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iOS Not Selling! Says Who?

December 15, 2013 | About:
Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) dominate the market when it comes to mobile systems space consisting of the smartphones, tablet PCs and Apps. Android and iOS together hold about 90% market share with Android having the maximum market share. Some experts, in fact, are of the view that Apple’s hold in the market is set to further go down leaving Android as the only leader in the market. Microsoft, for that matter, is nowhere near the two tech giants. Though it comes third in this category but has a paltry 3.6% market share and that too because Windows 8.

Coming back to what experts say about iOS’s future, they fear that just as the company lost the PC race in the 1990s they will lose the global smartphone market to Android much the same way in this decade. Android already has around 81% of the market share globally. They achieved this in the third quarter of this fiscal year. With Android booming in the market, things don’t look good for iOS.

However, if one goes by the web traffic statistics one finds a completely different story. Once a person goes online his activities like surfing the internet or downloading different files constitute the web traffic. This determines the popularity of a particular website or for that matter that of the operating system in question. At this point it is important to mention that Apple’s ios generates around 50% more than Android. This suggests that it definitely has more users than Android. This raises a question in my mind:

If Android sells more than iOS, why doesn’t this show on the web usage? That iDevices account for more than double the web traffic than Android based devices even after selling less is what I find strange. If we look at the sales of the top smartphones around the world we might find an answer to this question. One in every five smartphone that is sold does not even fall under the top ten categories. Most of these phones though use the iOS platform. The sales figures for tabs are a slight different where Apple is a clear winner. This trend in smartphone sales is particularly observed in the developing nations of Latin America where the average wage is less than the cost of an iPad alone. People in these countries are as much addicted to Facebook as their counterparts in other countries. What they have as an alternative is cheap and durable smartphones from lesser known brands which are exact duplicate of smartphones from Amazon. These smartphones are generally powered by iOS because of its easy availability in these nations. This therefore accounts for a much higher web usage by iOS devices than Android powered phones. The second reason that can be cited is that these smartphones are cheaper than Android powered models.

Other errors: One more reason why we find iOS generating more web traffic than Android can be faulty web statistics. Where exactly these statistics come from are monitors and other recorders that are embedded in the target webpage or in the apps that can run on particular platforms. These monitors help in generating statistics regarding the usage of a particular platform. They particularly help in the development of apps. These systems garner millions, if not billions of data points daily so their sampling size is very large.

The second potential source of error is the estimates of sales. Apple announces precise numbers for sales of each of its lines. None of the other manufacturers do so. Therefore, all Android smartphone and tablet sales estimates are mere estimations of what the analysts expect. So there is always a possibility that these numbers are significantly higher than reality.

Conclusion We must always remember that the sales forecasts and other estimates are mere guesses. Even the actual revenue reports and other sales releases are based on estimates which can be wrong. The numbers keep changing. In fact, by the time a report is released the market may have changed by a small factor.

Secondly, we must also remember that the market is also filled with millions of low-end and cheap devices that account for far more sales than the high-end ones. An investor must understand this before making any decision. A good investor would always use this deep understanding of the market and be able to judge and plan out investments after much thinking. What appears on the face of it is not always true.

Rating: 3.4/5 (5 votes)


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