hey-google-your-
nexus-7-marketing-images-look-like-crap/)

~~~
shinratdr
> Because, if anything history has taught us, Open Source will eventually win
> the war.

How does that work? Where is the open source OS that "won" the desktop war?
Where is the open source codec that "won" the codec wars?

~~~
bitcartel
I am guessing the original poster is referring to GNU/Linux beating Solaris to
win the server market.

EDIT: Regarding the desktop, just saw this: "Ubuntu will account for roughly
9% of all global PC shipments by 2014"
[http://www.omgubuntu.co.uk/2012/11/ubuntu-pc-sales-
skyrocket...](http://www.omgubuntu.co.uk/2012/11/ubuntu-pc-sales-skyrocket-
in-2011)

~~~
dfrey
pro-tip: Every VP of sales for every company will tell you that their market
share will increase in the next year. Half of them will be wrong.

------
jusben1369
What Apple does well: Take a nascent but exploding market and create a
fantastically superior experience via vertical integration. Get way out of in
front of the competition and own the consumer mindshare: PC/iPod/iPhone
(almost Newton)

What Apple doesn't do well: Own the mass market. The one place they have -
music players - has really collapsed as a stand alone market and merged in
with smart phones. (ie no one in the right mind today would launch a stand
alone music/video player)

Why Apple is in trouble: 47% of all revenue comes from the iPhone and it's
clear that that market has moved past their sweet spot.

What Apple needs to do: Understand that (to them) this market is mature. It's
not about fighting Android. It's about finding the next PC/Music Player/Phone
where the potential is huge and the vertical integration of hardware and
software will blow away the competition for 3 - 5 years. What is that? I don't
know or I'd be running the place! My fear is Steve would have known but Tim
does not seem like he would.

~~~
Steko
"Why Apple is in trouble: 47% of all revenue comes from the iPhone and it's
clear that that market has moved past their sweet spot"

This is not clear at all. Selling tiny computers with mobile broadband is
clearly going to be the biggest hardware business for the next 10+ years and
10 years from now the device that generates the bulk of Apple's revenues will
probably still be called an iPhone. It may bear little similarity to the
current slab/multitouch input phone of today but will serve all the same
purposes. And Android based competitors may be 90% of the market then and
Apple may still be the most profitable company in the world.

I have a hard time believing the story that 'Apple is in trouble' because they
have the highest margins in one the biggest markets which is still rapidly
growing.

~~~
jusben1369
Steko ask yourself this question. What portion of the smartphone market did
they have 3 years ago? What % is that today? What happens when the pie stops
growing in 3 years? It's feeling pretty much like PC vs Mac again where
they're at less than 10% permanently. Anyway, the point is they need to go
find another space now. They shouldn't exit phones they just should
acknowledge that the vertical integrated offerings strengths become it's
weakness.

~~~
Steko
"What portion of the smartphone market did they have 3 years ago?"

Around 17%.

[http://arstechnica.com/apple/2009/11/apple-grabs-17-of-
smart...](http://arstechnica.com/apple/2009/11/apple-grabs-17-of-smartphone-
market-in-latest-quarter/)

"What % is that today?"

Somewhere between 14% (most recent quarter, this thread's article) and 24%
(last year's launch quarter).

<http://www.totaltele.com/view.aspx?ID=470976>

"What happens when the pie stops growing in 3 years?"

The whole point is that Apple's pie has a lot more than 3 years of growth
left. We are talking about this arbitrary thing called "the smartphone market"
but Apple doesn't really compete in "the smartphone market". Apple competes in
a tiny corner of "the smartphone market" called "the $450+ smartphone market".

I remember when Apple competed in a space called "the $300+ music player
market". And how it "felt pretty much like PC vs Mac again" when cheap mp3
players were taking market share. And then Apple brought out a $250 music
player and then a $200 music player and then a $100 music player etc. Now
Apple found a bigger market to play in then music players but I'm saying that
I doubt there's a bigger market to play in then pocket computers with wireless
broadband [1]. And Apple can keep having amazing success in that market by
doing both (1) what they did in 2007 (make a much better pocket computer with
wireless internet than what was currently in stores), and (2) what they did in
the portable music player market (by continually addressing a larger share of
that pie).

What's called the iphone in 5-10 years may look radically different, maybe
it's Siri on steroids, maybe it's brain control, maybe it's holograms and
haptics, maybe it's Kinect, maybe it's aug reality ala Glass, maybe it's
smellovision... But what's essential about that product is that it will
replace the functions of the current smartphone.

If you're asking me if Apple can keep growing at it's current rate the answer
is clearly that they can't long term (law of large numbers). I do think Apple
will enter other markets -- luxury watches, tv/console gaming, search and
cloud services are the obvious areas. I don't think they will make as much
money in all of those put together as they will in the pocket computers with
wireless broadband category though.

