You know what they say about the obvious. ‘Sometimes you can’t see the forest for the trees.’ So it is with the ongoing battles between Apple’s iOS devices and Google’s Android.
On the surface, at first view, and as promulgated ad nauseam by today’s short sighted tech pundits, Android is winning. How so? Market share. Elsewhere in the forest, almost out of sight, Apple is slowly destroying Android.
Losing While Winning
Where, exactly, is Android winning in the battle against Apple’s iOS devices, the popular iPhone and iPad? Two words: Market share. Not revenue, not profits, not customers who spend money in the forest of Apple’s ecosystem.
In fact, on every other front except one, Apple is demolishing Android, despite being outsold in unit market share.
How does Android fare against this laundry list of important measures?
Apple has managed to capture almost 80-percent of the entire cellphone industry’s profits, leaving the rest to desperate Samsung (which spends nearly 10 times Apple on advertising and promotions).
The rest of the Android nation is starving, including Google itself. Wait. Isn’t Google planning to make money with mobile advertising? That’s the company’s strong suit, right?
Nearly 70-percent of mobile ad revenue is generated by iOS devices. That’s a two-to-one lead over Android devices, despite Android having three times the market share. What’s going on?
It’s usage. It’s ecosystem. It’s quality vs. mediocrity.
It’s been pointed out that 90-percent of mobile e-commerce revenue comes from iPhone and iPad; not Android devices. That indicates that iOS users actually use their devices in a substantially different way than Android users.
Over 80-percent of mobile gaming revenue comes from iOS devices. Web usage by iOS devices is more than triple that of Android devices which triple iOS devices in total numbers. Almost 70-percent of mobile ad viewing is done on iOS devices, not on Android devices.
iOS developer revenue is estimated to be four times that of Android developers. The numbers are worse for Android in tablets, where iPad dominates with higher web usage, higher ecommerce usage, and higher tablet activations in business.
How can all of this be true while Android dominates in unit market share? Apple’s iOS devices and the Apple ecosystem dominate usage, one of the true measures of winning.
Wait. The headlines indicate otherwise, right? After all, the Wall Street Journal described a feverish hype for a non-Apple device, the Samsung Galaxy S4. The hype seems to be confined to the Wall Street Journal. A more in-depth analysis reveals that whatever hype there is about Samsung vs. Apple, Samsung’s Galaxy is being outsold by iPhone, according to Tiernan Ray.
The Double Standard
Here’s the reality. Apple is dominating Android in all the areas that matter; from usage to revenue to profit to developer revenue to ecommerce to advertising; iPhone and iPad.
What’s happening in the headlines today is no different than what Apple has experienced through the entirety of the 21st century. The Mac is dead. Windows Music Store will destroy the iPod and iTunes. Apple needs a netbook. The iPhone is a flash in the pan. The list of wrong assumptions and predictions is long, and expertly displayed by Yoni Heisler’s The Apple Double Standard in NetworkWorld.
The headlines which shout ‘Apple is doomed, Android is winning‘ are merely headlines designed to grab attention, increase page views, and pile on the successful industry leader. There’s something human about such an effort. We cheer for underdogs and tear down those that lead and rule. That model for humanity may not be sustainable, either.
The latest noise points out that Apple is doomed if it does not release a cheap iPhone. Yet, we never hear cries that Lexus or Mercedes Benz or Cadillac must have a cheap version to prosper in a competitive environment.
Let the numbers speak. According to some, Apple’s CEO Tim Cook is charisma-challenged and it’s killing Apple. How so? Where are the numbers? Apple must develop an entry-level, ‘cheap’ iPhone? Must? What are the numbers to support the conjecture?
Outside of the number of Android devices being sold (or, distributed, hopefully to be sold later; notice that only Apple releases actual sales numbers), and the number of Android device models vs. iOS devices, where, exactly is Android winning? Numbers don’t lie.
The fact is this. In every other measure Apple’s iOS device is destroying the Android empire. Other than Samsung, which appears content to copy Apple devices at the atomic level, and spend 10 times what Apple spends on advertising and promotion to achieve lower revenue and profits, all other smart phone manufacturers and industry players are losing money by the billions.
