Apple's Smartphone Market Share Slips as Huawei, Lenovo Make Gains

[Michael Scrip]

Alas, I don’t know how many times I need to repeat the same thing for you to actually read the real meaning. You are still thinking about the commercial developers, who earns money on selling apps or ad spaces in the apps. I am talking about the developers who give their apps for free, as a support method for their real businesses.

All of the examples you gave are big businesses, and are all US businesses. iPhone’s market share in the US is around 40%.

You need to think about the businesses with less than 500 employees, or even less than 200 or even 100 employees. There are hundreds of thousands of those small businesses outside the US (and England), where iPhone’s market share is well below 10% now.

Yeah I get it... small businesses who make free apps to support their businesses.

I've been talking about worldwide iOS penetration... but you seem to be giving me highly-localized examples.

So let's look at one country... Brazil.

Android has almost 90% quarterly market share in Brazil... while iOS has less than 10%

If you just went by those numbers... you'd think a small Brazilian company probably shouldn't put too much effort into making iOS apps.

But usage share is a somewhat different story... with Android having 70% usage share... and iOS 20%

Guess what... there are iPhones and iPads in Brazil. There is an Apple store in Rio de Janeiro. Maybe only wealthy people in Brazil have iPhones and iPads... but they're there. And they make up 20% of mobile usage in Brazil.

Wouldn't a small Brazilian company want their free local app in the hands of wealthy customers? Whether it's a bank, a restaurant, a store, whatever... wouldn't they want iOS users to have their app?

Of course they do. They want their app in as many hands as possible... including wealthy iPhone owners.

Even though Android has 90% quarterly market share and 70% usage share in Brazil... you can't leave iOS out of the mix. It's still very important.

And there are more iPhones and iPads added every day in Brazil... increasing the iOS user base.

So that's why I can't understand why small businesses in Brazil will stop making apps for iOS. Or any country around the world.

There will always be more Android users than iOS users in almost every country. But that doesn't mean iOS should be a forgotten platform.

iOS has more than enough of a user base in countries around the world. So to ignore iOS would be crazy.

 

[twoodcc]

the iPhone 6 should really help sales. but Apple won't ever get those huge shipments unless it decides to go after the cheap smartphone market, which they really don't have a reason to do so.

 

[tongxinshe]

Yeah I get it... small businesses who make free apps to support their businesses.

I've been talking about worldwide iOS penetration... but you seem to be giving me highly-localized examples.

So let's look at one country... Brazil.

Android has almost 90% quarterly market share in Brazil... while iOS has less than 10%

If you just went by those numbers... you'd think a small Brazilian company probably shouldn't put too much effort into making iOS apps.

But usage share is a somewhat different story... with Android having 70% usage share... and iOS 20%

Guess what... there are iPhones and iPads in Brazil. There is an Apple store in Rio de Janeiro. Maybe only wealthy people in Brazil have iPhones and iPads... but they're there. And they make up 20% of mobile usage in Brazil.

Wouldn't a small Brazilian company want their free local app in the hands of wealthy customers? Whether it's a bank, a restaurant, a store, whatever... wouldn't they want iOS users to have their app?

Of course they do. They want their app in as many hands as possible... including wealthy iPhone owners.

Even though Android has 90% quarterly market share and 70% usage share in Brazil... you can't leave iOS out of the mix. It's still very important.

And there are more iPhones and iPads added every day in Brazil... increasing the iOS user base.

So that's why I can't understand why small businesses in Brazil will stop making apps for iOS. Or any country around the world.

There will always be more Android users than iOS users in almost every country. But that doesn't mean iOS should be a forgotten platform.

iOS has more than enough of a user base in countries around the world. So to ignore iOS would be crazy.

It all depends on the anticipated investment vs. gain. Sure all businesses want to have both Android users and iOS users to be helped, but when the business isn’t that big, so that the total anticipated profit increase from mobile apps can only slightly surpass the development & maintenance of 2 versions of mobile apps, how many of these businesses do you think will still bet on the development of an iOS version? Even if the 10% of iOS users might be more lucrative on a per-person basis, because obviously even 30% of the total anticipated profit increase might not worth the investment.

