

Google Android Captures #1 Position in U.S. Smartphone Market - clark-kent
http://comscore.com/Press_Events/Press_Releases/2011/3/comScore_Reports_January_2011_U.S._Mobile_Subscriber_Market_Share

======
mjfern
These data spell significant trouble for Microsoft in the smartphone market.
Despite launching Windows Phone 7 (WP7) with great fanfare in November 2010,
Microsoft's market share in smartphones has in fact declined 1.7% from October
2010 through January 2011.

~~~
keyle
They weren't many phones supporting WP7 until recently. I think you will see
that number grow slowly. They're a bit late to the party. I think it's a
better OS than Android in my view. That said, the only people I know with WP7
are .NET developers ;)

~~~
michaelbuckbee
The fact that .NET developers are the ones buying WP7 phones might be a
positive sign for the platform. WP7 needs apps.

------
bane
#1 in volume doesn't always mean #1 in profit.

I'm guessing Apple is trying to grab hard onto the market segment that brings
in the most profit, while Google is going for the commodity, high volume, low
margin option.

The good news is that both models can coexist in the same market. After all,
Nintendo's strategy is a bit like Google's, while Microsoft and Sony's are
more like Google's. Nintendo has been quite profitable for a very long time
even when they didn't own the entire market.

~~~
rbanffy
> Apple is trying to grab hard onto the market segment that brings in the most
> profit, while Google is going for the commodity, high volume, low margin
> option.

Hardly. Google doesn't make phones.

~~~
bane
Google "makes" advertising though, the more eyeballs it can get in front of,
the better for its model.

~~~
raganwald
Exactly. Google has supplanted Microsoft in the OS business. If you remember,
Microsoft's business model was to commoditize PCs. Microsoft won when Dell and
HP raced each other to the bottom on margins.

Now I see history repeating itself, only this time the handset makers have
_two_ people trying to squeeze them into commodity providers competing on
price: (1) Google and (2) The Carriers.

~~~
ZeroGravitas
Has anyone ever taken the time to explain why the apparently scary prospect of
people "racing to the bottom" is bad for me as a consumer or member of
society?

The original usage was about states competing by offering better terms to
corporations. These "better terms" were worse for the people living in the
state because they got less tax income and less worker protection. But they
are the vendors in that analogy, the customer/corporation was very happy with
how things worked out.

Am I really supposed to shed tears over a corporation's business model being a
bit more like operating in a free market?

~~~
raganwald
Your point is entirely orthogonal to my point, so I am quite comfortable that
following your digression does not undermine my comment in any way.

What I will say about Android handset makers racing each other to the bottom
is that what is good for you as a consumer is when entire products compete
against each other. The trouble with looking at handsets is that they aren't
really whole and complete products. They need an OS/Ecosystem/Theme Park and
they need a carrier's service to complete them.

What is best for consumers is when there is competition for all the elements
of the stack from top to bottom, either in packages (iOS on iPhone on AT&T vs.
Android on Nokia on Sprint) or individually. I don't know how things will play
out in the Android "space," but from what I've seen so far, the big nut to
crack for consumers is the carriers, not the hardware and not the OS.

When text messages are less than a penny each, I will know that the entire
stack is competing in a way that is good for consumers.

~~~
ZeroGravitas
From that comment, I'll assume you're not in Europe. We've had the telecoms
regulated somewhat sensibly and "racing to the bottom" for a while. And while
it's not perfect I will note that during my last foray into purchasing phone
contracts it seemed fairly difficult to avoid getting infinite text messages
thrown into the deal (though I did manage it since I got a very cheap,
effectively data-only plan which is all I needed).

~~~
raganwald
_I'll assume you're not in Europe_

'fraid not. Here in Canada, the Oligopolistic situation seems worse (if that
can be imagined) than in the US. It is possible to buy bundles with
effectively unlimited text messaging, but overall the situation for Internet
and wireless telephony is anything but an efficient, competitive market.

So, "Yay for Europe!"

~~~
ZeroGravitas
Just to clarify on the texts: The very cheapest monthly (as in a single month
long contract) deal I could find came with, by default, infinite texts (and
these are cross-network texts, which a quick Google suggests seems to be a
restriction on Verizon in the U.S. even when you pay an additional surcharge
for texts each month, the price of which alone is higher than my entire
monthly bill).

