reblogged by Keith Dickinson
from FORBES magazine
TECH 11/15/2013 @ 9:02AM 92,168 views
Android Dominates Market Share, But Apple Makes All The Money
by Tony Bradley
We’ve been hearing for years now about how Android is destroying iOS in market share. Ironically, though, Apple continues to make more money than all of the Android smartphone makers combined.
The most recent data from IDC shows that for Q3 of 2013 Android made up 81 percent of devices shipped. You read that right—four out of every five smartphones shipped in Q3 were built on Android. Meanwhile, Apple’s iOS scraped by with a sad and distant second place figure of only 12.9 percent.
Appdroid & Andople
Apple executives were probably upset by these figures. They probably had some sleepless nights, and an emergency board meeting to figure out how to turn that ship around and win back some market share. No. Not really.
The reality is that Apple is quite comfortable with the market share data, because the profit numbers are all Apple. Data from Canaccord Genuity shows that during that same period—Q3 of 2013—Apple made more money than all of its competitors combined, taking in 56 percent of the profit in the mobile device market.
The profit data illustrates how Apple’s primary rival is really Samsung—not Android. Samsung made 53 percent of the profit for the quarter. Apple and Samsung combined actually add up to more than 100 percent of all profit for the mobile industry, because all of the other players, like HTC, LG, Motorola, Nokia, and BlackBerry lost money.
The cause of the discrepancy between market share and profit lies in the second half of the IDC market share statement about Android. It turns out that two thirds of the devices that make up Android’s 81 percent market share are cheap “junk phones”. The remainder is primarily Samsung, which makes up 39.9 percent of the total Android devices shipped.
There is another area where dominant market share isn’t turning out to be an advantage for Android. In spite of a greater than six-to-one advantage in device market share, Android doesn’t sell more apps, or generate more advertising revenue than Apple.
When it comes to real world usage data, Apple has an overwhelming share of smartphone and tablet app sales, Web browser use, and ad network hits. Apple leads Android in enterprise adoption, and in retail shopping use by consumers.
The volume of apps available in the Google Play app store has caught up to Apple, and Android is winning in app downloads as well. Google reportedly comprises 75 percent of all app downloads, compared to only 18 percent for Apple. Yet, Apple made half of all app revenue in the most recent quarter, demonstrating once again that volume and market share don’t translate directly to income.
Android dominates in market share. Android dominates in app downloads. At the end of the day, though, somehow Apple’s iOS is making all of the money.
The bottom line is simple: You can’t reward investors, compensate employees, or pay the bills with market share. Apple can still ignore the market share data all the way to the bank.
Tony Bradley, Contributor
I write about startups, social media and trends in technology
Opinions expressed by Forbes Contributors are their own.