I received an email from a reader named Mark who called me out on my assumption that Android's market share isn't as high as IDC claims it is because shipped phones =/= sold phones:
Your implication every time seems to be that these phones are shipping to 'somewhere' but consumers aren't actually buying them. So tell me this, if FOUR TIMES more android phones than iPhones are sitting on shelves somewhere unsold, where are these shelves?
Here are some ideas:
Do you really think these devices are being manufactured but not actually sold to consumers? And given that Google's numbers for activations show the same trend, how is that happening - phones in boxes on shelves don't activate themselves.
I don't have the answers, and from what I read in Mark's email, neither does he. So, I did some digging. Here's Asymco's Horace Dediu on IDC's estimates of Samsung's mobile phone shipments during Q2 2012:
That’s the estimate from IDC. So why bother asking?
Because that is an estimate. Of the 104 million Android phones shipped in the quarter (itself an estimate from another, possibly different methodology), I could only account for 7 million actually reported. That figure comes from a close reading of an investor presentation from Sony. HTC does not report their shipment numbers. It stopped some time late last year. Neither does Motorola now that it’s a part of Google. Huawei is silent except for setting targets and ZTE published a press release citing IDC’s estimate of its own shipments.
If we apply the last half of that last paragraph to Mark's insinuation that Android has 75% of the market share because IDC said so, we're left with very little actual information to go on. HTC, Huawei, and even Google don't announce shipment numbers. So, where is IDC getting its information and how can it deduce that 136 million phones have actually been shipped this year? I doubt Samsung and ZTE, which seem to be the only companies saying anything, accounted for all of that.
Remember, kids: IDC is comprised of analysts, like the ones who consistently get Apple earnings estimates wrong and then claim Apple "missed expectations."
The other thing IDC fails to take into consideration is the iPod Touch, which also runs iOS. It's fair to claim Android has a greater market share than iOS in the mobile phone category because it's easy to find an Android phone at any price point on any carrier from any manufacturer. Apple's iPhones start free on contract, then go up to $99, $199, $299 and $399 on contract. And while they're readily available on three out of the four major carriers in the U.S. and international presence is growing, the iPhone trails in comparison to the number of Android handsets available all over the world.
Where the whole "Android has 75% market share" argument falls apart, however, is when people begin to understand that both iOS and Android are more than just mobile phone operating systems. Android and iOS are available on phones, tablets, and MP3 players.
Here are some figures:
Apple sold 32 million iPads, 72 million iPhones, and 42.6 million iPods in 2011. Apple doesn't split its iPods out by type when reporting financials, but does state that the iPod Touch is the majority seller. Let's assume Apple sold 32 million iPod Touches in 2011 because, hey, why not?
According to Andy Rubin in October 2011, there were roughly six million Android tablets in the wild at that time. Even if Google did well by the end of the year, there's no way it sold another 26 million tablets in a single quarter.
Horace Dediu estimated that in 2011, "the total cumulative number of Android devices activated so far is between 224 million and 253 million," which jibes with Larry Page's assertion that at the beginning of 2012, there were 250 million Android devices in use.
Put all of that together and you have 32 million iPads + 72 million iPhones + about 32 million iPod Touches (give or take) and the result: 136 million iOS devices sold/activated in 2011 vs. 250 million Android devices (the majority of which were phones). Based on those figures (and I admit, math was never my strong suit), Android ended 2011 with 59% market share. I'm not going to worry about RIM or Windows Phone 7 because this isn't a comedy piece.
We now return you to your regularly scheduled childish rant:
Seriously, sometimes you need to take a look at what you write and read it.
Did you forget I took a vow of abstinence from reading?
Asserting that the 75% market share isn't real because the device's somehow haven't reached consumers is just plain daft. Android does have the lion's share of the market, by any measure - but Google's strategy is different to Apple's (who have the lion's share of the profit).
Maybe Android does have 75% of the market by now. 2012 is almost over and a lot has happened, but IDC's sketchy estimates don't tell the whole story. Apple also sold three million iPads over the weekend thanks to the iPad mini launch and over five million iPhone 5's during the device's launch weekend.
I'd love to compare those to Amazon's Kindle sales, but Bezos isn't exactly forthcoming with the details. Plus, he's already said he's breaking even on the tablets in order to sell more Amazon content and services, and that's really where the "strategy", as Mark says, comes into play: Profits.
Apple is the profit king and no amount of market share is going to matter if Google can't bring in the money. Consider how much the company lost when Apple got rid of Google's Maps data, along with the ads that came with it. Most manufacturers aren't making much, if any money off Android, including Google. The system is just another way for Google to collect data from its users by providing them with "free" services and ads. That may be fine for Google, but ads don't help Samsung or HTC.
We won't know exactly what the market looks like until after the holiday season, when Apple reports how many iPads (especially the minis), as well as the number of iPod Touches and iPhones it sold to consumers. The large-scale iPad dominated over similarly sized Android tablets for years until seven inch devices like the Kindle Fire and Nexus 7 hit the market. Now that Apple has a smaller competing tablet, I think we're going to see these market share percentages fluctuate as people figure out which ecosystem they want, how much they're willing to spend, and who has more to offer.
IDC and its analysts can keep their estimates. I want to see the raw sales figures. They're all that matter.