Affordability is the key factor in Android adoption

Affordability is the key factor in Android adoption

Summary: Apple iPhones aren't seeing the uptake in some markets due to price. Android devices are more affordable and therefore more accessible.

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I've read comments from readers, on my blog and others, that Android's superiority is the main reason that its popularity is growing worldwide. I have evidence to the contrary. It comes down to affordability and nothing else. If it weren't for the huge price difference in the two, Apple would be the clear winner. At worldwide sales of an estimated 244 million, the iPhone is a major force in the mobile market. Android phones might or might not have the same or greater marketshare but the bottom line is that it doesn't really matter which one has the greater share at those numbers. Mobile device users generally prefer Apple over anything else but if it doesn't make economic sense, then consumers have to choose second or third best for the money.

In the US, iPhones typically retail for around $400 but discounts, known as instant savings,  are available that bring down that cost to $200. A $200 phone is fairly affordable for Americans. However, it's the $100 per month fee for phone service and data that really bites us on the backsides. These numbers are based on my experience with the five iPhones that I have in my house plus a few others that I've asked about from my in-laws and friends.

The Samsung Galaxy SIII is also $200 after instant savings with similarly priced unlimited talk, text and data usage plans. There are phones, even smartphones, available at US retailers for as little as one cent. It's really the monthly fees that make the largest difference for us.

Unfortunately, some US buyers don't opt for the unlimited plans due to the price but end up paying more each month when they exceed their plan limits. Those users inevitably upgrade to the unlimited plans after exhorbitant bills hit their mailboxes.

AT&T, my iPhone carrier, doesn't offer unlimited data plans, therefore we have to watch our usages very carefully. In my opinion, we pay for unlimited but we just aren't getting it. In the end, it's the carriers that really win in the phone battles. Sorry, I digress.

If you don't believe me about economics playing a major role in iPhone vs. Android adoptions, consider the following numbers.

In India, an iPhone 4S costs about $880 to purchase but the monthly fee is approximately $20 per month for a standard phone and data plan. The average tech salary in India is approximately $1,200. In Argentina, the iPhone costs a cool $750 and the monthly fees are a comfortable $45. The problem is that the average salary in Argentina is $900.

Those numbers, hopefully, will surprise you and educate you on the major reason why the iPhone hasn't quite caught on in certain countries. But, if you believe that I'm prejudicing my illustration with low wage countries, let me point out that the iPhone costs over $1,000 in US currency. Canada's iPhone price comes in at just over $800.

Price is a big factor in making a decision about a mobile phone.

By comparison, the Samsung Galaxy SIII cost ranges from $625 to over $700 in India. It sells for around $550 in Argentina. In the UK, the SIII price for an outright purchase is $800 and a mere $150 in Canada with a two year contract.

It seems to me that the choice, based purely on price, is easy in each case.

Neither phone is particularly inexpensive in any country but you have to admit that a 20 to 30 percent savings is significant enough to sway one's opinion and purchase decision toward the less expensive phone.

So, no matter where you are, you really want an iPhone. The reality is that you might not be able to afford one, so you choose to use the next best thing for the money. And, that's OK but don't assume or postulate that popularity equals quality or desire. It does not.

I don't have anything personal against Android phones. If you've kept up with my column, you know that I have a Samsung Galaxy SII and an iPhone 4. I like them both but for me, the iPhone is my choice for a personal phone and until I see something better, I'll always own an iPhone of some generation for personal use. It might not be the latest version but it will be an iPhone.

And, for me the choice wasn't so easy. In the US, the Galaxy phones and iPhones are very close in price, service and capacity. The primary factor that swayed my opinion to the iPhone was the Apps. Apple has the best Apps. The iPhone has a lot of third-party hardware and software support.

Secondarily, I chose the iPhone because of its ease of navigation, its stability, its long battery life and its recommendations by friends and colleagues. For me, the iPhone is the best choice--even if I had to pay a higher price. That's not the case for everyone and I understand that. But, I also understand that people have to make choices based on economics and not just features.

The heart says, "iPhone" but the bank account says, "Not an iPhone."

What do you think? Do you think that Android phones are popular because they're so great or because they're cheaper? Talk back and let me know.

Topics: Android, Apple, iPhone, Mobility, Samsung

About

Kenneth 'Ken' Hess is a full-time Windows and Linux system administrator with 20 years of experience with Mac, Linux, UNIX, and Windows systems in large multi-data center environments.

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18 comments
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  • x¿

    People by Apple products for the name.
    The majority buy Android for quality and cost.
    ¿UñÁÐáptâßLé¿
    • Mobile sector is about 2 years away from bust

      With Federal Reserve being in QE to infinity mode, you'd expect inflation to kick in the next two to three years. When food, gasoline, electricity bills and so on all go up there's not much room for a gauging data plan. Watch the demand for mobile devices plunge.

      I guarantee it.
      LBiege
  • And Why Is Android More Affordable?

