“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
