Apple Inc. (NASDAQ: APPL) has much to celebrate going into the Holiday 2010 season. Despite some serious PR issues during its launch window, the iPhone 4 had a tremendous release at the beginning of the summer, selling 1.5 million in its first 24 hours and doubling that number by the end of its two weeks.
So it’s surprising then that, given the massive success of devices running iOS, that Google Inc. (NASDAQ: GOOG) and its Android mobile operating system are stealing away its market share. The shift in control of the mobile operating system market was slow and steady a year ago. Now it’s changing fast and furious.
Even more baffling is that beyond smartphones, Apple has the iPad to juice OS stats. Even with limited stock, though, the iPad sold over 3 million units in its first three months on the market. Some analysts, like research firm iSuppli, are predicting that the iPad will sell 13 million units by the end of the fiscal year. Finally, just last week, Apple unveiled a new version of its iPod Touch that was very well-received. Actually all of this good news is less for the Apple brand than it is their mobile operating system, iOS. The versatile software is the backbone of all of these mobile devices from APPL.
Research group Quantcast published a new report on Friday that reveals Apple’s iOS platform, despite the introduction of multiple new devices in the past twelve months running on the software, has lost 11% of its market share since May of 2009. iOS now only represents 56% of mobile Web usage. Web usage, and the activation of smartphones capable of browsing the Web, is one of the more accurate measures of which software maker is controlling the smartphone market. It’s tricky business. While Apple and competitor Research in Motion (NASDAQ: RIMM)—who notably only controls 9% of the market after years of market dominance earlier last decade—have their operating systems running proprietary devices, Google’s Android is the operating system on phones and tablets from numerous manufactures, from Dell (NASDAQ: DELL) to Motorola (NYSE: MOT). That manufacturer agnosticism is most likely fueling Android’s meteoric rise in the mobile OS market place. Quantcast’s report shows that Android now represents 25% of mobile Web usage, a 17% increase over their share in May 2009. Apple has been selling iOS enabled devices since 2007, giving them a nearly eighteen month lead time over Android’s launch in October 2008. If the trend continues, it won’t matter how many iPads APPL sells. The mobile market place will be as dominated by Google as the search engine market was six years ago.
With daily announcements of new smartphones and tablet computers running Google’s operating system coming from companies like Samsung, Toshiba, and even a rumored Google-made tablet subsidized by Verizon (NYSE: VZ), it doesn’t appear that the trend will slow any time soon. Apple shareholders shouldn’t be worried about the Cupertino, California company; their status as the most valuable technology company won’t slow down any time in the near future. Their control of the mobile market place probably won’t be threatened when Microsoft (NASDAQ: MSFT) launches their Windows Phone 7 mobile OS and device later this year either.
They do not need to prepare themselves for the moment when Google takes a controlling share of the mobile OS market by the end of 2011, and they best hope that Apple creates new, more affordable devices to combat Android’s proliferation.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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