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October 26, 2016

Comments

Wayne Brady

I like that you put up the iPhones share of the entire mobile market. IMHO, that's been the relevant measure for at least the last 5 years. Android's massive growth in these last years has come almost exclusively from the low end conversions of dumb phone buyers.

Couple of other points of perspective. I don't remember a time when anyone thought the iPhone would take over the world in unit share. Maybe you could point a few outliers....but the "stupid American media" I hear all the time speak of Apple's financial dominance. Which is certainly true but outside the scope of your marketshare blog. To go along with Apple's outsized financial dominance....Apple has outsized influence. Apple sets the agenda in almost every way. Only very recently have Samsung designs become good enough that the Chinese copy them along with copying the iPhone.

Apple's 15% marketshare is not evenly spread out. Apple has huge marketshare in the US, Japan and significant marketshare in the Euro5 and China. And where Apple doesn't have great marketshare, it still has great marketshare "among the most desirable customers". This is not just 'Apple makes money, so what, who cares'. But everyone makes more money with Apple customers: the telcos, advertisers, merchants, accessory makers, app developers, enterprises, banks. And where the most money in the world is....is where Apple has much higher marketshare.

Which his irrelevant to unit marketshare but goes to your "long term viability" concern. At nine years and counting, the iPhone is already long term for a tech product. And from it's current position, there is no threat whatsoever to it's continued existence.

The iPhone has twice the unit marketshare of the Mac, and 3 times the historic marketshare of the Mac. The unit volume of the iPhone dwarfs that of the Mac....about 15 times larger. Apple has the #1 ecosystem, the Mac had an ecosystem to match it's tiny marketshare. The Mac eventually got help from the iPod....but the iPhone has help from the iPad, Apple Watch, Apple Tv, iMessage, Apple Pay, and the Mac. The iPhone/iPad combo sells more than the Windows PC market and does so with higher ASP's.

What of Google? Google the undisputed winner of the smartphone blood bath. They just released their own phones trying to mimic the iPhone. Not speaking about the similar look to the front of the phone....but the "vertical integration". Google designed the hardware (or at least selected the components), Google is going to update the OS directly to the consumer. They priced the Pixel exactly the same as the iPhone. Why?

Why hasn't the Android hoard left the iPhone in the dustbin of history long ago? Why do they still care?

Wayne Brady

Apple doesn't break out iPhone sales by model. Would love, Tomi, if you had any insider info on the sales of the iPhone SE. At one point you were bullish enough to think the iPhone would gain share at that price point.

Enquiring minds want to know...just how well is the iPhone SE selling? Where are it's sales coming from? Are they just canablizing sales of the larger iPhones?

Winter

So it looks as if Apple will end up with ~15% of mobile sales? That is higher than I would have expected.

On the other hand, it also seems that the price pressure on (cheap) Android phones is less than I anticipated. This would depress smartphone sales and decelerate the conversion to smartphones.

What I do not understand is why Android handset do not do not drop in price as fast as before?

Wayne Brady

@Winter - good questions. Some ruminations on what could be behind this.

There is an assumption that all dumb phones will become smartphones. But maybe this isn't true...or will take longer than some think. Consider my elderly mother. She has no interest in a smartphone. Even if a smartphone were cheaper than her dumb phone she wouldn't buy it. She also has no interest in paying for a data plan that goes with a smartphone.

As for Android ASP's....I see many midrange phones that are really well spec'd. And the migration of those no longer choosing to buy the best/most expensive may be slowing down. So while a nice $250-$400 Android phone is cheaper than a top flight $850 Samsung....maybe it's not coming from those stepping down but from those stepping up?

Lullz

Looking good. Apple is on the way for 15-20% share of the installed base of smartphones by 2020. Also looks like 85-90% of the phones sold by 2020 will be smartphones.

Juan

Tomi, I think your article is 100% accurate with a flawed conclusion:

"The digital world belongs to Android and Google, not Apple and iOS."

This is not true and the statement has many issues:

1. For the low end android installed base (60%, 70% I don´t know can only figure, and mean really low end no the Moto G style low end) having android on board means nothing, you properly mention the usage pattern (phone, SMS, facebook and light internet) for those devices...this usage pattern could be easily done by dumb phones. So for this installed base I´m not pretty sure its owners care about "android".

