Smartphones

Analyst: Android growth slowing, many may jump to iPhone

A new Wall Street analyst report finds a troubling sign for Android. While's there's some truth to it, here's why the conclusion is flawed.

There were conflicting reports on Monday about the state of the iPhone-Android battle. One report has Samsung eclipsing Apple as the single biggest smartphone hardware maker, on the strength of its Android phones. The other, more juicy, report says that Android growth faltered in Q3 and that could indicate that a lot of Android owners are considering a switch to the new iPhone in Q4.

The first report comes from The Wall Street Journal and it estimates that Samsung sold between 20-30 million smartphones in Q3 -- Samsung doesn't officially break out the numbers -- while Apple sold about 17 million. This is significant since in Q2, IDC estimated that Apple was the leading smartphone manufacturer with 19% of the market of 106 million smartphones sold while Samsung was No. 2 with 17%. Gartner also ranked Apple as the No. 1 smartphone manufacturer in Q2 with 18% of the market (Android manufacturers combined for 43% of the market).

The second report comes from Morgan Keegan analyst Tavis McCourt via Fortune. McCourt analyzed the AT&T and Verizon smartphone sales data for Q3 (see chart below) and noted that smartphone sales declined in Q3 for the first time. His conclusion was that there were a bunch of significant Android device launches in Q3 (including the Droid Bionic and Samsung Galaxy S II) so that likely means that a lot of Android customers were playing wait-and-see on upgrades until Apple announced its new iPhone 4S on October 4.

McCourt stated, "We believe slowdown in Android/Blackberry/[Windows Phone] sales at AT&T/Verizon likely indicates a reasonable number of customers choosing not to upgrade in Q3, but rather waiting to switch to the iPhone in Q4. The strong initial sales figures for iPhone 4S would seem to back up this assumption."

Sanity check

While plenty of Android users were likely waiting to see what Apple announced before making a decision on their next smartphone, I think the problem here is McCourt's assumption that all of them are going to switch to the iPhone. I'm sure there were a lot of Android users who saw what Apple announced and decided to either stick with what they've got or upgrade to another Android device instead, like the forthcoming Galaxy Nexus.

While I agree that Android may lose some of the users at the top end of the smartphone market to the iPhone -- especially non-tinkerers like business managers -- I think Android will more than make up for that by adding a lot of new users from people who are converting from feature phones to smartphones for the first time over the next couple years.

Read: Android Growth versus Stagnation

About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks (bit.ly/ftgeeks).

40 comments
Gisabun
Gisabun

Does anyone really care what analysts say? Please. Half of the time they dream of one thing/prediction and it doesn't come true. They start to predict something that will hapopen in 3 years based on what is happening today. For example, I'm sure most analyst thought the netbook would of sold millions and millions of netbooks in 2009 - except the fact that the iPad took off. Or maybe I'm sure mostr thought desktops would be still outselling laptops - until tablets [and alike] took off. According toi the graph non-iPhone smartphones have dipped in the last quarter but iPhone sales have tumbled. Butr if you look at the trends, iPhone sales drop before a new model comes out - which is logical [as who wants an old one]. On the other hand, non-iPhones are coming out constsntly [since multiple OSsc and brands. So no major dip.

charliegallie
charliegallie

Clearly Apple is out marketing Google, but that doesn't mean that these numbers make any sense. NOR does any of this indicate that Android users are waiting to jump to Apple. All the Android users that I know --and I know a lot-- are waiting for new Droid phones. I have two Motorola Droids one of which I can upgrade for free and the other one I will have to pay to upgrade. For domestic tranquility I'm going to wait until I can upgrade them both for free. The only reason that anyone has given for purchasing a new iphone is to ask it the meaning of life and other cute things. If you really are so clueless that you have to ask your phone the meaning of life then maybe an Apple is the phone for you?

