“Though activations of new Android devices are now significantly outpacing iOS, it is viewed as representative of a larger trend of surging growth in the smartphone market, which will also benefit Apple,” Neil Hughes reports for AppleInsider.
“Analyst Gene Munster with Piper Jaffray said Friday he remains comfortable with his estimate of 16 million iPhone units sold in the June quarter, despite Google’s announcement on Thursday that Android activations are now greater than 550,000 per day,” Hughes reports. “‘Apple’s numbers are deceivingly low given the shift in timing of the iPhone upgrade,’ Munster wrote in a note to investors. ‘We believe iOS devices would have been up ~20% (quarter over quarter) if iPhone 5 had shipped in June.'”
Hughes reports, “When that fifth-generation iPhone is released this year, Munster expects to see a “huge spike” in iPhone sales in the September quarter.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]
Oh no, we’re doomed! Meh
Android activations are not a concern for Apple for different reason: most of these activations are for incapable cheap devices, for which users are not going to have bank card accounts. Many of these phones do not even have access to Android Market.
I don’t think that’s entirely correct; I believe EVERY android mobile phone does have access to the Android market (the single most important quality of the OS is the ability to run 3rd-party apps). This doesn’t change the essence of your argument, though, as all those devices whose owners don’t have credit cards can still create a g-mail account with which to access the market, and download every single free app there is on the market. These free apps persistently show banner ads at the bottom (or top) of their screens, which generates revenue for Google and the app developer. So, even the cheapest, crappiest android phones, sold throughout the developing world, still count for the developers as possible revenue sources, until Google (or its advertisers) figures out how to properly count ad impressions / clicktrhoughs coming from the developing world (where such advertising generates zero real revenue for the advertisers).
Sorry, but only GOOGLE approved manufacturers and devices have access to the Android Market, so all the cheap knockoffs, etc do not!
Most of these incapable “smartphones” phones with Android devices are useless in terms of significance, since people often do not even care to create Google account (and it is not that easy or popular anyway — like in China).
Most of these phones will never run any Apps beyond built-in. These ownwers do not have Wi-Fi at homes and certainly do not pay for data plans. People are buying these phones not because they have Android (not sure if many even know or understand what this word means), but because there are countless cheap choices, it is sold everywhere, it has bigger screen than usual phones, more useful for looking at photos or, more rarely, getting access to Internet.
And no, countless no-name devices do not have access to Android Market. You might want to check sporadic reviews of Asian “wonder” phones. It is just a tip of an iceberg, and these trashy devices do not have access to Android Market (or any other market).
(Not to say that *all* of cheap devices do not have access to Android Market; more cultured manufacturers like HTC provide access to AndroidMarket even to phones which cost 1/4 of iPhone. However, HTC is just small part of these 550 000 activations per day.)
I don’t believe ANY of those cheap devices that don’t access Android Market (and are not even linked to a G-mail account) are actually included in this half-million number from Google, since they would never show up on Google’s radar. Unless an android phone is running a Google-approved OS, with Google apps, Google is unlikely to ever find out about its activation.
“Activations” is count of all phones that became connected to cell networks. It is possible to collect this data since cell networks get device’s information during initial connection phase. Android OS’ source code is open to any phone manufacturer and since its “open” nature it does not have to include AndroidMarket at all, as well as any other Google’s apps in the standard package. Not even Googl’e UI is required.
So this statistics does not have anything to do with determining its value, since it shows whole bulk of Android phones, many of which as incapable.
And Android is free so…. any revenue generated from this is pretty obscure, and nowhere near Apple’s mobile business unit.
The question is how many of those half million activations are existing Android owners replacing old Android phones. Which brings one more question, how many of those old, replaced phones will continue to be used as smartphones (compared to how many iPhones remain in service after being replaced by the newer model).
