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Hardware 2.0

Adrian Kingsley-Hughes

iPhone cannibalizing Android sales

By | January 10, 2012, 6:59am PST

Summary: iPhone sales are on the up, while Android device sales have slumped preciptously.

In the sales war between the iPhone and Android, latest figures from the NPD group suggest that while iPhone sales are on the up, while sales of Android device have slumped preciptously.

Between Q3 2011 and October/November sales of iPhones soared from 26% to a whopping 43%. During the same period sales of Android devices fell from a high of 60% to 47%.

Here’s a chart:

This chart clearly shows how the smartphone race is between iOS and Android. RIM has pretty much vanished into oblivion and none of the other players were worth adding to the chart.

Is the the iPhone 4S effect that we are seeing here, or is it indicative of a deeper problem and perhaps a slowing down of the Android machine? Hard to tell based om just a single data point. What will be interesting is seeing where this goes during the year.

Also according to NPD, two out of every three phones sold in the Oct/Nov period was a smartphone, while during Q3 11 this figure was only 59%. Basic phones only accounted for 15%, while messaging phones didn’t fare much better with 18% of sales.

The cellphone market is now very much the domain of the smartphone.

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Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology.

Disclosure

Adrian Kingsley-Hughes

All opinions expressed on Hardware 2.0 are those of Adrian Kingsley-Hughes. Every effort is made to ensure that the information posted is accurate. If you have any comments, queries or corrections, please contact Adrian via the email link here. Any possible conflicts of interest will be posted below. [Updated: February 23, 2010] - Adrian Kingsley-Hughes has no business relationships, affiliations, investments, or other actual/potential conflicts of interest relating to the content posted so far on this blog.

Biography

Adrian Kingsley-Hughes

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology -- whether that be by learning to program, building a PC from a pile of parts, or helping them get the most from their new MP3 player or digital camera.

Adrian has authored/co-authored technical books on a variety of topics, ranging from programming to building and maintaining PCs. His most recent books include "Build the Ultimate Custom PC", "Beginning Programming" and "The PC Doctor's Fix It Yourself Guide". He has also written training manuals that have been used by a number of Fortune 500 companies.

Adrian also runs a popular blog under the name The PC Doctor, where he covers a range of computer-related topics -- from security to repairing and upgrading.

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Bert
kosiara 20th Jan
Well, I don't live in the US but I DON'T believe iPhOnE 4s has 47% of the market ?! The phone has no features, no 4G, no NFC, was OLD when it was released and works on a closed platform with more problems/regulations/restrains than benefits. I think US users aren't that stupid. Come on!
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I think the term "cannabalizing" refers to a situation where a company makes a product that takes sales away from another of its own products... not a competitor's.
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@bstringy Exactly the point I was going to make when I saw the title. Apple is feeding on Android, not themselves.
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RE: iPhone cannibalizing Android sales
Melciz Updated - 10th Jan
@Aerowind
I dunno - one smartphone is cannibalizing another smartphone. Sounds appropriate.

Cannibals in New Guinea aren't called cannibals only if they eat members of their own tribe. They are still called cannibals if they eat whitefellas as well.

Tech usage of the word seems to have strayed a bit from the original in some people's minds.
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RE: iPhone cannibalizing Android sales
bstringy Updated - 10th Jan
What's really happening is a jump in iphone sales with a new release while android is experiencing a flat couple months before December Galaxy Nexus and Christmas purchases. I think the trends will be corrected with Q1 numbers. To call this a turning of the tables would be premature.
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RE: iPhone cannibalizing Android sales
General C# Updated - 10th Jan
@Aerowind I think we see different companies as different species, therefore this would not be cannibalizing. It's simply beating out the competition.
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@bstringy

Cannibalizing is:

"(of a company) reduce the sales of (one of its products) by introducing another similar product."

So, yeah, the writer has his terms mixed-up. It would be cannibalizing if Apple introduced a lower-priced iPhone that didn't increase sales over-all, but reduced sales of the initial product.

What Apple is doing with the iPhone 4S is apparently taking sales away from the Android smartphone market.

joeldm
ATlanta, GA
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@joeldm - You are quite correct.

@Melciz "Tech usage of the word seems to have strayed a bit from the original in some people's minds. " Not quite. The term (cannibalising) comes from marketing/sales, not technology.
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RE: iPhone cannibalizing Android sales
UrNotPayingAttention 10th Jan
blog sites, twitter, etc., "cannibalizing" real journalism
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Wow, you just wrote an article that says the sales of Apple products increased massively when they let out a new device.
Didnt this happen last year, and the year before...

And, how many of the buyers were already apple owners, who were upgrading?

