Windows Phone gains, but Android rules

Windows Phone gains, but Android rules

Summary: People may lust for iPhones, but IDC's numbers show that globally people buy Android smartphones.

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Some people love their iPhones. Apple claims that on the first weekend of iPhone 5s and 5c sales, the company sold 9-million phones. That's nice, but it wasn't enough. According to IDC, Android phones reached a new milestone during the third quarter of 2013: 81 percent of all smartphone shipped. With a total of 211.6-million Android-powered smartphones shipped during the quarter, Android topped the 80 percent market-share mark for the first time in its short history.

IDC Global Smartphone 3Q 2013
Android's on top, followed by iOS in a distant second place, with Windows Phone back in the back having finally secured third place from the rapidly declining BlackBerry. (Credit: IDC)

You might think that everyone and their dog who wanted a smartphone would have one by now. You'd be wrong. IDC found that "Despite high saturation rates in a number of mature markets, the overall smartphone space grew 39.9 percent year-over-year in the third quarter."

Android's vendors did particularly well with this increase. IDC found that Android reached its 81 percent market-share thanks "to its broad and deep list of vendors, including four of the top five vendors worldwide."

Samsung, in a renewed legal battle with Apple, accounted for 39.9 percent of all Android shipments for the quarter. The rest of the Android vendors claimed single-digit market share, and most of them had less than 1 percent market-share.

How did the iPhone and its iOS operating system decline despite such a successful launch of the iPhone 5s? IDC reported that even though Apple saw its total volumes increase and it reached new record third quarter volumes, Apple's global market share still declined to 12.9 percent for the quarter. IDC speculates that this was "due to soft demand in the weeks leading up to the launch of iOS 7 smartphones. Still, if the 9 million units sold during the last week of September is any indication of future adoption, iOS stands to reap another record quarter in terms of volumes, market share, and year-over-year growth."

As for the Windows Phone, it finally has a secure hold on a very, very distant third place with 3.6 percent. Still, Microsoft's Windows Phone grew a market-best 156 percent year over year. As IDC noted, "Granted, volumes started from a small base of 3.7 million units a year ago and overall market share is still less than 5 percent. But Microsoft's efforts, with Nokia's support behind it, helped drive the platform into multiple tiers and price points."

Indeed, Windows Phone's growth has been almost entirely because of Nokia, which Microsoft recently purchased for 5.44 billion euros. IDC found that "By itself, Nokia accounted for 93.2 percent of all the Windows Phone-powered smartphones shipped during the quarter, marking a new milestone in the company's short history on the Microsoft platform. Participation from other vendors, meanwhile, still seemed a mixed bag with more vendors participating from a year ago, but volumes still far behind Nokia's own."

Oh, and Blackberry? You don't want to know.

IDC stated that the beleaguered smartphone company "recorded the largest year-over-year decline among the leading operating systems during 3Q13. Underpinning its results was softer demand for its new BB10 operating system and continued demand for its older BB7 within emerging markets. Now, with a new CEO in place and an infusion of $1 billion, what remains to be seen is how and when the beleaguered operating system will be able to change course in the face of mounting pressure from Android, iOS, and Windows Phone."

"Android and Windows Phone continued to make significant strides in the third quarter. Despite their differences in market share, they both have one important factor behind their success: price," said Ramon Llamas, Research Manager with IDC's Mobile Phone team in a statement. "Both platforms have a selection of devices available at prices low enough to be affordable to the mass market, and it is the mass market that is driving the entire market forward."

At the same time, IDC found that smartphone average selling prices (ASPs) have continued to decline as the appetite for more affordable devices grows. ASPs were down 12.5 percent in 3Q13. Now, the average price of a smartphone is $317.

Simultaneously, the market has seen a large influx of large-screen smartphones (5- to 7-inch screens), also known as phablets. Large-screen devices generally come with a higher selling price than smaller screen devices, due to the need for more powerful and expensive components. Phablet ASPs in 3Q13 were notably higher than the market average at $443. However, the 3Q13 ASP was down 22.8 percent from the $573 phablet ASP in 3Q12.

"Almost all successful Android vendors have added one or more 5-7-inch phablets to their product portfolios," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker in a statement. "And, Nokia’s recent announcement of the Lumia 1320 and 1520 put them in the category as well. In 3Q13, phablet shipments accounted for 21 percent of the smartphone market, up from just 3 percent a year ago. We believe the absence of a large-screen device may have contributed to Apple's inability to grow share in the third quarter."

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Topics: Mobility, Apple, Smartphones, Samsung, Mobile OS, Microsoft, Linux, iPhone, Google, Windows Phone

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88 comments
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  • Wow, Phablet sales percentage

    This quote: "In 3Q13, phablet shipments accounted for 21 percent of the smartphone market, up from just 3 percent a year ago. We believe the absence of a large-screen device may have contributed to Apple's inability to grow share in the third quarter."

