December 22, 2014

Tech Analyst: Android Shares Have Peaked in U.S. and Will Continue to Decline with iPhone 5

Oh boy.  Tech analyst Charlie Wolf of Needham & Company believes that Android’s market shares in the United States have already peaked.  What’s more, he anticipates that a recent decline in March is only the beginning of the platform’s decline in share.  As he sees it, Verizon customers are, by and large, only holding on to their Android phone until the next iPhone is released.  Come September and the rumored iPhone 5 launch, Android will see an even bigger decline.

The recent Wolf Bytes newsletter was sent out to investors and industry players and says that even an “arguably tepid” Verizon iPhone launch is indicative of things to come.  Apparently one singular report that shows a drop from 52.4% to 49.5% market share is enough to call these the golden era of Android.

Here’s where I see the biggest problem with this report.  Wolf himself sees the next major battleground for smart phones playing out on pre-paid markets.  I’m not sure if he knows this or not, but the iPhone does not factor into this segment whatsoever.  Android, on the other hand, has been showing significant strides in the no-contract market as Boost Mobile, Virgin Mobile, and other carriers expand their smart phone offerings.

And really, this whole thing is one of the only recent studies that show Android losing steam, let alone market share.  Just about every report we’ve read over the last six months contradicts Charlie’s findings.  Here’s one from today that says Nokia and RIM’s freefalls are helping Android more than Apple.  Further, Apple needs to do something new to compete with Android in the mid-range.  Might I suggest reading “A “Mini-iPhone” Is Now Considered “Critical” For Apple To Beat Android“.

Oh well, such is life.  As ridiculous as this Wolf Bytes newsletter sounds, there are other analysts calling for Windows Phone 7 to emerge triumphant over Android within 3 years.



  • Anonymous

    Wow, this is one of the first people I’ve seen suggest that Android will be declining. I’m with you, I’m not so sure about his findings and everything else I’ve seen out there indicates Android is going to continue to gain market share.

  • http://muddypa.ws nportelli

    Sorry I’ll never buy an Apple product. I’m not getting a new Android phone because of those damn things called carrier contracts.  As soon as I can you can bet I’ll get a new Android phone…probably have 4 cores by that time.  I am in the tablet market though.  You know a type that is in the post pc era….that you don’t NEED a pc to activated and start using, ie Android.

  • Dineshabe

    ya right !! :) world is a big place. Companies like LG , Samsung , ZTE , Huwawei , HTC will push android phones all over the world. In big markets like india apple is not gonna go anywhere, Samsung Galaxy S2 and HTC sensation are sold at 2/3 the price of an iPhone4 in india. Nexus S is almost 1/2 the price of an iPhone 4 in india !!!

  • Anonymous

    It doesn’t seem likely that any of the successful companies are going to decline. The mobile market has a huge advantage over the PC market in its turn over rate. You’re expected to get a new phone every two years, and you likely will considering the wear and tear that a phone is subject to with everyday use.

  • Anonymous

    Wolfe and IDC are not the only analysts to report that Android is plateauing.

    Android’s global sales growth rate dropped to 3 percent in the March quarter from 7.5 percent in the fourth quarter and 9.5 percent in the September quarter.

    In addition to the figures in the article from IDC, the drop in Android market share is well documented by other analysts as well such as NPD who reported that In Q1 2011, Android’s share of quarterly sales in the US smartphone market shrank quarter-to-quarter (by 6% in fact) to 50%.  

    In contrast Apple’s iPhone grew 47% to capture 28% of all smartphone sales in the USA.  

    IDC also reports that Apple had the highest growth of any mobile phone vendor worldwide in Q1 2011 year over year of 115% with second place ZTE growing 45%, Samsung growing 9% and HTC and Moto not even on the chart.

    And these figures all include Android tablets because the vast bulk of them also include cellular radios and carrier subscriptions.  

    In contrast, Apple’s figures don’t include the iPod touch or iPad (which the analysts really should do when comparing operating systems), which when added in show iOS and Android to be neck and neck in quarterly unit sales.  

    Of course in terms of installed base Apple is far ahead of Android with 200 million iOS devices sold versus only 100 million Android as confirmed by ComScore who reported in April that *active* iOS devices outnumber Android devices by 59% in the  USA and by 116% in Europe.

    -Mart

  • Anonymous

    Besides, the market of the future belongs to China & India where Apple is yet to make a significant foray. A recent survey of Industry brands in India ranked Apple 40th and Google third. 

  • http://gadgetsarena.in/category/android/ Android geek

    Android is far ahead of apple. Apple products is just for fashion. Hope this trend wont come out as predicted.

  • Anonymous

    Apple is a very very sophisticated marketing company. They have a very large network of “market analysts” who actually do a lot of background marketing for Apple by predicting success for Apple products, downplaying Android, etc. This is all done under the guise of “market analysis” when its really just “marketing.”

    Certainly Mr. Wolf would have no reason to talk up Apple while downplaying Android.

    From Business Insider:

    “Apple stock is going to $450, Needham analyst Charlie Wolf said in a
    note today, jacking his price target up from $375. (Shares are up 1.8%
    today to $353.)”Read more: http://www.businessinsider.com/apple-stock-to-450-says-needhams-charlie-wolf-2011-2#ixzz1Q2GperIP

    • -hh

      Well, it is now a month later … and Apple’s stock is at $390, which puts it past Wolf’s prior $375 point and roughly halfway to his $450 prediction already. 

      FWIW, a quick, superficial look at the chart suggests that Android’s share came about from direct cannibalization of RIM & Windows Mobile … which as these two drop to (figuratively) zero means that growth from these ‘switchers’ must come to an end.  True, there’s still the overall growth potential of the ‘smart’ segment, but there’s also a big bag of ambiguity here because Android competes both in ‘smart’ as well as ‘feature’ phones, which results in ambiguities in analysis…it will be too easy to be statistically sloppy and end up misrepresentationally overstating Android’s ‘smartphone’ marketshare.    

      In the meantime, there’s also the other ‘share’ that’s generally more important which is the ‘moneyshare’.  Sure, it is convenient to look at units sold, but only when we simplistically assume that the revenue per unit is the same between competitors – – and we know that in the smartphone market this is not true.

      -hh

  • REality

    According to the IDC, the Android dwarfed all its competition during the
    fourth quarter of 2012 with 70.1 percent of mobile owners utilizing an
    Android operating system smartphone. In second place, Apple’s iOS earned
    21 percent of the market share.