Maybe the levels aren't equal. But Apple has a disproportionate share of the profits in the feature smartphone market. As long as that remains the case...Apple are on to a winner.
Android is fast becoming a race to the bottom on price, just as with the Windows-based PC market. Hardly any profit to be had in PCs, and Apple has the vast majority of that too.
I'm an end user, not an investor, or a developer. Why should I care about Apple's profitability? As an end user I think I would prefer lower profitability for Apple and lower prices for myself. It's almost like saying that it is a good thing that I have to pay more.
As far as I'm concerned, the competition between Android and Apple is already providing benefits to end users. I hope that it only gets more intense.
Why is it any surprise that 100 different phones would outsell the #1 phone?
Well, one hundred different MP3 players did not outsell the iPods. Difference here is:
(a) for most of the time there where three different iPod models, though admittedly the iPod mini and later the nano vastly outsold the iPod classic
(b) iPod did not need carriers, partial carrier exclusivity and the desire of the carriers to maintain their power leading them to make sure they would push multiple brands (aided by Androids malleability)
(c) the iTunes ecosystem is less of an advantage with smart phones than with MP3 players
And last but least,
(d) A determined and capable opponent in the form of Google
I'm an end user, not an investor, or a developer. Why should I care about Apple's profitability? As an end user I think I would prefer lower profitability for Apple and lower prices for myself. It's almost like saying that it is a good thing that I have to pay more.
As far as I'm concerned, the competition between Android and Apple is already providing benefits to end users. I hope that it only gets more intense.
Since one having slightly more or less OS marketshare isn?t an indicator of which one will be a better experience for an end user shouldn?t this entire article and discussion be a moot point?
As was touched on here - the real news will be whether or not Android app developers make money.
Right now, IOS developers make a LOT more money per app than the same app makes on Android. Partly due to the fragmented market - both in terms of the platform variety, and the fragmented marketplaces.
This means the overall development and distribution costs (and time) are higher for Android apps. It's a mess. There is no single, consistently-implemented ecosystem for Android devices. This places them much in the same place that Windows Mobile was a couple of years ago - in the middle of a potentially stagnating market. That's not a good place to be. Google needs to exert a little force and get more devices on the same OS flavor, and they need to get a consistent marketplace going - like making sure that the Google Marketplace is available on ALL Android devices (which today it is NOT). A stagnating app marketplace will not be a good place for Android to end up (they aren't quite there yet, of course) because it will make people bored with the platform - the shiny toy will no longer be shiny.
Apple, on the other hand, has an extremely robust marketplace (despite complaints about over zealous and inconsistent access/control). They have to keep things fresh somehow, though, or people will become bored (some already have) and move away from the platform. Apple has done a good job so far of keeping the devices progressively improved while minimizing the number of devices that get marginalized (dropped off) of the support bandwagon. But they have to keep it up and people will keep coming. If not - people will eventually drop away.
As has already been mentioned - in the end, it will never be about the raw number of devices on a given platform - you can gain raw user numbers by making devices cheap. That's meaningless in the long run. WM had many cheap devices, but no one bought apps - that had a lot to do with killing interest in the platform. Instead it is all about the profit from the platform - both for the manufacturers and for the app developers - and that will ultimately determine where the developers and hence the users go (or stay) in the long run.
I'm an end user, not an investor, or a developer. Why should I care about Apple's profitability? As an end user I think I would prefer lower profitability for Apple and lower prices for myself. It's almost like saying that it is a good thing that I have to pay more. .
I disagree. You need to care about profitability. Without it manufacturers and developers won't grow and progress devices and platforms. If Apple is highly profitable they will keep putting money into their products. So you SHOULD care about profitability.
Neither of which means they have to have the largest installed based.
The two leading platforms in the iPhone-type smarphone sector (ie, large touchscreens) have about 200 000 to 300 000 apps, the next competitors have all about 5000 (Palm, BB, MS). Sure, it is still early days and things are still in motion but developers have pretty much picked some very clear winners. There is a world of difference between the number two and the number three.
No, you do not have to be the market share leader but being number four or five compared to number one or two can mean a world of difference.