    That is amazing, I had not seen the numbers like that before. I guess when you include 5" phones in the phablet category that makes sense. In any case, it is going to be tough for Apple to launch a larger screen iPhone because of the fact that their development methodology is still in the "pixel perfect" world, rather than using responsive design. So all developers are going to have to upgrade their XCode and update all their apps or else be letterboxed, just like what happened when the iPhone 5 came out and added 80 pixels vertical. This did not have to be done when the iPad came out because the screen size was exactly double that of the iPhone 4S and lower. That software architecture is one of the things that is holding back Apple from this hurdle, even though they claim they have not created a larger phone yet because they just didn't want to do it.
    aneveu
  • Value always wins

    Win Phone and Android deserve to grow since they certainly have the best value. Hardware features, specs, and options are excellent.

    Apple and Blackberry price gouging days are over. You cant expect Apple to grow when iOS 7 is making people nauseous, and Blackberry has no leadership.
    Sean Foley
    • Android and Winphone are not

      pieces of hardware, they are operating systems that run on a wide variety of hardware, ranging from low-end junk to top of the line cadillac Samsung devices.
      baggins_z
      • You know what's awesome...

        Watching Apple Zealots waking up to the reality of Apple's demise.
        slickjim
        • baggins_z is sure making this entertaining...

          ..I don't know why, but I keep imagining the Jerry Seinfeld episode with the "European Carry-all" every time he comments...

          ..but it's not a purse!
          daftkey
        • How so?

          They make the lion's share of profits, are the #1 in the USA, and even IDC concedes that they stand to have a blowout 4Q.

          Why would people be rushing to buy iPhones in 3Q when the new one was right around the corner and the fact it launched at the end of the quarter means 4Q will be good for them. Supplies of it are just now starting to become plentiful.
          itguy10
  • Best article I've read from you

    Congrats! Little to no spin on the facts. Left out bias opinions that create comment wars. You, sir, deserve a gold star sticker :)
    ikissfutebol
    • +1

      N/T
      Ram U
    • I agree...

      this article seems written by an adult instead of a whiny child like his previous 1,000,000 articles.
      kstap
    • Seriously?

      You think this is unbiased? Seriously? Everything has bias, and this open-sourced-biased writer has left out key facts. Of course, AppleInsider is biased as well, but here is their slant on the exact same data (check it out): "IDC data shows 66% of Android's 81% smartphone share are junk phones selling for $215. IDC reported 251.1 million smartphone shipments for Q3, reflecting 40 percent year over year market growth but an implosion in Average Selling Prices, at least outside of Apple's iPhone sales. Average Selling Prices plunge toward $200. The problem for Android is that its high volume sales are not generating profits, because the majority of those volumes represent very low end phones. We can easily deduce this by subtracting Apple's known revenue. Apple's iPhone ASP for the quarter was $635, down from the company's year ago figures of $675. The company reported selling 33.8 million iPhones, resulting in about $21.5 billion in gross revenues. IDC reported that overall "smartphone average selling prices (ASPs) have continued to decline as the appetite for more affordable devices grows. ASPs were down -12.5% in 3Q13, accounting for an average price of $317." At $317 each, IDC's estimate of 261.1 million smartphones results in nearly $82.8 billion in total revenues. However, these numbers include Apple's much higher iPhone ASP. Subtract Apple's $21.5 billion and you're left with $61.3 billion. Across the remaining, 227.3 million non-iPhone devices, that leaves an ASP of less than $270. However, most of the "smartphones" IDC is counting sell for far less than even this. We know this because IDC also outlined an ASP specific to premium phablets. The firm reported that its ASPs for phablets plunged by 22.8 percent over the year ago quarter, and is now sitting at $443. In contrast, despite much handwringing about Apple's falling ASPs, the iPhone has only seen its ASP figures fall by 5.9 percent year over year. Market share growth achieved by slashing ASPs and margins is something that analysts both recommend and gravely warn about, but Apple isn't following the rest of the industry in doing that. However, there are vast shipment volumes remaining too: 172.5 million "smartphones," accounting for 66 percent of all the total volumes IDC counted. Divide those remains and you get an ASP of $214.50. This means Apple's 12.9 percent unit share of the "smartphone market" accounts for a 26 percent revenue share. Apple's profit share is even higher: around 75 percent, because it is only selling premium iPhones at an ASP that's nearly three times higher than the average price of two thirds of the entire "smartphone" market. As IDC emphasizes, the "smartphone market" is 81 percent Android, so most of the incredibly cheap devices that are pushing ASPs toward $200 are super cheap Android phones that sell for even less than this average because the total Android ASP still includes some premium Android phones that don't count among phablets: 4-5 inch devices that sell for prices similar to Apple's iPhone, such as Samsung's flagship Galaxy S4. This reinforces that about two thirds of the overall smartphone market is represented by extremely low end "mass market" devices that are really only called "smartphones" because the industry has decided that running Android makes a device "smart," even if it is a product like the Samsung Galaxy Y, with a hard to read, low resolution screen and such anemic processing power and limited memory that it can't really run apps and can't be upgraded, with hardware specs inferior to Apple's iPhone 3G from five years ago. The plummeting ASPs affecting Android makers are happening despite efforts by Samsung and others to sell more high end flagships like its Galaxy S4 and Note 3. Prices are dropping rapidly on both the low end and among high end premium devices because slack demand is not supporting higher prices. "Android's high market share in device shipments stands in stark contrast to Apple's overwhelming share visible in real world usage stats" This high volume, low profit strategy might make sense if there were some platform advantage to blanketing the globe with low cost smartphones. However, Android's 81 percent sales volumes aren't resulting in a boon for app developers, because two thirds of that volume is made up of low end devices that are effectively being used as basic camera phones."
      rpsin
      • For those 'open' minded enough to research...

