On a global scale, Android is the most used and profitable software in the world. This year alone, Android has continued its growth of market share as more companies being to use the system. While Android seems to be eating up the competition, the software did fall short in one key area which were profits. According to analyst Chetan Sharma, he has estimated that global profits in the Android hardware market for 2014 were down by half from the prior year. This news is startling since this is the first time that there has been any significant drop in earnings. A large part of this lost income comes from Samsung’s profit drop. Other companies like Sony and Motorola have also seen profit drops in their Android-based mobile devices. Meanwhile, Chinese smartphone maker Xiaomi gained a noteworthy bit of market share but is only making profit due to slim margins.
Analyst Chetan Sharma said “It is important for Google that the ecosystem stays healthy and balanced.” In addition, he said “Without profitability, some of these players will eventually disappear and it will primarily become a Samsung + Chinese OEMs ecosystem, which is probably not what Google wants.” A Samsung and Chinese OEMs environment is probably not the route Google wants Android to go. If you’ve seen the TV lately and ads on the internet, you’ll see the campaign Google has going on to push Android out there more. A large part of our global market is full of Android-based devices so the profits loss is a major concern.
The hardware side of Android is not the only aspect having a bad day. Sharma said that developers that create apps are seeing more earnings from iOS than from Android. What makes that so crazy is that Android devices outnumber iPhones in the market. According to Accel Partners’ venture capitalist Rich Wong, the profit loss that we are seeing within Android is more of a changing of the guard than a long-term concern. Wong suggests “In our experience, Android momentum in the broader startup ecosystem continues despite some of the near term profitability questions of the manufacturers”. So as we go into the new year, we have some new questions raised. Will Android’s profit loss go away or become a major problem in the new year? Let us know what you think in the comments section below.