I think making a pointless comment at least makes up for me wasting my time reading this waste of time article.
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@Will T
Considering Apple sold only 21 million iPhones in 2009, 40 million iPhones in 2010 and 90 million in 2011 and since most users are on 2 year contracts, very few new buyers are repeat buyers (only in queues ahead of new model releases do you see a high proportion of repeat buyers.)
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@Will T Hi Will T the iPhone has never had a +40% share of the american smartphone marked in any previous quater before. Going from a markedsshare of about 28% to a markedshare for the last quater of about 44% that is a significant increase and that makes the article relevant
new device during the same time period. Oh. Wait. They did. Dozens of them.
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RE: iPhone cannibalizing Android sales
Pete "athynz" Athens 10th Jan
@Will T If your aim was to make a pointless comment then you succeeded admirably. Never mind the fact that HTC, Samsung, LG, and Motorola also released a few new devices during that same exact time period. Didn't figure that into your pointless comment did you? There are those who are tools - you are the entire tool shed.
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@Will T That's the whole problem with this article and particularly this chart. The casual reader/viewer is led to think it's about market share when it's only % of sales during one quarter, a much different beast. For the reason you pointed out - users updating - only a market share chart could show if one product was taking away share from another. This is just (unintentionally) misleading.
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@jgm@...
Err, % of sales during one quarter is actually the definition of marketshare.

If you are thinking installed base, then iOS is even further ahead of Android with 300 million iOS devices sold by the end of 2011 versus 200 million Android.
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@Will T
Take another look at the graph. It goes all the way back to 2010 not just this quarter. Android's drop off and reciprocal iPhone gains are far greater then any previous change going back several years.
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I called it
toddybottom 10th Jan
Here is the sales pattern and guess which one is better for the long term:
1. Someone buys an iPhone. In a year, they buy another.
2. Someone buys an Android. They struggle with it for a few months to a year. Then they buy an iPhone. Go to step #1.

Android devices represent false choice. While they technically exist as a choice, they simply cannot compete with iOS devices.

We need real choice. We need a strong #2 and even a strong #3. This benefits consumers. We would all win.

It is a sick market. We all lose.
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@toddybottom

I've had Android phones (Evo & Evo 3D) for 1 1/2 years, & an Android tablet (Asus Transformer) for 6 months. In that time frame, I've never struggled.
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@illdini... THAT is the question:)

Pagan jim

Did I just agree with Toddy? OMG!!!
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@toddybottom

You say that they can't compete with iOS, yet...they have...for a long time.
@toadlife .. EACH individual sale. The only ONE making money on the Android side of the fence seems to be Samsung and I'm not certain how they are doing it but being a parts supplier on a very basic level has to have something to do with it i figure:P Still of the two Apple and Samsung I'm betting Apple is making more per sale than they. So "competing" um sure I guess if you stretch the word a bit.

Pagan jim
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@toddybottom nice try but only an apple nerd would let apple get away with selling them a dumbed down 4s phone instead of a 5. give me a break.
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Actually that is SUCH a huge fail.
James Quinn 10th Jan
@ajs@... Perhaps the first gen iPhone sold to only Apple nerds but after that the sales of iPhones continued to grow is still seems to be doing so. So people who work with and use Linux and Windows at work and home also purchase the iPhone and IPad perhaps the iPod Touch. Also the 4s IS a fine device.

Pagan jim
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RE: iPhone cannibalizing Android sales
Pete "athynz" Athens 10th Jan
@ajs@... And where is this mythical iPhone 5?
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@ajs@...
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RE: iPhone cannibalizing Android sales
Pete "athynz" Athens 10th Jan
@toddybottom Or they get a sucky Samsung Android device and start saving their cash to get a Motorola or HTC Android device - which is what I'm doing. This despite also owning an iPhone 4.

And there IS a choice: Android, WP7, RIM, or iOS. last time I checked carriers were selling devices running all of the above OSes. So much for your shopworn sad-sack "sick market" theory.
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@Pete "athynz" Athens
Android devices represent false choice. While they technically exist as a choice, they simply cannot compete with iOS devices.

We need real choice. We need a strong #2 and even a strong #3. This benefits consumers. We would all win.

I'm not sure why you are so much against having a strong #2 and even a strong #3. Unless you believe that Android is a strong #2 and RIM or WP7 are a strong #3?

I'm not sure why you view a market where one manufacturer absolutely dominates every single metric as a good thing for consumers. I don't see how a market where the best device in every price range is just so much better than the 2nd best device is a good market for consumers. Once you've decided how much money you want to spend, the iPhone at that price range is miles and miles better than the competition. That isn't real choice. That represents artificial choice. Choice for the sake of choice. No one who has done the research puchases an Android for the first time and no one in their right mind purchases a second Android after that. Only iHaters stick with non iOS devices just to spite Apple. It isn't working.

And because the profit share is nearly 100% for Apple in the smartphone market and over 100% for Apple in the tablet market, this situation is going to get worse before it gets better. There will not be a competitive market in 20 years.

It is a sick market. We all lose.
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@toddybottom Right now, the choice is wether to get a real iPhone, or a fake one for the same money. This isn't going to end well for the fandroids, and it's absolutely nothing like the PeeCee market (where MSFT roped complacent users into DOS and then transitioned that onto a yet another apple rip-off).

For there to be a 'real' choice, some company other than Apple would have to make a compelling product. Not just a copy of a compelling product.

At least MSFT is trying to do something different for once. Not going real well though.

This is going to end up pushing the entire computer market to Apple. The tie in to iPad and iPhone are much stronger than the old MSFT monopoly ploys of Office and IE and OutBreak. Apple worked around all of that already.
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First World Problem
Tigertank 10th Jan
@NZ
It is a sick market. We all lose.

