Why Android Handsets Keep Gaining Ground on the iPhone

    By Alex Salkever
    Posted 6:30AM 09/07/10 Posted under: Company News, Technology, Columns, Investing, Google , Motorola, Apple, AT&T
    Motorola DroidThe latest evidence that Google's (GOOG) fast-rising Android operating system is gaining ground in the smartphone sphere comes from online traffic counter Quantcast. It has released data showing that Android now owns 25% of the U.S. mobile Web-browsing market. That's an impressive 3% jump over the past two months.

    What's more, Quantcast also found that Apple's iOS dropped in market share from 58% to 56%, despite soaring sales of Apple (AAPL) iPads and iPhones. During the past quarter, Android's share of mobile Internet consumption has risen by 5.5%, while Apple's has shrunk by 3.1%. So what gives?

    Fast Processors Are Key

    A couple of possibilities come to mind. First, Android is getting better, faster and stronger with each iteration. No, it's still not as polished as Apple's iOS, and mileage varies depending on the hardware platform. On lesser phones with slower processors, Android chokes on processor-intensive voice-recognition and GPS functions that are bandwidth hogs. But such functions work flawlessly on the Droid 2 and other higher-end Android smartphones.

    As more and more carriers roll out Android, the positive word of mouth on Android grows and so does its market share. Does this mean the iPhone's iOS is inferior? Hardly. But in this sense, it's nearly impossible for Android not to gain some share due to Apple enormous head start. Call it the law of large smartphone sign-up numbers.


    A second possibility also exists, and it's closely related to the first. Not only does Apple have a head start but its dependence on AT&T (T) as its single distribution channel in the U.S. also robs the iPhone of the type of ubiquity Android enjoys. If that's been part of Android's rapid ascent, then the much-anticipated announcement that Apple will spread the iPhone love to other carriers could have a jolting effect on its market share in the mobile-Web market.

    As each marginal customer acquisition becomes more difficult for Apple (this is simply a market reality -- winning new customers is always much harder after you've scooped up the most willing), the current lack of distribution makes it harder for that non-Apple customer to encounter an iPhone in the flesh, either through intention or serendipity. Until that changes, advantage Android.

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    18 Comments

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    T REXX

    as they say.." it's the network stupid " verizon has the best

    September 08 2010 at 8:32 AM Report abuse rate up rate down Reply
    sailor7379

    used both, apple wins, no question

    September 08 2010 at 7:50 AM Report abuse rate up rate down Reply
    Burt

    Don't forget this: My teenage kid is talking about how cool Droid is and he and his buddies want it. Also, My wife's friend told her, regarding the Droid that her husband gave her:" Don't tell my husband, but it was betting than getting me diamonds!" That's the kinda stuff that makes me want to buy MOT!

    September 07 2010 at 11:22 PM Report abuse rate up rate down Reply
    Joe

    Since Verizon is the largest carrier and iPhone is not on Verizon. It's pretty obvious that Android is going to be bought by Verizon customers, along with Sprint and T-Mobile.

    September 07 2010 at 10:36 PM Report abuse rate up rate down Reply
    VINCENT

    Love my DROID, no issues no flaws. A great, and open OS, Flash, and Verizon. Ya can't beat it with a stick.

    September 07 2010 at 10:32 PM Report abuse rate up rate down Reply
    darqladymidnyte

    It's easy to gain a market share when you have to flood the market with Androids to catch up with a single phone on a single market. Considering that the Androids' gains are really not the impressive.

    September 07 2010 at 8:08 PM Report abuse rate up rate down Reply
    Michael

    There are people who will NEVER choose an Android, and peoplewho will NEVER choose an iPhone. Both systems will be around for a long, long time. Underestimating Apple has been the downfall of many a rival company over the decades. Bet against them, you will lose your shirt -- guranteed.

    September 07 2010 at 4:10 PM Report abuse -4 rate up rate down Reply
    coltauto7

    When issued an iPhone for work perhaps a year ago I found it to be an outstanding tool what with the ability to receive e-mail and bank information along with speedometer and navigation applications. Eventually, I found the iPhone to be a neat gadget and an inferior telephone. As time progressed it was learned that the announcement of a flash to a new generation of iPhones rated high-5's when flashes were available on my clamshell-style (flip?) phone five-years earlier. Recent upgrades to the operating system leave many having fits over lost music and applications and all manner of problems for a procedure a customer should rightfully expect to be seamless. Add to that certain quirks such as the need for some to make use of only Apple-issued, very-expensive synccables if one wishes to do more than just charge their device. Because of these factors my girlfriend bought a Droid X and loves it. It's undoubtedly not perfect but it's got USB and HDMI ports, a replacable battery, can use Flash, doesn't tout that it's got a crummy flash for its camera and is a more effective telephone than the iPhone. Go ahead, Apple. Cut ties with AT&T and try to reach a greater market, but there are a lot of us who could never promote your iGadget.

    September 07 2010 at 3:07 PM Report abuse +2 rate up rate down Reply
    robherron

    Uh, who cares. Neither platform is going away and competition makes them both better. Until that changes, advantage consumer.

    September 07 2010 at 1:40 PM Report abuse +3 rate up rate down Reply
    hemipwr54

    You see a major news reporter running articles on how to combat a crashing , bug ridden Operating System such as Windows , makes you wonder , why does one have to put up with that ? Well you don't , Linux is free and will run on just about any PC made , 100 times less Viruses and not the geek OS of years past . SO STOP worrying about Viruses and become one with the FREE , install Linux , you will thank yourself for it !

    September 07 2010 at 12:34 PM Report abuse +1 rate up rate down Reply