The question that tech media and stock analysts should be asking is, ‘How long before Android and Google’s partners give up the chase?‘
Here’s how all of this is merely déjà vu all over again, and a quick look at how Apple’s Crazy Competition Just Got Crazier.
About Kate MacKenzie
All well said, well done!
Judging from the headlines and Apple’s recent stock performance, you would think the company is beleaguered. I just don’t see any numbers to support that. On the other hand, I see plenty of numbers that the Android side of the fence is losing money and in danger of collapsing. The numbers support that.
I would say that the non Samsung Android market is in danger of collapsing. HTC 93% drop in profits, nearly every other non Samsung maker is underwater on profits. How long until we stop saying Android and just say what we really mean: Samsung.
Nicely put. Substance is not available in headlines. Website headlines are created to trap readers into an article of opinion, not an article of fact. Facts require research and analysis, and today’s tech bloggers just don’t want to put in the time and effort.
I don’t think it’s that they don’t want to check facts, it’s that they’re biased against Apple and drool over the notion that Apple will topple, which would give them something to write about for months or years.
AND
They’re getting a crap-ton of traffic to their websites (which generates ad revenue) every time they write a hit piece about Apple that’s based on speculation.
If Apple released something every 2 months (they physically can’t) that knocked everyone’s socks off all you would see is positive praise because that would keep their ad revenue up. As it stands, they see a spike in ad revenue once every 6 months unless they write a slanderous hit piece every week. Which they do, often multiple times.
Money is at the heart of the current slander from “tech bloggers.”
I think Jenkins comment was directed at this article. Nice round number percentages usually indicate someone is making a guess or rallying the fanboys with a % behind their opinion. My personal opinion, which may be WAY wrong, is that Android is more innovative due to its “fragmentation” (big bad word inserted) and openness. But most people like their hands held.This from my years as a Mac and iOS consultant. I see dollar signs when my clients Clash of Clans app crashes, or they get a beach ball because they dont know how to delete mail. Yet, when I want to do business on one of my phones, I reach for my Android, not my iPhive. Its just a better device for what I need to do. I dont think thee is any destruction going on here by or to either side. few people are actually biased agains Apple, but we are so so tired of race, money, politics whining about, they dont like us because we’re better.Fuck off already
10% of my clients buy Macs because they are in the arts. 100% buy them because of status. Fact.
I make $120 /hour troubleshooting Macs. I make a damn good living. So Im thankful for the argument, either way.
«Yet, we never hear cries that Lexus or Mercedes Benz must have a cheap version to prosper in a competitive environment.»
Maybe because Lexus HAS a cheap version—Toyota—and Benz puts out utilitarian and affordable vehicles—A-Klasse, B-Klasse, commercial vans, trucks, buses?
Don’t disagree with the article per se, just hate Bad Car Analogies. Stick to what you know.
Kate’s Note: Actually, Lexus doesn’t have a cheap version (Toyota). It’s Toyota that has a luxury line of cars. I drive one.
Excellent response Kate. LOL
Kate, will you marry me?
Seriously, the combination of yours and the Harvard Business Review’s “Intellectually Lazy” missive should be required reading for anyone thinking of investing in AAPL. Maybe then the weak of conviction won’t allow the FUDsters scare them out of their AAPL shares at bargain basement prices.
Thanks, but I’m already taken. For now.
Speaking of ‘intellectually lazy’ we could easily point fingers at the headlines regarding Apple’s maps saga. Even before Google released their iOS maps app I found plenty good about mapsgate in More Good, Bad, And Ugly on Apple’s Maps App.
iPhone users are the big winners.
Great article. Well done!
Nicely put. There is something about Apple that makes people lose their minds. I think it’s envy. It’s easy to hate a company that sells high end stuff. There has to be something wrong with its customers. They’re sheep. They couldn’t possibly like their iOS devices because they’re great…it’s all about image. Or my favorite – Apple is all style over substance.
This is a nice article, although I doubt it will take long for Android fans to come and start decrying it.
