Apple wins in the courts...
Last night the jury delivered a crushing victory to Apple, awarding a cool $1,049m of damages against Samsung for violating Apple's patents and trade dress with its Android handsets.
In reality of course Samsung is just a proxy for the bigger war between Google's Android eco-system and Apple.
... But is losing in the field
But this is why the verdict doesn't matter:
The chart above show's the installed base for the Apple and Android eco-systems. Note I include both iPad and iPod Touch (the trial threw up some very interesting internal data on iPod Touch sales which allows us to quantify this part of the ecosystem for the first time). And I don't bother to include Android tablet sales. I assume a two year replacement cycle for older devices.
Even on that basis Android is spanking iOS hands down in terms of growth and installed base. And remember in any clash of Empires, it is the size of installed base which determines who comes out as the eventual victor. The chart below, showing quarterly new smartphone sales by OS, makes the trend very clear:
Apple's patent victories may be too little too late. A likely injunction against sales of last year's Android handsets is hardly going to stop the onward charge of the might Galaxy S III et al. In the meantime Samsung and its Android cohorts have managed to steal a lead against Apple in the smartphone race. In that context an extra $1,049m really isn't that much to pay...
Might be interesting to do an analysis of "weighted installed base", with a multiplier of income or even "social influence" applied to iOS and Android users.
ReplyDeleteOn average, iOS users are probably considerably more affluent & thus have greater economic power. From an ecosystem point of view, that matters a lot if they are (disproportionately) the people who buy stuff.
Hey Dean.
DeleteYes this is one question that has been exercising my mind a lot this week. Not all installed bases are created equal. Certainly by being the first-mover Apple has captured the most affluent part of the installed base, leaving Android and Nokia with its affordable WinPhone strategy to scrabble over the lower end.
One way people look at this is by analysing market share by operating profit, where Apple overwhelmingly wins out (Android is gaining share, but not as quickly as it is gaining unit share). This is useful but I think it is also somewhat backward looking (Nokia also used to have great share by profit in the 20% margin days!) and reflects the business model of the vendor as much as the success of the ecosystem.
Certainly I plan to pull more detailed handset data by vendor to dig into that Android unit share bloc more - obviously ZTEs, Huaweis etc are worth less than Samsungs or HTCs. It might even be possible to pull out sales of individual hero devices (Samsung talks about shipment numbs for Galaxy S devices every now and then).
Then, as you suggest, some sort of weighted installed base analysis might be useful. Though obviously quantifying the weights will be somewhat finger in the air.
A couple of other issues I'm grappling with (thoughts from anybody welcome!) are:
1) Whether there is a limit to how much share Android can take (e.g. imposed by the size of the market - its probly taking a bigger share of new user adds but how much runway til new user adds slow down).
2) Whether its a winner-takes-all type market (my gut feel) or whether iOS can exist quite profitably with a minority market share (as OSX does on the desktop).
3) What impact (if any) the #3 or #4 ecosystems (at this stage WinPhone and RIM) can have on the race. e.g. its pretty clear to me that Apple are incentivised to have WinPhone succeed because any success it has it likely to be at the expense of Android much more than Apple - it was interesting in the trial it emerged the AAPL had a secret cross-licensing agreement with MSFT, and that their lawyers were bigging up Lumias as an example of good alternative designs which didn't nick Apple's trade dress).
Good thing I have lots of time on my hands at the moment (although this week am also busy preparing wedding canapes for 130! :-x)
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