Even so, regardless of answer(s) to above, Apple should keep an eye on these figures (and they do). At some point, these numbers will translate into some significant market share difference in favour of that Android. Even with the fragmentation, the tendency of Android customer base to expect free apps, and the multiple (and sometimes mutually exclusive) app stores, the Android platform may soon become attractive enough to many developers to become their first platform of choice (rather than second). Keep in mind, in order to develop for iOS, you MUST buy a Mac. Even the cheapest Mac of today is still perceived as outrageously expensive in the developing world (China, Russia, India and other places with high numbers of potential software developers). Many current iOS developers from those parts of the world have struggled to justify their Mac purchases (“so much more expensive for inferior hardware…”), but went ahead because of the lure of the iOS profits. Once Android becomes large enough and attractive enough a market, more and more developers, especially from the developing world, with just not bother with iOS anymore and focus on Android, regardless of all the obstacles and problems with the platform. And this may not be so good for iOS as a platform, for which one of the principal strengths of today is the abundance of GOOD QUALITY software.
eh.
This just sounds stupid every time I hear it. The majority of Android users DO NOT buy apps! You can try to twist that around anyway you see fit. But reality won’t change. Developers can’t waste their time on a fragmented OS lacking a realistic ecosystem. The tech biz is about making money & since Apple stepped into mobile, it’s become a multi-billion dollar market.
If you had read the comment, you would have found out that it actually did say that majority of android users expect free aps.
Practically EVERY free android app that I have downloaded has a persistent ad banner at the bottom (or top) of the screen. These banner ads translate into eyeball revenue for Google (and the developer). This is a recurring revenue; not one-off $0.99 purchase payment kind. A good example how this business model may be more lucrative for a developer (especially on the android platform) is Rovio (Angry Birds folks): currently, they are making more money from the ads in the free Android app than they are from the sales of the iOS app. The game is addictive enough that people keep coming back for more, viewing those ads in the process and generating money for Google and Rovio.
All those cheap, crappy devices sold in the developing world are equally generating ad impressions and ad revenue for Google. This will continue until advertisers figure out exactly how to correctly price the eyeball views coming from the developing world (where such advertising usually generates zero sales). Once that is figured out, online advertising model will start generating significantly lower revenue.
That’s just not true. Over half of those daily activations are coming from Asian phones that have no access to Android App stores and generate no revenue for Google ad placements. More than one manufacturer and/or service provider in Asia has actually opened the door for Bing/Microsoft ad placement.
How does Google benefit from ads when most of those Asian phones are running the Baidu browser.
Sorry I meant Search not Browser
the last story I saw was a few months ago and Rovio indicated they expected to make as much as the iPhone Angry birds, do you have a link to some report indicating they are making more?
In the end you can’t get around the fact that Google, through Android, has chosen an ecosystem with no economic input. Android is popular because it’s free. People who flock to free products generally don’t care much about quality, and generally don’t want to spend money on anything if they can get it for free. Developers and advertisers will find that out eventually. At that point Android will begin to decline, and so will the basic economic model under which Google operates. Putting your competitor out of business by giving away your competitor’s product only works if you can survive yourself.
Curious… if ATT, Verizon, Best Buy, etc says their best selling phones are the iPhones, how is the Android market growing faster than the iPhone market? Some one isn’t telling the complete truth… Apple or Google or both?
You’re joking, right?
“Though activations of new Android devices are now significantly outpacing iOS…”
No, not joking. If Android devices are now ‘significantly’ outpacing iOS devices in activations.. phones and tablets I would presume, how is it that the best selling devices are APPLE and not Android based? Are stores selling Apple products and not activating them? If Apple is the best sellers, one would come to the conclusion that there are more Apple products being activated. How can you sell fewer products (android base) but outpace the better selling items (apple)?
iPhones #1 device, iPad #1 tablet. Droid #2, but activate it 2 times to show more activations? Just doesn’t add up.
Comparing the iPhone to the Droid X, or Galaxy II is not the same as comparing iOS to Android. For individual device sales, Apple is usually at the top (and sometimes their year old model outsells many Android-powered devices) but it’s different for the OS.
As an example, Apple could sell 100 iPhones, the cloest Android competitor may only sell 10 of their device… but then there are 50 other companies that only sell 3 of their device. iOS activations – 100, Android activations: 160.
But you have not answered richie’s question, just given an example. What was asked was, how can you sell fewer products but have more activations?
In your example, you show 160 Android product sales = 160 activations.
Because it’s their best-selling SINGLE model. There are dozens of different Android-running models and the collective sum likely outsells the lone iPhone model.