[1] There are bigger markets of course (cars, houses, health care, education,
etc) and there will be bigger new markets (girl robots lol?) but none of them
play to Apple's strengths.

------
panabee
Apple has designed its business model to cede the mass market. It focuses on
capturing the majority of industry profits, not sales. It should surprise no
one that more phones ship with Android than iOS.

As a platform company, this strategy exposes a vulnerable flank since
historically the platform company with the most market share attracts the best
software and the most end users.

The greatest difference between mobile devices and PCs? There is no IBM, which
essentially standardized a powerful alternative to the Apple PC within a year
or two. Android is not a single alternative but more an umbrella term
encompassing several alternatives. There is still too much fragmentation today
in the Android ecosystem, and its structure fosters fragmentation -- not
standardization. The device manufacturers saw how commoditization destroyed
the PC manufacturers, and they are intent to avoid the same fate. Unless
something changes, Android devices from one manufacturer will continue to vary
from other Android devices in terms of size and functionality.

For developers, the right way to segment operating systems is not Android vs
iOS vs Windows 8, but by code reach. In other words, how many devices can be
reached with the same code base? My hunch is iOS will have an impressive lead
in this metric, but I'm happy to be proven wrong if someone has contradicting
data.

Apple is content to yield marginally profitable customers to "Android,"
provided Android remains as fragmented as it is today. If Android were to
unite, or some other OS emerges, allowing devs to target 75% of the market
with (fundamentally) the same code base, the threat to Apple becomes far more
dangerous.

~~~
bdcravens
This was more true 2 years ago. I think they are trying to capture back some
of that "mass market" where people expect a cheap or free phone as opposed to
the high end where we are used to paying $200-400:

<http://www.apple.com/iphone/compare-iphones/>

(4: free, 4S: $99)

~~~
Steko
These are contract prices. The unlocked iphone 4 still sells for $450+ which
is around what carriers pay.

What we talk about when we talk about the "mass market" is the half a billion
plus smartphones sold this year that range anywhere from less then $100 to
$350. Apple has thus far refused to compete in this part of the market.

------
Quekster
Actually, it powers 75% of all smartphones sold in the third quarter:
[http://thenextweb.com/mobile/2012/11/01/android-
grabs-75-0-m...](http://thenextweb.com/mobile/2012/11/01/android-
grabs-75-0-market-share-in-q3-followed-by-14-9-for-ios-and-4-3-for-
blackberry/)

~~~
rbii
Yeah, and 75% of all smartphones being sold today. And tomorrow :)

~~~
gte910h
This feels a bit cheerleadery?

This is actual PHONE MARKETSHARE being delivered (not necessarily sold, as
many of them are subsidized to $0).

Additionally, looking at just phones is a myopic view of the mobile landscape,
when tablets and mini tablets (aka, iPodTouches and sub 6" android tablets)
are a huge source of gaming revenue.

~~~
bunderbunder
On the gaming revenue side, it's interesting that iOS accounts for about 85%
of money spent on mobile games, and their share of the whole app revenue pie
is similarly sized.

This suggests a very different picture than what we get from the raw handset
shipment numbers. For the sake of argument, let's redefine how we subdivide
the the mobile phone market market in terms of how people use their devices
rather than what their devices are capable of. Considered that way, perhaps
the app revenues suggest that Apple still completely dominates the smartphone
market, and Android's handset shipment numbers simply reflect that the
dumbphone market has been flooded with a smartphone OS because nowadays even
the free phones are running Android.

~~~
danmaz74
All the basic apps that define a smartphone are free on Android (and on iOS,
AFAIK), so your definition only makes sense if you redefine a smartphone as a
tool that successfully forces you to spend money on software...

~~~
bunderbunder
Yup. In fact, that's exactly how I was proposing we might redefine it.

It's a worthwhile way to look at it because simply having apps to do certain
things isn't really what defines a smartphone - feature phones were letting
users buy and install BREW or J2ME apps for a long time. This includes all the
basic apps that people tend to expect on their phones nowadays, like Facebook.

So, apps being nothing new, the line's always been a bit blurry. Using what OS
the phone runs as a distinguishing criterion works fine, of course, and it's
probably the most sensible one overall. But distinguishing based on the way
people interact with the device, regardless of what OS it runs is also
illuminative.

In this case, for example, it would seem to explain why the market for 3rd-
party software (the thing that's supposed to be the heart and soul of
smartphones) is so tiny on Android despite it being far and away the biggest
smartphone platform. Perhaps it's the case that, regardless of what they're
capable of, a huge percentage of the Android devices out there are still being
used as if they were feature phones.

------
danielrhodes
This whole article reads like Google is announcing it's dominance, as if it's
some Christian crusader claiming a conquered land in the name of the Pope and
Christianity.

Here's my interpretation of some of what I read:

"If Google decides that HTML5 web apps are the way forward, making them a
first-class citizen in future versions of Android, then other mobile OSes will
have no other option than to follow suit."

(We claim absolute power)

"Conversely, Google could decide to cease development of the stock Android
browser — much like Microsoft did with IE4 — and push alternative technologies
like Native Client or Dart, forcing other mobile OSes to embrace Google’s
tech."

(You must all submit to our new power)

"And what about the other platforms? It seems like Apple is destined to occupy
a tiny corner of the market — no doubt making fat profits, but losing control
of the market and all-important mind share in the process."

(Your former leader has been dethroned and never had your interests in mind
anyways)

"You may point to the fact that Android is open source, thus making such a
monopoly rather toothless. This might be theoretically true, but in practice
Google still holds all the keys."

(Don't question Google's power)

"Over the next few years, Google will develop unprecedented control of the
fastest growing tech market in the world. Will Google use this power to gently
steer and cajole the web and mobile computing markets towards green pastures,
or will it cave like Microsoft and squeeze as much money as it can from
Android?"

(Will Google be a benevolent leader or a ruthless dictator? You will find
out.)

