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Android topples Symbian, but Apple gets the cash

Rory Cellan-Jones | 08:35 UK time, Tuesday, 1 February 2011

The latest figures from mobile phone industry watchers paint an amazing story. Google's Android operating system, just a couple of years old, has taken the smartphone market - where just about all the profits are made - by storm. But guess who's actually collecting most of the profits? Not Android but Apple.

Two people using smartphones

 

First, the sales figures. The research firm Canalys says 2010 was the year the smartphone went mainstream, with sales up by 80%. Throughout the year Android advanced up the league, passing the likes of RIM (makers of the Blackberry) and Apple. But in the final quarter Android smartphones outsold those using Nokia's Symbian operating system, a quite extraordinary achievement.

Nokia, after all, invented the whole idea of a phone as a mini-computer more than a decade ago, with its fabulously expensive Communicator. It went on to dominate the market, and even in 2009 it commanded 46% of all smartphone sales, according to Gartner, with Android having just 3%.

Now the figures for the last quarter of the year showed 32.9 million Android-based phones shipped worldwide, compared with 31 million running on Symbian. Apple was way behind on 16.2 million, just ahead of RIM on 14.6 million.

So a grim story for Nokia, which relaunched Symbian last year but has seen its market dominance evaporate in just a couple of years. Later this month, the Finnish firm will unveil the new strategy worked out by its incoming American CEO Steven Elop. There will again be speculation that Symbian is for the chop, and Nokia could do the unthinkable - and switch to Android.

But surely these figures also look like bad news for Apple? Not if you look at a set of charts produced by a research firm called Asymco. It has examined profits as well as sales for the whole industry - not just the smartphone sector - and it turns out that Apple is eating just about everybody's lunch.

Chart showing profit shares of eight mobile phone providers

The big blue band in the chart represents Apple's profits, making up about half of the total earnings for the whole industry. By contrast, the returns made by the biggest Android handset maker HTC look meagre, and as for Motorola, makers of the Droid, the thin green line representing its profits is barely visible.

Now Google will not be too worried by this - after all its mission is to get its operating system, its search engine and its mobile ad service onto the handsets of millions of consumers, and that is working. With Android grabbing market share, and the iPhone hauling in huge profits, both Google and Apple can be happy about how the smartphone war is working out. For everyone else, it is becoming a struggle to make an impact or make a profit.

Comments

  • Comment number 1.

    There will again be speculation that Symbian is for the chop, and Nokia could do the unthinkable - and switch to Android.

    You have heard of MeeGo, haven't you? The embedded OS project that Nokia are heavily involved in, and the successor to their Maemo project?

  • Comment number 2.

    Even tho it looks thin profit margins compared to Apple, Android has helped the likes of HTC increase profits and brand awareness exponentially since choosing to supply Android handsets. Android has also helped the likes of Motorola, Samsung and even small manufacturers like ZTE compete with Apple.

    Apple do have an impressive profit margin on their hardware but it has always sold premium products and done well in doing so. The best thing to come out of al this is both Android and iOS are decent platforms for developers and consumers alike and in that respect we all win.

    I do worry for Nokia. They need to adopt a new platform as Symbian doesn't cut it any more. Bring on the MeeGo handsets I say (or adopt Android or Windows Phone 7).

  • Comment number 3.

    Actually my ideal world scenario would would be for Nokia to make the phone part of the iPhone; because however much I love my old iPhone for it's pocket-computer functionality, I still miss how well my long-gone Nokia phones worked as, well, phones. Pity it'll never happen.

  • Comment number 4.

    Aplpe are grossly overpriced, yet consumers fall for it :-

    Nexus S 'free' on a £30.64 monthly contract
    iPhone 4 'free' on a £45.96 monthly contract

    £15 extra * 24 month contract = £360 greater cost to consumer.
    Drop to an 18 month contract and you'll have to pay £200-300 upfront on top of £30/month for an iPhone

    At least you can buy a Nexus S £430 SIM free and put it on any old SIM you like.

  • Comment number 5.

    @PhilT
    The networks are partly to blame for the high price of iPhone contracts.
    Also, you seem to be unaware that you can also buy the iPhone 4 sim free and put in any sim you want. £500. Not that much more than the Nexus S and the competition.

  • Comment number 6.

    @4 Do you really think that it's Apple setting Orange, O2, etc's contract prices?

    I just bought a sim-free iPhone 4 for £410, cheaper than the Nexus S. Who says you have to go with expensive contracts?

  • Comment number 7.

