Google vs. Apple: Why comScore Has Picked the Wrong Winner in This Mobile Battle
We have a winner in the Google (Nasdaq: GOOG) vs. Apple (Nasdaq: AAPL) grudge match…
In late 2010, Google began outpacing Apple in terms of smartphone market share – and the gap is widening at an incredible rate. Gartner predicts that Google’s Android’s share will hit 49% in 2012, with Apple’s iOS lagging at 19%.
But wait…
Last week, comScore released conflicting data, which suggested that Apple actually has its nose in front, after all.
Needless to say, the news sent the blogosphere into a breathless frenzy.
Whatever. Let me break down the figures and show you why…
- It’s total rubbish.
- Google isn’t the least bit scared.
A Collective Eye Roll for comScore’s Data
The Gartner figures above factor in smartphone market share. And that makes sense if that’s what you’re trying to nail down.
But comScore skewed the data by deciding to toss iPods and iPads into the mix, too.
By doing so, it bumps the total number of Apple users up to 37.9 million (a 16.2% market share), compared to Android’s 23.8 million users (a 10.2% market share).
Hmm… doesn’t sound like a fair fight.
What the data essentially reveal is that Google has never released a hit music-playing device. As Macworld says, if you remove iPods from comScore’s numbers (and keep Apple’s iPad sales), Google vaults back on top.
But just for fun, let’s roll with comScore’s findings. As you’ll see, Google could still reclaim the throne by the end of 2012.
Why Apple’s “iReign” is Destined to Fizzle Out
With the rise of the smartphone, portable music players are a dying breed. And for Apple, that spells trouble for the iPod. Sales of the device in April 2010 were down just 1% from April 2009. But sales this month have plunged 17% from last year.
As the decline continues to accelerate, Google could end up coasting ahead of Apple without doing a darn thing.
But what about the tablet computer market? There’s no question that Apple boasts a vice-like grip on this market, thanks to the success of the iPad. In terms of market share, Apple reigned supreme last year, with a whopping 83% market share, compared to Android’s 14.2%.
And it’s not just Apple lovers that are fawning over the device. comScore reports that 14% of iPad users own Android phones. Heck, I’m one of them. And a study across five European countries found that on a percentage basis, more Android phone users are buying iPads than iPhone users.
According to Gartner though, Apple should relinquish its tablet dominance by 2015, ending the year with a 47.1% market share. And thanks to Android’s growing presence in the tablet space, Google should pick up most of the slack, with a 38.6% share.
That means Google still won’t regain the lead in four years… but based on how fast Android snatched the wind from the iPhone’s sails, I’m convinced that it will pull ahead much sooner.
Google’s Just Rounding Third Base
Consider that the iPhone launched in June 2007, more than a year before the first Android smartphone – the G1 – hit shelves in October 2008. But even with that headstart, Apple ate Google’s dust in just over two years.
If the same holds true in the tablet space, Google should deliver the knockout blow by November 2012. Or two years after the first Android tablet – the Samsung Galaxy Tab – was released.
Don’t believe me? Consider that today’s tablet market (with a slew of new Android-powered devices hitting shelves) resembles the months following the release of Motorola’s (NYSE: MMI) Droid. And as you as you can see in this video, that’s exactly when Android adoption kicked into high gear.
So let comScore believe that Apple is back on top for now. It won’t stop Google from achieving full market dominance by the end of 2012.
Good investing,
Justin Fritz
Related Topics: Stocks, Tech and Innovation
Louis Basenese-
I like your article on Zipcar. Is there a shorting opportunity that you would recommend? Options etc? The same for GM?
Keep up the good work.
Patrick
[Reply]
Louis Basenese Reply:
April 28th, 2011 at 10:21 am
I don’t have any specific investment recommendations. Generally speaking, though, shorting Zipcar could prove problematic as individual brokers might not have shares available to short yet. As for options, it typically takes about 30-90 days after an IPO before options begin trading on a stock.
[Reply]
Hey Justin – several things are wrong with your argument… but let’s look at them one at a time.
1. You might not like that the iPod Touch is an iOS device, but guess who doesn’t? Developers. To iOS app developers, they see a huge number of people who could potentially buy their creations. This just isn’t the case on the highly fragmented Android side. After all, Apple has put out just four versions of the iPhone in four years – meanwhile there were more than FIFTY Android phones released in just 2010?!
All those different screen sizes, processor speeds, touchscreens, RAM, etc… means one huge headache for Android developers and users alike. Apps crash, UI’s are stretched (or squashed), and in general make it impossible to provide a good experience for the user.
In addition, a huge portion of Android’s sales come from cheap (or free) phones that are never intended to take advantage of what today’s smartphones have to offer – meanwhile 100% of iPhones do, and now can on the TWO largest carriers around.
2. You say that iPod’s are a dying breed because they are “portable music players”?! Sorry to bring you into today’s world… but to most under 20 year-olds, these iPod’s are gaming machines and portable computers as much as they’re music players. And as these teens grow… do you think they’ll adopt an iPhone (with the same UI and apps they’ve purchased) or an Android phone – which would mean re-investing in their favorite apps all over again?
To me, it looks like Apple has a huge “leg up” on 10+ million customers, no?
3. I simply LOVE companies that claim to prognosticate the 2015 market in which the Android side currently has NO viable competitor to the iPad?!
The bottom line is that the iPhone competed with Android while being limited to one (often inept) carrier. Now that the iPhone is both Verizon and AT&T compatible… and is offering a $49 option (the 3GS)… Android will continue to struggle on the high-end of their product line.
However, Android will eventually “win” the numbers competition by allowing it’s OS to be put on any plastic, knock-off phone and offering it to people for free.
To people that can’t see the difference between a rock and a pebble – that may seem like a victory. But to those who embrace smartphones for the mobile computers they’ve become… Apple will reign until another Soft Drink CEO takes over the company.
[Reply]
Justin Fritz Reply:
April 28th, 2011 at 3:04 pm
Russell, you make some interesting points here. But it looks like you already agree with my main argument: “Android will eventually ‘win’ the numbers competition.”
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Some good comments Russell, but yes 50 differenct types of ice cream and chocolate will still lose overall on the sales. We also must consider that the Android OS is in its infancy to some degree, as this improves along with the market and OS standards, it will eventually be a decent competitor in time.
Also the Windows Mobile OS on Nokia phones is something to watch…..
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