I'm sure you've been able to pay extra for a ridiculous numbers of texts for a
good while, but now they seem to have dropped to be very roughly in line with
their actual cost, which I believe is indistinguishable from zero to the
networks.

------
samirmm
Interesting sidebar in the comscore report: In the continuously contentious
debate as to whether the future of mobile apps are downloaded or browser-
based, we see a gain in both, but native apps seems to have had a marginal
edge in gain.

Would be cool to see this data over a longer window.

Used browser; 36.2%; 37.0%; 0.8 Used downloaded apps; 33.7%; 35.3%; 1.6

~~~
nl
I wonder how much of the gain in app usage can be attributed to the new
version of the Android market, which I think shipped during this time period.
We'd have to see app usage by platform stats for that though I guess.

------
jimbokun
I hope this serves as a wakeup call to Apple, that their position is not so
unassailable that they can continue looking for new ways to drive away
partners and developers without consequences.

~~~
lispm
Why? Apple makes much of the profit. A report claims that Apple makes with 4%
global market share 50% of the profits:
[http://www.appleinsider.com/articles/11/01/31/apples_4_mobil...](http://www.appleinsider.com/articles/11/01/31/apples_4_mobile_market_share_rakes_in_over_half_the_industrys_profit.html)

Google does not even really sell a phone. Google sells you, the user.

~~~
Kylekramer
They currently make most of the profit. But with declining market share puts
those profits in severe danger in the future.

And god, if I never heard the "Google sells you" line again, it would be too
soon. Apple has an ad platform too, you know.

~~~
rimantas
> But with declining market share puts those profits in > severe danger in the
> future.

Can someone explain, how this got upvoted? 50% of profits with just 4% of
market share, the article we ar discussing there sates that Apple's market
share _grew_ (6,4 to 7 percent in OEM, 24.6 to 24.7 in total smartphones
market. Even more—Apple was the only growing besides Google), and somehow
"declining market share" gets upvoted? Add 20x revenues of App Store vs.
Android market and 9,5 billions made by iPad in _just nine months_ — all that
is somehow "severe danger" to Apple's profits?

~~~
jerf
It is an outsized threat to their profits vs. what you might expect based on
linear extrapolation. Up until quite recently they've basically been able to
collect monopoly rent. It is quite likely they will not be able to do so by
this time next year. It is entirely possible that they will lose this ability
this year, with the speed this market has been moving with.

Especially if iPhone users start to migrate to Android. While Apple partisans
will swear up and down this is simply Not Possible (TM), it in fact is
completely possible. Broadly speaking, most Americans will choose to save
money and get something "good enough" over something perfect. Even if I
stipulate that Android will never be more than "good enough", a statement I
would not necessarily agree with but let's go with it, you will still find a
lot of not-Apple-partisans getting peeled off proportionally to the price
delta between the iPhone and the Android. In which case Apple will either have
to drop prices and profits or firmly entrench itself as the high-margin, low-
sales player... and drop profits. There really isn't a scenario in which Apple
gets to be the high-margin, high-sales player that some people seem almost
desperate to believe will be the outcome, but even mighty Apple with its
Steve-Jobs-powered RDF can't actually flout economic realities, only harness
them.

~~~
jimbokun
"Even if I stipulate that Android will never be more than "good enough", a
statement I would not necessarily agree with but let's go with it, you will
still find a lot of not-Apple-partisans getting peeled off proportionally to
the price delta between the iPhone and the Android. In which case Apple will
either have to drop prices and profits or firmly entrench itself as the high-
margin, low-sales player... and drop profits."

With iPod, Apple played this almost perfectly, driving down their component
prices by always being the single biggest customer of their suppliers, then
deciding how long they could charge a premium versus lowering prices to keep
the delta with competitors prices from getting too large. They kept the prices
close enough that most consumers were willing to pay the premium for the Apple
brand.

I actually think they will do the same thing with iPhone. They are getting
close to having the previous iPhone version a "free" throw in with new
contract, and there are rumors of Apple developing an even lower version for
pay-as-you-go contracts.

I think angering content providers is a much bigger risk for Apple right now.