    Because it's an open platform that encourages competition, which is what drives down the price.

    Open Source is all about choice. With Android you can spend lots on a Samsung Galaxy SIII or HTC One X, or you can be frugal and choose a low-end Huawei or ZTE or such. Nobody can lock you in, not even Google.
    ldo17
    • Carriers do not lower data plan price b/c it's FOSS

      And you can buy lower price closed source phone as well or, better yet, not owning any smart phone at all to dodge all the charges.

      Get a grip.
      LBiege
  • Not true

    I've always wanted the flexibility and customization of android. Our family has ipods and ipads, just not iphones.
    Romdude
  • Mostly accurate

    I suspect this article is mostly accurate. It's worth noting, morover, that certain Android phones are dirt cheap. I recently read an article that talked about an un-subsidized $99.00 Android phone that T-Mobile's pre-paid arm and some other pre-paid carrier were about to offer. It looked like a variant of the LG Optimus, based on specs and OS version. But still, the important fact to keep in mind: it was $99.00... un subsidized. No it's not the latest and greatest. The half-VGA screen revolution is almost embarrassing by today's standards. But it is a perfectly serviceable smartphone that can be used to check your e-mail, maintain a calendar, light web-surfing, light gaming... heck even navigate with Google Maps. I know: I was loaned an LG Optimus for a couple of weeks when I first joined Sprint and they were temporarily out of stock on the Evo 4G I wanted. My wife went with the Optimus and has never wanted for anything more. I'm more of a power user, so I do want a faster phone with a bigger screen, but even then, I've already decided that when my contract's up I'm switching to Virgin Mobile to save money and grabbing an HTC Evo 3D. Yeah, it's a last-generation phone, but it's still dual-core, with a 4.3" 960x540 screen, MicroSD slot for 32Gb of expansion (32Gb cards go for $20.00 at Amazon) and right now it's going for $230.00 un-subsidized on Virgin. Compare that to the $650.00 un-subsidized 16Gb iPhone 4S and you'll see why it's a no-brainer for me.
    dsf3g
  • Android is a positive choice

    You are right to the extent that most people start considering Android because of price but as you look deeper, you realise that the real daylight robbery begins after you purchase the damn device since apple forces you to pay for stuff you can expect to get free in Android and which you can carry over to multiple self owned devices free. [I have an SGS2, Galaxy Note and Galaxy tab 8.9 but have to purchase an app only once].
    Once you are inside the Android ecosystem you realize how transparent and configurable the whole thing is. You can use whichever way you like. It connects so easily to other devices like my TV and laptop for example. And most importantly it preserves my freedom to chose the best device in each category. Today I would not take an iPhone even if it is free.
    Now I also have friends who are buying smart phone. Most of my friends who were planning to buy iPhone ended up buying high end Android after discussing the pros and cons. While it is true that people who have no idea of smart phones generally aspire to own an iPhone (without realising what they are rooting for) but that speaks more about the marketing power and the reality distorting influence of Steve Jobs.
    My colleagues who have purchased iPhone have mostly only had regrets and I doubt they would ever buy them again. They are in a situation that they would have to change their laptops to macs if they have to utilize the phone properly. Half of them (mostly gifted by iOS crazy relatives based in US) use it like a dumb phone!!
    abledoc
  • No one can afford the memory for autonomous smarts

    Domain expert systems are reworking voice, video and gesture recognition while knowledge graphs, including user self knowledge are making PDAs with phones increasingly responsive to human wants/needs. SOME of this AI may eventually resided on your smartphone but most of it will be in the cloud.
    jnffarrell
  • Crap

    No matter who you are you want an Iphone but may not be able to afford it so get the next best thing......what rubbish, so basically your argument boils down to owning an IPhone being only a sign of wealth and nothing to do with quality. I won IPads and Android tablets and the only benefit of the IOS is that my 6 year old can use it, so there I have reduced the choice argumnet to if you are rich and stupid you buy Apple else you get Android....
    chuckchuckling
    • let me add to that

      The high price is part of the appeal

      This is a fact all over the world. If you pay a lot for something it says " look at me I can afford to waste my money and you can't. Part of being an apple fan boy is being a snob, an equipment snob. I am very familiar with this because my brother-in-law and his whole family are snobs and they are ALL fanboys.

      Holidays I have to endure all the statements we see here. They are sooo much better than anything else: they really design the best hardware: They cost a lot more but but if you could afford it "like me" you would understand.

      Have you ever been to an expensive restaurant and gotten a lousy meal. Then you look around and most all the customers are snotty upper class who are driving MB's and BMW's. They aren't there for the food they are there because it is a status symbol.

      Apple marketing has managed to put themselves into this niche. They make great looking things but in a lot of cases for the price it is an empty box.

      If I have come off sounding like I have a lot of issues---- I do, But I speak from experience. I was a Mercedes mechanic " I won't use the word Tech" and for 2 years was a 24 hr road side MB mechanic. The stories I could tell and the wanabe's I met have given me a new spin on the human condition.

