Don't Sweat the DROID's Sales Figures

You know that old saying about missing the forest for the trees? I think both Android optimists and pessimists might be doing just that by obsessing over early sales figures for Motorola's (NYSE: MOT  ) DROID smartphone.

The first two analyst estimates for sales of the DROID, released last Friday by Verizon (NYSE: VZ  ) and easily the most hyped device thus far to sport Google's (Nasdaq: GOOG  ) Android operating system, paint two very different pictures. The first one, from Broadpoint Amtech analyst Mark McKechnie, estimated that a mere 100,000 DROID phones were sold over the weekend. The second, from independent analyst Michael Cote, placed estimated sales at 400,000 -- a figure presumably measured as of Cote's published comments yesterday. Cote suggests that the difference in numbers is due to McKechnie's number being based only on sales from Verizon stores, while his also include online channels and resellers such as Best Buy.

But while Cote's figure, if accurate, is welcome news for Motorola, whose money-losing phone division needs all the help it can get, it doesn't do much to change the big picture for Android and its attempts to unseat the iPhone as the platform du jour of the smartphone world. After all, Apple (Nasdaq: AAPL  ) managed to sell 1 million units of the iPhone 3GS during its first weekend, and this was done without the kind of overwhelming media blitz that Verizon unfurled for the DROID, which it badly hopes can dull AT&T's (NYSE: T  ) iPhone thunder.

Look beyond Verizon's hype, and you can see why it's unrealistic to expect the DROID to challenge the iPhone's supremacy on its own. The DROID just doesn't have the kind of "Wow!" factor that the original iPhone delivered in 2007. That device, with its multi-touch interface, innovative web browser, tilt sensor, "visual voice mail," and iTunes integration, was unlike any phone that had been made before. The DROID can't claim the same kind of "Wow!" factor, and that's probably why Verizon is emphasizing features that the iPhone doesn't have but that, in many cases, are available on other phones on the market.

Sure, it's great that the DROID, unlike the iPhone, has a physical keyboard, five-megapixel camera, memory card slot, and replaceable battery, but it's hard to see consumers fleeing the iPhone in droves when smartphones from Research In Motion (Nasdaq: RIMM  ) , Nokia (NYSE: NOK  ) , and HTC, among others, have long had similar features. Most iPhone buyers are well aware of their device's hardware shortcomings relative to competing products, but it doesn't seem to faze them much. And though the DROID does have some interesting software features, they'll only take it so far.

If Android is going to challenge the iPhone's supremacy long-term, it won't happen because of one great phone. It'll happen because of the groundswell of support that Android has generated among smartphone also-rans -- a group that features not only Motorola, but also Sony Ericsson, Samsung, LG, and HTC. And it'll happen because the spread of dozens of Android devices made by these companies will lead to a virtuous cycle of media hype, positive word-of-mouth, and third-party software development similar to what Apple has seen with the iPhone.

I still think Google and its hardware partners have an uphill battle ahead of them, given Apple's current lead in both consumer loyalty/enthusiasm and available apps. But it's still early in the game, and Android might have time to catch up. Just don't try to decide upon a winner based on next week's DROID sales.

Fool contributor Eric Jhonsa has no position in any of the companies mentioned. Google is a Motley Fool Rule Breakers recommendation. Apple and Best Buy are Motley Fool Stock Advisor selections. Best Buy and Nokia are Motley Fool Inside Value recommendations. The Fool owns shares of Best Buy. The Fool's disclosure policy is always a winner.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 12, 2009, at 4:53 PM, comanchris wrote:

    I went into my local Best Buy store to look at the DROID yesterday and even the sales people were saying that it was not a very good phone-keyboard sucks and the "lip" or "ledge" sticking out from the bottom of the phone's screen made it bulky. Also, when I asked about how many had been sold, the answer was-NOT THAT MANY REALLY. A FEW.

  • Report this Comment On November 12, 2009, at 5:04 PM, gslusher wrote:

    "five-megapixel camera ..."

    Megapixels mean very little. Nearly every review I've read has remarked on the poor quality of the images. Posted images have backed that up. In photography, we speak of the "megapixel myth"--i.e., more megapixels is better. With a very small sensor, more megapixels can mean more noise (the grainy appearance of the image), among other things.