------
flogic
Well, I called that one. Where do I sign up to be a technologist. Or do I need
to be wrong for that job?

~~~
kreek
Nice, that made me laugh.

------
whatever_dude
Look at this momentum <http://plixi.com/photos/original/82369712>

------
valjavec
This is so funny. Android is gaining it's share and everyone is trying to
create iPhone killer. Noone is doing an Android killer:)

~~~
YooLi
It's because all Android has done is blurred the line between smart phone and
feature phone. It's Android phones now that are the free and BOGO phones and
that's exactly what Google wants--a base out there that they cannot be
excluded from for their primary business, advertising.

ex.:
[http://macdailynews.files.wordpress.com/2011/03/110303_andro...](http://macdailynews.files.wordpress.com/2011/03/110303_android_liquidation.jpg?w=590&h=471)

~~~
whatusername
Dear US writers: $0 Upfront is not a "free" phone. $50 Upfront is not a
"Cheap" phone.

I can get a "Free" iPhone 4 32GB on any carrier I like in Australia.

// This doesn't mean that Android isn't undercutting apple on price -- but
that $0 / $50 / $200 upfront are not meaningful in any way

~~~
YooLi
Dear non-US writers: This article is specifically about US smartphones.

"Google Android Captures #1 Position in _U.S._ Smartphone Market"

~~~
ugh
0$ phones are also not magically “free” in the US. You pay it with your
monthly bills down the line. The subsidized price is never a meaningful metric
for comparison, it is in itself not a reasonable metric for comparisons.

I have always been puzzled by this attitude which seems to be rampant with
Americans. Don’t you notice something’s up when somebody offers you something
for “free”?

~~~
detst
> 0$ phones are also not magically “free” in the US.

Yes, they are -- the only benefit will be contract/no-contract. Pay full price
and come back two years later and tell me it's not free.

> The subsidized price is never a meaningful metric for comparison

It's not subsidized when you pay the same monthly rate regardless (T-Mobile
being the exception)

> I have always been puzzled by this attitude which seems to be rampant with
> Americans

It's not an attitude; it's an acceptance of reality. I'd like a discount with
Verizon if I bring my own phone but I'm not counting on it anytime soon. Not
sure what's puzzling about that.

~~~
ugh
Wow. You pay the same price even if you bring your own phone?! That’s just
crazy. How is that even possible? You should get pitchforks!

The phones are obviously still subsidized, you just don’t get a phone for
free. It’s just that they presumably also overcharge you if you bring your own
phone. Wow! That wouldn’t fly in Europe.

~~~
detst
Yes, it's screwed up but just the way it is.

I think it stems from incompatible networks (GSM vs CMDA).

Since you can't take an out-of-contract phone anywhere else (with some
exceptions), signing a new contract for a free or reduced-priced phone is your
best option. Other companies can't use reduced rates as an incentive to bring
in newly-out-of-contract customers with a perfectly working phone.

It's created a consumer mentality where getting your phone from the carrier is
just the way it's done and signing a contract is the best value.

> It’s just that they presumably also overcharge you if you bring your own
> phone.

Sure, you can look at it that way but the average consumer here has accepted
that you get your phone from the carrier so the idea of being overcharged
doesn't even cross their mind. They look at it as getting something in return
for signing a contract and making a commitment.

------
rufo
iPhone is only one small piece of the iOS puzzle, though - iPod touches and
iPads add a not-small chunk to iOS' marketshare.

~~~
megablast
Yes, but that does not invalidate the data presented here. It is worth
comparing smartphones, to see how others are fairing in this market segment,
and it is worth comparing entire OS marketshare, to see what everyone is
using.

Apple is doing well, and Android is doing amazingly well.

~~~
Tycho
I don't know about amazingly. It seems entirely predictable: phone makers
desperate for something to rival iOS, and Google provide it for free. Why
would they turn it down? Android's popularity, in a funny sort of way, is
actually indicative of the iPhone's _lack_ of serious competition. What would
be amazing is if one of the Android handsets outsold the iPhone.

~~~
jerf
That's begging the question; since Android is not a serious competitor to the
iPhone, the fact that Android is doing so well is therefore proof that Android
is not a serious competitor to the iPhone. You neglected to spell out that
first clause but your statement is clearly based on that.

I'd suggest the much more plausible line of logic, along with being logically
sound, is that as Android is now outselling the iPhone, the Android _is_ a
serious competitor to the iPhone. Pretty much by definition of "serious
competitor". Will you still be dismissing it as "not a serious competitor"
when Android outsells the iPhone by a factor of two? Because I rather expect
it to only be a matter of time.

