iOS vs. Android: When the market is saturated, who wins?

Is it the platform with the biggest base, or the platform whose base spends the most?

Two charts: One from Mary Meeker, one from Katy Huberty (click to enlarge).

Meeker: Global smartphone growth hit 0% last year (ex PED: although iOS grew slightly).

Huberty: Android’s installed base is five times bigger than iOS, but iOS users outspend Android users by better than ten to one.

apple store clobbers google play

Fun fact: Before Mary Meeker left Morgan Stanley for Kleiner Perkins, she was Katy Huberty’s mentor.

6 Comments

  1. Fred Stein said:
    And… App Store revenue per device grows slightly faster than in Google Play.

    To be fair, Google Play competes with other Android App markets. And iPhones remain in service longer than Android Phones. So App Store has a slightly larger (than 15%) IB.

    As AAPL investors, all we need to know is that App Store revenue is growing and will continue to grow.

    1
    June 1, 2018
  2. Bruce Oran said:
    Though not a finance person, I have a fair investment in Apple. It seems to me that even at a saturation point of smart phones, there will be more people switching to iPhones who currently use other devices then iPhone users switching to different makers. It would be interesting to see the conversion rate in each direction and if it is as I suspected, iPhone will continue to grow at the expense of other manufacturers.

    3
    June 1, 2018
    • Gregg Thurman said:
      “It seems to me that even at a saturation point of smartphones, there will be more people switching to iPhones who currently use other devices than iPhone users switching to different makers.”

      This is true.

      Platform choice has always been driven by price. Android is and has been attractive to the lower economic strata because of affordability and lack of need for the performance/features of high-end smartphones. Most Androids are sold as glorified feature phones

      On the other hand, those preferring iPhone are typically in the higher (top 15% – 20%) economic strata. They choose iPhone because they appreciate quality (function and build) to the point they are willing to pay for it, and just as importantly, they USE the greater capabilities of a high-end product.

      At this point, the market has been pretty well bifurcated along those lines. Platform choices have been made and will continue along the lines described above. You can see this at play with the success of the $1000 iPhone X and iPhone ASPs (~$750) vs Android ASPs (~$250).

      In a saturated market, because the high-end is always aspirational, the iPhone will attract Android users more than Android will attract iPhone users. The switcher rate, however, will be small.

      1
      June 1, 2018
    • David Drinkwater said:
      Andriid is so fragmented and so diverse that it has no continuity, so switching from one phone/brand is difficult that it’s easy and vice versatility. Switching grime one iHone to another is so easy that it’s difficult to do anything else. For example, look at how strongly people upgrade iOS versions. Look at how “pixels” translate across screen sizes.

      I think iPhones today are an even more compelling example of the aphorism that …

      “Once you go Mac, you never go back.”

      In a saturating environment/ed, this is to Apple’s distinct advantage.

      0
      June 2, 2018
  3. Richard Wanderman said:
    The platform with the most chance of finding new ways to extend the ecosystem its part of and that’s Apple and iPhone for sure.

    0
    June 1, 2018

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