      ..............................calfee
      calfee20
    • Let me add...

      Let me add by saying that you're basically an asshole.
      gribittmep
  • India is a VFM Market

    In India affordability is not the prime reason. Indian consumers always look for VFM products primarily, next comes affordability.

    As you said $800 for an iphone 4S and say $700 for Galaxy SIII the consumers here primarily look for what and all they get for the given price. Its not all about the initial purchase. Affordability of spares, service networks , customer care etc...

    For $800 you get a polished product with a walled ecosystem . The accessory price also inflated.

    For $700 you get all the features , tones of new features with a much more friendly ecosystem, with affordable accessories. Plus the customer decided how the phones GUI should be.

    Why Maruti Suzuki cars are so popular in India, although other big players are already present in India. C'se they offer 1. VFM products 2. Affordable 3. Easy to maintain
    P-P
  • Well, I'd Choose Android Over Apple

    Well, I'd certainly choose an Android device over an Apple one at the same price, simply because of the restrictions on Apple devices. That might just be the techie in me coming out, though. Some of my family members have become annoyed at those same restrictions, though, on the iPod Touch, which is the only Apple device any of them own (and cost may be a factor in that).

    Another point to consider is that if the Apple devices were as cheap as the Android ones, then they might not have the same "status symbol" clout as they currently have. I'm not sure how much that figures in, but I wouldn't be surprised if it figured in at least a little. Some of the high end Android phones seem to have a little bit of the "status symbol" clout as well.
    CFWhitman
  • I'd choose Android over Apple because...

    People buy Android because they are cheaply made and are cheap in price. Why pay for a expensive phone that will last the 2 year contact like an iPhone will. I buy the cheapest Android phone and end of paying for another one during that contact due to the poor quality. Many times have I paid twice for Android phones over the same 2 year contract instead of buying a quality phone like iPhone.
    TimeForAChangeToBetter
  • Android is for Tech Geeks

    I am surprised that a OS admin with over 15 years chose an iPhone over an Android phone. I've been a software developer for 30 years and I fell into the Android camp almost 4 years ago. Now, on my second Android phone, I could never own an Apple. It's not for us.

    We techno geeks really love the openness of Android. We like to fiddle, customize and tweak our Android devices till they reflect our personality. If you get 4 tech geekgs like me together in a room, we'll all have different devices, with different looks and very differently customized UIs. That's why we like Android it's not the price with use.

    I purchased a top-of-the-line HTC Android phone in Christmas of 2011. I knew it was going to get the ICS, Android 4.0 upgrade, in early 2011. I liked this smartphone so much, I bought the same device for my wife for Valentine's day. We got upgraded to ICS in early June 2012. What Android has accomplished between 2.3 and 4.0 is amazing.

    Currently, we also have a Nexus 7 tablet with 4.1, Jelly Bean. That is even more impressive than 4.0. I can't wait for HTC and our carrier to push the 4.1 upgrade to our smartphones. As someone who has worked in computers, software and the technology industry for 30 years, I am just amazed at what this small, high-speed, mobile, always-connected-to-the-internet computer in my pocket is capable of. It's an exciting time in mobile technology.
    vadertime
    • surprise

      Enough said. I am also really surprised.. How can it be that somebody with such experience opt for being stuck with iOS. Ken, I believe in you and that's why I think your galaxy is more in some closet from day one or next day maybe. You must have some other reasons, private or professional... I am still waiting for you and believe you will rethink.. ;)
      goranskular
  • I bought an Android because it's significantly better than the iPhone

    There was a time when the iPhone had better hardware. That time is long gone. There was a time when iOS overall was better than Android. That time went even before Android phones overtook the iPhone in hardware. I'm in the US and have bought Android phones for years now. I don't buy phones on contract. I buy the phones outright and use it without signing into an expensive contract. That allows me to upgrade faster as better phones are released in the market. Why would I buy an iPhone with an tiny screen, a worse hardware and poorer OS which doesn't allow me to customize the phone the way I want to use it. It's my phone, not Apple's. iOS is very smooth and the apps are generally sleeker. But Android, now is just as smooth, afr more flexible and the apps have always had better usability. But lately since Google has published the design guidelines after ICS, many apps are now just as polished.

    Given that at $199 for most phones on contract, if everyone wanted to buy an iPhone, there would have been no high end Android phones sold at all!!! The fact that Samsung has sold 20 million S3s, 10 million Notes and God knows how many S2s, that's obviously not the case.
    os2baba
  • Wrong

    "So, no matter where you are, you really want an iPhone. " Wrong, I choose android because I like customization features and not being locked into what Apple thinks I should have. That's why I retuned my barnes & noble tablet and why I am not getting an amazon tablet. I like to tinker around and optimize my gadgets. When my iphone toting friends see my phone, I always get the "wow" comment plus with android freedom, I can even put a similar apple interface but I don't because it is too restrictive.
    Romdude