Android's Market Share is Literally a Joke

http://techpinions.com/androids-market-share-is-literally-a-joke/16709

by thoughtsimple • 13 years ago

20 11 13 years ago

This article is a joke. First, it misapplies the joke that it says "literally" applies to Android marketshare -- the "bigger truck" joke only applies when profit is negative so that the net is a loss, and a bigger truck is a bigger loss.

But even worse, its just throwing stuff out that doesn't stick together. I mean, it makes at one point the claim that Android manufacturers are sacrificing margin for marketshare (which is no doubt true; its a common strategy, one which Amazon's Jeff Bezos has highlighted with the comment that "Your competitor's margin is your opportunity"), suggesting that while the trend is against Apple in marketshare, Apple could easily reverse it by cutting its own margins.

But then the article goes on to say Apple shouldn't cut the prices on its offerings because not enough is known about price elasticity in this market (well, specifically, they say not enough is known about price elasticity of the iPhone).

And then they make the claim that the goal is not to maximize marketshare (okay), or even to maximize profits (!), but to maximize the ratio of profits to marketshare. By that logic, in a two-player market where one player has 99.9% of the marketshare and a mere 99% of the profits, and the other player has 0.1% of the marketshare but a whopping 1% of the profits, the latter would be winning.

mosqutip• 13 years ago

I agree. There is a lot of flawed logic in this article. People like to defend Apple's declining market share because of their absurd profits on devices (which is, in and of itself, an unfair comparison, since Apple owns the hardware AND the software).

Android is clearly winning in the mobile space, especially outside the US. Finagle the statistics any way you want, but it doesn't change the truth.

The profit-to-market share argument has some value, and is certainly a factor to be considered, but the huge discrepancy in overall market share still, quite clearly, shows Android being ahead.

dragontamer• 13 years ago

You're right. But beyond that... the analysis of this article is so shallow, it manages to say nothing while taking up pages and pages of information.

Who is "winning" the smartphone wars? How can an article like this rant on for pages and pages, without mentioning that say... Samsung creates over 25% of the iPhone?

http://www.economist.com/blogs/dailychart/2011/08/apple-and-...

What about that little fact, that the majority of revenue Google makes is from iPhones?

http://bgr.com/2012/03/29/google-generates-four-times-more-r...

Fanboys can sit around and play silly word games and armchair debates about who is "winning" or "losing". The fact of the matter is... these companies are well diversified and will do well regardless of marketshare.

A long rant without mentioning the most basic facts of this marketplace is not very worth reading.

gizmo6862• 13 years ago

Also, the smart phone market isn't a monopoly. And the copy-left nature of Android goes a long way to assuring that it never will be.

This protects Google (and many other companies) from Apple leveraging their market dominance into other markets.

mncolinlee• 13 years ago

This piece is a disaster. Samsung made an $8 billion profit, so the truck metaphor is misapplied.

His poorly-chosen metrics do not lend much support to his position. They fail to show momentum. If I were deciding which platform to support, I would be far more interested to see developers and customers dropping other smartphones for Apple and keeping their Apple devices rather than simply see that Apple still has customers and collects margins. At least it's true that Apple still has a warchest to fight back.

TechCrunch said, "There is no way even the most rabid Apple fanboy can deny that iOS is in second place now." I guess he proved them wrong.

ocean12• 13 years ago

This is absolutely a true statement:

"(T)he primary problem with using market share as a measure of business health is it provides no insight into the profitability of the product being sold."

But other than that, the answer to "who is winning" is first defined by what goals the competitors are competing to reach.

If Androids goal is market share, and Apples goal is profit, both could be winning...and at the same time.

rayiner2• 13 years ago

There is insight here which people are missing. Look at the PC graph. Honestly, would you rather be Apple making Macs with 8% market share and 45% profit share, or Dell, Asus, etc?

Unlike with social software, there are diminishing returns to market share in physical devices. Chasing market share and hoping profits will follow is the wrong game to play. It's taking the wrong card out of Microsoft's playbook: Windows might have huge market share, but it was always a very high margin product for Microsoft!

gizmo6862• 13 years ago

In a lot of ways, smartphones behave like social software. Their value is largely defined by how many third parties are writing apps for them, which is largely defined by how big the market share is.

rayiner2• 13 years ago

Social is different. A computing platform with 50% market share (or even 15% market share, as evidenced by the Mac) will still have tons of apps. A social network with 50% market share is something where half of everyone's friends will be on the competing network.

neogodless• 13 years ago

Oh right, but there is a company that profits from Android market share!

http://www.zdnet.com/microsofts-most-profitable-mobile-opera...

(Not sure what this chart is showing share of, since it doesn't correspond to the 74% Android and 3.2% Windows Phone chart that has been circulated lately.)

Zigurd• 13 years ago

tl;dr: Some competitors have higher margins.

However, high margins are less safe than they look. The article omits the fact that a high-margin competitor in mobile devices can retreat from market share only so far before it becomes impossible to maintain a viable ecosystem behind their product.

Android's Market Share is Literally a Joke

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