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Android's Smartphone 'Lead' Relies on Fishy Numbers

By Rob Walch MacNewsWorld ECT News Network
Oct 1, 2010 5:00 AM PT

I read an article recently in ComputerWorld titled "Devs bet big on Android over Apple's iOS." If that is not the definition of "link bait," I don't know what is.

Android's Smartphone 'Lead' Relies on Fishy Numbers

Either way, with hook in mouth, I surfed over to the article to find the opening paragraph proclaim that "A majority of mobile application developers see Google's Android as the smart bet over the long run." The article makes it sound like Game Over -- Android wins. Well, not so fast ComputerWorld, and others who misreported on this survey.

See, these "developers" that were surveyed were developers who use Appcelerators Titanium cross-platform compiler to produce iOS and Android Apps -- the same cross-compilers that up until recently Apple said were not allowed, which was the case at the time of the survey.

So asking these developers anything about iOS is like walking into a biker bar (a real biker bar, the type where the women's restroom looks worse than the men's -- and I know this because I actually worked in a biker bar in high school and cleaning the women's restroom still haunts me) and asking the patrons if they like Hondas over Harleys. The results will be skewed just a tad.

Running the Numbers

If you read the A-list tech blogs and listen to some of the key tech podcasts, you would get the general feel that at least as many Android devices have been sold to date as iOS devices. But what if I told you the reality is far different, with over three times more iOS devices sold to date than Android devices, and that each month and each quarter the difference between the two platforms has the iOS devices increasing their lead? You would -- if you read and listen to the aforementioned sources -- think I was daft. You might even at this point be looking for the comments section below to tell me as much. But the reality is, iOS is increasing its lead over Android. Don't believe me? Then lets look at the numbers:

At the end of 2009, there were 8.5 million Android phones that had been sold worldwide, according to Canalys. According to Gartner, in Q1 2010, there were 5.2 million Android phones sold, and in Q2 2010, there were 10.6 million Android Phones sold. Google said it was doing 200,000 activations per day this past quarter; that works out to 18.2 million Androids in Q3 2010. Add this all up, and the total Androids devices sold to date equals 42.5 million units.

As of Sept. 1, 2010, Steve Jobs said there were 125 million units sold and that they were selling 230,000 per day, which equals 7 million units for September, for a grand total of 132 million iOS devices sold to date.

So here is the real comparison:

132 million (iOS) vs. 42.5 million (Android) -- that is a 3.1 to 1 ratio in iOS's favor.

And when you look at the daily numbers, there is a 30,000 unit net gain per day for iOS, which means a 2.7 million net gain for iOS over Android in the last quarter alone.

This trend can be seen in some numbers from outside the U.S. Comscore's European smartphone market share showed a year over year increase for Apple iPhones from 10.2 percent to 19.2 percent vs. Android's increase from .5 percent to 6.1 percent, which is a 5.6 percent gain in market share for Andriod vs. a 9 percent gain for the iPhone.

This is very important, because in Europe there is a more level playing field -- in that Apple is not hampered by exclusivity in all markets, just a few. Again, Apple is pulling away from Android. Yes, Android increased its share, but not nearly as much as Apple increased its own.

Note: This does NOT include numbers for the other iOS devices, which also are selling well in Europe. And just think what happens when eventually in the U.S. the iPhone is available on the other three carriers.

Granted, 42.5 million Android units is nothing to sneeze at, but you do need to realize there have been many two-for-one programs for Android phones, including a few carrier plans where you got the Android phone for free. With the iOS devices, Apple and the carriers sold each device with no special deals. In other words, Apple got full price for each iOS device.

Family Size and Apple Pies

Another issue for Android handset manufacturers is the number of manufacturers and devices vs. iOS.

For iOS, there have been a total of nine devices to date: four iPhones, four iPod touches and one iPad. From the developer's perspective, there really have been just two different screen sizes, and all have the same number of buttons for interfacing. This makes it very easy to develop across the iOS platform. More importantly for Apple, there was just R&D and marketing costs for nine devices, and really only three at any one point in time for marketing purposes.

With Android, things get a lot more convoluted: There have been over 72 models of Android phones from 22 manufacturers to date. This means there are eight times the number of devices from 22 times more companies that have to share in a pie that is currently a third the size of Apple's pie (sorry for the bad pun). What this means is that Apple makes a lot more money than all the Android manufactures combined, and that money can be used in extra and more advanced R&D that ensures Apple can keep and grow its tech lead over its combined competition.

Another issue with Android is that there seems to be a lot more buyers' remorse than with the iPhone. Surveys have shown a much larger percentage of Android users are looking to make the jump to the iPhone than the other way around.

According to Nielsen, 21 percent of Android owners are looking at the iPhone as their next smartphone with 71 percent wanting another Android. However just 6 percent of iPhone owners are looking at going to an Android phone for their next smartphone, with 89 percent planning on getting another iPhone. Throw in BlackBerry users for a moment -- as they are the biggest market share in the U.S. currently for smartphones -- and you have 29 percent of BlackBerry owners that want an iPhone for their next smartphone vs. 21 percent that want an Android ... and just 42 percent that want another BlackBerry. This all bodes very well for the iPhone for the immediate future.

There are a few big differentiators between the iTunes App Store and Android's app stores -- key ones being ease of purchase on the iTunes side. But even more important is one you never hear mentioned on TWiT or in any of the key tech blogs, and that is the iTunes gift card factor.

You can easily find iTunes gift cards in the checkout lines of nearly every major retail and drug store in the U.S. iTunes gift cards are routinely given for birthdays, graduations, holidays, contest prizes and even just as a thank-you. iTunes gift cards are basically "funny money" users of iOS devices will then spend on iOS apps without any real thought, whereas on the Android side it seems people view app purchases as spending hard-earned money every time. This is a factor you never hear mentioned, but it's a key reason why app developers can get rich on the iTunes App store and why most developers know that it's iTunes first -- and if resources are limited, then iTunes only. That is not just a short-term plan; that is the plan for the foreseeable future by ALL of the developers I talk to.

I think one developer of a poker app explained it best to me. He said that if your app is number one in the iTunes App Store, that is equivalent to winning the Word Series of Poker's main event -- it is that big of a life-changer. Being number one in the Android app store is akin to winning the Friday night poker tournament at your buddy's house. It's OK money, but nothing that will change your life.

Rob Walch is host of the Today in iPhone, iPad and iPod Touch podcast.

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