The two leading platforms in the iPhone-type smarphone sector (ie, large touchscreens) have about 200 000 to 300 000 apps, the next competitors have all about 5000 (Palm, BB, MS). Sure, it is still early days and things are still in motion but developers have pretty much picked some very clear winners. There is a world of difference between the number two and the number three.
No, you do not have to be the market share leader but being number four or five compared to number one or two can mean a world of difference.
You?ve moved the goal posts to make the two smartphone OSes with the most mobile apps number one and two to support your point, but as it?s been pointed out smartphones with apps existed a long time before the iPhone and they didn?t have great success with app stores the way Apple pioneered it with their limited number of unit sales compared to RiM and Nokia if only counting the phones that can install apps.
While having more marketshare can be beneficial, it?s no guarantee of anything as we?ve seen with way Apple has changed the smartphone and handset market over the last 3.5 years.
As far as I'm concerned, the competition between Android and Apple is already providing benefits to end users. I hope that it only gets more intense.
Yes and no. Apple is being forced to up their game and are doing a bloody good job, so far.
However on the Android side of things, they aren't looking so great. The platform has got more fragmented. Phones from manufacturers are being locked out of new OS updates 6 months after they are released. More and more app stores are cropping up for the same platform, some with very potentially awful consequences/clauses (for developers - who incidentally help drive the usefulness/desire of a device), such as Amazon's awful "fire sale" policy.
Android is looking more and more shite by the minute. Android 3.0 has thrown UI consistency and clarity out of the window and that's just on Google's apps. It's turning it a shocking mess. And there is still no decent way for developers to monetize their applications, especially globally.
We should all be happy that Android is at least a decent competitor to Apple.
However, I'm waiting to see the numbers on AT&T for how many people get an Android Phone when an iPhone is available -- the OTHER very important number will be the percent of people who get an new Android Phone when they replace their current phone.
The Android phones are good on SPECS -- but the upgrade, support and fragmentation are NOT. So it isn't the same as having an early model iPhone that you just upgrade and most of the apps just work.
Apple is keeping even with only ONE phone service -- so when they get on T-Mobile and/or Verizon, then I think they will pick up more market share. The only problem will be; having the same data throughput on those networks as AT&T. 50% of ALL internet cell-phone traffic comes from just the 4% market of the iPhone. So, they might not be able to have videoconferencing and 4G speeds at first.
Hopefully, Apple will be a benign dictator, and force these other cell services to NOT make the iPhone different for each carrier. -- time will tell.
(d) A determined and capable opponent in the form of Google
How do we know Google are capable opponent in this area. They have yet to report any real details on Android, its running costs profit/loss or anything.
Sooner or later Google's investors are going to want to see hard evidence that Android is doing anything for them, although I think whilst their profits are on the rise I doubt the questions will be asked.
If Android takes a significant lead over iOS, guess where the developers are going to go? Not saying that they would all leave iOS, but Android might start getting Apps first, and iOS second. The exact opposite of what is happening now. Because developers will go where they can get the most exposure, and thus the greatest potential for profit/exposure/fame...
And, yet, even after Android's smartphone market share surpassed iOS's share, iOS apps outnumbered Android apps many fold. There are several reasons, including:
- Android users buy apps at a MUCH lower rate (at one point iOS accounted for well over 90% of the smartphone app sales)
- Android is much more fragmented wrt OS version (phones are still being sold with versions as far back as 1.5).
- Android is much more fragmented wrt features (any vendor can choose which features to add or leave out - which increases developer effort exponentially. See what the Angry Birds developer has to say about it.
- Much easier to pirate apps in Android - making it even less profitable for a developer
- iOS development not only gets iPhones, but also many millions of iPads which are typically not included in the smartphone numbers. There's no sign that Android tablets are going to have all that much success, based on early releases.
If Android was going to overtake iOS in developer activity, it would have happened by now.
Quote:
Originally Posted by tawilson
How do we know Google are capable opponent in this area. They have yet to report any real details on Android, its running costs profit/loss or anything.
Sooner or later Google's investors are going to want to see hard evidence that Android is doing anything for them, although I think whilst their profits are on the rise I doubt the questions will be asked.
Google makes their money from ads. There is little, if any, doubt that their Android efforts are brining in plenty of adds to justify the expense.
How do we know Google are capable opponent in this area. They have yet to report any real details on Android, its running costs profit/loss or anything.
