Android is Enjoying the Success of Leftover Consumers

Update 8/16/2012: Seems like I may not have been so far off in my predictions.  Bryan Bishop of the Verge reports that a January 2011 report from Apple asking why consumers would choose Android powered smart phones over iOS seems to point to a consumer preference to stay with their current provider.  If you like Verzion, you want a smartphone, and they don’t offer iPhone, what do you do?


I just finished reading a ComputerWorld article by Greg Keizer reporting on the Nielsen November 2010 numbers of the U.S. Smartphone market.  The numbers tell an interesting story in the Verizon-iPhone saga and, I would argue, offer proof that a Verizon iPhone will be the demise of Android.

Three interesting numbers from the article:

First, Nielsen reported that, in the last six months of 2010, smartphone buyers chose Android 47% of the time and only chose iPhone 27%.  This is an impressive lead by Android in new purchases.  At this rate, we could easily see Android pass iPhone in the U.S. as the most popular and the largest installed base smartphone.

Second, the numbers reported that, for all owned smartphones, iPhone held the slight lead at 28.6% with Android close behind at 25.8%.  The report also warned that, considering the margin of error, Android could be neck-and-neck with iPhone or even lead in the installed base.

Those are two amazing statistics showcasing Android’s impressive growth in the last six months.  But it’s another set of numbers that tell the real story behind Android’s growth which is a releasing of pent-up smartphone demand and highlights Apple’s need to get on other carriers, especially Verizon.

The smoking gun research from Keizer’s article are the numbers reported from NetMarketShare that the iPhone accounts for 1.02% of all Internet traffic, more than twice as much as Android’s at .40%.  So we have Android outpacing iPhone, a neck-and-neck install base, and yet iPhone usage beats that of Android’s more than two-to-one?  There are two reasons for this (1) the lack of iPhone on other carriers and (2) the demographics of a less tech-savvy consumer.  Let me explain.

Consumers want smartphones.  They don’t know why they want smartphones, they just want smartphones.  They see their neighbor’s nice shiny pocket computer that can check the weather, play games, surf the Internet, check stocks, connect with Facebook friends, and they want one too.  The problem is, three-quarters of the time when they arrive at their carrier they only have two choices – Android and RIM.  Where is the iPhone?  No iPhone?  I guess Android will have to do and because of this Android is enjoying this success.

Why three-fourths of the time are consumers denied Apple’s coveted mobile phone?  According to March 2010 research by ComScore, at&t accounts for only 25% of the mobile market in the US.  This means 75% of the time, consumers wanting a smart phone must either change carriers, or pick a smartphone other than iPhone.  This easily explains the first two numbers above: if three-fourths of all consumers do not have access to iPhone, wouldn’t we expect Android’s growth to be much higher than iPhone?  And if Android’s growth is twice that of iPhone, wouldn’t we also expect that Android’s install base would quickly approach iPhones install base?  With a 3-to-1 advantage (or more considering at&t also offers the Android option), shouldn’t we expect Android to already have surpassed iPhone?

Another observation in the tea leaves of these numbers is that these consumers buying Android phones are not tech-savvy.  The tech-savvy Android users bought their phones years ago.  This new influx of consumers want smartphones, but cannot get the smartphone they want because their carrier does not offer it.  So they purchase a smartphone and they don’t know how to use it.  Couple that with the [arguabley] less-user-friendly interface of the Android platform, and what is the result?  Two-to-one bandwith numbers.  How else can you explain a neck-and-neck install base but a two-to-one usage.

The tech-savvy consumers bought their iPhones back in 2007.  The next level of tech-savvy consumers bought their iPhones in 2008 & 2009.  The leftovers are the trend followers who desperately need the end-user experience of iOS, but are denied by at&t’s exclusivity with Apple.  Android is enjoying the success of leftover consumers.

If these same consumers had an option for iPhone when they were at other carriers, they would have no doubt chosen iPhone and much higher rates.  I dont’ believe the bandwidth numbers would have increased substantially, but the adoption rate and install based would be heavily favored towards the iPhone.

Perhaps this is a telling sign of the ease of use differences between iOS and Android.  iOS users enjoy browsing the web more because it is easier and more intuitive.

Then again, it may just be that Android developers are much more bandwidth concious and can write the same programs at half the bandwidth of iOS developers.


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