Apple will continue to ignore Android market share stats all the way to the bank

“It’s not a secret that Android has surpassed iOS in terms of mobile market share,” Tony Bradley reports for Forbes. “While Android loyalists take great pride in this fact, though, Apple could seemingly not care less — and for good reason.”

“The reality is that Apple doesn’t really compete with Android. Apple and Android cater to different markets with different needs,” Bradley reports. “There are Android vendors who aspire to compete with Apple—like Samsung—but Apple isn’t actively striving to win over Android users.”

“It comes down to this simple fact: The people who buy cheap Android smartphones and cheap Android tablets were never in Apple’s market to begin with. It wouldn’t matter if Android didn’t exist at all—those customers are simply not part of Apple’s target audience,” Bradley reports. “Android expanded the size of the mobile market share pie, but really had virtually zero impact on Apple itself.”

Bradley reports, “In the end, what is the value of market share if it doesn’t result in revenue and, more importantly, profit? Apple doesn’t need to be concerned with the market share battle, because most of the customers who are driving the skyrocketing market share of Android are not Apple’s target market, and don’t provide any underlying value aside from headline fodder for tech news sites.”

Read more in the full article here.

MacDailyNews Take: As we’ve been explaining for many years now:

The price tags on and features of Apple’s products are an IQ test. They are a filter that Apple uses to skim off the desirable customers and leave the leftovers to the knockoff peddlers. Tablet buyers, just like personal computer and smartphone buyers, either pass or they fail – daily, repeatedly, forever, until or unless they finally figure it out. Newsflash: Apple sells premium products at premium prices to premium customers.

As we wrote last November:

Android can have the Hee Haw demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth.

[Thanks to MacDailyNews Reader “David E.” for the heads up.]

51 Comments

  1. It is really quite simple as I see it, there is Apple and iPhone, and there is everybody else. Everybody else just aspires to be like Apple. If you can’t see that you are blind, ignorant and/or really stupid.

  2. “Bradley reports, “In the end, what is the value of market share if it doesn’t result in revenue and, more importantly, profit?”

    Sorry if I sound like I’m talking to a 4 year old: you do know there is such a thing as Profit Share, correct? It’s been highly touted for years now. It’s not that hard to calculate either.

    1. Are you speaking for or against Apple’s business model? Your comment is unclear. MNXT41 below explains what I think you’re trying to say very clearly. 85% of the profits of the ‘smartphone’ market is captured by Apple. iPhones are responsible for 80-90% of revenue generating internet traffic (real $ not just click-through activity). Apple has control over economies of scale and component costs (in their favour) which are two threats when your product is a commodity (which in the case of iPhone, Apple has ensured through design it is not).
      Apple shouldn’t and doesn’t ignore developments in the Android, and they are right to pursue patent infringement against unethical companies.
      Finally, Apple’s rise to dominance is compelling evidence of a successful business model and product offering which, if Apple is successful in its litigation against patent infringers, will force competitors to develop better products through original (I.e. their own) R&D to the benefit of the market at all price points.

      1. Hrmmm… for it. I’m speaking against the braindead writer Tony Bradley, who’s out there hacking away at strawman arguments. The term ‘profit share’ has been around for quite some time and is used in connection with Apple all the time. This ‘piece’ is based on the assumption (?) that profit share doesn’t exist or no one has heard of it.

        TLDR: This is old news.

  3. I would much rather have a smaller market share and higher margins, than the other way around. Market share is nothing more than bragging rights, and in this case here’s how that goes – “We can give away more Android phones, than you can sell iPhones!” Anyone can give something away …

  4. Based on current profit margins, as a very rough (and even numbered to make a broad point figure Apple could be making approx $200-$300 per iPhone.

    Loads of people complain that iPhones are too expensive and that they should cut the cost so they will sell more and make more money. On a $600+ device, how much of a price cut would make a substantial difference to the number sold? $100, $150, more?

    Even if generous and you say Apple are making $300 a phone, cutting by $100 dollars means they have to sell 50% more just to break even to where they were before. Economies of scale may come in to play a bit more, but they would be negligible considering the volumes they’re already doing. Cutting the price more would just increase further the amount they need to sell to be at the same point, and cutting it less wouldn’t likely increase sales much. Considering they can’t make them fast enough they would basically just be throwing money away for no tangible benefit. I don’t think a $100 price cut would increase sales anywhere near enough to warrant it.

    The only way for Apple to make a substantially increased amount of money on increased sales would be to cut costs and sell a lower quality device. That is something that they just don’t want to do, but would also be cutting out one of their primary selling points.

    Apple price their products very deliberately, you can argue that a few tens of dollars either way on things might balance price points more, but they analyse the hell out of these things and come up with prices for a reason. The fact they are as profitable as they are and that the rest of the market isn’t pretty much proves that.

    People calling for Apple to sell things at lower cost are not saying it because they think it will make Apple more successful, they’re doing it because they’re cheap and want to pay less themselves.

    Windows had huge market share and made a lot of money, but when Apple really got it together with the launch of OS X and all the machines that have run on it, they leveraged their small market share into the biggest profits in the industry. The difference this time is that Android isn’t making the same big money that Windows did originally, Android doesn’t have the larger volume of software that Windows did (quality aside). Windows had advantages because it built up a lead which Microsoft then blew. Android doesn’t have those and is largely just occupying the low profit end which they are welcome to. If anything, low end users getting Android “smartphones” is an opportunity for Apple because a number of them will upgrade to iOS subsequently.

    1. What in the name of all thing holy are you doing? Mature, educated thought that holds water? Get the hell out of here. You’ll scare the kids! AHHHHHHHHHHHHHHHH!!!!!!!

      Spot on – kudos

  5. …. like Apple ignored Windows market share all the way to the bank?

    Having the best product means little if you can’t maintain a vibrant 3rd party developer base. While iTunes indeed offers that today, other platforms are rapidly eliminating Apple’s lead. To propose that Apple should ignore the health of the competition is absolutely ridiculous.

  6. Yes, Apple was in a good position. But then it released the iPhone5c and iPad mini, meaning it is trying to make a go for a wider market, because keeping its existing market would eventually run it at a loss. This and the fact that Android starting to eat away at Apple’s once-exclusive niche, means Apple is in a very tenuous position right now. Market share matters, and Apple knows it.

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