I meant capable on a technical level, nobody disputes that Google has produced a capable OS faster and more complete then MS or RIM. If RIM, MS, and Palm had been the only competitors for the iPhone, it's marketshare would have been noticeably higher.
If Android takes a significant lead over iOS, guess where the developers are going to go? Not saying that they would all leave iOS, but Android might start getting Apps first, and iOS second. The exact opposite of what is happening now. Because developers will go where they can get the most exposure, and thus the greatest potential for profit/exposure/fame...
There are two aspects to this: the installed base AND the demonstrated profitability of that base for the developers. As a developer you have you weight the cost of doing business with a given platform, the reliability of the platform and the income to cost ratio.
If developers, for example, see more income realized against their costs from charging for an app than for imbedding ads - they will go that route. If the reverse then the other route makes the most sense. The third route is a low-charge app with ads - a hybrid. The cost of the app is weighed by users against it's perceived value - whether high utility, ease of use or immersive or capturing quality. The higher the perceived value, the less resistive a consumer is to the cost to obtain the app, or to tolerate ad intrusiveness. That brings up the next factor - ad intrusiveness. Most free apps have more intrusive ads - to allow more opportunity for ad hits - which results in ad revenue returned. The problem is, when you depend on ad revenue, you immediately abstract your income source, and it becomes harder to determine what affects ad hits. Without isolating the factors affecting ad revenue the developer is always uncertain what to do to maximize income potential for the app.
Add to this platform pressures: For Google it is their desire to not have any paid apps at all - they derive the most value for their profitability from free apps all running ads. So developers are driven to depend on Google's ad revenue machine, which has been demonstrated to be easily hijacked by creative and resourceful web developers. And Google will want to get as much ad revenue out of the mobile space as they can at the outset, before other ad-revenue machines can establish their own share of the revenue pie.
For developers who are less certain about their viability the iOS platform has some reassurances for them by being well-supported, well-controlled and more mature, with a proven track record. For those who are more risk tolerant, the ad-driven space of Android is an acceptable risk. Many developers prefer to develop for more than one platform if it is feasible, as it spreads the risk across several sources, either mitigating failure, or building on success and popularity.
Apple's advantage is a more mature platform and proven profitability/popularity. Android's advantage is a growing ad revenue platform that could be even more profitable in the long run than the more controlled iOs platform. But it is critical to understand that Google is all about the ad revenue machine in the mobile space, and developers will be completely dependent on it.
There are two aspects to this: the installed base AND the demonstrated profitability of that base for the developers. As a developer you have you weight the cost of doing business with a given platform, the reliability of the platform and the income to cost ratio.
...
Great explanation!
I'd still love to get a sense of how many impressions/clicks it would take to match the 70 cents that a developer would make from a 99 cent app.
All it means is that the ios platform is not the most popular amongst smartphone owners. Apple's client base has always been a niche market until the iphone came along and then they made billions. Now they can go back to making a high end niche product and earn record profits from loyalists. I think it's a winning formula.
On Galaxy S, Samsung also has a winning formula and it's a win-win in a growing market.
I think it means that if me and my significant other want a new phone, a Buy One Get One FREE android offer is easier to pay for. I wish the numbers reflected how many devices SOLD. Every time I see these comparisons I try to fathom how they have anything to due with anything relevant.
So how many iOS devices sold in the US when you count iPads and iPod touch's and how does that number stack up against the number of Android smartphones and Tablets sold in the US?
If there are more iOS devices the platform is still more attractive to developers, which is the thing that underpins the main effect of the Android "beating" iPhone argument. i.e. that developers will be attracted to the most devices, which is still overwhelmingly iOS especially when International markets are taken into consideration.
1) When we can actually start to see (audited, segment) profit numbers for Google and the handset makers, this type of news will start to make more contextual sense.
2) If I were Android, I'd be deeply worried about the impending arrival of iPhone on Verizon. Growth could start to decelerate fairly dramatically.
Quote:
Originally Posted by bstring
I think you will be surprised at how little the Verizon iphone affects the trend.
Comments
when would AI get it .. Android is not a phone ! ... Iphone is a phone . let me know when M Droid outsells Iphone 4
By your bizarre logic then how does the Mac stack up against Windows? Or would that be Max vs Dell, Mac vs HP, etc etc.