~~~
wutbrodo
Apparently you're unaware that extremetech.com is not a part of Google (and
unaffiliated with them, as far as I know). All of those quotations are from
the article, which Google didn't write...so I fail to see how any of this is
"Google announcing its dominance" (as opposed to ExtremeTech announcing their
perception of Google's dominance, which is a VASTLY different thing).

------
atirip
So now that one company is Google, that one man is Andy Rubin and that one
phone is Android. Thats the future we wanted. Thank God Google acted.

~~~
eta_carinae
Android is not a phone.

If we standardize on one operating system, I definitely prefer a future where
we have thousands of phones to choose from and not just five.

Thank you Google for saving us from an Apple monopoly.

~~~
Steko
Talk of an Apple monopoly is silly. Apple has shown no interest in building
budget smartphones. That market, which is hundreds of millions of phones per
year, was always going to go to whichever competitor which managed to both
copy the iphone the best and kowtow to the carriers. WebOS only met the first
criteria, Nokia only the second, Android checked both boxes.

------
drp4929
The title is misleading. It should read :

"Android now powers 75% of all smartphones sold <b> in 3rd quarter of 2012
</b>"

------
bdcravens
I keep thinking this will be a bit antitrust concern in future years. I'm not
even going to get into the FTC's recommendation to sue over patents:

[http://www.washingtonpost.com/business/ftc-staff-said-to-
for...](http://www.washingtonpost.com/business/ftc-staff-said-to-formally-
recommend-suing-google-over-
patents/2012/11/02/830f8bb6-24a5-11e2-92f8-7f9c4daf276a_story.html)

1) To make use of many Android device features, you typically are required to
have a Google account. (Ditto with the iPhone, but it's a bigger deal the more
you control the market) 2) The pressure exerted on Aliyun 3) By default,
Google search in the browser. How long before there's pressure for a "search
engine ballot" screen?

~~~
Kylekramer
Google already offers a ballot for desktop Chrome, I wouldn't be too surprised
if they offer one for Android at some point.

------
nchomsky
So if Apple has 70% of the market share, how does Android make up 75%? It can
only be less than 30%. Can anyone clarify?

~~~
daenz
I _think_ that because the sentence includes "of all smartphones sold", the
discrepency is describing a shift in market share. Apple could have 70% now,
and 75% of all new devices sold _now_ could be Android. They were in the game
first, and aggregated a huge market share, but now it is shifting.

------
rbanffy
I don't think a monopoly made on top of an open-source platform makes any
sense.

------
drivebyacct2
I don't see why they demonize this: "If Google decides that HTML5 web apps are
the way forward, making them a first-class citizen in future versions of
Android, then other mobile OSes will have no other option than to follow
suit."

~~~
azakai
They don't demonize it, they are just showing how much power Google will have.
Power that could be used for good or for bad from the world's perspective, but
will always be used for Google's benefit.

------
gte910h
This title feels a bit cheerleadery?

This is actual phone handset market being delivered (not necessarily sold, as
many of them are subsidized to $0).

Additionally, looking at just phones is a myopic view of the mobile landscape,
when tablets and mini tablets (aka, iPodTouches and sub 6" android tablets)
are a huge source of gaming revenue as well as advertisement revenue.

I think the ecosystem is still a vibrant multiplayer arena.

~~~
jonknee
> This is actual phone handset market being delivered (not necessarily sold,
> as many of them are subsidized to $0).

Sold is sold, subsidies just change who is doing the buying.

~~~
jlgreco
Alternatively, subsidies don't change who is doing the buying, but rather
obscure the buying behind a built in camouflaged payment plan.

