Android And iOS Will Keep Their Place By 2018, While WP Will Gain Marketshare According To The IDC

The smartphone market is currently dominated by two operating systems and two metrics: marketshare and revenue. Google's Android and Apple's iOS are the two big players and currently Android has over 80% of the market compared with iOS having 14%, according to a report released by the International Data Corporation, or IDC. The second metric used is that of valuation, in other words, the amount of cash sloshing about the industry. Here, Google's Android has captured two thirds of this with Apple at around 30%. This tells us that Android earns less compared to iOS, a lot less on a per-device basis. Apple's premium image means consumers are still paying very high prices for its mobile products. However, current information is one thing, but it's the IDC's predictions for 2018 that are most interesting. At the core is that both Android and iOS will continue to be the number one and two players. Android's market share is expected to soften a little, but still be at about 80%. Apple's share is also expected to drop by a single percent point, too. In terms of revenue, we'll see Apple punch above their market share yet again, thanks to very high prices. These statistics are interesting reading, but as always, numbers only tell a part of the story.

Let's dig a little deeper. Firstly, Windows Phone currently has 2.7% of the market and the IDC expect this to double to 5.4%. Presumably, the IDC believes Windows Phone will capture users from Android and iOS. I'd like to let the dust settle on this remark, but I don't see this. Windows Phone is four years old and despite Microsoft pouring millions into the project, including paying developers to write applications and buying their very own pet smartphone manufacturer (so that at least one hardware manufacturer was still making Windows Phone devices), it's failed to capture the interest of the market. Windows Phone brings nothing new to the party. Perhaps Microsoft will pitch Windows Phone at the developing markets? This same criticism can also be levelled at BlackBerry, where despite the significantly improved BlackBerry 10 operating system, it doesn't offer much new to the party. BlackBerry OS is more innovative compared with Windows Phone and I personally find it a pleasant experience, plus there's some compatibility with Android applications and this helps, but it is still struggling.

I don't necessarily believe that Windows Phone and BlackBerry OS are essential ingredients to keep Android fresh, though. Competition with other operating systems has driven Google to improve Android but it's Apple's iOS that's been the main threat. This isn't because of Apple's thermonuclear stance on Android, but on market share. Android also generates its own competition from within - witness the legions of fans of each particular flavor of Android devices, from Samsung to HTC to Nexus to similar. Google are not afraid to take ideas from their manufacturer partners, such as Samsung's KNOX and Motorola's Moto Display technologies incorporated into Lollipop. All the same, I don't want Windows Phone and BlackBerry OS to die out, just improve to the point that they offer something different and compelling for ordinary consumers.

The final point derived from the IDC report is the average price of smartphones. We are seeing intense competition between the manufacturers pushing prices down, plus Android One selling reasonable handsets at the $100 point. We are to see increased numbers of devices sold but at lower prices, so revenue growth is going to be slower. The IDC is forecasting 10% annual growth in smartphone sales to 2018 compared with just a 4% annualized growth in revenues. Worldwide handset prices are expected to fall from $297 this year to $241 in 2018, but this figure hides the two-speed market. In developed smartphone markets - Europe, the United Kingdom, the United States of America - smartphone prices are expected to remain where they are. It's in the developing markets that we are expecting the average selling price to drop (from $135 in 2014 to $102 in 2018). Partially, that's because of the influx of Chinese manufacturers able to build good quality devices offering a great user experience and sell these at an ever lower price, but partially because the developing market is the next area of industry growth. Consumers in developing markets are not used to the idea of paying many hundreds of dollars for a smartphone.

In conclusion, the IDC state that given the dominant position Google's Android has on the marketshare, it will be extremely difficult for new entrants to make an impact and will struggle to compete without doing something radically different. We won't know what this is until it happens! Apple has to maintain their premium status and this will push Google into keeping Android fresh and competitive. As for the also-rans, the Windows Phones, BlackBerry OS, Tizens and similar; they have a part to play, but I do wonder for how long will Microsoft keep pushing the elephant up the mountain.

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.
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