“IDC reported 251.1 million smartphone shipments for Q3, reflecting 40 percent year over year market growth but an implosion in Average Selling Prices, at least outside of Apple’s iPhone sales,” Daniel Eran Dilger reports for AppleInsider. “IDC’s public interpretation of its smartphone market figures were outlined in a press release that focused on market share, particularly noting that devices using Android now account for 81 percent of its total figures. The problem for Android is that its high volume sales are not generating profits, because the majority of those volumes represent very low end phones.”
“Apple’s 12.9 percent unit share of the “smartphone market” accounts for a 26 percent revenue share. Apple’s profit share is even higher: around 75 percent, because it is only selling premium iPhones at an ASP that’s nearly three times higher than the average price of two thirds of the entire “smartphone” market,” Dilger reports. “As IDC emphasizes, the ‘smartphone market’ is 81 percent Android, so most of the incredibly cheap devices that are pushing ASPs toward $200 are super cheap Android phones that sell for even less than this average because the total Android ASP still includes some premium Android phones.”
Dilger reports, “About two thirds of the overall smartphone market is represented by extremely low end “mass market” devices that are really only called ‘smartphones’ because the industry has decided that running Android makes a device “smart,” even if it is a product like the Samsung Galaxy Y, with a hard to read, low resolution screen and such anemic processing power and limited memory that it can’t really run apps and can’t be upgraded, with hardware specs inferior to Apple’s iPhone 3G from five years ago.”
“Android’s 81 percent sales volumes aren’t resulting in a boon for app developers, because two thirds of that volume is made up of low end devices that are effectively being used as basic camera phones,” Dilger reports. “Android’s heavy representation by the low end is also failing to provide Google with a viable alternative to Apple’s iOS. Despite being ostensibly a larger platform, Android doesn’t sell more apps or generate more advertising revenue.”
Tons more in the full article – highly recommended – here.
MacDailyNews Take: Obviously, IDC and their ilk are having difficulty determining what’s a smartphone and what isn’t – not surprising, since they haven’t figured out what a personal computer is yet, either.
As we explained back in November 2012:
Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong. Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.
iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera.
Android can have the “Hee Haw” demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth.
Not all consumers are created equal. There are valuable customers, and then there is everybody else. Sticker prices are remarkably adroit at separating the wheat from the chaff. Apple collects the valuable consumers and leaves the leftovers for their “rivals.”
Related articles:
IDC: Android worldwide smartphone market share passes 80% – November 12, 2013
Apple Maps makes killer comeback as Google Maps loses access to world’s most desirable mobile customers – November 12, 2013
Android phones 3 times more likely than Apple iPhones to have been bought at discount store – August 22, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
Twitter heat map shows iPhone use by the affluent, Android by the poor – June 20, 2013
Apple’s iPhone generates more in carrier fees than rival smartphones – January 30, 2013
Unsurprisingly, survey says Apple’s iOS is highest priority among mobile developers – January 23, 2013
People buy more Android phone units and do less with them vs. Apple’s revolutionary iPhone – November 14, 2012
Study: iPad users more likely to buy – and buy more – online than traditional PC users – September 29, 2011
iPhone users smarter, richer than Android phone users – August 16, 2011
Yankee Group: Apple iPhone owners shop more, buy more, remain more loyal vs. other device users – July 20, 2010
iPhone owners more likely to pay for digital content – November 26, 2009
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
Apple iPhone users buy many more apps, surf the Web much more than other ‘smartphone’ users – March 27, 2009
SamDung & Sons….. Do Do Do Doooooo!!!! JUNK YARD OF TECH.
Junkware…… Crapware…… the foul STENCH of their products are polluting the once Great Nation of The United States. Meanwhile….. @ the Halls of Injustice…… The U.S. Government continues to enable such prolific pollution from the most unethical entity on the planet earth.
Where THE !#$% is Greenpeace!!!
“THE BITTERNESS OF POOR QUALITY LONG OUTLASTS THE SWEETNESS OF A LOW PRICE.” – unknown
Amusing though watching those Fandroid desperately trying to justify their poor and cheap life’s decisions.
Aldo Gucci.
This also explains the crappy quality of the plethora of YouTube videos taken around the world . . . .
and the truth shall set you freeeee…
To paraphrase my grandfather, free technology. like free advice, is worth every penny you pay for it.
dmz
The headline is wrong!
“About two thirds of the overall smartphone market is represented by extremely low end mass market devices.”
That takes Android’s 81% down to 15% just slightly ahead of Apple’s 13%.
So, if IDC knew the difference between feature phones and smartphones, iPhones would be around 40%. Samsung would be about 50%.
