iPhone vs. Android: The battle of Manhattan

iPhone vs. Android: The battle of Manhattan

Summary: All the big smartphone trends indicate that the iPhone is losing dominance. It may still be the norm in San Francisco and New York, but these places are probably a lagging indicator of market trends.

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Analyst reports yesterday confirm a trend that has been long-recognized: Android phones are gaining smartphone market share rapidly. The days of this gain coming at the expense of BlackBerry and other lesser brands are over, since they're all small potatoes, so it's coming at the expense of the iPhone.

We know a few things about these market trends: The iPhone still seems to be dominant in wealthier areas, while Android is the new norm among the more common folk, and especially in emerging markets where BlackBerry was once the norm.

apple-samsung

But there's more to it than income. This past Sunday I made a trip by train into Manhattan and visited the Lower East Side. I always look at the phones people are using. Counting Penn Station, the Lower East Side and the subways in-between, I saw about 10 iPhones for every one of something else. You can't really tell just by looking, but few of these people appeared wealthy. It's my experience that San Francisco is similarly iPhone-heavy.

There are plenty of high-end, expensive Android phones that cost as much as an iPhone, but in macro sense what sticks out about Android is that you can get dirt-cheap phones running it. And yet, there's something in the local culture (or maybe the water?) of Manhattan that drives even starving artists to the iPhone.

There can't be any better word for it than 'fashion'. Let's face it: Residents in Manhattan and San Francisco are used to overpaying for things for the privilege of being where it's at. The iPhone is just part of the uniform.

Another mobile phone trend we've heard recently is that the high-end of the market is running into resistance. Users aren't upgrading to the newest, best thing out there with the same gusto they had in recent years.

I can relate to this. A few months ago I bought a Samsung Galaxy S4, and I'm not using any of the new fancy stuff like its ability to follow your eyes and scroll appropriately. I may as well have bought a Galaxy S3 and saved $100. In my town I know a lot of iPhone users, and even those who recently bought them bought a 4 or 4S to save the $100 or $200. It's good enough, even if (as I would argue) the iPhone 5 is a much better smartphone than the 4S.

All this just confirms some more conventional wisdom: the iPhone is a luxury item, like a Mercedes Benz. Such products can be very successful, even if they're up against Lexus and other luxury brands, but that doesn't help them against the vast majority of users who can't even think about spending that much.

Apple is responding with a lower-cost iPhone, due in the Fall, but this is treading on dangerous ground. Luxury brands run the risk of cheapening their image if anyone can afford them.

 

 

And yet they have to do something. As my Editor in Chief Larry Dignan pointed out recently, about half of Apple's revenue comes from the iPhone. They can't afford to be shy about protecting that.

Based on what I've seen so far from iOS 7 and the rumor mill, I don't see them being able to protect the iPhone in the long term. They're going to need to come up with something new and different again, like the iPhone and iPad were when they were new. What can they possibly do in the iPhone 6 to grab the attention of people outside of Manhattan and San Francisco? It's hard to imagine.

The real turning point will be when some other brand becomes acceptable in the polite societies of our great coastal cities. When I start seeing a lot of Samsungs on the subway in New York, then I'll know it's all over.

Topics: iPhone, Android, Apple, Apps, Mobile OS, BlackBerry, Samsung, Smartphones, BYOD and the Consumerization of IT

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46 comments
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  • Apple is popular in the US because of subsidising, tradtionally

    Yes apple is like a luxury car, and very fashionable but if you can get it at the contract price same as a less fashionable android, then why wouldn't the average american tend to get the iphone. All your friends have it and its easy to know how to use it because they all do. Those of us who are more 'lone wolfs' go with what we know we want and not what everyone has because its fashionable.
    drwong
    • I do not own any i stuff ...

      I refuse to own any i stuff, not because they make bad stuff...
      It is because they have no soul. They cornered the e book market。。。。
      Consumers have to pay $14.99 instead of $9.99 for e book.
      Only the DOJ have the power to take them to court.
      Any inaction on the part of DOJ, the consumers are on the hook.
      All they care is about making money, nothing else, not a good corporate citizen.


      Steve can go to hell.... if he is not there yet...
      patrick lion
      • I think...

        You never liked Apple and look for any excuse to put them down. Amazon is the one who cornered the book market and forced the closure of the mom and pop book stores like they are starting to do with practically every consumer product. Low prices for consumers is not always the greatest thing...look at Walmart.
        rfoto
      • Apple in no way controls the ebook market

        Apple has maybe less than 5% of the ebook market. Amazon controls 90% of it. Without a competitor to Amazon they stand to become a monopsony where they are the sole buyer of all ebooks and can dictate terms to publishers, which you don't want because then they can say "this is how much we want to pay, sell it to us at $3 or go screw yourself."

        Apple encouraged them to use the agency model which the publishers make less money, but control the price and force Amazon and others to compete on even pricing terms.
        Apple was just stupid in how they went about it which is illegal.