    I blame Nokias marketting. The latest S60 phones are actually pretty good, yet where is the marketting? There isn't any. The BBC and other pundits mention apple and iphone in every single program, webpage, dinner party and probably in their sleep - because apple is continually banging on through its marketting. Nokia - just a complete silence - maybe they think people will just go and buy them without a single advert or anything? Where are the adverts that were around a few years ago - connecting people etc? Where is the information about how the phone can download apps from their appstore? Where is the 'btw our camera is better than yours'... where is any comment from them at all?

  • Comment number 8.

    All that's saying is that Apple charge a hell of a lot more for there phones, whether that be through direct sales or an incremental based on the monthly contract from the mobile network. Apple have a great product but its clear to see who's won the publics vote, does this now mean that the BBC will make bespoke apps for Android?

    PS - I'm impressed there is no Rory bashing today considering we're talking about his favourite brand....

  • Comment number 9.

    What comes next?

    I guess that depends in part on what consumers want. Do we want Facetime / video calls. Not so far.

    At the moment is seems that people want smartphones to be the centre of their lives - Facebook updates, visa payments, online banking etc.

    I think the next big driver will not be from the consumers but from the content providers. Business can not afford to have developer teams supporting Apps on 4 platfroms (& mulitiple versions) forever. Soon only certain apps, banking, information etc will only be updated on certain OSs. Then the 'lesser' operating systems will die through lack of demand.

    Oh, and it wont be things like the Dell Streak either :)

  • Comment number 10.

    I just don't see much of a future for Nokia. I always used to buy Nokia phones (the 8810 being my most memorable) but it's been iPhones since 2007, and maybe Android in the future.

    I recently tried to set up a colleague's Nokia phone and connect it to our corporate Exchange system. Nokia's software is just horrible, in fact worse than horrible. Diabolical.

  • Comment number 11.

    I believe that Nokia's market share in the "smartphone" market has been consistently overstated. Many Nokia Series 60 handsets based on Symbian are effectively used as normal "feature phones"; that is the features actually used by consumers on these devices have been no different from those used on, say, higher end Sony Ericsson devices, which would not be classified as smartphones as such. The definition of a smartphone is hard to pin down for an average consumer who does not use it for business purposes.

    Perhaps the greatest revolution here is not the operating system as such, but more the rise of the app and with it the encouragement of mobile web browsing and download of content. Apple, with Google in their slipstream, have managed to drag mobile operators kicking and screaming into the 21st century where all previous attempts have failed - with all you can eat data plans and effective content retailing, usually by taking this latter service out of the operator's hands entirely!

  • Comment number 12.

    Whilst it seems like it is good for Apple, the fact that Android is now outselling it may actually result in less iOS apps being developed. Since many people make their decision on which phone to get on the quality and quantity of the 'apps' if Apple lose their advantage here they will be in trouble. I would say this is also starting to happen, particularly in the US but even in the UK (for example the official Ocado Android app exceeds the iPhone app in functionality).

  • Comment number 13.

    Interestingly there's not a mention of Windows Mobile. The Nokia user mentions the nightmare of connecting to Exchange. If that's your requirement to easily connect to Exchange plus having Office apps out of the box then Windows Mobile is the OS. Sadly Microsoft seem to be targeting the domestic market which it lost with the advent of the iPhone. Instead it should target the business market, but the fact that they haven't yet even got a MS Lync client available for Windows Mobile 7 shows that they are chasing the wrong fox.

  • Comment number 14.

    Android is outselling Apple!

    Well, there's a surprise!

    Android is an OS available on a multitude of phones from different suppliers.

    Apple has ONE phone ... one phone which woke the industry up from its slumber.

    Who knows ... maybe Android will dominate but there's a way to go yet ...

  • Comment number 15.

    Charles (no. 2) said ...

    "I do worry for Nokia. They need to adopt a new platform ... or adopt Android or Windows Phone 7."

    Windows Phone 7 ... a death-knell indeed. THEN you can stop worrying.

  • Comment number 16.

    Apple has ONE phone

    I guess you should go and look as see what iPhones are still selling. The 3GS is still on the market.

    Yes, that 1 phone that woke sheep up. Wowee, lookee, it's got a video call now. So 6 years ago....

  • Comment number 17.

    Why is this necessary Tengsted? Granted, Often Rejected is not entirely factually correct in their statement that Apple currently sells one phone, but the argument is a sound one - that the number of phones carrying iOS is markedly lower than that carrying Android.

    The counter-argument surely is that of course Apple are going to be making much more money, because they have control of both the hardware and the software, enabling them both to get two portions of the pie, but also to control much better the actual cost to the consumer, and thus their profit.

