NPD: Android Surging, BlackBerry Falling, Apple Flat

Prediction: android share on US smartphones peaks in Q4 (probably 55% or so) and then declines into Q2 2011

Is there any real reason this is important? No.
Correct me if you can.

martin hill… allthingsD should hire you. EOM

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Let’s see—-

If I ran a business would I rather have the most widgets sold spread over dozens of manufacturers with different unsupervised app stores, & several fragmented OS’s flavors—

OR

one basic device/OS/app store the sales of which captured more than 50% of the NET profit of the industry?

Hmmm, that’s a tough call.

Needs lots of market research before I decide the route I’d go.

Ayuh

Most of the apple apps are “fake”, you know that. There are hundreds of websites advertising that they can publish an app on the apple app store for $5, all you have to do is give them your RSS feed and customize a few things like title, description, etc. You call that an app? I call that a walled garden RSS feed.

The app numbers iOS vs Android are totally irrelevant. What matters is how many of the really useful apps are on each platform, that number is about SAME.

This is no surprise to me. Blackberry had market share only because they were the first to office a “no cost” phone when SMS texting first started to be extremely popular. In reality Blackberry as a real SmartPhone style device has been loosing ground for years. It should too. It’s an extremely outdated platform. Sure they often release “new versions”, but they have not changed the underlying OS methods since day 1. The underlying OS that I referring to is simply a Java engine. Java is dead, and should be put out to pasture. Along with this phone platform.

Yes, very important to mobile application developers. VERY important. Which in turn becomes very important to end users.

The iPhone is not carrier exclusive in most countries, and the majority of iPhone sales occur outside the USA, so even if your premise were true, your conclusion would be false.

The trouble is, your premise is also false. Apple COO Tim Cook has stated several times during Apple’s earning calls that ending exclusivity has not lead to lower iPhone margins.

apple was forced to end carrier exclusivity in europe because of EU law, but the deals have been and still are of exclusive character.

So tim cook wishes he can keep same unreasonably huge profit margins after end of AT&T exclusivity. It’s his wish. Fact is no carrier will want to pay $650 per iphone when they can pay below $400 per similarly specced Android super phone. It’s simple mathematics. Carriers can keep the $250 to themselves by getting new customers using Android instead of Apple.

The only way apple will keep any significant market share in the smart phone industry is by significantly lowering their profit margins!!

Two things…

1. Since we still live in BVI (Before Verizon iPhone) time, I don’t think AAPL is too concerned.

2. Got to give credit to Android or did RIM really miss the boat and is moving towards becoming irrelevant?

It’s fine to point out that the Apple OS works on iPods and iPads. But it doesn’t mean we shouldn’t look at the OS installed on new phones – that’s an apples to apples comparison, and nothing wrong with pointing that out.

Hmm let me see here, Android phones are ubiquitous and generally cheaper, the UI is advancing at rapid pace, it is not a walled garden, and the day after every new iPhone lands the market responds with YAAHTPIF/H (Yet Another Android Handset That Pummels It’s Features and Hardware).

For the above reasons, I believe Apple will shrink to what it is good at, low market share devices that make the company high margins – this is their formula and it seems to be playing itself out again.

No, you are incorrect. There are far more quality apps on the iOS app store. The largest segment – games – is a prime example. Android OS is severely lacking in big name game titles released by all of the largest mobile Game publishers:
* Gameloft – 136 games for iOS vs 12 games for Android
* Capcom Mobile – 27 games for iOS vs 4 games for Android
* EA – 74 games for iOS vs 0 for Android
* Ngmoco – 42 games for iOS vs 0 for Android
* Pangea – 24 games for iOS vs 0 for Android
* Popcap – 5 for iOS vs 0 for Android
* ID’s new game Rage is only being produced for iOS

And total number of games:
iOS = 38,000 vs Android = 13,000

Although Popcap and EA have said they will start porting some games to Android soon, this disparity is not likely to change much with iOS developers making 50x the income ($1 billion) compared to Android ($21 million) over a similar timeframe and with piracy ranging from 50-97% on Android.

The situation is the same for business apps. The Android App market just does not compare to iOS.

Peter, the problem is that all we ever see from the analysts is this one comparison – cell phone sales from Apple vs cell phone sales from all Android manufacturers combined.

However, you have to ask yourself, what market share numbers are actually useful for developers, advertisers and consumers?

From that perspective, the useful metrics are:
- total size of app platform (actual size of market for developers & advertisers)
- web browser marketshare (actual size of market for advertisers)
- individual phone model popularity (will my phone be an orphan or well supported?)
- profit share of manufacturer (health of manufacturer)
- hardware peripheral market share (will my phone work with all the iPod dock equipped HiFi systems out there or will it work with my car’s iPod dock and steering wheel integration?)
- number of quality apps (will my phone have all the top games/business apps/utilities?)

On all these counts iOS far exceeds Android, but it never comes out in a simplistic comparison of just the phone segment of these mobile OS platforms.

This is why NPD and Canalys’s numbers are not terribly useful.

-Mart

@ Martin Hill
Yup, in France, where the iphone is sold by all carriers, that number goes as far as 50% of the market. Android ? Andr..what ?

Of course the size of the entire operating system platform is the important measure. How else are consumers going to judge which platform to buy into?

How are developers going to know which platform is the most popular to target? or which platform gives the most develper income?

How are advertisers to know which platform has the most eyeballs?

How are 3rd party manufacturers going to know which platform has the most devices with a common form factor and dock connector to make hardware peripherals and cases for?

How are investors going to know which manufacturer is the most profitable so they can invest wisely?

