We've seen this before. The rabbit takes off, looks like the heavy favorite, gets distracted, and loses the race. Microsoft tears out in front of an inept Apple in the 90's, only to see the advent of the smartphone and tablet eclipse their massive lead and take over the race. And while the tortoise and the hare fable has an end, in the real world of tech there is seemingly no finish line, yet the race is anew with Apple and Android in the mobile space. Android is the rabbit, while Apple is again the hare. Sorry Apple haters, but the Fan Boys (a derogatory term for those that like, use and support Apple products) are likely to win this race too.
Reading the daily pop-tech columnists, or listening to Wall Street's analysis of the day, one would think Apple never stood a chance against Android. Google's omnipresent OS is everywhere and Apple is losing the market share race. Steve Jobs is gone and it is only a matter of time until Apple folds shop, leaving the planet via their forthcoming spaceship campus.
Spin is everywhere against Apple lately for a variety of reasons, but buying trends tell an entirely different story:
- AT&T sold a record 10 million smartphones in the December quarter. 80% of those are estimated to be iPhones (another quarterly record for Apple and AT&T)
- Verizon sold a record number of smartphones in the December quarter, with iPhone leading sales figures amongst the category (also setting a quarterly record of iPhones sold for Verizon)
- Apple reaches highest-ever US Smartphone sales share at 53.3% according to Kantar World Panel's US group (the largest panel survey of it's kind in the world)
- IGD estimates Android loses market share in 4Q12 to iOS
To be fair to the Apple haters out there, I am slicing this pie to reveal only US market trends. World-wide numbers show Android taking an increasingly dominate stance over Apple and all other players in the market.
But it was only a little more than a year ago that many research firms were pointing to Android owning 53.3% of the U.S. market, with Apple's iOS only claiming 35.8%. What's happened? How has Apple taken over 50% of the U.S. smartphone market in a little over a year?
Studies continue to show once a user chooses an iPhone, only 10% plan to switch to a different mobile OS with their next purchase. Apple's seamless ecosystem of iPod, iPhone, iPad and Mac is evidently a pull far too strong to sway users once coming into the Apple realm. Contrast this to Android, which has only 50% of their users planning on sticking with an Android device for their next smartphone purchase.
Android took an early lead in the U.S. but for all the marketing and advertising Samsung, Motorola Mobility, HTC, LG (along with their carriers) push on the public, the slide to iOS devices continues.
Apple haters can hang their hats on world-wide market share -- for now. Emerging markets have largely relied on feature phones. Today there are a slew of new Android smartphones for $49 - $100 USD, which many low-wage markets in Asia and abroad can afford. Thus, Android's world-wide share is growing at a record pace. And herein is the rabbit in all it's glory. It's flashy, it's growing, but it's not for the long term.
Apple and Samsung account for nearly 98% of the entire mobile industries profits (Apple achieving over 70% of that figure). HTC just announced it's profits for 4Q12 dropped 91% yoy, to a USD $34.5 million in profit. Basically, HTC has been reduced to a non-profit handset maker, and HTC is likely to become an unprofitable company in 2013 and beyond.
How many cheap handset makers outside of Samsung will be around by 2014? How many more older top-of-the-line iPhones will Apple keep in it's lineup year after year for China and beyond, reaching down to the $299 price points and below? Likely many, while many of the feature phones converted to low-end Android users will follow a similar US path, eventually winding up with the desired Apple ecosystem of devices.
The affluent U.S. populous allows this transition to Apple's iPhone and iOS ecosystem to take place at an accelerated pace vs other markets. The mobile race is in the states is being won by the Apple tortoise a quarter at a time, while the spry Android rabbit has shifted to other markets to start again. Any questions as to who will also end up winning those races?
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