Why Won’t Analysts Believe in Android?

The Sad Android

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Smartphones aren’t doing so well. Reports from Strategy Analytics on second-quarter performance show a dip in sales across the board. Samsung is still number one. But there were a few surprises. Apple actually saw some gains, and Apple-loving analysts are just hysterical about it. But we have some more rational explanations.

The Android Numbers

The second quarter wasn’t kind to Android phones. Due to lower-than-expected sales, their market share dropped 4 points to roughly 56 percent.

That doesn’t feel like such a steep drop, but don’t tell Strategy Analytics executive director Neil Mawston that. According to him, this monumental drop in market share is a sure sign of the end of the line for Android.

In fact, he argues, Android can’t grow anymore because every household in America that was going to buy a smartphone has bought one already.

Says Mawston, “Android remains the number one platform by volume in the United States, but its market share is approaching a peak.” That’s it Android, market’s full. You can go home now.

That seems like a pretty bold statement, especially when you consider pretty basic facts like economic improvement (albeit slow), lower smartphone prices and population growth. Or what about the fact that Samsung shipped 50.5 million smartphones in the second quarter? That’s not only much more than analysts expected but the largest number of smartphones ever shipped by a single smartphone vendor in a single quarter.

And we won’t even mention the possibility that users may switch from Android to iOS at some point in the future. We don’t want to get any strongly worded sent from iPhone letters from angry analysts.

Apple v. Android

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Apple’s Numbers

While everyone else struggled in the second quarter, Apple managed to do fairly well for itself. It increased its market share from an abysmal 23 percent to 33 percent. That’s a 10 point jump, which is pretty remarkable in a climate where smartphone sales are down and everyone who’s ever wanted a smartphone has purchased one already (apparently).

To what do we owe this miracle? Analysts tend not to speculate about cause when it comes to Apple. Mawston certainly doesn’t bother to comment except to predict further growth after the release of the new iPhone. That’s probably because Apple is simply following the gravitational pull to the head of the pack where it naturally belongs.

But miracles and divine right notwithstanding, we have a more practical explanation: the iPhone 4. This once top-of-the-line phone is now on its last legs. Because Apple only produces one iPhone a year, its older technology has long since been dwarfed by its Android counterparts. Plus, the iPhone 5 is coming out any minute now.

Carriers know that as well as we do and the price for the iPhone 4s they have left in stock is plummeting. Some carriers are even offering the iPhone 4 for free with a standard two-year contract. That is dirt cheap and certainly an incentive to buy, even in a shaky smartphone climate. And at the very least it’s a better explanation than deus ex machina.

Apple the Deity

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What we Think

It’s hard to tell what the future holds for Samsung. A lot of the uncertainty has to do with the iPhone 5. What is in that thing already?! It better be the best smartphone ever or it’s going to be pretty anticlimactic.

And things may just be less awesome than we all expected. The most news we’ve been able to get out of Apple so far is that it may feature NFC technology — something that Android already has. If it can’t pay up on all the suspense, we may be witnessing the end of Apple’s era despite the enthusiasm of tech reporters everywhere.