    The counter-argument is NOT to start calling people names. I do not see how your post contributes to the thread one iota, and personally I wish that the moderators would deal much more harshly with people like you who are clearly here simply to start arguments and to trash-talk any product that they do not currently support.

  • Comment number 18.

    So, the iPhone is available in more than 1 flavour? Yes.
    So what you're saying is, I'm correct then? Yes.

  • Comment number 19.

    How many 'phone users' actually look at mobile applications?

    I use a mobile phone, had the same number since 1986, but it's a phone, not James T Kirk's universal communication device. People call me, I call them, that's about it.

    I am in the older age group (65 next month) but have used mobile phones and home computers virtually since their inception, but I don't feel the need for much, if any, of the new stuff, it seems more a victory of marketing over 'need'.

  • Comment number 20.

    @1 Nokia is dead in regard to smartphones. From what has been leaked of Meego it’s too little too late. Just look at Palm, they released a great OS but it couldn’t save them (their hardware lineup was poor and the app SDK was poor). Nokia just seem to regurgitate old ideas and don’t really understand software for a touch based UI. By the time Meego is released iOS and Android will be on another level. HP could possibly resurrect WebOS if they release great products and create a rich app library that is easy to navigate and purchase.

    @16/18 that flavour is the same product not something brand new. As for video calling that has always been a failure, rather than spending time on something that might not appeal to customers they spent time refining the experience of the GUI. If Apple decided to put their fingers in every pot the iPhone would be a mess. It has taken quite some time for Android to become something usable and they still have a way to go since the app/media experience is simply terrible.

    @19 I, along with many others, use apps all the time. I’m sure most would use Whatsapp, Facebook, Twitter and various camera apps quite often. If they can save you money (like Skype for calling family overseas, vouchercloud for eating out, redlaser for comparing prices while out shopping) then most people would use them.

  • Comment number 21.

    ive just changed from a nokia x6 to a htc desire and my god what a differance the htc is smooth quick and kills the iphone as for the nokia what aload of junk i will never ever buy another one there slow clunky a pain to set up rip nokia

  • Comment number 22.

    @11, what a typical Apple fanboy attitude to take. Everybody seems to think that Apple are the intuitive ones who brought us the smart phone etc. When really, Nokia (who you seem to be bashing), had more to do with that then Apple. In addition, if we're talking about apps rather than OSs, I think it's clear which out of Google and Apple are more developer-friendly (clue: It's not Apple).

    The figures in the article don't make much sense to me. I recall a while ago Apple managed to manipulate some figures to make themselves look like the largest "mobile" producer/retailer, but it turned out that "mobile" included nearly all of Apple's products, whereas the other companies listed nearly exclusively produce mobile phones. I have a nagging suspicion the stats in the article are doing the same thing: "[...] the whole industry - not just the smartphone sector [...]"

  • Comment number 23.

    You say "Apple gets the cash" like that's a good thing.

    It's the opposite.

    It means Apple is fleecing customers and app developers.

    When Apple had a monopoly in this area, this was sustainable. Now that there is serious competition, it no longer is.

    Either Apple's margins will plummet, or its market share will.

    Either way, its share of profits from smartphone and smartphone-app sales will go down.

  • Comment number 24.

    @Bristolboy

    While Apple sold “only” 16 million iPhones last quarter, it also sold 10 million iPod Touches (same iOS software and form factor and runs all the same apps as the iPhone, but without 3G network interface), and a further 7 million iPads.

    Total iOS devices sold in the last quarter: 33 million.
    Total Android devices sold in the last quarter: 33 million.

    Undoubtable that Android has caught up and will surpass/has surpassed iOS, but the overall numbers are still so large that I don’t think it’s time to stop developing apps for iOS yet…

    --

    Further point about Apple’s profit margin that hasn’t been mentioned: a few years back Apple signed a multi-billion dollar supply deal with several flash memory producers. Due to the amount of flash memory Apple uses (remember all the iPods, as well iPhone, iPod Touch, iPad, MacBook SSDs), Apple has to some extent cornered the market, giving it a competitive advantage, lowering component prices for their own devices, and raising the component prices their competitors pay.

    Apple recently announced another such deal. Although it didn’t say for what component, it is widely expected to be for screens where demand still exceeds supply: iPad supplies have been constrained due to lack of screens, and note how few 10” tablets have been produced by Apple's competitors, even as prototypes, until CES this year.

  • Comment number 25.