I am Gorby
I am Gorby

I am an Android user (HTC Desire) and so far quite happy. I won't change until my contract is over. I actually like the iPhone. My son and daughter has one each. Nice and easy to use. But I can't stand how iTunes must be installed on your PC to get the best out of the phone. iTunes "eats" a Windows based PC. I have a second PC in the house just for the kids iPhones (and iTunes). I will not let iTunes on my PC.

rrwolff
rrwolff

Siri. Android, Got Siri?

doug.montgomery
doug.montgomery

Frankly, this isn't Windows VS OS2, and why does it have to be? There are differnt solutions for different needs. One doesn't have to "win" I am in the process of picking up a couple dozen phones for salespeople that are on blackberrys. I have been evaluating android, and I received the iphone 4s on launch day. Since this is what I do for a living, I support whatever is the best fit, keeping emotional attachements out of it. "Loving" one or another is the quickest way to alienate your customers. After living with the iphone, I only see the benifit to those who have had apple products in the past. My users are not tech smart. I have to tell them what to do over the phone without seeing thier phones. Navigating on the iphone is so inconcistant. I just dont know how I would tell a user how to get back to the last screen. The buttons always move, and sometimes they dissappear. If you get into a sceen you didn't want to be in, you have to figure out how to close that screen by reading it. My users may not even understand the screen. The inability to plug the phone into a usb port and use it like a thumb drive is just limiting, and really uncomprehesible at this time. Why not usb charging? I want to wire my house USB because I have so many devices that use the same charger. The new iphone has gone dead twice because of the funny cable, and with just a days use, and no third party apps loaded. Android has a back, home, and menu button. If you want to go back on any screen, you hit the same button. If you wind up on a sceen you didn't want to get to, you dont have to read it, just hit back. If you want to start over, you hit home. USB, bigger screens for my old eyes, drive letter access, NOT having to sync. Thats the big difference to me. The iphone is an extension of a pc, and an android is a pc unto itself. The icloud is suppose to fix that, but 5GB, and no way to access content you already own dont seem to make that it that useable. I am looking forward to testing a WP7 phone next month. We will see the progress they have made over the years. I beleive teh first Windows phone I had was windows mobile 2003. They have let me down time and time again. Competition is good. It keeps the contestants trying harder. Lets hope no one wins. It keeps the entire field innovative

learn4ever
learn4ever

.. narrow-minded article. There is a world outside the USA. Ever think about iPhone vs Android the world over? The rest of the world doesn't rate sales based solely on Verizon or AT&T any more than Samsung or Apple themselves do.

andrew232006
andrew232006

I think the iphone's advantage has been it's superior hardware. And if they don't have something more advanced than the 4S on the way, the market is going to turn away from them.

pk de cville
pk de cville

What do you make of the polling that shows 89% of iPhone owners say they'll buy another iPhone? The number for Android owners is 55%. If this doesn't change Android SmartPhones (Androids sold for more than $200.) will begin losing mktshare within the next 2 years. And as hinted above, Android's costing less than $150 are very cheap feature phones. I guess 65% of the Android 'smartphone' market is not in the smartphone mkt at all. Apples to apples, iPhone smartphones outsell Android smartphones, 2 to 1.

Vulpinemac
Vulpinemac

The chart above doesn't really give a significant view, it it seems to show the seasonality of the iPhone based on launch dates and holiday seasons while Android showed only one peak which tapered downwards over the last two quarters. Personally, I'd like to see this chart extended back another two years. What some of the analysts may be taking into account also are statements by HTC and Samsung who have both said they are considering alternatives to Android, now that Google has purchased Motorola Mobile to produce their own in-house Android products. I can understand their reasoning, too. What with building in-house phones, Google may be less likely to push updates to the OEMs in a timely manner, affecting competition and giving Google itself an 'unfair' lead. Samsung already has an OS available in Bada while HTC expressed interest in 'purchasing' an OS--possibly WebOS from HP. If you take this information into account, Android may well have passed its peak and is headed for a more competitive level closer to Apple's own 25% or so, making room for WP8, Bada and (WebOS?) to each have a relatively balanced market share. Of course, the added competition will be good for all involved.

MichelliL
MichelliL

Personally, I came due for my upgrade in August. I currently have a BlackBerry Storm2 (which I'm quite unhappy with). I had planned on making the jump to the Droid Charge, but then I heard about the Bionic, so I waited. While waiting for the Bionic, I heard about the Spider/Razr/whatever they want to call it, so I waited again. Then news broke of the Samsung Galaxy Prime, and I have completely committed to getting that when it comes out. My wife is as well (and she was up for her upgrade long before myself). A buddy of mine at work (who has the Storm1) is waiting on the Prime now as well. This article keys in on why the initial analysis was wrong. Android watchers wait and see. With so many manufacturers in the Android ballgame, it makes sense to hang on to your current phone just a bit longer to see if something knocks your socks off. If you're an Apple fan, you just buy whatever iPhone is current.

