Out on a Limb: comScore MobiLens Data Actually Portends the 2015 Loss of Significant Android Territory to iOS in the US Smartphone Market

The iPhone 6 Generation’s Market Potential in the US is “More Powerful than You Think”

Two simple charts.

Two storylines.

One conclusion for 2015 that seems mundane, but when digging into the data, has the potential to seriously surprise in magnitude…in what happens to be one of the most coveted regional markets.

Step 1: Take September 2014 comScore MobiLens Charts…

First, the data. comScore MobiLens issue their “U.S. Smartphone Subscriber Market Share” report every month. Subscriber market share is derived from a 3-month average, so the September report, which was just released, reports the July-August-September composite and, for reference, provides “quarter-over-quarter” comparison (in this case, the April-May-June composite).

The methodology, at least as far as MobiLens is concerned: “MobiLens data is derived from an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older.”

According to the report, in September (well, the 3-month average ending September, anyway), Apple had a slight dip in share to 41.7%, from the prior-quarter-composite average of 42.1%, a change of negative 40 basis points. Samsung, on the other hand, had a 40 basis point swing to the upside, improving to 29% share from the “prior quarter” 28.6%.

As far as smartphone platforms (of which iPhone has a commanding 100% iOS share), comScore MobiLens reported that Android in the US managed to gain 20 basis points of share “quarter over quarter”, from 51.9% to the “current” 52.1%.

The takeaways from this one report? Well, if you insist on quick analysis in a relative vacuum: Apple lost share (which could be explained by the iPhone 6 sales pause), Samsung gained share (well, it has in the US for a while now – I’ll revisit that soon enough), and Android as a whole, with an assist from third-place vendor LG, gained a little ground. Oh, and since that iPhone 6 is coming out and it’s reasonably popular, Apple will probably leapfrog Samsung and Android for a while, and even if there isn’t divergence (Apple’s gain at Samsung’s/Android’s detriment), well at least Apple will outgrow both at some point for a few months or more.

Yep, you know what I’m getting at. That’s lazy, almost strawman analysis. 😀 It’s not even close to the depth you can go – and we’re only going to “home gamer” depth this post.

Step 2: Add Samsung, Apple, and Perceived Android Storylines…

Moving on to the next set of baselines. Samsung’s recent financial trends don’t just reflect a ungraceful fall from the peak, they border on crisis.

Apple, on the other hand, is a company on the rebound – though to be honest, it’s more public opinion than it is actual financial results, so “don’t call it a comeback”. Apple’s revenue and bottom line “stalled” somewhat thanks to falling iPad average selling prices (iPhone ASP downtrend and gross margin decrease didn’t help either), then were further weighed by iPad’s sharply slowing and now-negative unit growth. But iPhone units have grown year-over-year throughout (albeit at a modest 13% annual rate for Fiscal 2014 versus 20% in Fiscal 2013 – putting aside the business physics of growing from a GAAP sell-in base of 150.2 million units).

But as for Android in general? A few perspectives you may have seen around the web:

BGR, Jul. 1, 2014, Despite iPhone 6 hype, Android continues to dominate iOS market share: “It wasn’t long ago that Android overtook iOS as the most popular mobile platform in the United States, but as the release of Apple’s first large screen phone approaches, Android’s lead is beginning to look insurmountable.”

CNET, Nov. 6, 2014, Android ups its lead over iOS (which is based on the same September 2014 comScore MobiLens report): “Demand for both versions of the iPhone 6 will very probably increase Apple’s market share over the next three months and help it catch up with Android. However, Google and other Android-device makers have been busy launching their own new phones, including the Nexus 5 and the Samsung Galaxy Note. So how much market share Apple can snag from Android this quarter is the question.”

Android Central, Nov. 6, 2014, partial article title Android leads U.S. smartphone market share: “ComScore had released its mobile market share data for the September 2014. In terms of platforms, Android leads with 52.1 percent followed by iOS with 41.7 percent and Microsoft with 3.6 percent. Both Android and Microsoft grew its market share slightly compared the the prior quarter ended in June 2014.”

The Register, Aug. 29, 2014, partial article title “Too slow with that iPhone refresh, Apple: Android is GOBBLING up US mobile market”.

So, Android’s fine or better than fine, huh?

In my opinion, these next two articles carry a perspective more difficult to find, and they’re also closer to the mark:

Electronista, Sep. 5, 2014, ComScore: Apple continues to gain share in US smartphone market: “The trend [as seen in comScore MobiLens’ July 2014 report] bucks conventional wisdom that demand for the iPhone drops off the closer one gets to the debut of new models, since the rough timetable of their arrival is well-known. Nevertheless, by platform iOS gained exactly as much as Android declined between April and July, further evidence of an ongoing trend of Android holding or losing share in aggregate.”