        I would argue Apple has more soul than Google and Samsung. Apple at least has the interest of their customers in mind.
        taylor@...
        • I don't think you are correct

          While having competition is good, what you described just isn't what is happening.

          First, Apple is reported to have somewhere around 20-25% of the ebook market. A quick web search would show you that.

          Then, since Apple has been convicted and every single publisher involved took plea deals, then Apple didn't encourage anything. The word you are looking for is conspired. As in conspired to fix book prices in an anti competitive way.

          For all the benefits of having Apple be a competitor to Amazon, that competition resulted in only two things: book prices went up roughly 50% and publishers made more money.

          I agree that Amazon needs competition, but the way Apple went about it is not only wrong, but illegal and has resulted in harm to consumers.
          Emacho
      • You try it

        Get back to me when you successfully run a business selling ebooks at that price.
        Amazon drive prices down, sell billions and skim a small % off the top and then post quarterly losses. Good for consumers but not good for competitors. Apple sell at a sustains able price - they don't make losses on any of their products to leverage sales on other products like Amazon/Kindle, XBox and Google -it's just their business model. Sure they could sell books at low prices to make you happy just like you could work for $1/day to make others happy but I bet you wouldn't. Amazon is like Wallmart selling $1 jar pickles until every pickle manufacturer is gone bust and then everyone wonders where all the pickles went. Enjoy you cheap books.
        global.philosopher
        • Apple makes losses on software

          to sell hardware. That has been their business model since they began.
          With the advent of the appstore, Apple now expects developers to cop losses on software to help Apple sell hardware. Software prices have hit rock bottom thanks to Apple. All the money is now coming thru in-app purchases. More and more apps are resorting to advertising as the buy-once-upgrade-forever model is not sustainable in the long term.
          When a USB cable costs more than most apps, there is a long term problem for software developers.
          warboat
          • Sure thing

            Except Apple does not dictate prices that sell thru the App Store (Amazon does dictate prices). Competition is dictating the price of apps not Apple. Apple takes its cut, so what, so does Google and Amazon so what's you point.
            And by the way, one reason why Apple computers are more expensive than its competitors plastic products is that it includes the price OS software development and support. Compare Asus's and Samsun'gs and LG's support to Apple and then you will realize why the cost difference.
            global.philosopher
          • Re: Apple makes losses on software

            How do you know that?

            Why you think software has to be as expensive as Microsoft wants? Apparently, Apple's 'low price' model for software makes a lot of developers happy.

            "When a USB cable costs more than most apps, there is a long term problem for software developers."

            Are you serious? You compare the price of hardware, that has raw material costs, manufacturing costs, shipping and warehousing costs etc with the price of software *license*?!?!
            danbi
          • ridiculous to even deny that Apple software division is a loss leader

            most Apple software is free downloads and free support.
            they give it to you for free because they already ripped you on the hardware to subsidise the software.
            Microsoft actually has to make money on most lines of their software without any subsidising. They also have to offer support for it, so issuing a license is not the only cost of software.
            warboat
        • So it's bad if Amazon...

          ...cuts prices and makes no profit, but it's perfectly OK if Apple makes massive profits. I thought corporations were evil for making profits.
          jumbledmess
      • Apple controls the ebook market?

        I assume that you have never heard of Amazon.
        Wakemewhentrollsgone
    • Choices

      I carry a higher end Android phone not because it is cheaper than an iPhone. In fact, they are similar in cost. I carry my phone because I like the (much) larger screen, the wide availability of micro USB chargers, and the fact that it does everything I need it to do.
      Sometimes it's about just liking something that works for you, regardless of who made it.
      Jim Schramm
  • Don't know what subway you ride...

    What subway do you take?I see an absolute 50/50 between iPhone and Samsung Galaxy S3/S4.
    spdrcr5
  • iPhone and Android are crap

    iPhone is a waste of money and Android is malware and Google spyware. The only options for a safe mobile platforms are Windows and Blackberry.
    OwlllllllNet
    • Re: iPhone and Android are crap

      Microsoft wishes its products were that crap.
      ldo17
    • and Fowlnet the microsoft shill makes his custumary rant

      Buy from Microsoft... Ignore their two convictions for being a predatory monopoly...

      They are really sweet and nice and you just don't understand them.

      Lol
      frankieh
  • IT's over!!

    Get ready for it to be over. Heck, it already is. Everyone can afford the iPhone 4 and 4S and they are outselling the iPhone 5. At my job, most of the techs have iPhone 4 and 4S. Only two have iPhone 5. If the 5S is little more than an incremental upgrade, it will be a yawn fest. No one is going to stand in line for another stale iPhone 4 elongated design, unless it's in plastic.
    Jorgen_Roth
  • It's not just the coastal cities.

    It is all of North America. I'll grant you Android is big in India and China.
    rfoto
  • oh this is really sad

    Denial right in front of our faces!

    I know several diehard iPhone fans that switched to Galaxy S4 and Note 2 devices and I thought for sure several of these people would be the last to jump ship.

    As for the other way around, I know 1 single solitary person that has jumped ship to Apple and she was still using a blackberry curve.
    slickjim