Smartphone Share: Android, Apple Gain

This chart should look similar to the last several.

This news is getting very familiar: Once again Android gained market share, and so did Apple's iOS, and everyone else lost. Smartphone sales were up 74% in the second quarter of 2011 compared to last year, as smartphone sales grabbed 25% of all phone sales (compared to 17% last year). This is while overall sales of mobile devices rose by 16.5%. The mobile market is growing, and the smartphone share is growing very rapidly. There were 108 million smartphones sold in Q2, worldwide. Which is around two orders of magnitude more than videogame consoles sold in Q2, in case you're wondering why intelligent game publishers are eyeing the smartphone market. Those that aren't already there, that is.

The big losers for Q2 were, of course, Nokia and RIM, as Symbian and Blackberry continue to fade. Microsoft, too, lost ground, as we await the first Nokia phones with Windows Phone 7 software on them later this year. There's a lot more interesting data on manufacturer market share here.

While Android clearly has a commanding market share lead, Apple is still making more money (about two-thirds of all the smartphone profits belong to Apple). Developers seem to be approaching the Android marketplace a little differently, too, according to the data from Mobilewalla, an app discovery firm. More than half of all the apps in the Android Market are created by developers who have authored more than 100 apps.

So Android has a lot of developers who are pushing out huge amounts of apps... which may certainly explain the general perception that Android apps are lower quality than iOS apps. Also, Android apps are getting updates at almost 3x the rate of iOS apps, which may be a result of the fragmentation of the hardware in the Android market. I'm sure there are many Android apps that get released, and then the developers find out it has a problem with a particular smartphone they didn't test on. Apple's relative scarcity of different models of phones does have an advantage after all.

Mobilewalla's data also seems to indicate that Android apps, once you get out of the top 30, are even more invisible than typical iOS apps. In other words, if you're not one of the popular apps, you're not getting found or downloaded. So the larger size of the Android market isn't helping smaller developers; the discovery problem is still just as great.

I'm sure we'll continue to see nifty advances in smartphone hardware and software from both Google and Apple. I wish they'd take just a fraction of the effort they put into the technology and put it towards improving their app stores. I doubt that's going to happen, though, but I'd really like to be wrong about that.

Apple Now #2 In Smartphones; RIM Sinks to #3

Apple's #2 and climbing.

To no one's great surprise (except perhaps RIM management), Apple has now surpassed the Blackberry as the #2 smartphone in the US. Of course, Android is #1. Want to bet that Apple's numbers will continue to improve when they release a new iPhone? Yeah, I thought you wouldn't.

I think Blackberry is toast; RIM missed their chance to be competitive years ago, and now they would have to do something amazing, and do it swiftly, to regain their lost eminence. It's not going to happen. The only question is whether or not the Microsoft/Nokia combo will succeed in gaining any sort of market share, or is that doomed to irrelevance as well?

Android Leads In Share, iOS In Revenue

See a larger version here.

Here's a recent survey of global smartphone market share that may influence how you allocate your development dollars. Android has 53% of the market, iOS has 28%, RIM has 16% and everyone else is a trace element.

The key question is really how much money can you make on a platform, and this is where iOS wins with 50% f all the revenues. Android has 39%, and RIM shrinks to only 9%.  This is no doubt due to in-app purchasing being baked in on iOS, and the severe hardware/Android version fragmentation. Yes, Android is more open than iOS, but that leads to a much wider array of hardware and Android versions, which makes developing and testing software significantly more difficult.

Of course, the picture is going to change over time. In the near term, we can expect Android and iOS to continue growing at the expense of RIM. Nokia's collaboration with Windows Phone 7 won't really move the needle, if it does at ll, until next year sometime. I expect Android revenue numbers to improve as the effect of integrating in-app purchasing takes hold, and the effects of their store improvements occur. Until Apple makes a serious run at the lower-cost smartphone market (which might happen this year or next), I think Android will continue to outgrow them.

Smartphone Market Share: Android Up, iPhone steady, Blackberry Who?

Market share... isn't that something RIM used to have?