By the way, in this discussion the “usage share” doesn’t matter, because no matter how often the iPhone owner uses his phone to surf the web, he could only install one copy of each of the free support apps.

 

[PracticalMac]

Ummmm.... the iPhone has never had a majority share of the smartphone market at any given time. They started at 0%... hit a high of about 20% a couple years ago... and now they're at 10% quarterly market share.

But how many small businesses, restaurants, banks, etc don't have an iPhone app?

Why would any company... big or small... choose to support a smartphone with such low market share?

Look man... the iPhone is a popular platform and is VERY recognized by the public... with TONS of support from developers and 3rd party accessories... despite the existence of a billion "Android" devices around the world.

What are you suggesting... that Wells Fargo Bank, Old Navy, McDonalds or Netflix will stop developing their iPhone apps because "Android" has more market share?

Guess what... "Android" has had more market share for years! And yet... developers both big and small continue to make iPhone apps.

I guess that pokes a few holes in your "more market share = support" theory.

That is true, but the USA and probably European market.

In other countries where Apple has recently entered, like India, I am sure the situation is very few iOS apps.

I am not and never will assume iOS will not be usurped in Dev support.

 

[Michael Scrip]

It all depends on the anticipated investment vs. gain. Sure all businesses want to have both Android users and iOS users to be helped, but when the business isn’t that big, so that the total anticipated profit increase from mobile apps can only slightly surpass the development & maintenance of 2 versions of mobile apps, how many of these businesses do you think will still bet on the development of an iOS version? Even if the 10% of iOS users might be more lucrative on a per-person basis, because obviously even 30% of the total anticipated profit increase might not worth the investment.

Yeah I can agree with that.

By the way, in this discussion the “usage share” doesn’t matter, because no matter how often the iPhone owner uses his phone to surf the web, he could only install one copy of each of the free support apps.

True... but if iPhone owners tend to use their phones more in general... they would open your free app more often and use it more too.

There are some parts of the world where there are lots of Android phones... but they don't use the internet much on them. Data is still expensive in some parts of the world and thus some Android phones are only used for voice and texting.

You're right... an iOS user and an Android user could only install your app once... but the iPhone user might use your app more because of the reasons I listed above.

Imagine a small bank in an area where Android is overwhelmingly dominant... but that don't use mobile data that much. That banking app wouldn't get too much use by people on Android... even though they greatly outnumber iOS users.

 

[tongxinshe]

Yeah I can agree with that.



True... but if iPhone owners tend to use their phones more in general... they would open your free app more often and use it more too.

There are some parts of the world where there are lots of Android phones... but they don't use the internet much on them. Data is still expensive in some parts of the world and thus some Android phones are only used for voice and texting.

You're right... an iOS user and an Android user could only install your app once... but the iPhone user might use your app more because of the reasons I listed above.

Imagine a small bank in an area where Android is overwhelmingly dominant... but that don't use mobile data that much. That banking app wouldn't get too much use by people on Android... even though they greatly outnumber iOS users.

Sure, totally possible, either side. That’s why it’s normally unsafe to totally ignore a platform if it has at least 20% market share, even for the small businesses implementing free supporting apps. But for a platform of <10% market share, it’s much safer to ignore.

That’s why I think Apple needs to pay some good attention to the market share to avoid the dangerous “spin to death” zone (small market share —> low attention from the society —> bad support from other companies —> considered “incompatible” platform by regular customers —> smaller market share —> worse support —> ……)
Sure Apple is still far from that zone AT PRESENT, even in the areas where it has very low market share, because the global fever it created around itself and its products, which breaks the resonance chain by not satisfying the “low attention” requirement. But, as no fashion could last forever, it needs to prepare itself before that day comes.

 

[Michael Scrip]

That’s why I think Apple needs to pay some good attention to the market share to avoid the dangerous “spin to death” zone (small market share —> low attention from the society —> bad support from other companies —> considered “incompatible” platform by regular customers —> smaller market share —> worse support —> ……)
Sure Apple is still far from that zone AT PRESENT, even in the areas where it has very low market share, because the global fever it created around itself and its products, which breaks the resonance chain by not satisfying the “low attention” requirement. But, as no fashion could last forever, it needs to prepare itself before that day comes.

Once again... "market share" is different than "user base"

One is a percentage of sales over a 3-month period... the other is all active devices in use today.

