The Smartphone Wars: 48% and rising
<p>There&#8217;s been a lot of talk in the trade press over the last month by people who believe &#8211; or want to believe, or want us to think they believe &#8211; that Android&#8217;s momentum is slowing, and in particular that the multicarrier release of the Apple iPhone was a game-changer that will eventually pull Apple back into the dominant position in smartphones.  Most of these talkers have been obvious Apple fanboys; a few have been contrarians, or tired of reporting the same old Android-wins-again stories, or merely linkbaiting.</p>
<p>The last week has not been kind to these people.  First, Canalys reported that in a survey of usage in 56 countries, Android has <a href="http://thenextweb.com/google/2011/08/01/android-hits-48-smartphone-market-share-but-not-without-troubles/">reached 48% market share worldwide</a>. Then the comScore figures on US installed base up to June 2011 <a href="http://www.comscore.com/Press_Events/Press_Releases/2011/8/comScore_Reports_June_2011_U.S._Mobile_Subscriber_Market_Share">came out</a>, and report only 40% share here. </p>
<p>I think comparing these sources is instructive, particularly with the <a href="http://www.catb.org/esr/comscore/">longer-term trends</a> as context.  It&#8217;s also worth noting a couple of other recent developments that cast doubt on the Apple-comeback scenario.</p>
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<p>The 40% to 48% discrepancy is easily explained.  With Nokia and RIM in collapse and Microsoft failing to gain traction, the smartphone market is increasingly just a two-horse race &#8211; Android va. Apple.  Android does better against Apple in price-sensitive markets; U.S. consumers are the least price-sensitive in the world and so Apple competes better here.</p>
<p>More interesting, perhaps, is what is <em>not</em> happening in the latest figures. Tragically for the contrarians, it is Apple&#8217;s U.S market-share growth rather than Android&#8217;s that has stalled.  Android share growth continues to bucket along at about 2% a month, while Apple&#8217;s shows no increase in the latest figures.  </p>
<p>The future is another country, of course, but right now it looks like those of us who thought that multicarrier iPhone was going to be largely unable to fix Apple&#8217;s long-term positioning problem were correct.  The iPhone&#8217;s market isn&#8217;t exactly saturated in the normal sense, but sales volumes are only growing as fast as the smartphone userbase as a whole; the multicarrier &#8216;breakout&#8217; only netted Apple about a 1% competitive gain, and that gain now appears to be over.</p>
<p>Apple is now relying on smartphones for <a href="http://www.readwriteweb.com/archives/iphones_ipads_are_nearly_70_of_apples_revenue.php">68% of revenue</a>, so they&#8217;d be very vulnerable to an actual drop in marketshare.  I&#8217;ve taken a lot of flak for saying the company looks like a late-stage sustainer with a principal product line about to experience disruptive collapse,  but this is yet another straw in the wind.  If next month&#8217;s figures show an actual share drop, expect it to be self-reinforcing and get the hell out of Apple stock.</p>
<p>Meanwhile, the whole smartphone market may be undergoing some sort of subtle shift.  Microsoft didn&#8217;t hemhorrage any share this month, which compared to their performance  since the WP7 release is a major victory for them &#8211; they even gained a few users.  I have no theory about what this means.</p>
<p>HP&#8217;s WebOS has fallen so far (below 2.2%) that comScore has stopped reporting it, probably because it&#8217;s now below their normal statistical noise level. Now they&#8217;re tracking Symbian instead.</p>
<p>In other news, Google is <a href="http://www.ibtimes.com/welcome.html?surl=http%3A%2F%2Fwww.ibtimes.com%2Farticles%2F189726%2F20110730%2Fgoogle-ibm-patents-buy-new-1000.htm">buying patents from IBM</a>, doubtless with the intention of turning the confrontations with Sun and Apple into Mexican standoffs.  My evaluation continues to be that the smartphone patent wars will be like a tale told by an idiot, full of sound and fury but in the end signifying nothing.</p>
<p>Finally, there&#8217;s really superb article on <a href="http://nfarina.com/post/8239634061/ios-to-android">Android vs. iOS</a>.  Anybody still laboring under the delusion that iOS&#8217;s toolset for app development is unequivocally better than Android&#8217;s should read this.</p>