    It was not unexpected - i was expecting this not to happen so soon though. Symbian is dead in the waters (my first been the Sony Ericcson P1i). Nokia is the only one supporting it and if there were others, the story might be different today. When i was looking for a new smartphone, i seriously considered the N8 but changed my mind because of the Symbian OS.

  • Comment number 26.

    @24 so half of the 33m Apple smartphones aren't even phones ?

  • Comment number 27.

    @PhilT

    Consumers don't "fall" for anything, it's called choice. Get over it!

  • Comment number 28.

    @PhilT

    [pedant]All of the Apple smartPHONES are phones[/pedant]

    I didn't say Apple sold 33 million smartphones, I said it sold 33 million iOS devices, of which 16 million are iPhones (smartphones) and the rest are iPod Touches and iPads (smart…devices?).

    But I see your point.

    My point is this: Apps are developed for iOS, not just the iPhone. Developing an app that is cross-compatible with the iPhone and iPod Touch (and to a certain extent, iPad) is of negligible difficulty – certainly easier than making an app cross-compatible with all the different Android handsets and software versions. Therefore, a developer sees all iOS devices as his/her target market rather than just the iPhone.

  • Comment number 29.

    Regarding Apple's supply contracts for flash memory and screens, it may be worth remembering that some of Apple's rivals (in particular, Samsung and LG) are major manufacturers in their own right of LCD screens and flash memory. The real reason margins are narrower in the Android space is probably that vendors who specialize mainly in mid-price products have been caught by surprise by good quality, low-priced products from makers like ZTE.

  • Comment number 30.

    The iMac - far too expensive and it uses USB.. it will never sell
    The iPod - far too expensive and unnecessary capacity.. it will never sell
    The iPad - far too expensive and its just a big iPod.. it will never sell
    The iPhone - far too expensive and Apple know 'jack' about phones.. it will never sell

    There is no doubt that the Jobsian Reality Distortion Field can on occasion be turned up to 11.. but do Apple haters ever get tired of face planting?

    Market share has its benefits but it does not dictate profitability, nor is it responsible for successful implementation of technology (regardless of who invented a technology and failed to recognise its potential) or innovation.

  • Comment number 31.

    Apple's Profit Margins on that chart are about as useful to compare as including the profit margins of your local news agents.

    Companies like HTC and Nokia are exclusively mobile phone manufacturers - clearly they're going to have a smaller profit to Apple since Apple deals in multiple markets, many of which it is the industry leader (iPad, iPod) and many of which the device itself sells for 1000's (Apple Mac, Mac Book).

    If you're going to compare Apple profits to the likes of Nokia then you should only be comparing iPhone and, at a push, iPad sales. If you do that, chances are companies like HTC will actually be doing better.

  • Comment number 32.

    Everyone knows Apple's profit margins will be huge - their products are much more expensive than their competitors.

    However @30 is totally wrong to relegate market share as a 'nice to have'.

    Market share is everything.

    App developers are business men and women who will maximise their profits by selling to the biggest market. If the iOS loses significant market share to Android they will jump ship without any hesitation.

    Putting innovation before market share is the wrong way of thinking about it - innovation can create a market or can increase your market share, but your profits come from your share of the market.

    Increasing your market share is successful implementation of technology - you cannot be successful without it!

    Apple have done very well from other people's ideas (and why not!) but this battle looks very like the Mac/Windows battle - and we know who won that!

  • Comment number 33.

    Are you all mad?
    "I have used iphones since 2007" to qoute one post. How many phones do you lot get through?
    I have just read some of the posts on here, and as a normal bloke who uses an ordinary mobile to make calls I am stunned at the way people react and relate to all this stuff. I learned a long time ago to control my phone, so, I withhold my number, as incoming calls waste time with work. I explain to people (Face to Face) to leave a message on my answer service and I call back, I also explain to them why.
    Its an electronic dog lead if you let it rule your life.
    Why do we seem to invest so much of our self image in the phone we use as well?
    Please, lets get a life.

    Apologies if this is in the wrong site for my views, but if not here, where?
    Chris

  • Comment number 34.

    Some of the corkers that people come out with here are priceless. Let's look at a few, shall we?

    "Most Nokia smartphones aren't smatphones because they're not used as such"

    Well, stats or it didn't happen there I think. The fact that people may or may not use a feature does not mean the phone isn't a smartphone. If you have an issue with that the write to the analysts, ok?

    "Nokia need WP&/Android/iOS/blah, blah, blah"

    Nokia need a new UI. That's it for the short term. Nokia then need to find a way to transition from Symbian to a new OS without alienating its massive customer base. You know, kind of like they're doing with Symbian to MeeGo using Qt as a bridge?