(I'm talking about overall worldwide numbers now)

Yes... iOS apps are "incompatible" with Android devices... but there are over 500 million iOS devices that those apps will work on. And more iOS devices are added every day.

That's why developers make iOS apps.

I'm having a hard time putting "low attention" and "500 million devices" in the same sentence.

Again... I'm talking about general overall worldwide numbers... not specific geographical examples.

 

[jrswizzle]

the iPhone 6 should really help sales. but Apple won't ever get those huge shipments unless it decides to go after the cheap smartphone market, which they really don't have a reason to do so.

Really it comes down to availability of certain devices across the world.

Android = hundreds of various devices at a large variety of price points.

iOS = less than 10 currently available devices are very few price points.

Apple hitting the larger display market will help. And they'd be an even bigger player if they would hit the low end market. But I don't think they'd be able to compete with the vast number of OEMs cranking out low margin smartphones.

There are far too many "buy 1 get 1 free", too many free/low cost Androids already out there. Just the way it is.

Apple will continue to sell the single most popular smartphone and tablet each year, but Android will continue to dominate overall marketshare.

 

[jrswizzle]

Once again... "market share" is different than "user base"

One is a percentage of sales over a 3-month period... the other is all active devices in use today.

(I'm talking about overall worldwide numbers now)

Yes... iOS apps are "incompatible" with Android devices... but there are over 500 million iOS devices that those apps will work on. And more iOS devices are added every day.

That's why developers make iOS apps.

I'm having a hard time putting "low attention" and "500 million devices" in the same sentence.

Again... I'm talking about general overall worldwide numbers... not specific geographical examples.

You're lowballing Apple.

That's 500 million iPhones. They've also sold 200 million iPads. Add in 100 million iPod touches (as of 2013) and you're likely looking at close to 800+ million iOS devices already. They'll probably pass the 1 billion device mark sometime next year or early 2016.

EDIT: Active versus sold....my bad http://www.asymco.com/2013/11/25/one-billion-ios-devices/

 

[tongxinshe]

Once again... "market share" is different than "user base"

One is a percentage of sales over a 3-month period... the other is all active devices in use today.

(I'm talking about overall worldwide numbers now)

Yes... iOS apps are "incompatible" with Android devices... but there are over 500 million iOS devices that those apps will work on. And more iOS devices are added every day.

That's why developers make iOS apps.

I'm having a hard time putting "low attention" and "500 million devices" in the same sentence.

Again... I'm talking about general overall worldwide numbers... not specific geographical examples.

1. The term “market share” is used to refer both sales percentage in a specific time period, as well as percentage of install base.

2. If a certain sales percentage have persisted through a time period longer than the average lifetime of the product, that sales percentage can be safely used to represent the current install base percentage, more or less.

3. There are nowhere near to 500 million iPhone+iPad in use at present. The total sales of iPad is less than 120 million till now, at least 20 million of them are no longer in use. The total sales of iPhone is less than 350 million till now, at least 100 million of them are no longer in use.

4. Among the 350 million iPhone+iPads in use, maybe only around 100 million are in the BRIC, the other Asia and South America countries. At the same time, well over 800 million Androids are used there. From now on, more than half of worldwide smartphone+tablets sales will be from these areas, and that percentage will be larger and larger in the next 5 years. Apple needs to maintain a good enough market share in these areas to secure a safe future.

 

[Michael Scrip]

1. The term “market share” is used to refer both sales percentage in a specific time period, as well as percentage of install base.

2. If a certain sales percentage have persisted through a time period longer than the average lifetime of the product, that sales percentage can be safely used to represent the current install base percentage, more or less.

3. There are nowhere near to 500 million iPhone+iPad in use at present. The total sales of iPad is less than 120 million till now, at least 20 million of them are no longer in use. The total sales of iPhone is less than 350 million till now, at least 100 million of them are no longer in use.

4. Among the 350 million iPhone+iPads in use, maybe only around 100 million are in the BRIC, the other Asia and South America countries. At the same time, well over 800 million Androids are used there. From now on, more than half of worldwide smartphone+tablets sales will be from these areas, and that percentage will be larger and larger in the next 5 years. Apple needs to maintain a good enough market share in these areas to secure a safe future.

