Android has good reason to fear Apple's resurgence

Suddenly, the punditocracy is saying Samsung's best days are behind, and Apple may dominate mobile again

In recent weeks, a drumbeat has grown among tech analysts that Apple's iPhone is poised for massive uptake while Android smartphone sales may have peaked in developed nations. Also, Android is threatened in the developing world from a Google creation called AOSP, which strips out Google's services (where Google makes its money) and lets any device maker avoid paying Google service royalties. This is especially significant in China, the world's biggest emerging market, where AOSP is the top-selling mobile OS and which accounts for 20 percent or more of global "Android" sales. At the same time, various analysts have noted that Samsung is being squeezed by both Apple and AOSP, and Samsung may have already peaked in mobile, with 2012's Galaxy S III representing the high point.

Although some of the claims are clearly inspired by techno-partisanship, I'm struck that several thoughtful, nonpartisan analysts like Jackdaw Research's Jan Dawson and Yankee Group's Philip Elmer-DeWitt are noting these trends, not just Apple fans like Creative Strategies' Ben Bajarin (who have excellent data, but their interpretations tend to favor Apple). What in the world is going on?

[ Why Google seems to be having second thoughts about AOSP. | Keep up on key mobile developments and insights with the Mobilize newsletter. ]

For years now, we've been seeing competing storylines in the tech press:

  • On one hand, Android will take over the mobile world -- it's on 85 percent of smartphones shipped today, says a recent report -- while Apple's iPhone will fade into a niche product for fashion-conscious rich buyers. In this view, iPads are a fad yet Android tablets are not.
  • On the other, Android is an unholy mess that includes lots of not-really-Android devices like those AOSP units common in China and much of Asia, as well as Amazon.com's Kindle Fire, with little actual usage for the cheapie models that dominate sales. Meanwhile, Apple's iOS is what people actually use for real business and entertainment, as evidenced by its majority presence in website-usage tracking data. In this view, the fractured Android has little cohesion beyond the use of the robot icon, so it doesn't really matter.

Both storylines are true, which is why you keep seeing them. As in economics and politics, everything you read is filtered through someone's perspective, which sometimes is actually a deep bias. Sadly, much of the research you read of tech market wars is created to support a predetermined point of view.

Even when analysts try to figure out the market trends without a presupposed result, the data they rely on is inherently biased. Most Android sales data comes from guesstimates, not actual sales figures -- because companies like Samsung, HTC, and Amazon.com don't report sales figures. (Apple is the only major mobile provider that provides data on actual sales to customers.) In those sales guesstimates, some people include AOSP and Kindle Fire devices, some don't. Plus, some companies -- Samsung is notorious for this -- produce false data to look better.

What you can actually believe about the mobile wars
As a result, you can be sure that the Android sales numbers you see are inflated. The truth is that Android's market share is not as high as the reported data would suggest. But no one knows the extent to which these numbers are inflated. What you can reasonably believe is this:

  • Android, in all its forms, outsells iOS -- except in business.
  • Apple devices and related services generate the vast majority of the mobile industry's profits: iOS makes real money; Android, not so much.
  • People use iOS devices much more than they do Android devices, from app usage to Web usage to media consumption. That's especially true for tablets.
  • Apple is on a roll when it comes to iPhones, but not when it comes to iPads.
  • The major non-AOSP Android device makers -- such as Samsung and HTC -- are currently struggling to stay level, much less grow.

The reasons people are seeing an Apple resurgence
That last item is what's new and why you're seeing all those "Apple's resurgence" stories. Apple is growing more in the high end -- the users who spend real money both on devices, then apps and peripherals -- while the AOSP vendors are sopping up the low-end market outside the United States. "Full" Android is feeling the squeeze.

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