Ubergizmo, Oct. 8, 2014, ComScore: iOS And Windows Phone See Slight Gains In US Market: “[A]ccording to the latest figures by comScore, it seems that iOS and Windows Phone are seeing an increase in their market share, while Android has actually declined by a bit. However these changes are minute, with iOS and Windows Phone going up by 0.1% market share each, and with Android dropping by 0.1%.”

Now to be fair, reporting on the news/statistical releases of the day isn’t trend analysis, so it’s inherently ill-suited to information dives. And you won’t tend to see all that much editorial as a consequence – in particular, any editorial claiming Apple’s about to make the most serious territory push in its stronghold US market in at least a year – because the data in that one release, paired with ongoing perceptions, just doesn’t support that notion at present. Sure, there’s iPhone 6, but there was iPhone 5S, and 5, compare against a comScore MobiLens Android US market share data point some months back, looks about the same for Android, iOS isn’t actually doing any damage to Android share, there you go. Not only that, the US market is just a subset of the entire world, with its much more exciting emerging and higher-growth markets. So it’s 100% understandable that many news sources and authors just don’t bother much with the US data.

I did do a modest data dive, though, and based upon it, I’m making an Out on a Limb™ call that iOS is primed to make a significant, long-term market share grab from Android in the US next year.

Step 3: Blend Well With Some comScore MobiLens Data from January 2013

Here’s the results of said comScore data dive (click for full size):


The takeaways:

1) Android share as measured by comScore has been remarkably steady since at least January 2013, hovering slightly above 50% US market share.

2) iOS share has been making steady but slow gains over the past “21 months”, currently slightly over 40% but not yet making a meaningful move higher (though it’s possible the survey has yet to capture a representative sample of iPhone 6 users, which it soon will).

Here’s where things get much more interesting:

3) Samsung’s market share of the entire US smartphone market has mostly steadily increased from a low of 21.3% to a high of 29% in the Jan 2013 – Sep 2014 period.

4) Samsung’s “Android Share” (easily obtainable by dividing Samsung US market share by Android US market share, both being subsets of the same number of US smartphones) has risen from a low of 40.9% to the current peak of about 55.7%.

5) Samsung’s experienced a recent, fairly sharp drop in “quarter-over-quarter” market share gains in basis point terms – and in September 2014, turned in its weakest market share gain since at least January 2013, at just 40 basis points. Note that the prior blended 3-month average basis point gain (ending August) was 110 basis points.

Sure, it could just be the result of a saturated market or Samsung nearing some growth potential peak. But that’s ignorant of context. As you know, Samsung’s financials are in genuine disarray punctuated by a drastic year-over-year drop in smartphone/tablet operating profit, and it sure doesn’t look like increasing channel fill (sell-in) is the solution.

Also, no other smartphone vendors are even close to Samsung’s scale in the US, they usually aren’t gaining share (though LG experienced a 50 basis point boost in September), and HTC and Motorola combined for 10.7% OEM share (Sep. 2014), a far cry from the combined 18.3% share reported for January 2013.

Similarly, given Samsung’s recent smartphone growth phase, no other smartphone vendor has ever gotten anywhere close to 50% share of Android smartphones in the US, at least not at this scale.

Basically, as I’ve mused on Twitter in the past, Samsung’s been holding up Android’s US market share for quite some time. Not growing – just maintaining. And now the evidence is clear that Samsung Electronics is seriously faltering – just when Apple launched the iPhone 6 series to record initial sales, powering a blowout fiscal Q4 and analyst-expectations-beating Q1 guidance. Oh, and iPhone 6 shipping times are still far from “within 24 hours”, to say nothing of the iPhone 6 Plus.

My conclusion/prediction: With Android’s bedrock support and “growth driver” suddenly on its heels, the stage is set for Apple to make a major, long-lasting run at US smartphone market share gains much more similar to 2013 (~400 basis points) than the flat growth of 2014 thus far. And much of it will come at Android’s direct expense.[1]

Let’s see how my prediction turns out about a year from now.

[1] Supplemental prediction: The share gains will also manifest as significant (basically, noticeable) Apple revenue growth in the Americas region, although the impending addition of the Americas-Retail segment will provide convenient “obfuscation” for Apple very shortly. Yes, any “nova effect” from iPhone 6 (sales/market share spike) might also come at the “expense” of the iPhone 6S generation. But the overall trend in Android/iOS market share divergence should still be evident throughout 2016.

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