Android Gaining Share on Apple iPhone

29 03 2010

The latest AdMob Mobile Metrics Report results are very interesting, showing the Android OS is gaining ground fast on the iPhone.

AdMob servies up ads for over 15,000 mobile Web sites worldwide.  They have recently published an analysis of traffic and usage trends on the sites they manage.  Full AdMob Report

Summary:

  • Android as a mobile phone Operating System is gaining market share from 16% of smartphones in November of 2009 to 24% of smartphones in February 2010.
  • In terms of mobile traffic by OS as seen by AdMob, iPhone has a 50% market share but Android is growing faster and is close behind at well over 40%.
  • Laggards: RIM, WinMo, and WebOS are all in the low single digits for AdMob mobile traffic.

While the iPhone is more mature, full-featured and has more software applications (OK, “apps”), Android looks to have much faster growth at present.  The more interesting questions is why?  It all comes down to business model.

Reasons for Android’s Growth

  • The “Less Than Free Business Model.”    Google does not charge to develop on their smartphone OS and does not charge to deploy on it either.  What’s more, Google actually pays ad splits to vendors who ship their operating system.   Google also lets carriers customize their customer UI and offers an open source version of Android should they need an “out.”  This is extreme market disruption.  See a brilliant write-up on the Less Than Free Business Model.
  • Android, as a result, is supported by multiple device vendors.  iPhone is only available from Apple.
  • Anybody can download Android and develop software applications on it.  Apple reserves the right to decide which of their software applications gets to market.  They rather famously denied Google the right to deliver Google Voice on the iPhone.
  • Google operates very transparently with Android.  Apple is very very secretive with iPhone.

Let’s see…  I think I have seen this movie somewhere before.  Apple comes into a market with superior design and product innovation (Mac) only to be overtaken by a more open platform with a better business model (Windows).  In that case, openness drove down the cost of the platform hardware, which resulted in greater market share and more software applications.

It is certainly not to late for Apple to change their direction, but failing to act soon could be disastrous, and we are nearing the market tipping point.  And, by the way, we have seen Google tip markets on established market leaders before.

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