All developers care about is the OS. What the shape of the plastic casing which surrounds it looks like is beyond irrelevant.
Maybe the levels aren't equal. But Apple has a disproportionate share of the profits in the feature smartphone market. As long as that remains the case...Apple are on to a winner.
Android is fast becoming a race to the bottom on price, just as with the Windows-based PC market. Hardly any profit to be had in PCs, and Apple has the vast majority of that too.
I'm an end user, not an investor, or a developer. Why should I care about Apple's profitability? As an end user I think I would prefer lower profitability for Apple and lower prices for myself. It's almost like saying that it is a good thing that I have to pay more.
As far as I'm concerned, the competition between Android and Apple is already providing benefits to end users. I hope that it only gets more intense.
Why is it any surprise that 100 different phones would outsell the #1 phone?
Well, one hundred different MP3 players did not outsell the iPods. Difference here is:
(a) for most of the time there where three different iPod models, though admittedly the iPod mini and later the nano vastly outsold the iPod classic
(b) iPod did not need carriers, partial carrier exclusivity and the desire of the carriers to maintain their power leading them to make sure they would push multiple brands (aided by Androids malleability)
(c) the iTunes ecosystem is less of an advantage with smart phones than with MP3 players
And last but least,
(d) A determined and capable opponent in the form of Google
I'm an end user, not an investor, or a developer. Why should I care about Apple's profitability? As an end user I think I would prefer lower profitability for Apple and lower prices for myself. It's almost like saying that it is a good thing that I have to pay more.
As far as I'm concerned, the competition between Android and Apple is already providing benefits to end users. I hope that it only gets more intense.
Since one having slightly more or less OS marketshare isn?t an indicator of which one will be a better experience for an end user shouldn?t this entire article and discussion be a moot point?
Right now, IOS developers make a LOT more money per app than the same app makes on Android. Partly due to the fragmented market - both in terms of the platform variety, and the fragmented marketplaces.
This means the overall development and distribution costs (and time) are higher for Android apps. It's a mess. There is no single, consistently-implemented ecosystem for Android devices. This places them much in the same place that Windows Mobile was a couple of years ago - in the middle of a potentially stagnating market. That's not a good place to be. Google needs to exert a little force and get more devices on the same OS flavor, and they need to get a consistent marketplace going - like making sure that the Google Marketplace is available on ALL Android devices (which today it is NOT). A stagnating app marketplace will not be a good place for Android to end up (they aren't quite there yet, of course) because it will make people bored with the platform - the shiny toy will no longer be shiny.
Apple, on the other hand, has an extremely robust marketplace (despite complaints about over zealous and inconsistent access/control). They have to keep things fresh somehow, though, or people will become bored (some already have) and move away from the platform. Apple has done a good job so far of keeping the devices progressively improved while minimizing the number of devices that get marginalized (dropped off) of the support bandwagon. But they have to keep it up and people will keep coming. If not - people will eventually drop away.
As has already been mentioned - in the end, it will never be about the raw number of devices on a given platform - you can gain raw user numbers by making devices cheap. That's meaningless in the long run. WM had many cheap devices, but no one bought apps - that had a lot to do with killing interest in the platform. Instead it is all about the profit from the platform - both for the manufacturers and for the app developers - and that will ultimately determine where the developers and hence the users go (or stay) in the long run.
I'm an end user, not an investor, or a developer. Why should I care about Apple's profitability? As an end user I think I would prefer lower profitability for Apple and lower prices for myself. It's almost like saying that it is a good thing that I have to pay more. .
I disagree. You need to care about profitability. Without it manufacturers and developers won't grow and progress devices and platforms. If Apple is highly profitable they will keep putting money into their products. So you SHOULD care about profitability.
Neither of which means they have to have the largest installed based.
The two leading platforms in the iPhone-type smarphone sector (ie, large touchscreens) have about 200 000 to 300 000 apps, the next competitors have all about 5000 (Palm, BB, MS). Sure, it is still early days and things are still in motion but developers have pretty much picked some very clear winners. There is a world of difference between the number two and the number three.
No, you do not have to be the market share leader but being number four or five compared to number one or two can mean a world of difference.
