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Android momentum not at risk even as iPhones sales jump, says analyst

Apple's share of new phone buyers jumps, while Android stays flat, reports Nielsen

Apple's iPhone gained share among U.S. consumers who bought a mobile phone in the last three months, as the share for devices running Google's Android remained flat during the same period, Nielsen said Thursday.

In May, 17% of those surveyed by the polling firm said that they'd purchased an iPhone in the preceding 90 days, up from the 10% who said the same three months earlier.

Android, meanwhile, was the choice by 27% in both May and February.

On the blog that announced its newest data, Nielson concluded, "Apple is now driving smartphone growth."

Hang on a minute, one analyst said.

"You can't look at these numbers and say that the momentum of Android is slowing," said Jack Gold, a telecommunications analyst at J. Gold Associates, pointing to the increase in the numbers gap between Android and Apple among all smartphone owners.

Although the iPhone's share of new buyers climbed, Google not only retained its lock on the top spot in smartphone ownership, but increased that share, according to Nielsen.

During the months March through May, Android devices accounted for 38% of all U.S. smartphones, up two percentage points from its share of 36% during the three months of February through April.

Meanwhile, Apple's slice of the smartphone U.S. user base grew just one point, from 26% to 27%, in the same period.

The 11-point difference -- a point higher than earlier -- shows the iPhone is not driving smartphone sales, said Gold.

He also had an explanation for the surge in iPhone sales among consumers who purchased a phone in the last three months. "It's often the case that a particular phone gets a kick in the market when it's new," said Gold, "and announcements of new Android phones have slowed down."

More pertinent, he said, was that the iPhone was gaining new users at the expense of Research in Motion's BlackBerry, not of Android. "People that decided not to buy a new BlackBerry -- it's been, what, a year since RIM came out with a new model? -- are going to the iPhone," said Gold.

According to Nielsen's survey, RIM's share of the new buyer's market plunged from 11% in February to 6% in May.

The BlackBerry's share of total smartphone ownership also slipped, said Nielsen, which pegged the RIM device's March-through-May share at 21%, down two percentage points from the period February through April.

Nielsen also noted that smartphones now make up 55% of new phone purchases, and account for 38% of all phones in use in the U.S., both records in its tracking.

The rise of smartphones is no surprise, said Gold. "There's almost no reason not to buy a smartphone now," he said, citing the small differential between the lowest-priced smartphones and the average price of so-called "feature phones." "Smartphones have gotten to the point that they are the feature phones of today," Gold added.

That could present a problem for Apple long term.

"The question for Apple is how to stay away from being a commodity phone supplier," Gold said. "Volume matters in the phone business, especially for Apple. It's not just the iPhone that they're selling, it's all the services, the apps. The more volume they have, the more likely they are to sell apps, and sell app developers on getting their apps into the App Store."

Apple's challenge, Gold continued, will be to maintain its historically high margins on the iPhone as the smartphone business becomes commoditized. "If the iPhone is seen as a commodity, then that's when their margins are going to tank," said Gold.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is [email protected] .

Read more about smartphones in Computerworld's Smartphones Topic Center.


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