tripplec
tripplec

The carriers and OEM's point figures back at each other as to whether the updates will come to the OS. When is does its not the latest in the series as in my Fascinate after nearly a year i just got the bugged version 2.3.3 and not the 2.3.4 available for the longest time. Bluetooth voice dialing still does not work so I still have to use my hands on the phone contrary to local laws. I want a phone where I can get updates when released and major function actually work with fluid response. Thats no the case with the T959D Fascinate and other hardware is even further back in versions.

jonrosen
jonrosen

About the only time I get a new phone is when re-up-ping for a contract, and get nice rebates, or if just switching service. This being said, I don't wait to see what's about to come out most of the time. So minimum is about every 2 years, usually far longer as I tend to use a phone to it's end of life-cycle. Given, with Android, that's coming a bit faster as they update so much so often, and the phone I got wasn't on the power-end, so it's slowing down a bit with each new version. Of course Verizon's spam of useless and irremovable crap doesn't help. As for the iPhones. Never had one, doubt I ever will. They never impressed me, and honestly, while not a mac-'hater', I've simply never been a fan of i-toys and more especially of i-tunes. Anything which virtually requires jailbreaking and (in theory) i-tunes use, makes me steer FAR away. Given, I'm getting closer to jailbreaking the one I have just to get rid of Verizon's crap. Other than that, I'm exceedingly happy with my android-based phone.

Jouten
Jouten

I am one of the people who have two phones (one Sprint, one AT&T). I ended up buying the iP4S because I want a phone that works and is very low maintenance. I got the iP4S on my AT&T account. I still have my Nexus S 4G on Sprint though. If I were to only choose one phone to keep though? It would be the iP4S. I'm just not that motivated anymore to keep up the maintenance and to continually tinker with my phone. There's a good smartphone market out there and I just don't see why there has to be only one choice for all. I think it is developing into a good market filled with choice. I would even like to see WP7 take off too. This keeps the market fresh and full of choices for all.

Slartibartfast
Slartibartfast

I'd be very cautious about using any third quarter figures for any kind of analysis. Q3 is traditionally poor in the CE market. Q4 may show a totally different picture. We're also seeing some Blackberry defection because of their well-timed woes, and BB users are, I would guess, more likely to choose iPhone as 'non-tinkerers' (good phrase).

rhonin
rhonin

I waited till Sep as I knew the SGS2 , Nexus, 4S/5, etc was launching. I wanted to see what the devices offered and timeline on launches. Nothing more. A lot of my peers did the same.

mitcoes
mitcoes

Tegra2 was the best Soc by far until Ipad2 and Iphone 4S with the new TI PowerVr arrived, but NV tegra3 ak Kal-El will be better. The ASUS padfone, if it has a good price would be a better choice than Ipad/Iphone, and in the future upgrading the phone will upgrade also the tablet. Because the screen last longer than the Soc as state of the art.

OSF-BayArea
OSF-BayArea

In my small circle of about 70-80 people, only two have ordered the iPhone 4GS. Both are Mac owners with iPads and iPhone 4's. Most of the iPhone owners were not impressed enough to plunk down the cash. In contrast since the launch of the iPhone 4GS, two have purchased Bionics, one purchased a Galaxy S II and one purchased a Slide 4G. Two others are waiting for the Galaxy Nexus. All this in the heart of SF. Just my objective observations :)

Spitfire_Sysop
Spitfire_Sysop

My co-worker had an older Android that was out of date. He wasn't happy with it so he just got the new iPhone 4GS. So he would be included in this statistic. However he says that it's not as good as expected and he misses his Android. We compared the 4GS to my more modern Android and he decided that he is going to return the 4GS before 30 days is up. He is going to exchange it for a Galaxy Nexus when it is released in a couple of weeks.

patti.pender
patti.pender

If your people are not smart enough to figure out how to use iOS, you really should consider just carrier feature phones or even flip phones. iOS is plain and simple--not customizable or hackable enough for most power users, but perfect for those who want a smartphone that "just works." Arguing that Android is better from an "ease-of-use" position is just dumb.

