With Verizon shaping Android into its image, you can read AT&T's embrace of Microsoft as the deeply-held belief by operators that they need multi-platform balance in their portfolio.
The idea that operators will tolerate "dominance" of a platform is looking less and less tenable.
Following up on my last post on how misleading US-only share comparisons can be, I decided to draw charts to visualize the comparison.
As Android and iPhone compete in various ways, it's hard to see which is the preferred choice given a direct comparison. In other words, iPhone and Android devices rarely are placed next to each other with similar terms.
Take the US market for example. The overall data from NPD suggests that last quarter Android reached 28% share vs. 21% for iPhone. Many of those Android devices were new to market or at least newer than the iPhone which in Q1 was coming to the end of its product cycle. Second, pricing for Android devices seems to have been quite aggressive with buy one get one free sales. But I won't dwell on tactics now; what I do want to note are the differences in share between AT&T users and non-AT&T.
Note that within AT&T, iPhone outsells Android over 4 to 1. iPhone also outsells "others" (mainly RIM) more than 3 to 1. However, outside AT&T, where the iPhone is not available, Android does not outsell "others".
If we exclude the US altogether, we also see that Android does not have a great distribution.
Outside the US, the iPhone also outsells Android nearly 4 to 1, but it has a way to go before challenging Symbian which makes up the bulk of "Others".
So in markets where Android is head-to-head with the iPhone (AT&T and non-US markets), iPhone's lead is quite high (still). The possibility still exists that Android will overtake iPhone given the broad licensing and distribution, but it's not necessarily a given. And in any case, iPhone is not the market share leader today and that leadership does not seem to be their objective (note the pricing).
The bigger question is what will happen to RIM and Symbian as Android grows.
Much ink is being spilled over Android outselling the iPhone in the US in Q1. Here's what NPD survey data shows:
Q1 units for Android reached 28% vs. iPhone at 21%.
AT&T stated that they activated 2.7 million iPhones. That is 31% of all iPhones sold by Apple. Assuming NPD data is accurate, we can conclude that Android shipped 3.6 million units in the US or 65% of their total.
In a previous posting (Global smart phone OS shares « Asymco) I estimated, based on Canalys estimates, that global Android share reached 10% last quarter or about 5.5 million.
We can compute that Android captured only 4% of smartphone share outside the US while Apple obtained 14% share.
You can also observe that iPhone's US share increased y/y while every other platform except Android dropped (implying that Android took share from everybody but Apple.)
NPD claims AT&T accounted for 32% of the smartphone market, and even though AT&T carried both Android and WinMo and Blackberry devices, 21 out of every 32 phones or 65% of AT&T's volume were iPhones.
We can conclude that Android captured 34% of the non-AT&T US smartphone market.
The table below combines the NPD, AT&T, and Canalys data to show units for iPhone and Android in the US, Global and non-US regions.
One can only wonder what would happen if iPhone would be available non-exclusively. Would iPhone achieve greater than 60% share as it did on AT&T? Certainly that's what happened in France.
About 31% of the units sold in Q1 were activated on the AT&T network. The iPhone is reaching a more balanced global distribution but still has a long way to go.
Cusick says his checks find Palm is getting only about 1% share of handset sales at Verizon Wireless, or about 10,000 units a week, versus 400,000 units that were sold in to the company. At this rate, he says, there is “no prospect of Verizon follow-through” in the May quarter - and he sees weak sell-in at AT&T in the quarter as well. (AT&T has said plans to launch a Palm phone, but no timetable has been announced, I would add.) He sees Sprint launching other new smart phones soon, “which would reduce Palm’s share even further.”
Stepping back into the wayback machine to read analyst commentary from 6 months prior to the launch of WebOS (June 27th, 2008):
In a report form Deutsche Bank’s (Sell rating). They noted that 38% of the shares were sold short, while 10 holders account for almost 70% of the shares outstanding.
In Deutsche Bank’s view, Palm’s future would be “entirely dependent on their new products, services and operating system,” all due next year. “If these turn out to be good, then the stock could do well,” he says. “If the new entries are not attractive, then Palm risks bankruptcy.”
As the Backflip will mark the first time U.S. customers under contract with AT&T will have the option to choose between Android and the iPhone, every Motorola Backflip that AT&T sells might potentially be at the expense of an iPhone.
That Backflip sold will not generate Google any ad revenue since it will offer Yahoo/Microsoft search exclusively. Nor will the Backflip generate any license revenue for Google, because Android is licensed without a fee.
If that buyer would instead have bought an iPhone, the search from mobile Safari would have some non-zero value.
It is therefore pretty obvious that, at least in this instance, Android is destroying value for Google.
Comparing US sales of iPhones vs. Nokia's NA device business.
AT&T iPhones activated in Q3: 3.2 million
Nokia phones sold in North America Q3: 3.1 million
(obviously, Nokia's figures include Canada and Apple might have sold a few more phones in the US than AT&T activated so Apple outsold Nokia by a significant margin in units in the US.)