Where are you getting your information from?

9 months ago there were 700 million cumulative iOS devices sold:

http://www.macworld.com/article/2048491/cook-more-than-700-million-ios-devices-sold.html

With an estimated 500 million currently in use:

http://www.asymco.com/2013/11/25/one-billion-ios-devices/

And at WWDC just a couple months ago they announced over 800 million cumulative iOS devices sold:

http://gigaom.com/2014/06/02/wwdc-statshot-800-million-ios-devices-sold-75-billion-apps-downloaded/

So it would be safe to say that there are somewhere north of 600 million currently in use today.

And can you imagine how many more iOS devices will be in use over the next quarter or two? Or next year?

Look... people like iOS devices. And they will continue to buy iOS devices. And developers will continue to make apps for iOS devices... as well as accessory makers, case makers, etc.

All this time you've been saying that Apple won't have "enough market share" in the future to keep developers interested.

And I've been saying this whole time that there are 600 million iOS devices in use... and that iOS users DO purchase apps, accessories and all sorts of things in the iOS ecosystem. And more iOS devices are added every day.

You point to areas in Asia and South America that have huge percentages of Android devices... but you forget that many of those devices are complete garbage purchased by people who don't buy apps and who don't add anything to the ecosystem. Does that really make developers excited?

Of course not.

A platform with 600 million devices today... or 700 or 800 million in the next few years... has more than enough of a chance to have a safe future.

 

[firewood]

But for a platform of <10% market share, it’s much safer to ignore.

That’s why I think Apple needs to pay some good attention to the market share to avoid the dangerous “spin to death” zone (small market share —> low attention from the society —> bad support from other companies —> considered “incompatible” platform by regular customers —> smaller market share —> worse support —> ……)

BMW has less than a 4% market share, and seems to still have pretty good support (repair shops, etc.) in my neighborhood. Not ignored at all.

 

[Michael Scrip]

BMW has less than a 4% market share, and seems to still have pretty good support (repair shops, etc.) in my neighborhood. Not ignored at all.

Thank you!

I'll add that Honda has only 9% market share... yet Honda is very well supported too.

There will always be more Toyotas out in the world (and GM cars, VW cars, etc...) but that doesn't mean that Honda is some forgotten automaker.

 

[tongxinshe]

Where are you getting your information from?

9 months ago there were 700 million cumulative iOS devices sold:

http://www.macworld.com/article/2048491/cook-more-than-700-million-ios-devices-sold.html

With an estimated 500 million currently in use:

http://www.asymco.com/2013/11/25/one-billion-ios-devices/

And at WWDC just a couple months ago they announced over 800 million cumulative iOS devices sold:

http://gigaom.com/2014/06/02/wwdc-statshot-800-million-ios-devices-sold-75-billion-apps-downloaded/

So it would be safe to say that there are somewhere north of 600 million currently in use today.

And can you imagine how many more iOS devices will be in use over the next quarter or two? Or next year?

Look... people like iOS devices. And they will continue to buy iOS devices. And developers will continue to make apps for iOS devices... as well as accessory makers, case makers, etc.

All this time you've been saying that Apple won't have "enough market share" in the future to keep developers interested.

And I've been saying this whole time that there are 600 million iOS devices in use... and that iOS users DO purchase apps, accessories and all sorts of things in the iOS ecosystem. And more iOS devices are added every day.

You point to areas in Asia and South America that have huge percentages of Android devices... but you forget that many of those devices are complete garbage purchased by people who don't buy apps and who don't add anything to the ecosystem. Does that really make developers excited?

Of course not.

A platform with 600 million devices today... or 700 or 800 million in the next few years... has more than enough of a chance to have a safe future.

You just jumped back to the commercial developer cliche again! We’ve covered it a couple times — they don’t matter much about whether a platform is supported well enough. They support all major platforms anyway.

Those 700, 800 million numbers are so suspicious — look at Apple's quarterly report, they sell 35 million iPhones and 10 million iPads a quarter, and that number is much smaller two years ago and much much smaller two more years ago.
Anyway, as long as they are too much outnumbered by Android devices in the non-US (and a handful of western countries) areas, and with the maturity of the whole smartphone industry, the cheap Android devices have smaller and smaller quality gaps from iPhone, Apple is in a more and more dangerous situation. It needs to act now to maintain a less than 5:1 outnumbering status, otherwise it will eventually fall into similar situation it had with its Mac computers in late 90’s — less and less people DARE NOT to buy it even if they like it.

