Good Days Now, Better Days Ahead for Android

Carl Weinschenk
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Are Smartphone Owners Switching Teams?

The growth of smartphones and tablets has led to a parallel growth in studies and assessments of how many devices have been sold in a given quarter and year. Such analysis is valuable in telling the industry where it stands, but the greater value may be in providing an idea of where it is headed.

Numbers and commentary have been released by ABI Research, Strategy Analytics and IDC. The big picture takeaways—none of which are shocking—are that the smartphone segment is doing very well, Microsoft’s Windows Phone is showing signs of life, and that the arc of development favors Android.

The momentum is good for the entire category: Strategy Analytics said that globally, 229.6 million smartphone units shipped during the third quarter of 2013 compared to 156.5 million during the year-ago quarter. IDC saw a jump from 156.2 million to 236.4 million units.

The advances made by Windows Phone were noted by both Strategy Analytics and IDC. Strategy Analytics said that shipments of the Windows Phone operating system jumped from 5.6 million to 8.9 million between the second quarter of 2012 and this year’s second quarter. That translates into market share growth from 3.6 to 3.9 percent. IDC saw a bigger increase for the OS: Shipments rose from 4.9 million to 8.7 million and its market share rose from 3.1 percent to 3.7 percent.

This is timely good news for Microsoft because the next few months will be characterized by increasing activities among a quartet of smaller players vying for a spot in the top three mobile OSes: Canonical’s Ubuntu, the Firefox OS, Tizen and Jolla’s Sailfish. For Microsoft, building up a head of steam now is important to staying ahead of the pack.  

The needed shot in the arm for Microsoft is mirrored by the trends that are undoubtedly making Google happy. Shipments and market share for Android increased from 108.7 million to 182.6 million, and from 69.5 percent to 79.5 percent, respectively, according to Strategy Analytics. IDC put the shipment and market share increases at 108 million to 187.4 million, and 69.1 percent to 79.3 percent.

The bottom line is that when an industry is moving toward providing something as a commodity, the company that already treats the product in that manner has an advantage. Android, of course, is the Chevrolet of the smartphone operating system world: dependable, not particularly flashy—and more than adequate for the lion’s share of users who rely on the products but are not obsessed by them. This group of lower-priced smartphone users is growing, particularly in less developed regions. This is how ABI Research sees the future:

Low cost smartphones, defined as smartphones with a wholesale ASP below $200, are increasingly appearing in OEM and operator portfolios in both emerging and developed markets. The low hanging fruit for low cost smartphones is to drive smartphone adoption in emerging markets where handset subsidization and disposable income are scarce. Market intelligence firm ABI Research forecasts low cost smartphone shipments to grow from 238 million in 2013 to 758 million by 2018, driven by the low penetration of smartphones and large subscriber bases found in BRIC countries.

Of course, ABI is not describing growth in what traditionally is Apple’s strong suit. The competition from the newcomers notwithstanding, the two juxtaposed statements—that Android is experiencing great growth in a market of a specific size and that market is expected to grow by a factor of about two-and-a-half over a the next half-decade—clearly suggests that Android is in great shape for the future.

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