The one thing that I think most analysts miss in the Android vs. iOS battle is the nature of the business. Apple has designed its business model around a small market share (when introducing the iPhone, Steve Jobs claimed Apple’s goal to be 1% share). They have a quite profitable business with 20% market share. That’s not to say that they don’t want 30% or 40%, just that it doesn’t have to be a gargantuan share.
Compare that to Windows Phone or Android. It’s not clear to me that Android will ever be profitable for Google, even if it gains a quasi-monopoly status. Similarly, Microsoft needs iPod-sized market share to make even half of what Apple is making with the iPhone.
Android is a money pit for Google. It’s not clear for how much longer they can continue to throw money at it when iOS is more profitable for them.
I think things are even worse than that. The only Android partner that is making money, Samsung, is not tied to the platform. They have their own platform and are also experimenting with Windows 8. So the one bright spot in the Android platform has options and will probably jump ship if Google is seen as favoring Motorola.
The Android numbers are also being distorted by forks in the platform. Amazon is using a fork of Android and it’s users are not participating in the Android ecosystem. There are similar forks being used by Chinese firms building cheep phones.
So the question becomes who gives up first Google or its Android partners – you can only not make money for so long.
oh, KM, you are thinking rationally! shame on you. you don’t belong on the web. you’re not a hit-whore.
a good further example of Apple winning being called losing by web idiots is the iOS Maps app saga. what really happened is:
1. Google sticks Apple with an inferior iOS defatult Google Maps apps for years, a de facto advantage for Android products.
2. so Apple replaces it as the default app with its own new Maps app that is superior technically but also has start up issues.
3. all the web boo-birds and Apple bashers whine loudly.
4. Google soon responds with a new much improved iOS Google Maps app that matches Apple’s technically and is downloaded by many.
5. all the web boo-birds and Apple bashers declare great defeat for Apple.
6. while actully Apple now has two much better map apps than before, making iPhones/iPads even more attractive compared to Android, and …
7. Apple permanently strips away a big chunk of former Google iOS map users – half? – who are satisfied with Apple’s Maps app alone, a major blow to Google’s ad revenues and location services agenda.
8. all the web “pundits” fail to grasp what has really just happened and continue citing this as a sign of Apple distress.
the tech web is turning into a huge Ship of Fools.
That’s the best explanation of the maps saga I’ve ever read.
Well done. I did a Apple Maps vs. Google Maps shootout about a month ago. Google wins, but not by much. Apple and iPhone users win because they have the two best maps apps available.
Yes. that explains why forstall got sacked.
Forstall was fired because he was an asshat; pretty much like Steve Jobs. He was a protege, smart and ruthless but lacked jobs vision and charisma. Apple is better off without him.
FWIW Department: I’ve been using Apple Maps on my iPhone 5 for months and it works great. Perfect? No, of course not. Neither is Google Maps (and I have that one, too). Two terrific apps, both free, both better than the old Apple Maps.
So, Samsung spends ten times what Apple does to market their phones, and Apple’s are overhyped and Samsung’s aren’t? OK. Sure.
No serious person argues that the Apple Maps rollout was what the company wanted. Apple is a pretty ruthless meritocracy (see AntennaGate), and expects execs to perform a level justifying their compensation. When they don’t, they’re out.
Awesome article, Kate!
You just got a link on my website so the haters may come. Learn to ignore them gracefully, just as I do
Damn it Adrian! Is the Internet getting smaller or are we reading the same stuff?!?
Ok, ok, I read Boio more often than mac360. Happy now?
Apple should not produce a cheap anything, agreed. But that doesn’t imply they can’t or won’t expand the line. There are multiple macs, multiple ipods, and two ipads. Certainly there can be more than one iphone.
There are. You can still get a 4S if you prefer. There are even still 3GS models around in some markets.
I have watched the analists hate Apple for ever. When the company started doing well, they said “not well enough”. Just recently I listened to a podcast of Apple fans saying that this might be the turning point of Apple’s demise. Unbelievable! Kudos for telling a real story about what never gets looked at.
Well, I see it differently. I don’t care what Apple can do for the corporations and companies and providing revenue for those.
My Android is a decent operating system having its own limits, but I have a firewall, rooted phone, no ads, freeware apps, no games. I need the phone to be an internet always on, which serves ME and not the corporations eagerly wanting my money.