2. Funny thing, dumb phones should license Java but if they don´t use Google Services Android is free to use, so low end android phones are even cheaper than dumb phones looking at the license model.(and if those phones are not using google services...how relevant are they for Google??)

3. Android is a showcase and relevant (in the sense of trend setting) only in the high end spectrum, I don´t have official data but I´m pretty sure that if we talk about really flagship android devices on line with the iPhone we are talking pretty much about the same market share of the iphone (or less)

4. Look for the last Samsung flagship product introduction (S7, S7 Edge, Exploding Note 7), please tell me how many times Samsung executives spoke the word "android" (I have the data for the Note 7 = ZERO mention to Android). This fact tells you what about relevance??

5. Android is a commodity, is necessary and uncomfortable evil for manufactures to compete vs. iPhone/iOS, at the very same time that a company with muscle enough (Samsung?) find an alternative they will move away from Android...ANDROID FAITH IS TO BECOME THE DUMB PHONE OF THE FUTURE. (And/Or a nerdy thing like Linux)

6. Looking back (leaving a moment alone the Market Share Church) and knowing what you know about the Windows history, if you have the opportunity to travel back in time I don´t know...10 years; would you choose to be Dell, Lenovo, HP...or Apple?

7. The most funny thing about Android history is that even Google understood what you are missing:
GOOD HARDWARE (WITH ANDROID DENIAL SYNDROME) + POS HARDWARE WITHOUT GOOGLE SERVICES + A DATA MINING MODEL (NOT APPLICABLE ON THE VERY LOW END) = NOT ENOUGH TO BE RELEVANT

Pixel phones have relevance for Android/Google, and with luck they will have 2% of your beloved market share, the rest of the android universe is white noise.

cornelius

Awww, still no ear buds for the iSheep! You can't listen to music, but it just works because it is expensive. Nice.

Apple Says It Needs More Time Before New Ear Buds Are Ready

http://www.nytimes.com/aponline/2016/10/26/technology/ap-us-tec-apple-airpods-delayed.html

Juan

@ cornelius, do you realize that the real iSheep (Samsung, LG, Google, etc) will take the same path next year, or you don´t?

cornelius

@Juan Do you realize that with Android, the customer has CHOICE? With Android the customer decides what's best for him, as opposed to Apple where Tim is telling you what is good for you. And right now listening to music is bad.

Pekka

>>Do you realize that with Android, the customer has CHOICE?

No. There is not much choice.
Example1!: There is only big and huge flagship grade phones available. No iPhone SE or even iPhone 7 screen size flagships available (Sony's latest best 4,6" phone is not flagship grade phone anymore).
Example 2: No cameraphones available. Samsung do not make Zoom series anymore nor it offers any upgrades to the old phones. iPhone 7 plus might be the only phone with some optical zoom (fixed 2x) available.

Jack Rabbit

@cornelius
"Do you realize that with Android, the customer has CHOICE?"

Yes. If only iPhone users could use any Bluetooth headset from any Android maker or third party cheap vendor instead of Apple-branded ones... Wait - they can.
Well if only iPhone users could use any never-even-heard-of brand cases instead of Apple-branded ones... Wait - they can.
If only Android wear smart watches would support iPhone instead of being forced to use Apple Watch... Wait - they do.
If only iPhone users could use third party lightning-connector accessory chargers instead of Apple-branded ones... Wait - they can.
So... 3.5mm headphone jack? If only iPhone users could find 3rd party lightning-connector headsets where charger can be used at the same time instead of Apple-branded ones... Wait - they can. :D

cornelius

@Pekka
Your reply makes no sense so I can't answer that.

@Jack Rabbit
If only the iSheep could be milked for third party stuff instead of getting the headphones included in the price of the phone. Wait- they can be milked!

E.Casais

@Pekka

"iPhone 7 plus might be the only phone with some optical zoom (fixed 2x) available."

Wrong.

The Asus Zenfone Zoom ZX550/ZX551 provides 3x optical zoom. With full OIS (contrarily to the iPhone 7).

It is an Android phone. Released in December 2015 --- well before the iPhone 7.

Apple has been at the forefront of mobile innovation in many respects, but when it comes to cameras, it is barely playing catch up.