Vulpinemac
Vulpinemac

*Navigating on the iphone is so inconcistant. Please explain how. I see no inconsistencies and certainly have no trouble finding my way back to the home screen--merely click the single button once. *The buttons always move, and sometimes they disappear. Are you sure you're talking about the iPhone? My buttons never move and I haven't had one disappear yet unless I deleted it myself. *If you get into a sceen you didn't want to be in, you have to figure out how to close that screen by reading it. What? Why? Just hit the home screen! If you're using a browser, just hit the back arrow on the screen. How hard can that be? It sounds to me like you're confusing yourself more by trying to use two different platforms at the same time. *The inability to plug the phone into a usb port and use it like a thumb drive is just limiting, and really uncomprehesible at this time. Why do you want to use a cell phone as a pocket hard drive? For that matter, you don't even need to manually synch data any more on an iPhone 3GS and up because of iOS 5, which makes it completely hands (and wire) free. And if you can't figure out how to plug in a simple cable, then you're got more severe problems than just the phone. What's so funny about a 30-pin connector on one end and a standard USB-A connector on the other? You can recharge it from your PC, from a wall block, a cigarette lighter adaptor and who knows what else; all you need is that USB connector on the charging end. Maybe I can understand a "back" button, but not as a full-time button, and 'menu' is simply redundant and unnecessary. You want an app? Touch the app icon; it picks up right where you left off. You want to swap apps? Hit 'Home' and touch the new app, or hit 'Home' twice and even go back to the same place you had when you quit. You want to shut down apps? Click 'home' twice, touch and hold one icon, then touch the red 'minus' mark to quit the app. It really can't be easier. If you think WP7 is going to be significantly better, I think you should prepare to be disappointed. I believe it will be easier to use and more reliable than Android, but so far I think it looks too... cutsey? I'm not a fan of that Post-It-Notes-type interface.

Vulpinemac
Vulpinemac

You can be certain that Apple has something better "on the way", but it won't come out until sometime next year, to approximately the same schedule they've used for the iPhone from day one. Just like the previous versions, Apple has set the major upgrades to a semi-annual basis (meaning every second year) with a performance update in between. That's essentially what we've seen here and it's obvious that the update is quite successful. Honestly, I don't see the 4S as disappointing at all. True, I don't need to replace my current model so I probably won't replace it, but there are plenty of other people whose two-year contracts have expired and this is a perfect time to get a significant upgrade from their old phones. Rather, considering the way people are developing a 'wait and see' attitude with all the new Android models, I'm beginning to see why Apple was slipping so badly back in the early '90s, when they released a new Mac every three months. You simply don't know when the best time to buy in will be.

Vulpinemac
Vulpinemac

... and I'm a well-known Apple proponent. Yes, I do agree that Android's biggest charge in the smartphone field has been due to low pricing--sub-$100 pricing via 2fers and other bargain basement sales; but that doesn't support your 2:1 sales ratio for MSRP-priced phones. None of us really knows those numbers. I also have to wonder about other skewed sales figures when every brand--even Apple--announce shipments, not raw sales numbers. (Apple's 'sales' are marked as 'into distribution channels, i.e. sales to carriers and retail stores, not end users.) That said, Apple's retail sales are quite visible by merely watching the traffic at any Apple store whereas sales through carrier outlets are practically unknown. As such, we really don't know how well any of them are really selling unless the carriers themselves choose to tell us. We almost never hear of any Android 'record sales' or 'huge surge'; they seem to merely be 'business as usual' which normally implies the buyers come in and select the cheapest available that does what the customer wants. With Apple's 3GS now one of those 'free with contract' phones, Android may see a significant cut in low-end sales.

desilvav
desilvav

get something that works for you. The only reason I have a basket of Apples, is because each time a ding-bat (phone or computer not an Apple) broke I borrowed a fruit from my dear wife. When I tried to use a normal ding-bat, fruits were sweeter and easier to use. And guess what I get updates as they happen, if I need them. Enjoy

nyexpat
nyexpat

Sorry for the pun. But I agree with the post above. Unless you have to use all the microsoft cr-ap, i-whatevers are just so much more user-friendly and "shinier". I liken this to when I used to work in real estate. Showing something "nicer" and then showing something sub-par always makes the sub-par look even worse. ha!

pk de cville
pk de cville

"The carriers and OEM's point figures back at each other as to whether the updates will come to the OS." What's in it for them? If they update the phone, it will cost them $$$ and opportunity cost AND the customer will be less likely to buy another phone (profit loss). They can mouth the correct concerns and point fingers, but really, they will never get over the bottom line math: NU = MP + LC no upgrades = more profits + lower costs

desilvav
desilvav

Apple is not wagged by the operators

laequis
laequis

the Samsung Galaxy Note. Also both a phone and tablet with a stylus no less.

