Why Android’s ’80 percent market share’ might only represent half of all smartphone users

As measured by ABI Research, in the third quarter of 2013, Android had 80.6% worldwide smartphone market share.

“It’s simply wrong, though, to extrapolate from that to think that four in five smartphones in peoples’ hands are Android-powered,” Charles Arthur reports for The Guardian. “Here’s the reality: at the time this was written, more than 40% of the smartphones in use in the US were iPhones. Only about 51% of the smartphones in peoples’ hands in the US are Android phones. The ratios are more in Android’s favour elsewhere, but nowhere outside of China (and perhaps India) would you find four in five smartphone owners using an Android phone.”

“Market share is a measure of sales [or shipments]. Only in the specific case where the market is saturated – that is, everyone who wants a Widget has one, so that now the market is essentially just replacements – does market share probably tally with ‘installed base,” Arthur reports. “But if the market share figure is so useless [for smartphones right now], why does everyone quote it all the time? Now we get to the key point. Because it’s easy to measure market share – much easier than measuring installed base, which requires large panels of people who you interview on a regular, repeated basis. (ComScore does this in the US, where it provides a picture of the installed base of smartphone users that is consistent back to the end of 2009. Its figures for the three months to September 2013 show a 51.8% installed base for Android – that’s 76.6m – and 40.6% for iPhone – that’s 60m. It’s not 80% Android; not even close.) ”

“Plus ‘market share’ gives journalists who like nothing better than a metaphorical horse race something to write about – look at the preponderance of polls, especially in the US presidential election. Trouble is, it doesn’t necessarily give us useful information,” Arthur reports. “Market share does tell us who’s shipping the most of something. If you put it together with other things that matter to businesses – such as profits and revenues – it can be illuminating about who is doing business most effectively. And it can tell you how a market is changing, if you have a time series. Unfortunately some people don’t understand how little market share on its own tells you. Which leads them to focus on those figures alone, and to misinterpret them.”

Tons more in the full article – very highly recommended – here.

[Attribution: Daring Fireball. Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

Related articles:
Digging in on the Church of Market Share – May 25, 2013
The Church of Market Share revisited – April 26, 2013
Android’s market share is literally a joke; Apple is winning the smartphone wars and winning them handily (interview) – May 29, 2013
Android’s market share is literally a joke; Apple is winning the smartphone wars and winning them handily – May 23, 2013
Yankee Group: iPhone ownership in the U.S. will top Android by 2015 – April 26, 2013


    1. Unfortunately, this article is wrong. He compares latest quartely sales (ABI Research) with “installed base” (ComScore), which is also only for USA.

      ABI Research stastistics is also roughly confirmed by Google’s Android OS installations data, though it has bigger value because it includes non-Google version of Android OS.

      At the same time, while laid out arguments and stastistics uses in this article is totally irrelevant to the point, the point itself is not wrong, because most of Android users, especially in second/third world countries, only buy those devices for calls and maybe for big-screen photos. Nothing to do with browsing Internet, buying media or applications. They mostly do not even subscribed to data plans.

      So yes, ultimately, the world is roughly half iOS, half Android among real “smart” use scenarios.

  1. I think the writer, Charles Arthur, makes the very good point that unless market share translates to a growing installed base, then market share may only show a transient picture of device dominance.

    Installed base accurately reflects the absolute number of devices in actual usage Ias measured by web surfing or online purchases surveys) or the number of users purchasing apps on that platform. Both metrics show iOS users overwhelming the number of Android users by a factor of 2:1 belying Android’s so called market dominance as measured by sales volume.

    Installed base is what generates new and repeat customers. Installed base correlates to user satisfaction with the platform. Market share is a transient metric that shows popularity at any given moment in time.

    Apropos iOS 7 vs. Android, I think both are just as ugly, only iOS 7 less so. For this reason alone, I’ll stick with the less ugly of the two sisters.

  2. Let’s not forget fragmentation — only a tiny fraction of those Androids are running a current OS and large percentage are running and ancient one. That Android share figure really should be broken up by version since they are so different.

    1. Indeed!

      I persist in my view that any discussion of “Android’s” supposed market share is way off base unless the idea is brought in that there is, essentially, no such thing as Android. There are a bunch of incompatible branches of something that was once called Android.

      I don’t know this technically (anybody?) — but I think talking about Android as one thing is dramatically less valid than talking about OS X, iOS, all the varieties of Unix and all the varieties of Linux as one thing.

      My guess is that OS X is way more compatible with the whole Unix world than many varieties of “Android” are with each other.

  3. this explains why stock market types don’t understand AAPL v GOOG, iOS v Android. They are speculating on marketshare rather than future profit share.

    There is no reason at this time to believe that Android will sell at a premium to the top of the line iPhone which goes for $400 on contract. There is no reason to believe that Android handsets will become more profitable over time and many more signs point to less profitable as android margins decline.

    My friend has bought 3 subsidized Android HTC, MOTO & Samdung phones for $100-200 in the time I have owned my iPhone 4S for $300. In my case $900 went to Apple who cleared about $550 profit on my handset. My friend’s HTC and MOTO handsets, which both broke, did not show a profit margin. His Samsung handset showed a fraction of the Apple profit, prob under $100. Samsung needs to sell roughly 5-8 android handsets for every iPhone to derive the same profit share.

    1. d,
      Just as you said about your friend – I think droid manufacturers count on this, and so does wallstreet. While it does produce more sales, it shows more dis-satisfaction for the product, and in the end, a penchant of the stockholm syndrome for the users. A Windows era deja vu – all over again! 😉

  4. In all the ways that matter, it doesn’t really matter what Android’s market share is, or how it is measured…

    A typical Android phone has become the replacement for yesterday’s “feature phone.” Many Android users buy the phone and use its built-in features, but do not add any third-party apps. Therefore, one key advantage of having a high market share (for a computing platform) is negated. A high level of platform fragmentation further erodes the motivation for developers to participate in the Android platform (except for developers creating malware).

    And “feature phone” is the way most Android phone makers treat their products. They usually cannot be upgraded to the latest version of Android, when a new version is released. They often do not even come with the latest version of Android, when it sold as brand new. The customer gets what he or she gets when they buy the Android phone, and nothing more is expected (except maybe bug-fix updates). That describes a feature phone product more than a computing platform. Apple treats the iOS platform like the Mac platform, as a computing platform.

    Android (in all of its variations) is what (other) smartphone makers use, because it is free, and they are too lazy and/or cheap to create their own OS. Unlike the PC market, where Microsoft derived huge profitability from high market share and enforced uniformity on the platform, there are no major advantages to Android’s collective market share. The accurate and meaningful competitive measure of “market share” in the smartphone world is Apple versus each of the competing smartphone makers (separately), not Apple versus all of the Android smartphone makers combined.

  5. Consider how the numbers change with the addition of one space in the headline: “Why Android’s ’80 percent market share’ might represent less than half of all smart phone users”

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