Today the IDC made some predictions about market share for mobile OS’s in 2014 that hide more than they reveal. Electronista.com headlined that Android would pass iOS leaving iOS with only 10.9% of the smartphone market compared to Android’s 24.6% in 2014 Market Share. Sound scary as an Apple investor?The IDC numbers are here:
Two comments about these numbers:
First the smartphone market is growing in several directions. More and more people are buying smartphones and smartphones themselves are moving down the price ladder so that while there remain premium priced Android phones, more and more we’re seeing cheaper and cheaper Android phones in places like Asia where the OPhone and other similar projects show how ubiquitous Android will become not only in the high end where it is now in the US and somewhat in Europe but also on ever cheaper and cheaper devices as smartphones move bigtime into developing and emerging economies. So while Android may have 24.6% of market share in 2014, that 24.6% probably won’t represent the lucrative upper end of the market as many might infer from today’s situation.
Apple is far from the biggest seller of laptops, they have few models below $1000 (leaving aside the iPad for the moment). But in the lucrative over $1000 laptop market where margins are highest Apple sells 95% of all laptops and making excellent money doing so.
Similarly I see the second unmentioned part of the IDC prediction being that although in 2014 Apple may only have 10.6% of the total smartphone market, that 10.6% may well represent 50% or better of the lucrative top end devices. These machines appeal to higher income families who spend more on apps, more on accessories and value ease of use and style over purely utilitarian less expensive devices.
So what seems to be a troubling trend for Apple as portrayed in the media, may well be a very profitable outcome for Apple which they will happily accept. Apple’s 10.6% market share will almost certainly be at the upper price end of the market and they may dominate that sector. It’s not possible to know because the IDC figures don’t give anything but a coarse overview, just enough for the media to splash some Apple in their headline.
Parenthetically I’d add that with only 24.6% of the market in 2014 one would have to say that the whole Android project is on shaky ground. Google needs to be present in the newly developing mobile space not only on the browser but in apps. Assuming that Microsoft is not going to accomodate Google any more than Apple will in the ad space, and assuming that Nokia would like to control advertising on their market share, Google may be left with “not enough” to keep revenue growth growing at a fast enough pace to keepits stock price rising.