        http://appleinsider.com/articles/13/11/12/idc-data-shows-66-of-androids-81-smartphone-share-are-junk-phones-selling-for-215
        rpsin
      • Paragraphs, dude... paragraphs...

        ..I'm sure you had something informative to say right there.. unfortunately your comment is just too hard to read..

        I get that you want everyone to be "open minded" and everything, but the least you could do is make your comment readable..
        daftkey
      • Time for some math...

        Even ignoring the 66% of junk Android phones, the remaining 34% of non-junk Android phones is still more than twice Apple's market share. I don't see how these numbers represent in any way a victory for Apple.

        I agree that Apple is hugely profitable. As a shareholder, I would be delighted with huge profits. As a consumer, I don't really care. In fact huge profits are a slight negative for me as a consumer. It means that their profits are coming out of my wallet.
        Harold Callahan
        • Profits are important for a consumer

          A company that is not profitable is not going to be able to continue to improve, develop and support their products.

          If you were a Mac user in the late 1990s, you know that a failing Apple was not good for the platform.

          Marketshare is not very relevant as long as the platform is stable and vibrant. iOS and Mac OS X are doing just fine and going no where. Development for both platforms by 3rd parties has never been better. The installed base is strong and growing, and that is all that matters.
          yoshipod
          • No,

            Profits are NOT important to the consumer. In fact, high profit margins are detrimental to the consumer because they have to pay for more the good or service.

            Profits, on the other hand, are important to the investors.
            benched42
          • I was a Mac user in the late 1990s...

            ..a failing Apple was what eventually led to the return of Steve Jobs, the invention of the iMac (then the iPod, then the iPhone), and the overall revitalization of the platform.

            A successful Apple would still be churning out Power Mac 96xx's with an outdated processor and charging $9,000 a pop for the privilege.

            I would say the failure of Apple the company did more to improve Apple the platform than the current success of that same company has done to serve that same platform.
            daftkey
  • Windows Phone gains, but Android rules

    Despite the evidence we see here and know for a fact that Microsoft Windows Phone grows at an incredible rate each year I'm going to bet that ZDNet will still continue to publish articles saying its doomed. Microsoft Windows Phone is really picking up pace. I know I get a lot of questions as well as ooohs and aaahs when I show my phone to people.
    Loverock.Davidson
    • Growth rate

      A growth rate from little/nothing is always impressive, until the cold hard light of perspective shines in.

      2012 - Sold 1 widget
      2013 - Sold 3 widgets

      Wow, a 200% growth rate, in Widgets sales.
      neil.postlethwaite
      • You think that was so witty you had to post it twice, eh?

        "A growth rate from little/nothing is always impressive, until the cold hard light of perspective shines in."

        If we were talking about Firefox OS or Ubuntu Touch, then yep, you could almost talk about one here and two there in terms of numbers. Growth in Windows Phone has been at a rate higher than the overall market, however, which means it is gaining market share itself.

        It is those who scoff that get knocked off guard. You only have to look at the comments from Blackberry and Microsoft when the iPhone came out, and then look again at the comments from Apple fans when Android came out.

        Regardless of what the "big dogs" want you to believe, the mobile market is still in its infancy, and it is a long way from becoming a two or three-party system. There is plenty of room for a current "also-ran" to make tremendous gains. This is just as true for Microsoft as for Ubuntu, Firefox, or the dozen other mobile OS camps that are currently lined up for a piece of that pie.
        daftkey
      • Your point?

        @neil.postlethwaite: I don't get your point, the shipment volumes are clearly marked in the table above. Microsoft Windows Phone shipped 9.5 million units, which isn't 1 *or* 3 (per your widget example). The scale is millions. In fact, they shipped almost a third of what Apple, with all of their experience and market channels, shipped for the same period.

        I have a Galaxy Note 2, I've never touched a Windows phone, nor do I plan to get a Windows phone, but I am pretty damn impressed by their growth thus far.
        dwoodeson