 

[BaldiMac]

You just jumped back to the commercial developer cliche again! We’ve covered it a couple times — they don’t matter much about whether a platform is supported well enough. They support all major platforms anyway.

You repeating this opinion over and over again doesn't make it true. If you'd like us to look at your "non-commercial" developer share, than post actual numbers. Otherwise you just have a completely unsupported theory.

Those 700, 800 million numbers are so suspicious — look at Apple's quarterly report, they sell 35 million iPhones and 10 million iPads a quarter, and that number is much smaller two years ago and much much smaller two more years ago.

Nothing suspicious about the numbers other than the fact that they are low estimates. Apple has sold 875 million iOS devices as of the end of Q2 2014. Maybe a little more depending on iPod touch sales.

The 650 million sold in the last three years is probably a good estimate of install base.

Anyway, as long as they are too much outnumbered by Android devices in the non-US (and a handful of western countries) areas, and with the maturity of the whole smartphone industry, the cheap Android devices have smaller and smaller quality gaps from iPhone, Apple is in a more and more dangerous situation. It needs to act now to maintain a less than 5:1 outnumbering status, otherwise it will eventually fall into similar situation it had with its Mac computers in late 90’s — less and less people DARE NOT to buy it even if they like it.

And yet more and more people are choosing to buy iPhones each year despite a greater than "5:1 outnumbering status".

I think people with similar arguments to you continue to underestimate the importance of the facts that 1) the iPhone is the number one selling smartphone in the world and 2) Android is not a single platform. I think these two facts are the key elements why the smartphone market isn't playing out like the market share-based analysis would predict.

 

[Michael Scrip]

You just jumped back to the commercial developer cliche again! We’ve covered it a couple times — they don’t matter much about whether a platform is supported well enough. They support all major platforms anyway.

I don't care about classifying developers as big or small... commercial or independent... or whatever.

All I'm saying is... there are PLENTY of iOS devices in the world for developers to make apps for... more than enough for ALL kinds of developers.

How many devices? Read on...

Those 700, 800 million numbers are so suspicious — look at Apple's quarterly report, they sell 35 million iPhones and 10 million iPads a quarter, and that number is much smaller two years ago and much much smaller two more years ago.

9 months ago... Apple announced 700 million cumulative iOS devices sold. I posted a link to it.

Then I posted a link to another article that estimated about 500 million active iOS devices at that time. Here's a recap:

"iOS unit sales crossed over 700 million units last month [October 2013]. That is a significant milestone but the total number of units in use is likely to be lower. My estimate based on device replacement assumptions is that about 500 million are still in use."​

Before we go any further... do you have any evidence to the contrary?

That report was from Horace Dediu of asymco.com... he's a well-respected industry analyst with a focus on the mobile industry.

If you have a problem with his numbers... you need to find another source. All you've done is say how wrong it is... without backing it up.

2 months ago... Apple announced 800 million iOS devices sold to date. So it's only natural to assume an active number higher than the 500 million quoted before.

Or... you need to show proof otherwise.

My point was... Apple has plenty of active iOS devices today... and they're constantly adding more active iOS devices every single day. Imagine how many there will be next year and the following year.

iOS was successful with only 100 million active users a few years ago... and they're successful with 600 million active users today.

Why would it not be successful with 700 million or more?

Anyway, as long as they are too much outnumbered by Android devices in the non-US (and a handful of western countries) areas, and with the maturity of the whole smartphone industry, the cheap Android devices have smaller and smaller quality gaps from iPhone, Apple is in a more and more dangerous situation. It needs to act now to maintain a less than 5:1 outnumbering status, otherwise it will eventually fall into similar situation it had with its Mac computers in late 90’s — less and less people DARE NOT to buy it even if they like it.

What is "dangerous" about being outnumbered?

There can only ever be one #1

But if #2 is big enough... it can still flourish.

Of course I'm talking about worldwide numbers here... nobody has time to break down each individual market.

The iPhone is available in 120 countries.