A Sobering analysis of the current Android marketshare

From the NPD press release issued this morning:

First quarter 2010 information from The NPD Group's Mobile Phone Track reveals a shift in the smartphone market, as Android OS edged out Apple's OS for the number-two position behind RIM

NPD's wireless market research reveals that based on unit sales to consumers last quarter the Android operating system moved into second position at 28 percent behind RIM's OS (36 percent) and ahead of Apple's OS (21 percent).

To be explicit, for the first quarter of 2010, Android was sold on 28 per cent of smartphones in the United States. This puts its sales directly between the reigning Blackberry OS and the former “second place” iPhone OS.

This is very impressive in its own right and I think the Android platform ought to be congratulated for its performance. Better still, it lights a major fire under Apple's ass, and the old saying comes to mind: companies compete, customers win. So if nothing else, this should mean better products no matter what platform you choose to support.

It is important to note, however, raw sales data does not equal exact market share. Android is clearly trending upward, and if this trend continues it will naturally chisel away at Apple and RIM's OS market share.

A Dose of Zealotry

As with any news even remotely belittling Apple, it is immediately treated as libel by some of the pro-Apple press (the zealots, while few, are certainly vociferous). Here's one choice gem from the MacStories' reaction to NPD's press release:

Suggesting that Android holds 28% of the smartphone market compared to the iPhone’s measly 21%, things are looking great for Google and friends right? Well considering the iPhone is only on one carrier in the United States (and produced by a single manufacturer), compared to the four big carriers Android is on and multiple manufacturers, why hasn’t Android captivated more than 30% of the marketplace? Heck, they should be up there with RIM by now if their phones were really that good.

I personally don’t think the numbers are all that impressive (if we pretend for a moment that NPD’s numbers are actually reliable). Let’s look at the Android phone world as a whole – we have dozens of devices out there, compared to Apple’s main three (3GS, 3G, and 2G).

NPD's market research (like many other firms) is not an exact science, as device manufacturers rarely reveal exact sales data, and it is often difficult to gage actual market share information (browsing usage is one metric, and Apple does lead in this metric). But NPD's data is generally quite highly regarded among market research firms. Were Apple leading in the survey, would MacStories also be discrediting the data?

So while NPD does not offer precise-down-to-the-sale data, they are quite competent at measuring general trends in the market.

The argument against NPD's data is that they are somehow less valid because Android phones are offered on more carriers and there are more devices than iPhone devices for sale in the US. It is completely true Android OS is available on more carriers in the US than iPhone, but this hardly undermines the data. It's just a fact, whether it seems fair or not to the zealots.

Cold Shower

While Android OS is becoming great competition for iPhone OS I hardly think this is the beginning of any doom for Apple's platform. There are some facts to remember when considering this:

  1. There are new iPhones every June or July, and this trend has repeated for the last few years. Savvy consumers (those who understand the difference between iPhone OS and Android, at least) are well aware of this schedule, and as a result iPhone sales have generally slowed down in the months before a new device is unveiled (*ahem* properly).

  2. Apple already has a burgeoning developer community with over 200 000 applications in their App Store already. Android's marketplace has continued to make strides and has also been expanding rapidly, but not at the same growth-rate of the App Store. Platform strength is extremely important (*cf.* Windows in the 1990s).

  3. Tangential to no. 2, applications developed for an iPhone work exactly the same on any current iPhone ever sold, and any iPod touch ever sold. There are something like 100M of them worldwide. While that not be the market leader, consider the same application will run identically on the devices. Aside from the cellular chip in the iPhones, iPod touches are essentially the same device. There is no consideration given as to whether the device will have a physical or onscreen keyboard, or the screen size, or whether the device will have Maps built in, or whether location functionality is available. All iPhone OS devices are guaranteed to have these capabilities.

  4. Fourth, and possibly Apple's secret weapon of strengthening the iPhone OS platform is the iPod touch (and to a lesser degree, the iPad). iPod touch is just an iPhone without a cellular contract, which makes it irresistible to many more people. And more people buy more apps. And more app sales attract more developers. And more developers make for a stronger platform. There is no Android equivalent to the iPod touch; there is no way to get the Android platform without purchasing a phone (which usually means a contract).

If I had to guess the reason of Android's current success in the United States, it would simply be that the devices are available on networks other than AT&T, which has been the chagrin of many american iPhone users over the past years. I have the feeling many Android users on Verizon are there for the network, and not the phone. Either way, I think it's important for Apple to remove abysmal network performance of AT&T as a reason for not buying an iPhone in the United States.

Speed of Light