    "Nokia are doomed"

    Yeah. Increasing sales by over 30% sure is doomed. Oh no, wait. It isn't!

    Nokia have problems but are a long way from doomed. Get the UI right and watch Android's growth curve flatline because, let's face it, Nokia hardware is better and if that's th eonly remaining differentiator they win.

    "Apple are forging ahead"

    Yup. For now until they're increasingly boring product gets overtaken by the new hot s**t. RAZR mark II here we come!

  • Comment number 35.

    I worry about Nokia! I really hope they pull their finger out and get a decent OS because the hardware they make is excellent. Personally I think they should go the android route for their smartphones and use symbian for their feature phones, but given the CEO's history he'll probably go windows phone 7.

    Competition between the operators is good but I agree Apple will remain the dominant force for good App design because of the ipod Touch and Ipad using IOS also.

    Android is likely to catch IOS in terms of total apps available but I question the quality and security that the Android platform will provide.

  • Comment number 36.

    @34: Their, not they're. They're is an abbreviation of they are.


    "Yup. For now until they're increasingly boring product gets overtaken by the new hot s**t. RAZR mark II here we come!"

  • Comment number 37.

    I used to swear by Nokia until the Os interface became to frustrating to use.
    Switched to HTC Android, Never looked back.

  • Comment number 38.

    I think the next 6 months will be very interesting. Apple will likely release iPhone 5 in 2011, Android will no doubt continue to advance, and Microsoft have clearly come to the market in a big way with the Windows Phone 7 OS. As a Mobile App developer I'm very happy to see the smart phone market doing so well, Symbian has been far from the OS of choice for developers and I think this is something Nokia will be looking at. Apps really do drive device sales! Will Nokia want to become just a device manufacturer rolling out someone elses OS? With the new boss at Nokia being from Microsoft Windows Phone 7 is certainly a posibility!

  • Comment number 39.

    Some tired and lazy arguments again, yes there are a limited amount of phones running Apple OS, and lots running Android, a direct result of the two different producers marketing choices. And how can you celebrate a huge disparity in profit with claims that high end products gave higher profit margins; or are they just overpriced? How much do Apple pay for then charge for the extra memory in the higher memory model? Is that high end too? So long as people say it is good because it is expensive and are happy to look smugly at my obvious jealousy I shall continue to laugh and wonder what to spend the money I saved on.

  • Comment number 40.

    Re. nokia i think a switch to Windows mobile would be much more likely (the new nokia ceo is an ex MS'er)

    Also this would catapult MS into the big league of smart phone OS's. Don't forget that nokia is still the defacto mobile brand for the masses around the world.

    This is far from a mature market, there is still plenty of room for change

    David

  • Comment number 41.

    <RICHPOST>Its really interesting that mobile phone has become a major keystone to our lives. All these fabulous apps that keep us entertained and informed are great, but so many to choose from. We have now got to remember that the humble mobile phone is now much more than just a communication device, it is a remote control, its your organiser, entertainment device, payment device and security centre, it can open doors to your office, it can even run your bath!. but we STILL call it a mobile. <BR /><BR />Its made buying a mobile a complicated issue, which operating system, how many apps, tunes and videos can it hold, what connection, wireless the list is endless. . . <BR /><BR />How do mobile dealers put all that into a quick sale. . . YOU CANT<BR /><BR />I think mobile phones shops should now be classed as computer shops??<BR /><BR /><p>Chris Brookfield<br><BR />[Unsuitable/Broken URL removed by Moderator]</RICHPOST>

  • Comment number 42.

    Its really interesting that mobile phone has become a major keystone to our lives. All these fabulous apps that keep us entertained and informed are great, but so many to choose from. We have now got to remember that the humble mobile phone is now much more than just a communication device, it is a remote control, its your organiser, entertainment device, payment device and security centre, it can open doors to your office, it can even run your bath!. but we STILL call it a mobile.

    Its made buying a mobile a complicated issue, which operating system, how many apps, tunes and videos can it hold, what connection, wireless the list is endless. . .

    How do mobile dealers put all that into a quick sale. . . YOU CANT

    I think mobile phones shops should now be classed as computer shops??

  • Comment number 43.

    @28 "My point is this: Apps are developed for iOS, not just the iPhone. Developing an app ... is of negligible difficulty "

    My experience of developing an iOS app (as a developer of 25 years) is that I would rather stab various part of my anatomy with red hot needles. It was terrible. Perhaps developing a noddy hello world might work, but anything with 1/2 oz of complexity is bordering on impossible, and then to get it to market requires the patience of a saint (which I certainly don't have).

 

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