Nothing harbingers the doom of civilization like only having to choose between the top luxury mobile device and one that is almost as good.
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RE: iPhone cannibalizing Android sales
thtechnologist 10th Jan
Its because there was a new device, happens every year, nothing to see here, move along.
@thtechnologist .. and of those many Android devices how many of them were new or newish?

Pagan jim
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Are you sure there's nothing to see here?
dave95. Updated - 10th Jan
@thtechnologist

I thought it wasn't a "new" device, just a rebranded iPhone 4 from years past? And therefore, its a big fail? "Apple is no longer the smartphone that sets the bar. Like others, its just trying to stay relevant"

http://www.zdnet.com/blog/google/as-iphone-mojo-fades-android-continues-to-grow-satisfy/3380?tag=search-results-rivers;item1

Listening to some folks immediately after the iPhone 4S launch, this device was supposed to fail, badly. A disappointment to fans etc. Meanwhile there's a "new" Android launched every few weeks.
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@thtechnologist
Nope, didn't happen in 2010 when the iPhone only managed half the sales of Android.

Android is finally plateauing while the iPhone is accelerating.
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@Melciz
This is not surprising since the iPhone is still in the process of rolling out with many big telcos. From a logistical standpoint, the iPhone 4S is the first phone Apple can offer to virtually any telco in any country and that potential is a very, very big deal when you realize that the iPhone 4 and the positively neanderthal iPhone 3GS were still the No. 1 & 2 selling phones before the iPhone 4S came out.

Apple's biggest problem with market share was simply producing enough phones and offering them to enough telcos.
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@Synthmeister
I agree. Apple is finally getting closer to being able to compete properly with Android on the distribution side of things and it is very interesting to see the results.
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I know I'm ditching Android
itguy10 10th Jan
It was an OK 2 years but I want something reliable and supported. Which my Droid X has not been.

So back to an iPhone.
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@itguy10 That's the sentiment of pretty much every Droid owner who buys an iPhone.
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How is this even possible when Android is "winning"???
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Look at the trends
use_what_works_4_U 10th Jan
@dave95.
Right now Android is in a position where it Has been trending upwards. That seems to be changing. As a former iPhone user who has gone to Android, I helped that upward trend last year. The problem is that I will be returning to the iPhone (like many others) and thus negating my original purchase in the long run.

It's not just how many customers you create, it's how many repeat customers you create. I know a lot of people who will stick with Android, but I know a lot more who either have stuck with iOS or, like me, will be returning to it now that there is real choice among carriers in the U.S. I went Android because ATT ticked me off and Sprint had better plan pricing than Verizon. I didn't do it for Android. After a year with the HTC Evo Shift, I know that I will stay with Sprint, but I will not stay with Android.

The trend for Android has changed directions, and it will continue to until there is a repeat customer loyalty built up that doesn't exist now.
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Release cycle?
rlorenz 10th Jan
This just seems like statistics... I would expect it to slowly reset itself until the next iPhone is released, at which point we'll see this graph again.
@rlorenz ... So are you saying Apple "IS" special or what?!?! As far as I can tell there is a new Android device at least once per month if not more. Doesn't that make for an interesting Android release cycle?
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About the next iPhone
dave95. Updated - 10th Jan
@rlorenz

If a year old "rebranded" iPhone 4 hardware can cause such a spike in sales and share, how do you think a newly redesigned iPhone 5 will do? And as mentioned by James, there's a new Android device that drops every few weeks/month, why isn't this affecting the iPhone the way we were told it would going back to 2008 (G1)?
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@dave95. Good point.
Add in the 7-10 million iPod touches and 13 million iPads sold this quarter to the 36 iPhones sold and it is obvious iOS has taken the unit sales lead from Android in a BIG way.
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36 million not 36 right?
James Quinn 10th Jan
@Melciz

Pagan jim
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@James Quinn No 36. The rest of the quarter they were out of stock. :-D
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@James Quinn
Ya, 36 million. happy
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Now that Google owns Moto? Are you going to see Samsung get squeezed out of certain OS updates? I think Google's purchase of Moto is going to hurt them in the long run. Sure the patents they received are great for fighting Apple and MS, but what happens a few years from now when all the other Droid handset makers cry about unfair advantages Moto gets? Plus, how much do you want to bet that it even further fragments the market when all of them make different flavors of the UI?
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@hammeroftruth .. Even "IF" Google somehow manages NOT to show and or give Moto favored status won't that be on the mind of every other OEM out there? How could they avoid it? If their given sales projections fail quarter after quarter and profits take a dip how can the board and CEO of a given Android OEM not point the figure of blame at in theory only here Goggle/Moto? It's human nature "It's not me... It's them"

Pagan jim
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@James Quinn
+1
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Bert
kosiara 20th Jan
Well, I don't live in the US but I DON'T believe iPhOnE 4s has 47% of the market ?! The phone has no features, no 4G, no NFC, was OLD when it was released and works on a closed platform with more problems/regulations/restrains than benefits. I think US users aren't that stupid. Come on!

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