So I’m a happy user, making life easier for myself and not being a statistic on how many ads I see on my android phone. I use Firefox with Adblock also, mobile version!
Thanks. Great Article with a lot of useful data.
Another couple of media myths;
1) Android dominates iPhone in the US….LOL
This is manifestly false if you check the carriers’ SEC filings.
Also Kantar research shows that iPhone US sales market share has SURGED very strongly, from 35.8% in Nov 2011 to 53.3% in Nov 2012
While Android;s US market share DECLINED from 52.8% to 41.9% in the same period – see
kantarworldpanel.com/dwl.php?sn=news_downloads&id=112
Statcounter internet usage data shows exactly the SAME TREND
http://gs.statcounter.com/#mobile_os-US-monthly-201109-201301
2) That iPhone is losing market share in China and iPhone sales are weak there….LOL
In fact Statcounter data shows that iOS market share has surged after the launch of the iPhone 4, of the $s and now th 5 and each time has retained most of the gain in market share
gs.statcounter.com/#mobile_os-CN-monthly-201006-201301
Android has gained market share strongly in China, but at the expense of other OSs, NOT at the expense Apple’s iOS.
As for weak iPhone 5 sales the above chart shows a very strong increase in iOS China market share since the iPhone 5.
This is one of the most blind articles I have ever read. It does not show anything apart from the facts that 1) Apple is making more money by overpricing it’s products. 2) More apps on Android are free so people the Appstore revenue is more. 3) The author compares $1b cars with a cell phone. Do you see the common man driving a Benz or a Cadillac? Do they even target the common man as potential customers like Apple does? By your argument, Apple products should only be owned by billionaires. If that is true, so be it. Let the billionaires own iPhones and we middle class people will own Galaxy phones.
But hold on here, I actually agree with the author on one point. The hype about the Galaxy S4 is confined to WSJ. That’s because there IS no unnecessary hype about Samsung phones. Can this be said for the iPhone? Isn’t it Apple’s mission statement to make it sound like the end of the world everytime they release a slightly longer phone with a horrible OS?
The truth is, the customer base is getting more intelligent by the day. Apple’s founding father understood the stupidity of the average tech customer in 2004 and marketed his mediocre phones brilliantly for that. But that is changing now. Smarter customers will not be fooled by Apple’s rose tinted windows. THAT my fickle friend, is why Apple is going to have to pull up it’s innovation socks in the coming years. Not because of profits or revenues.
You couldn’t be more wrong in your generalizations. Facts are facts. You haven’t refuted a single fact. Not one. Just blather. Apple is overpriced? That’s not a fact, that’s an opinion. Other manufacturers dream of Apple’s margins, and if they don’t figure out how to increase their own margins they’ll wither away and die.
The app stores are important to the whole ecosystem, whether Mac or PC, Android or iPhone. If the Android apps don’t make money, they become– which is becoming apparent– second class, almost third world citizens.
So, customers are getting smarter and that means they’re flocking to Android vs. Apple? That’s hardly the case. They flock to Android because of price, and don’t bother to use the features available. That’s not smarter. Smarter buyers are more discriminating and go with iPhone to use the product as it was intended; which means more apps.
In every measurable item except unit market share, Google and their Android partners, save Samsung, are getting beaten soundly by Apple.
Ben, note here that I’m not denying any of the facts. I am refuting the conclusions drawn from the facts. Your top margin is definitely not a pole star indication that your company is going up. I’m not even denying that Android phone makers are suffering. I am just commenting on the trends that are visible in the market today. Apple has created a huge fan base by marketing their products really well. Surely even you won’t deny that their products are hyped way more than they are worth. You say Apple’s ecosystem is very comprehensive and whatnot? I’d rather have an ecosystem where I don’t have to sync my computer to my mp3 player every time I want one new song. More and more people are realizing today that apple is not the end all of mobile computing. And unless Apple comes up with some genuinely new products instead of shrinking and expanding their existing ones, I’m afraid my observation still stands valid. Cheers.