One who recognises that "smartphones" aren't the only market available to iOS developers.
are you even following, read my first post
The two leading platforms in the iPhone-type smarphone sector (ie, large touchscreens) have about 200 000 to 300 000 apps, the next competitors have all about 5000 (Palm, BB, MS). Sure, it is still early days and things are still in motion but developers have pretty much picked some very clear winners. There is a world of difference between the number two and the number three.
No, you do not have to be the market share leader but being number four or five compared to number one or two can mean a world of difference.
You?ve moved the goal posts to make the two smartphone OSes with the most mobile apps number one and two to support your point, but as it?s been pointed out smartphones with apps existed a long time before the iPhone and they didn?t have great success with app stores the way Apple pioneered it with their limited number of unit sales compared to RiM and Nokia if only counting the phones that can install apps.
While having more marketshare can be beneficial, it?s no guarantee of anything as we?ve seen with way Apple has changed the smartphone and handset market over the last 3.5 years.
As far as I'm concerned, the competition between Android and Apple is already providing benefits to end users. I hope that it only gets more intense.
Yes and no. Apple is being forced to up their game and are doing a bloody good job, so far.
However on the Android side of things, they aren't looking so great. The platform has got more fragmented. Phones from manufacturers are being locked out of new OS updates 6 months after they are released. More and more app stores are cropping up for the same platform, some with very potentially awful consequences/clauses (for developers - who incidentally help drive the usefulness/desire of a device), such as Amazon's awful "fire sale" policy.
Android is looking more and more shite by the minute. Android 3.0 has thrown UI consistency and clarity out of the window and that's just on Google's apps. It's turning it a shocking mess. And there is still no decent way for developers to monetize their applications, especially globally.
We should all be happy that Android is at least a decent competitor to Apple.
However, I'm waiting to see the numbers on AT&T for how many people get an Android Phone when an iPhone is available -- the OTHER very important number will be the percent of people who get an new Android Phone when they replace their current phone.
The Android phones are good on SPECS -- but the upgrade, support and fragmentation are NOT. So it isn't the same as having an early model iPhone that you just upgrade and most of the apps just work.
Apple is keeping even with only ONE phone service -- so when they get on T-Mobile and/or Verizon, then I think they will pick up more market share. The only problem will be; having the same data throughput on those networks as AT&T. 50% of ALL internet cell-phone traffic comes from just the 4% market of the iPhone. So, they might not be able to have videoconferencing and 4G speeds at first.
Hopefully, Apple will be a benign dictator, and force these other cell services to NOT make the iPhone different for each carrier. -- time will tell.
(d) A determined and capable opponent in the form of Google
How do we know Google are capable opponent in this area. They have yet to report any real details on Android, its running costs profit/loss or anything.
Sooner or later Google's investors are going to want to see hard evidence that Android is doing anything for them, although I think whilst their profits are on the rise I doubt the questions will be asked.
If Android takes a significant lead over iOS, guess where the developers are going to go? Not saying that they would all leave iOS, but Android might start getting Apps first, and iOS second. The exact opposite of what is happening now. Because developers will go where they can get the most exposure, and thus the greatest potential for profit/exposure/fame...
And, yet, even after Android's smartphone market share surpassed iOS's share, iOS apps outnumbered Android apps many fold. There are several reasons, including:
- Android users buy apps at a MUCH lower rate (at one point iOS accounted for well over 90% of the smartphone app sales)
- Android is much more fragmented wrt OS version (phones are still being sold with versions as far back as 1.5).
- Android is much more fragmented wrt features (any vendor can choose which features to add or leave out - which increases developer effort exponentially. See what the Angry Birds developer has to say about it.
- Much easier to pirate apps in Android - making it even less profitable for a developer
- iOS development not only gets iPhones, but also many millions of iPads which are typically not included in the smartphone numbers. There's no sign that Android tablets are going to have all that much success, based on early releases.
If Android was going to overtake iOS in developer activity, it would have happened by now.
How do we know Google are capable opponent in this area. They have yet to report any real details on Android, its running costs profit/loss or anything.
Sooner or later Google's investors are going to want to see hard evidence that Android is doing anything for them, although I think whilst their profits are on the rise I doubt the questions will be asked.