Pekka

>> The Asus Zenfone Zoom ZX550/ZX551 provides 3x optical zoom. With full OIS (contrarily to the iPhone 7).

It has nice camera, but otherwise it is not veery impressive (atom based :(). And it is not available in finland.

RickO

Watch out iSheep. BBK (Oppo,Vivo, One Plus) are coming to rain on your parade. I bet Q2 2017 BBK combined will push iPhones out of the Global number 2 position. Oppo, Vivo, Hauwei, Xiaomi, Lenovo and other Chinese brands (and possibly even Nokia and LG) with upper/mid spec phones will dominate 2017 - especially if Samsung loses too much sales momentum with the Note 7 disaster. At least Samsung should be able to recover more quickly but if something similar happened to the smaller Chinese brands that could be devastating for them. One brilliant phone can make a company - one dud phone can almost finish it.

Huber

@Juan: "do you realize that the real iSheep (Samsung, LG, Google, etc) will take the same path next year, or you don´t?"

Did you have a look at the flagship phones of these vendors lately?

- LG G5 and V20 have removable batteries, SD card slots and IR blasters (also OIS and an additional wide-angle camera)
- Samsung Galaxy S7 series has SD card slots
- Google never had IR blasters, SD card support or removable batteries, so there is nothing to see here

Wayne Brady

Folks - it's all choice. The iPhone is a choice, an alternative.

And if you choose an iPhone....you have the richest set of choices for most everything else. Apps, services, cases, headphones, cars...on and on it goes. Nothing is supported better than the iPhone.

You also get exclusives....an OS that get's updated regularly and you don't have to wait 6 month to a year (if ever) for your phone to get updated. You get iMessage and full backups with iCloud. If you would rather use Google services...you can. And Amazon's, Msft's...everybody's.

Plenty of choices on the Android side....but they altogether (with iPhones) count as choices. Perhaps you have a particular need or preference such that the iPhone isn't the choice for you. I have a $60 Android backup phone. It's a great choice to have a decent phone at such a great price. Of course, the camera isn't nearly as good (or much good at all), and I get to see Amazon ads on my lock screen (my choice to save the $50 for the 'no ad' version).

But no one Android phone has every good thing there is to be had in a phone. Once you make your choice....you will therefore have limitations. Maybe you choose a cheap Android phone and forgo the option to have the OS --ever-- updated. And you put up with poor performance and a cheap screen. But you saved money. Or maybe you buy the Pixel which will come closest ever for an iPhone like experience on Android. But you'll PAY for that privilege...the same price as an iPhone.

But there is no such thing as an Android phone that has every good thing there is in Andriod. Ultra cheap + removable batteries + quality metal build + huge screen + memory card expansion + plus ultra thin + plus huge battery + extra durable + google native experience + direct from Google OS and security updates + a stylus + apps that take advantage + side by side running of apps + + + + +

Plenty of choices to be made....but every choice involves compromise

Wayne Brady

@RickO - It should definitely happen that one of the Chinese should push Apple out of the #2 spot. But Apple is still going to sell 200M+ iPhones The iPhone should be flat to small growth next year. There isn't going to be a collapse the puts the existing #3 into Apple's #2 spot.

What will happen eventually, is consolidation among the Chinese. So far we just keep seeing the Chinese swap places with each other.

Cold Spring

Yes but you get to choose what you want, and not be locked into what Tim Cook or Jony Ive thinks you need! That's the whole point of Android. Ifanboys simply can't grasp this point! For example, for people who love using stylus with their phone, there is Note series, or even LG stylus series. For people who love huge screen, there is Mi Max with 6.4", or even Huawei Mate with 6.8" screen. For people who need phone with ruggedness and thermal imaging, there is Cat S60. For people who need molecularity, there Moto Z series and LG G5. The list goes on and on. Apple simply has no answer for the huge diversity and options availble in Android world. One other point is that Apple is one company, and iphone/IOS relies 100% on single company. This is a SPOF which Android does not have. For example, Samsung Note 7 debacle was terrible for Samsung, but for Android as whole, it was a non event. Had same battery issue occurred for iphone 7, that would have indeed been a proverbial "meteor strike" on planet of ifanboys! Over the long run, Apple has no hope of competing with Android, and even 10% global market share for iphone is likely too high for Apple to be able to maintain.