-Mart

@Lotsie
Um, would you like to fill us in on what competitor “A-PAD” (?) has killed recently?

Have you not noticed that no other competitor has managed to match the iPad’s 10″ multi-touch screen for the same let alone a cheaper price.

Just about all competitors have resorted to 7″ screens or smaller with less than half the area of the iPad and yet still have to try and hide the true cost behind 2 year carrier subsidies.

Apple’s enormous economies of scale and up-front multi-billion dollar supplier contracts have left competitors struggling to compete with Apple’s iPod or iPad prices.

No, Apple quite obviously doesn’t have to drop prices and margins and cut their throats like everyone else.

-Mart

You are correct that it is far from dethroning the iPhone but it is certainly on the right path. While there still is quite the large disparity of quality apps between the 2 platforms, the shift in professional development to Android has really only begun very recently. It will take time before we can see where things are going to settle. Android is getting killed in the tablet market but Google hasn’t even released the development kits to work on tablets yet(though it should be coming soon). The current tablets are hack jobs. It’s no wonder they aren’t doing well. They don’t even have access to the Market without a hacked apk. I expect to see real competition on that front in 2011 with the next Android release.

On another front, we will probably also see a new direction for Android in the form of Google TV next year. I know that it’s already out, but it’s really for early adopters at the moment. The good stuff is hopefully coming next year.

I certainly can’t wait to see what comes out for Android in 2011. I love good competition. It spurs innovation and lower prices.

@Charbax
>”It can also be argued that the real quality apps are developed for Android only”

You might try and argue that but even one of the most famous Android developers would disagree:

John “DVD ” Lech Johansen, the author of DoubleTwist the popular iTunes replacement for Android has this to say about the Marketplace:
“Google does far too little curation of the Android Market, and it shows. Unlike Apple’s App Store, the Android Market has few high quality apps…. just a few examples of what’s wrong with the Android Market. … 144 spam ringtone apps (which are clearly infringing copyright) are currently cluttering the top ranks of the Multimedia category… Developers and users are getting fed up and it’s time for Google to clean up the house.”

The average time for approval on the App Store is now sitting at 4.05 days with a max of 24 days according to 148Apps.biz. I think you’d better complain about something else.

>”there are stories of HUNDREDS of app developers loosing MILLIONS of dollars”

That’s funny, all we ever read about is the hundreds of app developers making millions of dollars on the iOS App Store. For example, Angry Birds has sold 1 million copies in 6 days or 10 million in total in 10 months, “Fruit Ninja” sold 1 million copies in 74 days, “Cut the Rope” sold 1 million copies in 10 days. Gameloft has sold 20 million games etc etc.

Care to enlighten us regarding similar successes on Android? *crickets*

Now to address your other red herrings:

There are several VOIP apps on iOS including Fring and Skype (care to let everyone know about the 3G-only limitations Verizon has imposed on Skype on Android?).

There are hundreds of Video Streaming apps on iOS. Not sure what your point is here?

P2P, yes well that is mostly illegal, but jailbreak your iPhone and you can do that too.

Bluetooth – yep, plenty of apps use Bluetooth for everything from remote control to gaming to 2-way radio etc. I agree Apple should add wifi tethering, but again you can get that by jailbreaking.

Plenty of apps compete with Apple’s own software eg, Pandora, Spotify, a dozen different web browsers, etc etc.

>”Android is growing by 1000% y/y while iOS is loosing significant market share”

iOS sales are 275,000-300,000 per day while Android is only at 200,000-250,000 so the gap between iOS and Android installed base just continues to grow.

>”very few third party providers make any significant money”

Wrong again. iOS developers made 50x the income ($1 billion) compared to Android ($21 million) over a similar timeframe and with piracy ranging from 50-97% on Android, as Larva Labs have said “This really indicates how much of a cottage industry the paid Android Market remains, with insufficient sales numbers to warrant full-time labor for paid content.”

>”Android is better as app developers can target newer and better hardware APIs, they can reach new hardware functions several months before apple adds them”

What, like the Retina Display or the gyroscope or the accelerometer – oops Apple added those first didn’t they. So how’s that Facetime equivalent going on Android – oh those third party video conferencing apps are pretty crappy and most Android phones don’t have forward facing cameras. Oh well.

I’m sorry Charbax, but you are really grasping at straws and your manufactured “facts” are really dragging down our discussion. Maybe I should stop perpetuating this dialogue.

-Mart

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@Millnd
Apple’s IPS Retina display has 160% the resolution of the Samsung screen and better outdoor performance so no, your thesis that Apple really wanted the Super AMOLED does not hold water.
Also, the Galaxy S was released only 20 days prior to the iPhone 4 (June 4 vs June 24), so that’s a wash.
Good point on the G1′s compass – I was a bit hasty on that point.

On the Facetime issue, there are 14 million iPhone 4′s out there and 50 million Macs that can all Facetime and pretty ubiquitous wifi in most homes and workplaces and the protocol has been released as an open standard, so I wouldn’t rush to say it is useless. I would say that the grainy, postage stamp-sized, stuttery mobile video conferencing of many competitors have their own usability issues. (and of course Facetime over 3G is only a jailbreak away if you do want it).

In any case, I do agree that Apple’s annual product refresh cycle and virtually single phone model does lend itself to other phones featuring better specs in some areas at times, but I wanted to stress in my comment that Apple is very often the leader in new features as well.

However, the iPhone and before it, the iPod, have proved that the whole is greater than the sum of the parts and the success of Apple’s consumer devices does not rest on how many geek hardware bullet points they tick off, but rather in how much better the overall integrated software, hardware, peripheral and online experience and ecosystem is.

-Mart