Vulpinemac
Vulpinemac

You make the assumption that because only two iPhone 4 owners updated to the 4S that most iPhone owners will choose not to buy. Well, you might be correct that iPhone 4 may not update (though I personally know a few who will--including my wife) that doesn't mean that iPhone 3GS owners won't buy. Not everybody can afford to absorb that huge Early Termination Fee to buy the latest and greatest--especially when the device they currently own still works just fine. By your viewpoint, the 4GS should hardly be moving, yet it has set records for Apple as well as all three US carriers for launch-week sales and doesn't seem to be slowing at all. No, I don't think your observations are totally objective, since you don't mention how many of whom are holding on to what they already have.

Vulpinemac
Vulpinemac

... since the quarter ended before the announcement of the iPhone 4S. I also don't think he's taken enough time to get the 'feel' of the iPhone, but that's his own choice, not yours. Meanwhile, it appears he plans to operate without any phone at all until that Nexus appears.

doug.montgomery
doug.montgomery

From a design point of view, it is inconsistant. Sometimes, the way to go back is by hitting the button in the upper left corner of the phone. If you create a calendar item, the button in the upper left is cancel. To delete an email, you swipe from left to right, in calendar swiping left to right changes days. How do you delete a calendar item? First you have to edit it, then scroll down to the bottom. If your in a page you dont understand, hitting home, and reentering the app will put you back on the page you didn't understand and wanted to get out of in the first place. Android is consistant. If you looking at a page, and you want to do something, hit the menu button. If your on a page and want to go back, you hit the back key. That is a simple interface people dont have to spend time learning. If your in calendar and you flip the phone landscape, the buttons disappear. If you have spent the time to learn the inconsistances in IOS, then they are familiar to you and its not a problem. If you are a new uer, you have to invest time learning the screens, and the locations of the moving buttons. Thre is no value in learning how to use a device. Its wasted time. Using a phone as a drive is convenient because I can just copy things to it. I dont sync with my work computer, but I have files on it that I may want to take home. THat isn't possible with the iphone. I have dozens of devices that all use the same USB charger and cable. Since they all came with a charger, the chargers are all over the house. Any device can use any other devices charger. THe iphone has its own cable. Its just inconvenient and has led to the battery going dead on 3 occations.

wizard57m-cnet
wizard57m-cnet

some people may prefer something different. Could be Microsoft, could be Samsung, heck even Blackberry. Every person is entitled to that choice. ps...your comment may have been more welcome in the ZDNet forums

nrhudson
nrhudson

Give it up, we obviously can tell you are offended that someone would choose something other than an iPhone. You can't make someone do something they don't like.

BrianMWatson
BrianMWatson

He would be included, since the statistic is a decline of smart phone sales in Q3. If he got an iPhone 4s - released AFTER the end of Q3 - then he obviously waited and didn't buy a smartphone in Q3, therefore making him part of the statistic. Glad you like the iPhone 4S. Apparently he didn't. That doesn't mean he didn't give it enough time. People are different. Get used to it. He has 30 days to return the iPhone 4s. Even if the Nexus isn't yet available, that doesn't mean he will be without a phone. Even if he did decide to go without a phone, I'm not sure what business that is of yours, or why you would be snide and critical of that choice. He's an adult, and YOU don't have all the details. Let make his own decisions. If it's the wrong one, it certainly won't affect you.

Vulpinemac
Vulpinemac

... I'm offended by people using lies to influence a third-party's decision. It seems you can make somebody do something they don't like--with simple peer pressure.

Vulpinemac
Vulpinemac

Even so, it doesn't excuse you for calling me pompous when the guy's own statements made it quite clear that he was biased and influenced the other's decisions.

BrianMWatson
BrianMWatson

If you look at the author of the posts, you'll notice I'm not the original poster. I'm just commenting on what I saw as ridiculous and jaded post. Which is why I responded in the way that I did. Also, I didn't repeat your own words back to you. In fact, I didn't quote you at all. I did, however, respond to your points.

Vulpinemac
Vulpinemac

The pompousness is obviously all yours as you express nothing but insults for my statements. I never stated that I liked the iPhone 4S, but I did state that I don't believe he gave it a fair shake based on his former Android experience--the difference is enough to confuse until you get used to it. However, his choosing to abandon the 4S will have no effect on the chart one way or the other. Meanwhile, stop repeating my own words back to me; you made it quite clear that you influenced his decision to exchange.

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