The truth is out there.
The other 19%… Knock-offs.
Way to go on the skewed headline, MDN.
What percentage of iPods that Apple sells are “junk iPods”? Surely you can’t consider anything less than an iPod touch to be a _real_ device in the “smart iPod market”.
Humans come in all shapes and sizes, with different needs, different priorities, and different budgets. To artificially declare the more minimalistic devices inferior — and by extension the people who find the simpler gadgets a better value — is sheer arrogance.
Yes, we know that Apple makes the finest quality mobile hardware. We also know that Apple has chosen not to offer a wide-ranging family of iPhones as it has the iPods. Inevitably, the market will rush to fill the void, and so simpler non-smartphones are made by other manufacturers. Not all of them are junk. If Apple was truly wise, it would find a way to offer simpler, high-quality, cost-competitive iPhone models that would sell well in emerging markets, where most of the future growth is. Selling last year’s flagship phone isn’t cutting it in global markets.
Um, I think your idea of what Apple should do were they truly wise presupposes a motive that they do not possess. They are not in the business of taking over the mobile phone market. That’s not what they want to do and I for one wouldn’t want them to do it. There are too many other spaces where they could be playing and where I believe they will be playing, but once again, with high quality products that have high profit margins so that they can continue to do the R&D necessary to do the very same thing again and again. Who cares what Apple’s market share is? Do you remember what SJ said when he announced the iPhone? Hopefully we can capture 1% of the market, wasn’t that his stated goal? Apple has done incredibly well with the iPhone given that they started out with such a modest goal. You’re going to argue that Apple’s share of the market can become so low that no developer will want to develop for it, and, while I suppose that’s possible, it doesn’t seem likely to me given the demographics of the iPhone users vs. the Android users and their spending and usage habits.
“Smart iPod market”? Seriously?
Mike, the lengths to which you go to present a contrarian argument are just amazing. You really want to present yourself as the smartest man in the room, but you’re not fooling anyone.
——RM
I said it before and I’ll say it again.
Android may have the highest market share, but “Android” is a buzzword for generic phones (and some high end phones).
Why? Because when you buy a new Android phone today, you could get anything from Android 2.x to Android 4.3. Price of the new phone does not dictate this, either.
So, Android as an OS is simply the OS of today’s generic “smartphone” and feature phone.
Compare to Windows (PCs). Even the shittiest PC *has* to run Windows 8 in the stores. They can’t promote Windows 98 as the free computer and Windows XP as the $100 version. There is no “generic” Windows box. There are shitty ones, but not generic ones. With Android, you can very easily get both.
run a lock down phone that can’t run stock Android apps (like China O phones), a ‘gameboy’ with a few built in ‘pac man’ like games, a photo display, a pocket calculator powered by ‘Android’ and the idiot analysts will count them as ‘Android phones and tablets’.
I put the bracket around ‘Android’ as many are far from Google’s intention of android as you can get as most Android services are incapacitated (no accelerometers, little ram, no wifi etc). Seriously when ‘tablets’ cost 50 bucks in a roadside bazaar what do analysts think they are selling?
reminds me of NDP which proudly counted Windows tablets as ‘PCs’ but refused to count iPads (“Windows tablets are PCs, iPads are not” ) . In an interview when NDP rep was asked whether the then upcoming new HP Slate which was going to run WebOS replacing Windows, whether they would count them as PCs or not, the NDP guy stammered unable to answer….
Analysts count numbers to suit their own needs. They sell their data to PC, phone OEMS, carriers, support business for them to promote their stock, get loans etc. Numbers are ‘massaged’ to fit their clients needs.
typo NDP should be NPD.
Actually, the data cited in the article suggest that more than *three-quarters* (not ⅔) of all Android smartphones are low-end devices. Because the ⅔ of all smartphones that are low-end devices apply only to that portion of the smartphone market that excludes iPhones, which is: 81% for Android and 6% for “Other” (but excluding 13% for Apple iPhone). Therefore, low-end devices represent 76.5% (ie, 66.6/87) of Android + “Other” phones sold; or 82.2% if all the low-end devices sold were Androids (ie, 66.6/81). In other words, based on the estimated data cited in the article, it can be assumed that somewhere between 76% and 82% of all Android sales — or is it shipments? — are low-end devices unsuitable for market share comparisons versus the high-end Apple iPhone. Discuss.
I’d say that figure is about 19% short.
I’d have to agree with this, if you take a look at the range of android phones available on the market, you will notice that the vast majority of them are actually rubbish. I own a product reviews website and I try to steer clear of the junk and aim for the products that I think are actually worth reviewing.