It's interesting to watch to the market share numbers for smartphones over time. There are no big surprises in the numbers themselves: Android continues to rise (up to 34.7% from 28.7%) , Apple gains slightly (up to 25.5% from 25%), Blackberry continues its headlong plunge (dropping 4.5% to 27.1%; they've gone from over 40% a year ago to about 27%), Microsoft continues to go from bad to worse while awaiting Nokia's introduction of Windows Phone 7 phones.

The real surprise, to me, is what has to happen before RIM takes action to prevent (or, at least, delay) its complete loss of market share and relevance. Are they striving to be the beeper company of the 21st century?  Apple should pass them this quarter in terms of market share, and from there RIM is just racing downward to see how long it takes to reach Microsoft's market share of under 10%.

At least Nokia figured out that it was in trouble, though they had to completely change out their management team in order to come to that realization. Now they are trying to do something about it by adopting Windows Phone 7, though how successful that effort is we won't know for a couple of years. RIM, though, just continues making Blackberry phones with minor improvements as if nothing has happened in the phone market. Kind of sad, really. It must be ego; the co-CEOs of RIM just don't want to admit how badly they've screwed up, and so they will continue to deny there's even a problem until they're escorted off the campus by security. Let's hope, for RIM's sake, that occurs sooner rather than later.

Meanwhile, if you're a developer looking to make some money on games, better try iOS or Android. I guess there is an opportunity for a small developer on Blackberry or Windows Phone 7, since you could stand out in a field that's much smaller than Android or iOS, and thus get some attention and brand equity before taking your title to the platforms where you can really sell a lot of copies. For larger developers, though, there's nothing to gain by looking at the Blackberry marketplace. Except, perhaps, a delightful frisson of schadenfreude.

US Smartphone Market Share

Here's a look at the latest US smartphone market share numbers... You can see it better at the link, but the important part is this: Android 29%, Apple and RIM at 27%, and then there's everybody else. Hey RIM's not doing to bad, you think... except when you realize last quarter their share was 35%. As Blackberry users run out their contracts, they are finding their way to Android or iOS.

I expect Android will continue to grow their lead over Apple, unless Apple makes a significant move on the lower end of the price range. Sure, Apple needs an iPhone 5 to keep up with the Android Joneses, but the real place to pick up market share is in getting a $99 smartphone out there with no contract commitment.

Apple has already revolutionized the mobile phone business once. I don't think they're finished revolutionizing, yet. I expect a full range of price points, and maybe ways to cut the carriers out completely. One thing's for sure: They'll be selling a lot of phones.

Android #1, Beating Blackberry and Apple

At this rate, RIM is going to be battling Microsoft for the bottom of chart very soon.

Looks like it's finally happened... Android has grabbed the #1 slot in market share for the USA. They managed to pass up iOS in November, and now that RIM is helping out by losing big chunks of market share for Blackberry, Android is in first place.

I'd expect Apple to do well in the next report, given the introduction of the iPhone to Verizon. Apple's choices for new product intros this year will be very important; will they announce just a spiffier iPhone, or also one that's designed to hit a lower price point? There's no doubt Apple will do well with a more powerful iPhone, but if they want to catch up to Android they're going to have to address the lower end of the market.

Apple has done that before, though. The initial iPod was very expensive, and it took years before Apple covered a full range of price points. In the process, though, they kept their profits and their market share high. Can they pull that off again?

Meanwhile, Android will continue to have many new devices introduced this year. Which is a problem, as it means the hardware base will continue to fragment, making things tougher for developers. No one really wants to test their games on a dozen or two dozen or three dozen handsets.... but that's where we're headed in the Android market. Unless you keep the system requirements at a fairly low level, which means your game won't be looking as good as an iOS game. It's a tough set of decisions.

It does show how far Windows Phone 7 will have to climb, though. Nokia better get some phones out soon, and one hell of a lot of them.

Smartphones Outsell PCs

The 4th quarter of 2010 marked a historic milestone: Smartphones outsold PCs for the first time, 100.9 million units to 92.1 million units. The PC will never catch up... at least not unless they start including tablet numbers in the PC totals.

