A More Complete History of the Great Smartphone War (US)
I’ve updated my chart from the last post to include all of the relevant “combatants” in the hotly contested, obviously-quite-lucrative-although-maturing US smartphone market. The comScore MobiLens-sourced chart now includes “perennial” top 5 smartphone OEMs HTC, LG and Moto (soon to be Lenovo…?), as well as “everyone else” (the combined share of all OEMs outside the top 5). I also went back one month, to Dec. 2012, which is as far as the survey goes while exclusively focusing on smartphones (vs. all mobile handsets – remember feature phones and basic phones anymore?). Please note, I corrected a few data point errors (mostly relating to iOS), but I doubt you’ll much notice, as it didn’t affect the data trending or my prior post’s analysis at all.
I’ve since discovered that I made a major assumption: that Samsung’s smartphones sold in the US were essentially 100% Android devices. I believe this assumption to be generally correct from at least Dec. 2012 onward (the proliferation of Galaxies, after all), and in any case, it’s “even more true” as we get closer to the present (thanks to IDC’s Ryan Reith for the assist). If anything, overcounting Android share from earlier time periods makes my point about Android’s “dependence” on Samsung to maintain its share even more powerfully (so, lucky me!)
Here’s the chart (click for full size), and then some additional home game thoughts:
The Smartphone Competition
To no one’s surprise, Apple and Samsung blot out the sun in the US. Per comScore, they take up 70% of the market on their own.
The other vendors on the Top 5 have remained HTC, LG, and soon the OEM Formerly Known as Moto (?) ever since (the three month share composite ending) Dec. 2012. HTC has fared worst share-wise (having “started” at over 10%), with Moto not far behind, while LG has stayed essentially on pace with the growth rate of the US smartphone market all this time.
That leaves Everybody Else. Over the past 22 months, their combined market share drifted from 18% in “Dec. 2012” to a semi-plateau of 12.5% or so as of September. So, who is “Other”?
In no particular order, based on potentially unreliable memory and some quick carrier searching: ASUS, Sony, Alcatel, Nokia/Microsoft, OnePlus, Huawei, Amazon, ZTE, Kyocera, PanTech, NEC, Sharp, and BlackBerry. A baker’s dozen of OEMs, and not a lot of units to claim among them all.
Like ’em or not, Samsung is top-of-mind and synonymous with Android in the US. So if, as I’m expecting, Samsung’s smartphone shipments either experience slower or retrograde growth year over year in the quarters ahead (in either case, iPhone has an opportunity to gain ground), how will Android’s share remain above 50% in the US?
Potential Android Standard-Bearers and Windows Phone (sorry Blackberry, you don’t look particularly relevant in the US market right now)
Let’s address Windows Phone. Sooo…Lumia. And HTC, Huawei and Samsung I guess. Competing against Microsoft Lumia. Maybe it’d seem less awkward if market headroom were more evident.
At 3.8% share as of September (vs. 3.2% in January 2014, and 3.1% in January 2013), Windows Phone is creeping upwards, but it’s got a lot of work to do before even getting to HTC’s total market share. We’ll have to see if Android’s loss, if any, can also be Microsoft’s gain. With so much demand for iPhone 6, it’s tough to see Microsoft posing any credible threat to one of Apple’s iPhone stronghold regions near-term (growth from a small base is inherently easier, as well).
So, what about other Android brands picking up the slack for Samsung in the event of slowing or slumping shipments? Definite factor. HTC, LG and Moto/Lenovo are certainly gearing up to gather up any disenfranchised Galaxy etc. owners up for renewal, or just a change of leased smartphone.
As for Android-to-iOS switchers? For one thing, Tim Cook seems to think it’s more of a phenomenon than ever in the iPhone 6 cycle (and he’s observed it happening before, particularly among “yesteryear” iPhones remaining on the market at lower prices). And given his overall performance since taking over the CEO position, I’m disinclined to doubt him. Further, according to a late February 2014 report by Dominic Sunnebo, Global Strategic Insight Director, ComTech at Kantar Worldpanel, there is 41% brand loyalty when users change mobile devices, and 68% loyalty to the OS. So for as long as Apple continues to grow iPhone units (which it still is), unless a rather high attrition rate is assumed (undetected leak on the Good Ship iPhone), iOS loyalty doesn’t appear to be much of an issue. Assuming iOS loyalty is around 80% (it seems low, but I’m no expert)…where’s that leave everyone else?
Ah, but what about challengers yet to come? Lenovo’s supposedly primed to make its debut in the US – but it has yet to, and no one can say with confidence how well it can parlay its name recognition with its PCs (top OEM worldwide, but fourth place in the US per IDC) into smartphone sales.
Xiaomi? A force in China, no doubt (though shielded from intellectual property scrutiny, let’s just call it what it is). Whatever my feelings on the company, it has great growth prospects for the foreseeable future. Could it apply that winning formula to the US?
Well, first, it has to expand sales to the region without being sued by Apple (I know, it didn’t affect Samsung – or did it?). Then, it has to import MIUI and its associated ecosystem, since it’s highly unlikely to deviate from its AOSP (Android Open Source Project) + independent software/app ecosystem business model. Then, it needs to get sufficient US-recognized developers onboard to create MIUI apps (to the extent they haven’t already), or get MIUI developers to localize for the US (more likely the former than the latter at this point?) Then, it needs consumer acceptance – where the only other AOSP-type OS out there is…well…Amazon (which does have all the “name brand” apps common to Android and iOS). So it’s also likely to mindshare-compete with Android/Google Play right out of the gate, absent some surprise partnership.
Sure, MIUI has its fans in the US, and Xiaomi has wisely prepared its language support. But to quote the rather sadly mistaken Ed Colligan, in this case? “They’re not going to just walk in.” It would be an undeniably uphill battle. (Just as iPhone’s launch was, so you don’t misunderstand me.)
Long story short? I’m quite sure the key to Android’s lead over iOS in the US smartphone market continues to be Samsung at least for now. And Samsung, as Android’s Atlas in the US, is an increasingly uncomfortable standard-bearer.