By MG Siegler
In September 2010, I wrote a post that ignited an absolute shitstorm around these parts. "Shitstorm" in this case meaning a post with a thousand comments, the majority of which were spewed up by rabid Android fanatics. The title of that post:
At the time, we were in the midst of a massive Android surge to the top of the smartphone ecosystem food chain. This was happening all around the world, but the focus of this particular post was the U.S. market. Based on some comments made by developer David Beach at the time, I wondered if, as the title suggested, Android was only doing so well in the U.S. because the iPhone was still only available on one carrier, AT&T (NYSE:T)?
It's time to revisit that thought because there's now absolutely no question that this was the case. There's now data to back it up. What's more, despite what some surveys suggest, this trend may have fully reversed itself.
Over the past few days, both comScore and NPD have put out data showing that Android still has a healthy hold on the U.S. smartphone market with their best market share numbers yet. According to comScore, Android controls 51 percent of the market. According to NPD, it's more like 61 percent.
For comparison, Apple (NASDAQ:AAPL) is the number two player with 30.7 percent of the market according to comScore, and 29 percent according to NPD.
On the surface, there's one big glaring problem with these numbers. Actual sales data from the three largest carriers in the U.S. doesn't seem to back up the comScore and NPD numbers. At all.
In the last quarter, the iPhone accounted for 78 percent of all smartphones sold through AT&T. On Verizon (NYSE:VZ), the iPhone accounted for 51 percent of all smartphones sold. Sprint (NYSE:S) didn't report their total smartphone sales numbers, only iPhone sales numbers, but estimates peg the iPhone percentage around 60 percent. The iPhone is not (yet) sold on the nation's fourth largest carrier, T-Mobile.
That's 51 percent of all smartphones sold on the nation's largest carrier (Verizon). 78 percent of all smartphone sold on the nation's number two carrier (AT&T). And 60 percent of all smartphones sold on the nation's number three carrier (Sprint). Jay Yarow of Business Insider did the math: all together, the iPhone accounted for 63 percent of the smartphone sales in the past quarter on the big three carriers. The 63 percent number is close to the 59 percent estimated by Raymond James analyst Tavis McCourt last week, as reported by Eric Savitz for Forbes.
And if you believe the Yankee Group, the big three carriers account for roughly 80 percent of the overall U.S. smartphone market. This equates to almost exactly 50 percent of the overall smartphone market in the U.S. for Apple.
It's hard to see how Android could control 61 percent of the market when there's only 50 percent to spare after the actual numbers are calculated. Maybe Android is huge with undocumented workers. Undocumented workers who love taking surveys, mind you. But I digress…
And, of course, there are other smartphones out there from RIM, Microsoft, Nokia, and the like. Even giving Android the other 50 percent of the market would mean all of the other players equal zero percent. (Sadly, perhaps not that far off, actually.)
ComScore at least has some wiggle room here. They don't actually measure phone sales quarter to quarter, but overall market usage. So it's certainly possible that after a few years of Android sales, they do still control the majority of the U.S. smartphone market. But their numbers get sticky when you look quarter-to-quarter and see that Android's market share increased nearly four time more than the iPhone's market share this past quarter. Again, that doesn't sound right when the iPhone accounted for 63 percent of all smartphones sold on the big three carriers.
When I brought this point up a few days ago, comScore was quick with an answer. They told me that amongst the big three carriers, the iPhone subscriber growth actually did outpace Android subscriber growth, 13 percent to 11 percent. It's just that overall Android growth from the remaining carriers (meaning T-Mobile and the regional carriers) more than wiped out that difference.
First of all, 13 percent (iPhone) versus 11 percent (Android) growth on the big three carriers still doesn't sound right if the iPhone accounted for 63 percent of all sales last quarter. Second, if the big three do in fact make up about 80 percent of the overall market, how did the remaining 20 percent tilt the scales 4x in favor of Android (in terms of market share growth quarter to quarter)? It doesn't make sense.
And then you look at NPD's numbers. Yarow demolished those earlier. And sure enough, NPD reached out right away with clarifications.
Here's the real issue: this rapid swing in favor of the iPhone seems to have exposed some serious flaws in the way these market analysts get their data. They're hiding behind vague technicalities on how their numbers could be what they say, but they still don't add up. Their problem is that we have actual numbers from the three largest carriers in the U.S., all of which are finally selling the iPhone and boasting about those numbers because they're huge.
So how do the other guys get their numbers?
In comScore's case, their MobiLens data comes from "an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older". They don't disclose the number of people surveyed, but you can bet it's not a massive number. In NPD's case, they survey 12,811 people.
Which numbers do you trust? Millions upon millions of actual sales reported in a legal manner by public companies or surveys of thousands of people?
Further, as Ethan Kaplan points out, "NPD and the like are incentive based surveys so naturally skew a certain way. Teens, college students, etc." Several others have made this point over the past few days. The numbers comScore and NPD use in their statistically small surveys are likely skewed for a number of reasons. And again, now we have actual sales data that heavily suggests that's the case.
By now, I probably have the Android fanatics really upset, so let's throw out all these rational numbers and instead continue on with the dream that Android is "winning" in the U.S. Not winning in revenue or profit mind you - you know, things that actually matter for business, and things which Android will likely never be winning in any sense of the word - but winning in terms of overall market share. If you want to ignore all the above information and insist that Android is still winning there, that's fine. But let's jump back to the beginning of this post.
Again, the argument made in September 2010 was that Android was winning in market share in the U.S. because Apple was letting it win by only making the iPhone available on AT&T's network. If Android still does control half to two-thirds of the market as the surveys suggest, what does it mean that on the three carriers where the iPhone is available, Apple now controls over 60 percent of these markets on a quarterly basis? (Again, this is fact backed up by actual sales numbers.)
It means that Android was/is winning in market share because Apple was/is allowing it to.
Android was previously the top smartphone OS for both Verizon and Sprint. But that was only because the iPhone was not available on either network until last year. When it became available, it quickly shot to the top. One type of phone outsold hundreds of other models combined. That's pretty insane.
And it doesn't speak well for the future of Android's market share, survey or not. At least not in the U.S. (the rest of the world is more complicated for many other reasons). What if Apple finally puts the iPhone on T-Mobile later this year? Given what we now know - again, from actual data - is there any question that it becomes the top smartphone there? What about the other, smaller regional carriers? That's already starting to happen.
Android's only hope is to actually have a phone, or a set of phones, that are more appealing to consumers than the iPhone. But that hasn't happened in the past four years, so what makes us think that will change this year? Or next year? All Apple has to do is say the word and they can win the market share battle in this country.
Actually, again, if you consider the numbers above, it sure looks like they already have won that battle.