Wayne Brady

@Cold Spring - you are just describing choices...and you are acting as if every choice is available to every person. Most of those you mentioned are not available world wide. And there is no difference between "Tim Cook thinks you need" and "CEO of any one of those Android manufacturer's thinks".

For example - only Samsung things you need a stylus, and the functionality to go with it. But Samsung doesn't think you need the stylus on a smaller screen or in a cheaper phone....nor one with a removable battery. Dammit...Samsung is telling you what you want!

Per "wertigon" Ekström

@Wayne Brady:

"And if you choose an iPhone... You are by definition choosing to be incompatible with the entire Android ecosystem."

Fixed that for you. :)

My thinking goes like this.

1. Peripherals will come to platform A that platform B will not be able to support.
2. Apps will come to platform A that platform B will not be able to support.
3. Some of these apps and peripherals will affect the choice of which platform you use.

These three are truly uncontroversial statements. It will happen. End of discussion.

We also know that many buyers get the platform with most support and users (why isn't consumers switching in droves to Macs and Linux systems, by many considered "superior", on the PC market for instance?), and that the more users a platform has, the bigger the market for apps, peripherals and eyeballs (ads).

This would lead to suggest that the mobile market will converge to the Android platform over time, since it is bigger. Size and growth drives market share, and when there is no growth there is only size...

But yes, the uneven market share distribution of Apple can explain quite a bit.

Pekka

When people are realising security risks of the non updated phone, they may switch to iPhone. iPhone is cheap to own.

Android smartphone from well known manufacturer is typically supported 18 to 24 months. For flagships you may get a bit longer support. iPhone SE costs about 470€ in finland and probably will have about 4 years of software support. If i buy 200€ android phone, which may get one big update (nougat, because it will ship with soon obsolete marshmallow), my yearly cost is higher than with the iPhone SE. If I choose better and more expensive phone difference will be even bigger. Even iPhone 7 is quite affordable, 775€ divided to 5 years is 155€/year. If I will buy android phone which costs more than 250€, it will be more expensive per year than iPhone 7.

Huber

@Pekka: "When people are realising security risks of the non updated phone, they may switch to iPhone. iPhone is cheap to own."

I hope you know the difference between Apple's updates and Android's updates.

- Google provides security updates for Android 4.4 and up (if the vendor publishes them is of course another question)
==> You don't need an upgrade to Nougat to get the latest security patches. Kitkat will do

- Then you get the Google Play Services updates (available for Android 2.3 and up)

- And finally the App updates themselves (Chrome, GMAIL, etc.)

This is completely different to Apple's approach (single update for OS updates, security patches and Apps like Safari, iTunes etc.)

Apart from this, the thruth is that most people don't give a damn about updates. They just buy the phone and use it.

_WE_ are talking about this because we're nerds/ enthusiasts. Just ask a few random guys and gals on the street which security level they have. Most of them won't ven know what this is or where they can look to see this.

Pekka

>> I hope you know the difference between Apple's updates and Android's updates.

I know. But I have several android phones, for example Galaxy S4A and K zoom. From summer 2013 and summer 2014. Both have not got any OS updates for a long time. Both have serious security flaws. I switched the SIM card from those phones to year 2012 iPhone 5, which runs the latest iOS 10 while it was shipped with iOS 6. galaxy K zoom was shipped with Kitkat and the latest version available is Kitkat. Android is too costly for me. It is way cheaper to use iPhone.

Juan

It´s funny how the android taliban speak about choices but clearly miss the point that the iphone is simply another choice, you can choose Nexus/Pixel, you can choose Samsung/LG/Motorola/etc, you can choose Apple...heck even you can choose a Windows Phone...

I cannot understand why for the android taliban if people choice the iPhone is such an offense for them...I don´t care what phone are you using.

My primary phone is an iPhone, however my secondary SIM (family/friends only) is on a 8801 Sirocco that I refuse to let go...may be you as an Android fan (shouting choices) could not understand why I use a 10 years old Nokia dumb phone in place of a $50 Android POS, but for me makes all the sense...choice is about this, using what you like best, choice is not use whatever is available on the Android world.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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