For game developers, this is a good thing. It's not like PCs have stopped selling, but smartphone sales are growing rapidly. Smartphones offer a reasonable gaming environment that continues to get better over time, and most importantly it doesn't require a huge startup cost in development hardware. Or navigating a big bureaucracy to get products published. The biggest hurdle is marketing, and at least that's all under the control of the developer.

Smartphones Sales Zooming, Android Ad Sales A Winner

Remember when Google was claiming an astounding 200,000 Android phone activations per day? Well, that's old news... now it's 300,000 per day. Poor Apple can only muster 270,000 iPhone activations per day. That's about 9 million Android phones per month, and about 8 million iPhones (with iPads and iPod Touches, I guess, being on top of that).

If only Android was a better moneymaker for developers... but here's some evidence that you can make money on Android. It's just not by getting people to pay for your app; you can make a lot of money selling ads. Rovio sells Angry Birds on the iPhone, and has done very well with that (over 6.5 million copies at a buck a pop isn't bad). Rovio doesn't sell Angry Birds on Android; they give it away for free. How do they make money" Advertising... AdMob is using Angry Birds as their poster child for advertising with them, as Angry Birds is bringing in $1 million a month to Rovio through selling ads. Not a bad income for a free app.

When Google finally gets it together and makes in-app purchasing in Android as easy as it is in iOS, there will be some serious money made. That is, if your game is designed around in-app purchasing... you have been thinking about that, haven't you?

The big loser in all of this is the handheld console. No in-app purchasing, no ad sales... you start looking at the list of what a 3DS can or can't do compared to a smartphone, and it's rather sad. Remember when the N-Gage came out and everyone laughed at the idea of playing games on a phone? They ain't laughing now. Dedicated handheld gaming devices are looking to line up a slot in museums right next to pocket calculators. The saddest part is that it's not so much the hardware that killed them, it's the business models that they couldn't adapt to.

Update: Oh, and if you were wondering about Blackberry? Fuhgeddaboutit. As example of what's happening to them, in the last year on Verizon Blackberry went from 90% share to less than 20% as Android phones ate their lunch. You think that's bad? Wait until the iPhone hits Verizon... Blackberry who? Those guys can have a nice chat with Nokia about what could possibly have happened to them.

The Mobile Phone Market

US Market share, Q1 2010

If you're looking for an overview of the mobile phone market, here it is. What's interesting is the information hidden between the facts and figures. For instance, if you've been wondering why more developers don't create both iPhone and Android versions of their software, one need only see that 99.4% of all the App downloads last year were iPhone apps to know the answer. It's the same answer that famed 1930's bank robber Willie Sutton gave when asked why he robbed banks. "Because that's where the money is," he replied. No duh, in modern parlance.

The brief version is this: The iPhone and Android are growing, Blackberry and Windows are shrinking, and of course PalmOS is going away... and Nokia's Symbian barely registers. Smartphones are growing rapidly and overtaking the regular phone market, especially among the young. I think the core market for gamers is probably very likely to have a smartphone. Which makes a presence there all the more important.

The chart is not accurate or is misleading in some respects as regards worldwide market share. Here's the latest figures from Gartner Group:

• 41.2% – Symbian
• 18.2% – RIM
• 17.2% – Android
• 14.2% – iOS
• 5.0% – Windows Mobile
• 2.4% – Linux
• 1.8% – Other OSes

So worldwide, Nokia is still on top... it's just in the US that it's nowhere. Android is leading over iOS, but for developers the Android market is much more fragmented hardware- and software-wise. Unless your App is very basic, you'll need to do some work to address all the variants of Android versions and hardware out there. Not to mention a lot of testing... these smartphone markets are starting to resemble the old phone markets with the multiplicity of handsets. Ah, the relentless march of progress.... making life harder for developers. And marketers.

One important thing to note is the impending release of Windows 7 Mobile, which has gotten positive early reviews. Microsoft's starting in a hole, but they may be able to develop some legs with this release. Oh, and it's still unclear what HP intends to do with Palm's WebOS software... smartphones? Tablets? The software had some very nice features, but it would need a healthy push to get back significant market share. Will HP take the plunge, or just let their acquisition gather dust?

Whatever marketing strategy you craft, you have to remain flexible since the hardware landscape and market shares continue to change.