Google makes their money from ads. There is little, if any, doubt that their Android efforts are brining in plenty of adds to justify the expense.
How do we know Google are capable opponent in this area. They have yet to report any real details on Android, its running costs profit/loss or anything.
I meant capable on a technical level, nobody disputes that Google has produced a capable OS faster and more complete then MS or RIM. If RIM, MS, and Palm had been the only competitors for the iPhone, it's marketshare would have been noticeably higher.
If Android takes a significant lead over iOS, guess where the developers are going to go? Not saying that they would all leave iOS, but Android might start getting Apps first, and iOS second. The exact opposite of what is happening now. Because developers will go where they can get the most exposure, and thus the greatest potential for profit/exposure/fame...
There are two aspects to this: the installed base AND the demonstrated profitability of that base for the developers. As a developer you have you weight the cost of doing business with a given platform, the reliability of the platform and the income to cost ratio.
If developers, for example, see more income realized against their costs from charging for an app than for imbedding ads - they will go that route. If the reverse then the other route makes the most sense. The third route is a low-charge app with ads - a hybrid. The cost of the app is weighed by users against it's perceived value - whether high utility, ease of use or immersive or capturing quality. The higher the perceived value, the less resistive a consumer is to the cost to obtain the app, or to tolerate ad intrusiveness. That brings up the next factor - ad intrusiveness. Most free apps have more intrusive ads - to allow more opportunity for ad hits - which results in ad revenue returned. The problem is, when you depend on ad revenue, you immediately abstract your income source, and it becomes harder to determine what affects ad hits. Without isolating the factors affecting ad revenue the developer is always uncertain what to do to maximize income potential for the app.
Add to this platform pressures: For Google it is their desire to not have any paid apps at all - they derive the most value for their profitability from free apps all running ads. So developers are driven to depend on Google's ad revenue machine, which has been demonstrated to be easily hijacked by creative and resourceful web developers. And Google will want to get as much ad revenue out of the mobile space as they can at the outset, before other ad-revenue machines can establish their own share of the revenue pie.
For developers who are less certain about their viability the iOS platform has some reassurances for them by being well-supported, well-controlled and more mature, with a proven track record. For those who are more risk tolerant, the ad-driven space of Android is an acceptable risk. Many developers prefer to develop for more than one platform if it is feasible, as it spreads the risk across several sources, either mitigating failure, or building on success and popularity.
Apple's advantage is a more mature platform and proven profitability/popularity. Android's advantage is a growing ad revenue platform that could be even more profitable in the long run than the more controlled iOs platform. But it is critical to understand that Google is all about the ad revenue machine in the mobile space, and developers will be completely dependent on it.
There are two aspects to this: the installed base AND the demonstrated profitability of that base for the developers. As a developer you have you weight the cost of doing business with a given platform, the reliability of the platform and the income to cost ratio.
...
Great explanation!
I'd still love to get a sense of how many impressions/clicks it would take to match the 70 cents that a developer would make from a 99 cent app.
All it means is that the ios platform is not the most popular amongst smartphone owners. Apple's client base has always been a niche market until the iphone came along and then they made billions. Now they can go back to making a high end niche product and earn record profits from loyalists. I think it's a winning formula.
On Galaxy S, Samsung also has a winning formula and it's a win-win in a growing market.
I think it means that if me and my significant other want a new phone, a Buy One Get One FREE android offer is easier to pay for. I wish the numbers reflected how many devices SOLD. Every time I see these comparisons I try to fathom how they have anything to due with anything relevant.
are you even following, read my first post
So how many iOS devices sold in the US when you count iPads and iPod touch's and how does that number stack up against the number of Android smartphones and Tablets sold in the US?
If there are more iOS devices the platform is still more attractive to developers, which is the thing that underpins the main effect of the Android "beating" iPhone argument. i.e. that developers will be attracted to the most devices, which is still overwhelmingly iOS especially when International markets are taken into consideration.
1) When we can actually start to see (audited, segment) profit numbers for Google and the handset makers, this type of news will start to make more contextual sense.
2) If I were Android, I'd be deeply worried about the impending arrival of iPhone on Verizon. Growth could start to decelerate fairly dramatically.
I think you will be surprised at how little the Verizon iphone affects the trend.
Which trend? Zero profits?