OK, now that is a good explanation. I can see numbers that way. Thanks
Nevertheless, there have been a plethora of reports lately which state that the Verizon and AT&T stores the iPhone has been outselling the Android and it’s been stated as outselling Android devices. Not device.
Only from MDN. Don’t believe all their sales data, it’s a little biased.
Who gives a flying rat’s ass about the number of activations? They’re probably counting the Chinese Android derivatives OMS and Tapas. The bottom line is Apple reported revenue growth of 83% and profit growth of 95% last quarter and is expected to report the same this quarter. Apple’s revenue and profit growth are growing exponentially while Google’s growth is a steady but not stellar 32%. They could be activating 100 million Android devices from cheap android enable e-readers to chinese knockoffs for all I care. Apple has more cash, more growth and more innovation. Google’s good at search and better pray Apple doesn’t flip the switch on its own “porn-free” search engine on iOS devices. It will rue the day Eric Schidt went to Google’s Board back in 2007 (probably more like 2006) with the “you won’t believe what Apple’s up to” emergency meeting.
All of the Google tryPhone, er…Android, users I know will freely tell you they got the phone because it was A) “Free” or B) <$30.
Game is over if/when Apple decides to play with the bottom.
Apple won’t play with the bottom. They’ll never go there. The iTunes store runs near break-even because Apple makes most of its money on hardware sales and app store sales. Apple won’t give up the high-margin device sales because they don’t care about market share as much as about revenue share and controlled growth. They’ve had great success with their products, but are still happy to be somewhat exclusive by price.
All these stories should say something like, “A bunch of incompatible free OS’s, named (for some reason) for their originating parent, available from a PILE of different companies, ALL added together are outpacing Apple.” Really not very impressive.
I still go back to Steve Jobs in 2007… “we want to sell 1% of the phones world wide…” at the time there were about 850 million phones total.
notes on android activations:
1) android variants like OMS in China (one of the largest android growth zones) are counted but are so different from stock android they are incapble of running Google search or services and are locked down to private app stores (to stop variants Google is now desperately trying to restrict it’s ‘open’ software to select OEMs)
– many android phones are locked down to Bidu, Yahoo or Bing. You can’t even get Google on them unless you jailbreak the phones.
– there are plenty of third party app stores which steal revenue from Google (which also creates opportunities for huge pool of malware)
– Besides the fragmentation issue, phones like OMS that don’t run stock android apps, developers are also facing massive PIRACY. (if I remember correctly) in one developer conference more than 90% of the developers said their apps have been pirated.
– Google does NOT make a lot of money of android. Google says it’s on track to make 1 to 2 billion a year from mobile (all non pc platforms search, services, electronic payments). A huge chunk of that is from iOS as Google search is default on Apple devices. (Apple is so confident it’s not gone to Bing etc like many android phones have.) Google PAYS apple millions for the privilege.
In contrast to Google’s 1 or 2 billion Apple easily makes over $50 billion a year from mobile i.e it will take Google like 50 years to make what Apple makes in one year.
Google’s mobile profits are low even with high android activations because:
a) variants like OMS which don’t run google services are counted
b) phones can run Bidu, Yahoo and Bing
c) when a person is looking at an ad on his android phone he is NOT looking at a Google ad on his desktop: sum gain zero. Only gain is when mobile EXTENDS viewing time i.e when people are walking with a phone (people can’t walk and look at a desktop or laptop). Also phones have smaller ad space than desktops etc, so if more people look at mobile devices the square area of ads actually go down.
If Google makes so little of android how committed will it be to android vs Apple which makes 50 times as much?
I own a bit of Google as well as Apple stock.
If you look at the numbers: since Android and iOS introduction, google stock has gone nowhere, even with the boost yesterday it’s still under its 600+ high a few years ago. Apple has gone from around 100 to 350, i.e since android Goog has almost zero gain, apple around 300%.
Google? Almost zero gain??
It has a way to go to reach zero gain since its first iPhone year peak of 741.79 (November 6 close, up $4.23).
It has not been a kind investment.
AAPL was at $50 when iPhone was announced. That’s the day I bought mine. I was a Palm Treo owner at the time and could see what was going to happen.