Android Outselling iPhone – The rest of the story

MoD apologizes about the communication blackout, but the Ministry had their annual spring cleaning/destroying and redacting of important files.

Now back to the news.

So the technorati is broadcasting quite loudly that Android OS phones are now outselling the iPhone. And based on US Smartphone Q1 2010 market share survey by NPD they are exactly right. However, there are number of other stories that the NPD data provides, and it’s really bad news for everyone not called Apple or Google

So let’s look at the data courtesy of a chart from AppleInsider.

So Android has had a great last 6 months in the US market. Accelerating from relative obscurity at the start of 2009 to 2nd place in Q1 2010.

And while Apple’s share has dropped to 21%, it’s not suffered any year over year market share declines. In addition, this chart highlights that Apple’s biggest phone quarter is either Q2/Q3 when the new iPhone is released. Q1 is a weaker quarter for Apple overall.

Now while Apple is holding their share year over year, let’s talk about everyone else.

1. RIM has lost nearly 10% of their marketshare in the Smartphone US market. At a time, when the Smartphone business is increasing. Not a good sign at all in a global smartphone market that is growing by over 50%

2. Microsoft has lost nearly 10% of their marketshare and that was before Microsoft basically kneecapped themselves with their March announcement that WinPhone7 would have zero backwards capability for any phone shipping in the next 6 to 9 months.

3. Palm has lost the entire bump from their Palm Pre launch. It’s no wonder that Palm was looking for a buyer without an infusion of cash their death was going to be inevitable.

4. Even “Other” has had a bad year over year losing nearly 5% of their market share. It’s not clear what Other represents but the MoD guesses that Symbian Nokia and Sony Ericsson represent the bulk of that. Sweden/Finland not having a great Q1 either.

So adding up those market share drops,  the 25% of lost marketshare has been redirected to Android while the iPhone has remained pretty constant. HTC has shifted their focus on WinMobile and redirected it to Android. And Verizon has adjusted their marketing power/subsidy dollars to focus on Android phones instead of just RIM.

Is there anything that Apple should pull out of this data? As the MoD has been saying for months, the real marketshare in play for Apple from a US market standpoint is getting the iPhone on Verizon. There’s probably anywhere from 10 to 15 percentage points available for Apple with a Verizon phone. In addition, while Android’s market share includes TMobile and Sprint, Verizon is really the safe haven for Android.

It looks like an early June instant release of the new iPhone on AT&T is imminent, does that early release give time for Apple to then focus on prepping a CDMA/LTE iPhone for Verizon?

Other questions to track. Can RIM and Microsoft reverse their slides?

Simple phones with nice keyboard but small screens, bad web browsing, and no real application capability are only going to last so long. RIM is going to be pushing their new OS 6 this summer along with a Storm replacement that has a slider keyboard. RIM needs a serious big screen smartphone hit, so combining the Storm with a keyboard is probably their best bet.

Microsoft will be on the sidelines until WinPhone 7 is ready. MoD is not sure which would be worse, a delay of several months or an incomplete/buggy OS. Both could be lethal for Microsoft’s mobile plans. Engadget has some early images of Dell’s future WinPhone 7 device which look promising, but until someone gets a unit in hand with a release candidate OS it’s all just vaporware. And by October/November of this year, WinPhone 7’s biggest vendor HTC maybe so wedded to Android that moving away from WinPhone 7 maybe a viable option.

Where’s Nokia? Good question. Nokia is still a power in total phone sales, but their total smackdown in the US smartphone market and market share losses in Europe have to be eroding the confidence in the Symbian/Maemo OS strategy. In addition, their latest greatest phone using the latest/greatest Symbian 3 is already getting terrible pre release press.

What about Palm? The HP deal is interesting on several levels potentially. The real problem is that there’s zero signs of new phones from Palm. The Pre and Pixi’s guts can continue to be updated but neither phone is standing up well against the onslaught of new Android devices and the new iPhone device/OS won’t help at all. And the chaos around Palm has to have hurt developer interest, and reclaiming any momentum in 2010 is going to be tough. Just because HP has cash, it doesn’t mean that Palm can immediately start spending it to revamp their phone lineup. Delays in 2010 are going to be deadly for any vendor. Waiting unitl 2011 to regroup may not be a real strategy. HP may in fact be more interested in retooling the WebOS for NetBooks and Tablets than creating a new lineup of phones.

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