~~~
bonch
First off, like many Android fans, you insist on comparing an operating system
to a single phone. It would be a shock if a free OS on multiple phones
_didn't_ outsell a single phone. However, the word "outsell" is a weird one,
because Android doesn't cost anything, so it's not Android that's outselling
anything--it's the total sum of the multiple phones that just happen to run
Android compared to the one phone that runs iOS. Almost all of Android's
market share gains came at RIM's expense, not Apple's.

Android is not a serious competitor for Apple because it's not making Google
money. It has a negligible app presence and a fragmentation problem. iOS is
still what guides the industry, it's what people talk about, it's what Android
is copying (Android was going to look totally different before the iPhone came
out in 2007), and it's where the developers are.

It took an operating system with no price tag and the promise of total control
for the carriers to outsell a single phone. That's a big deal. Even then, not
one single Android handset outsells the iPhone on its own, and the iPad still
has no legitimate competitors.

More importantly, Apple make huge profits on iOS devices. It has the
developers, and it gets the press attention. Android makes no money for
Google, barely has developers, and is known as the geeky platform for cross-
armed OSS evangelists who hate Apple. It's also experiencing a non-trivial
rise in malware--two negative articles came out today in major news outlets.
Sorry, but Android is not a serious competitor for Apple.

~~~
queenOfEngland
The post above is exactly why I left Hacker News. The level of discourse here
has descending to the prattle that you read in the Engadget comments. Yes,
everyone here has read all of the talking points (boring, boring, really old
talking points). Many phones versus a few. Many makers. Profit margin.

Seriously, how incredibly boring.

------
akamaka
_American_ smartphone market.

~~~
mcantelon
The world market as well: [http://www.reuters.com/article/2011/01/31/us-
google-nokia-id...](http://www.reuters.com/article/2011/01/31/us-google-nokia-
idUSTRE70U1VW20110131)

~~~
jessriedel
Well, the OP's headline is about phone _models_ and your rank is about
_operating systems_. Is still don't know what phone model is #1 in the world.

------
dchest
Again?

~~~
noahlt
It seems like we get this story every week.

~~~
whatever_dude
I'd say it's because there are different milestones that people - fanboys,
media, companies - set. There's so many ways to measure. Daily activations,
current total market penetration... then there are variables like location (US
or global?), range (smartphones or all mobile devices?)... Android is just
winning them one by one, and this specific one happens to be one of the most
important metrics, IMO.

------
rooshdi
We've seen this coming for quite some time. Both Google and Apple have very
apparent opposing strategies in how they're going to attract customers to
their respective platforms. It's almost like watching Mac vs Windows all over
again. Apple is shooting for higher quality and high-end customers, while
Google is aiming for a higher scale and much wider user base. In the end, both
should co-exist and serve their niche just like Mac and Windows.

------
iworkforthem
Er... why is HTC not in the list?

~~~
ZeroGravitas
The first chart is all phones, not just smartphones and HTC only sell
smartphones. You either have to sell lots of dumbphones too (like Samsung and
LG) or sell a whole bunch of smartphones (RIM and Apple).

I'm not sure whether Motorola is there mostly on the strengths of smartphone
sales alone or combined with dumbphones.

------
georgieporgie
Somewhat off-topic: is there any reason _not_ to get Virgin Mobile's $150 LG
Optimus V for the purpose of exploring Android development? Aside from smaller
memory and lower-res camera, it looks like I don't miss out on anything from
top of the line models.

~~~
athom
I just wish I could afford one. Can you still use the pay-as-you-go plans with
this one?

~~~
trotsky
More or less. Virgin Mobile is a no contract provider, you pre-pay for each
month of service as you go. All the plans are unlimited (~5gigs) data/
unlimited texts - $60 gets you unlimited voice, $25 gets you 300 minutes, and
there is something in the middle at $40/mo. The $25/mo is the best US deal for
a capable android phone that I know of. You do need to pick from these plans
though, you can't use their x cents a minute pay as you use it plan afaik.

EDIT: Link to the thread (thanks georgie) about it being $129 w/ $20 gift card
at target. Damn good deal, note the one I played with worked fine over wifi
before it was activated with VM. Sale started yesterday:
[http://slickdeals.net/forums/showthread.php?sduid=0&t=27...](http://slickdeals.net/forums/showthread.php?sduid=0&t=2720701)

