How significant is the rise of Android’s market share in smartphones and tablets? By one tech columnist’s estimation, not much at all.
Industry observer John Kirk says there’s been way too much reporting that gives Android credit for taking over the mobile market. He lists 13 headlines (a mere sample of the many out there he says) that wrongly give the impression Android is beating Apple’s iOS.
Here's are a few he points to as off base:
“Market share without context is not only useless, it is worse than useless because it is likely to be misinterpreted,” Kirk writes in Techpinions.
“Scoring by market share alone and ignoring profit is like saying that a baseball team won because it had more hits when the other team scored more runs.”
In point of fact, it’s widely accepted, as Kirk details, that Apple apps make more money and Apple devices are more profitable than their Android counterparts (with possibly a few rare exceptions on the app side).
Apple regularly crows about the billions of dollars it’s paid out to developers as part of its revenue sharing agreement (under which, Apple takes a 30% cut of revenue for publishing to the App Store and processing payments, with the rest going to the developer). Google recently said the amount its paid developers has risen significantly, but has yet to say how much it's paid out.
On the hardware side, leading tablet makers like Amazon and Google sell their devices at or near break even, looking to make profits on services. Apple by contrast, uses its huge cash resources to deal for big discounts on large quantities of components and can afford to keep its devices priced at a relative premium thanks to its brand, software and services reputation. Samsung, which also has a big advantage because it also makes components, is the one significant competitor to Apple when it comes to profits.
Losing and still winning
On the tablet side specifically, Kirk notes: “Apple LOST tablet market share, but because the entire market was rapidly growing, they GREW unit sales by 65%.”
In summary Kirk says:
“Not only do the high priests of market share have it wrong, they have it exactly backwards. The company with the lower market share and the higher profits has all of the leverage.
“The goal is to INCREASE, not decrease, the ratio of profits to market share. Increasing market share at the cost of profits is a recipe for disaster, not a formula for success.”