Amogh Simha: Unfortunately you’ve just disproven your own thesis: “The truth is, the customer base is getting more intelligent by the day.”
Android phones are the new feature phones, it’s as simple as that. The vast majority of people I know who own Android phones just use them for calls, texting and a bit of Facebook. That’s it. No music purchases. No apps purchases. They don’t care (or know) about updating the OS – hence the majority STILL on gingerbread – it’s just a dumb phone until they get the next dumb phone when their contract runs out.
Ummm. Your comment makes no sense. People are still on Gingerbread because the telecoms have not updated the phone, not because the people have chosen not to update. That is exactly the same situation as a person who doesn’t have Siri on their iPhone 4.
The only people who CHOSE whether to update the OS is the ones who root or jailbreak their phones. That is a tiny minority.
That “vast majority of people” you refer to have a life beyond those little rectangles in their hands. Calls, email and texting is plenty for them. Who, other than guys who spend too much time with rosie palm, care about “Apps” and updating the OS.
In other news, Apple’s 30 year plan to destroy Windows as the dominant PC operating system is proceeding EXACTLY as planned!
Kate’s Note: Uh, what? Not particularly accurate, realistic, or clever. Apple does what Apple does. And there isn’t a shred of evidence that Apple has a plan for worldwide dominance in any product market. Pricing alone eliminates that as a goal.
Too bad, if true. Android is a much better system.
Kate’s Note: Another Fandroid without the ability to argue a point. If it is so much better then how? The lemmings who use Android fall into two categories. 1) Anti-Apple, 2) Neophytes who don’t know how to use apps and don’t care.
People like me that enjoy widgets, don’t use iTunes, and are heavy Google services users. I was actually starting to thing you were objective Kate.
Kate’s Note: That’s a tiny minority.
The most cogent comment: “There is something about Apple that makes people lose their minds.”
Do alot of reading in tech – user comments – and see alot of people who are commenting on different tech topics. It is apparent that many have no problems shifting to Android from iPhone and are willing to wait for more apps. iPhone had a headstart in the market and that always tips the plate – there are no guarantees that it will always be that way.
Competition is a good thing. Although when I made my decision which to buy – I went with Android. I did this because I wanted my mobile experience to be based on a company that was rooted in the Internet and not in hardware. Apple does well by innovating and they haven’t done that so well lately. Making it bigger or smaller is not innovated. And what’s with the mini – they couldn’t give an equal level of resolution of the other tablets out there? Seriously? If you go back Apple claimed the smaller tablet would NEVER go anywhere and they had no intention of making one. What happened there? Bottom line, if you understand mobile then you understand the hardware has to be mobile. No one takes an $800 8 x 10 tablet to the beach – they do take a Nexus or a Kindle though – and the apps will catch up as volume does as well and the figures bear that out.
Sure Apple is succeeding at what they want to do, which has to do with doing the easy thing, the focus on rich customers, new uses, high returns. And if we all become rich, my bet is we will end up preferring LESS mobility rather than mobile access to technology. If that’s so then Apple is only winning what it set out to win, which does not include anything I care about.
I pretty much am concerned with my own desires, and to some extent what I believe to be the desires of the general human population. Access trumps quality here except on those things where quality is universally available. Simple as that.
The mobile thing is not really about folks liking access to their tools and toys wherever they are (of course they like that), its mostly about extending the tools and toy, in this case personally customizable useable and available access to and use of the internet – to maybe a majority of humanity on the one hand (Apple ain’t doing that). And its secondly about creating a sort of new world – instead of vaporizing socially erected barriers a la the internet, now we sort of annihilate location itself PARTLY – now we need not know jack about the neighborhood but some ap can suggest potential friends, restaurants, etc. Apple’s big on this second part of it, and my hat’s off to them I don’t think the other players get it. Hence the rewards.
My guess however is that the next step will be 3 D printing rather than a portable sense of one’s home turf: less travelling about will be necessary and choosing what is in the world, as far as one’s own life is concerned, will become almost completely under one’s control.
Then after that, something that combines being god of one’s own world and being able to get together with other people face to face, without giving up all of god’s conveniences…maybe at that point Apple would really win who knows it’s a couple decades off…
The title “Apple is destroying Android…” is funny. Saying the opposite is exactly the sensationalism you people are saying other sources use to get web page views. ‘Sigh’
The facts are that the 2 companies (apple and google) have different philosophies and therefore different strategies. Google isn’t necessarily competing with Apple because they make money from Apple. Apple relies heavily on Google for their products to be worth having; ie search, maps, gmail, YouTube, etc. Android is just another way for Google to be able to make money on their products that do have quantifiable profits.
When using data to makes one’s point, another argument can be made as to the new variables in the equation. Android’s os has made major improvements over the past year or so. I would expect that to make substantial impact to the argument if you were to look at the segment where android has been determined better than ios to now. The question is, was that with ICS to the masses or jellybean?
Looks to me that maybe she is right. Android does NOT prosper. It’s being starved to death. The only company that makes any money using Android is Samsung who is in a fight for second place, not first place. It’s Apple that controls the most revenue and profits among smart phones. It’s the class act for those with discriminating tastes while Android has become the 21st century version of the feature phone. Everyone has one, and they use it as a phone and don’t engage in what Google wants them to– applications, hence not much advertising revenue on Android.
Starving is death from within. Android is starving. Google’s partners are starving. Lots of calories (unit market share), but no sustenance (profits).
Name a feature phone from a different century. Ha!
But seriously, I like how definite all this talk is that android brings in no money, but everyone has to say “excluding Samsung.” If we are talking android phone manufacturers, there are those that are making money and those that aren’t. The main difference is the hardware and a splash of well placed marketing dollars. Now that we know that there are manufacturers that ARE making money, we can address who also has to make money for android to survive… Google- an advertising company. And they seem to be doing just fine right now. Think about this, even people that don’t know how to use apps know how to “Google” something with their phone. That popularity is why companies use Google to advertise and why Google uses android to promote their services for even more popularity… and the cycle continues. Apple isn’t destroying android, it is doing exactly what Google wants it to do.
Dude, you gotta read more than just headlines. Feature phones still rule in most of the world, but their numbers are dwindling as Android becomes the new feature phone.
Of all the smart phone manufacturers, Apple and Samsung are the only ones to make a profit. All others are losing hundreds of millions to billions. That does not bode well for Apple’s competition or the Android platform.
Even Google doesn’t make a profit on Android, including advertising. Why not? Android users don’t use their smart phones the same way iPhone users use the iPhone. That’s why iPhone, with a much smaller market share, accounts for the most web usage, the most search usage, the most maps usage, the most apps used, and on and on.
Google wants Android to dominate, but all it dominates is unit market share. Not revenue. Not profits. Not usage. Not apps. Not satisfied customers. Nothing else. Android thus far has been a losing proposition for Google and all their manufacturers except Samsung.
And it’s interesting to note that both Google and Samsung stole from Apple. So both are getting what they deserve.
Ok… So based on market share, if every other manufacturer of android phones were to tank other than the ‘one successful one’, guess who would be making just as much money if not more than apple?
Oh, I get it.. If you ain’t first, you’re last. Since apple makes more money off of you than Google does off of android users, then somehow they are not successful at all and are starving from the inside. My theory is that since android phones do so much more than iphones with widgets, launchers, live wallpapers, notification shade actions, and home screen configurations… that the time iPhone users spend buying apps, android users are actually enjoying their phones without spending a penny.
Google and Samsung are having some pretty decent success right now too. Is that what you mean by getting what they deserve?
Silly argument, Trillyizzle. You’re assuming that if all other manufacturers bite the dust (won’t happen), that ALL smart phone buyers would choose Samsung (won’t happen).
Yeah, it appears as if Google is starving itself with this Android venture. What part of ‘losing money’ don’t you understand? They get some ad revenue, yes, but no profits. Again. NO profits.
Where is this Google success story you tout? It sure isn’t with Android. Google’s recent financials indicate that advertising revenue is up, profits not so much, which means the money losing Android venture is eating into Google’s cash.
As to enjoying their phones, gimme a break, troll dude. It’s very common knowledge that Android users don’t use their phones as much as iPhone users, and by a wide margin.