    It's easy to find a cheap point-and-shoot camera with more megapixels than my 8MP Canon 30D DSLR, but the 30D's images will beat the point-and-shoot images nearly all the time, in part because I use high-quality lenses, but also because the sensor is better. (I can get nice shots at much higher ISO levels than point-and-shoot cameras.)

  • Report this Comment On November 12, 2009, at 6:31 PM, MyCouponsApp wrote:

    Haha. You didn't unload your apple stock yet? Give me a break with these uneducated comments. Think about it...free operating system that can be LEGALLY installed on any trashy dime-a-dozen hardware China spits out. The volume alone will crush anything in its path within the next year. Why not short AAPL if you're that scared. It's okay to make money coming or going, you're not married to Apple...

  • Report this Comment On November 12, 2009, at 6:44 PM, kendalla59 wrote:

    The smartphone wars have already moved past features and performance, and on to price, price, price. Apple is smart, they have already announced a leaner and cheaper version of the iPhone that will be available on the Verizon network. But with Sprint cutting monthly charges in half, the other big boys will soon follow. New devices will take advantage of WiFi and VOIP to reduce pressure on their wireless networks. Once again, Apple is thinking far ahead of the competition.

  • Report this Comment On November 12, 2009, at 11:58 PM, andranic wrote:

    Hey guys I love my droid. I had a Htc touch pro before this and this phone blows it away. I have seen alot of people say that this phone cant do Multitouch and its not true I made a video to show that the Droid can do Multi touch . hope u like it

    http://www.guysfromqueens.com/?p=765

  • Report this Comment On November 13, 2009, at 1:36 AM, Fool wrote:

    Bought the DROID and love it!! Try downloading content from an I-phone in a none 3g market (80% of the country) and compare it to Verizons Droid...Blows away AT&T!!!! Oh and If you dont beleive me...compare AT&T's 3G map with Verizons...Why have a 3G phone on a 1G network....HMMM!! Oh I live in New Mexico...only one city has 3G service there on AT@T....Verizon has it in 95% of the State!!!!

  • Report this Comment On November 13, 2009, at 8:53 AM, kbbad wrote:

    3G coverage doesnt matter to most people who utlize the WiFi connectivity -- in which AT&T has over 20,000 locations -- also..once you try the touch keyboard -- you never want to go back to a regular physical keyboard...The fact is, NO ONE will be able to replicate a phone with the Apple iPod and iTunes -- THAT combination alone is the reason why I'd never buy anyone else's product.....

  • Report this Comment On November 13, 2009, at 9:10 AM, kjgfdlje4eiee wrote:

    i am sweating it. i listened to analysts and the droid is supposed to put rim and iphone out of business.. they told me its the next big thing. now nobody is buying it, no line ups nothing. but reading this article i am soothed, a device thats a bit tad late low quality MOT product with no future. HAha!!

  • Report this Comment On November 13, 2009, at 9:44 AM, kennyboy81 wrote:

    Sold my iphone for a blackberry bold. Best move I ever made.

    So much for never giving up the iphone, apple fanboys.

    I prefer a phone I can use, rather than play with.

  • Report this Comment On November 13, 2009, at 9:49 AM, TMFBent wrote:

    "managed to sell 1 million units of the iPhone 3GS during its first weekend, and this was done without the kind of overwhelming media blitz that Verizon unfurled for the DROID"

    The iPhone was the beneficiary of the largest media blitz in the history of phone launches. The only difference was that Verizon had to pay for its, and Apple got it for free by being first in the space with a differentiated product. The world news media fell all over itself for months praising the iPhone (ever before it was released).

    Droid won't dent iPhone unless it gets app development up to speed and fast. That doesn't seem likely to happen when developers can find such a ready market for the iPhone.

  • Report this Comment On November 13, 2009, at 10:12 AM, Gauss77 wrote:

    I am interested in Android primarily because it will have support from 20 manufacturers, it's open, and there will be a plethora of devices in the next year.

    I am even more interested in Android because it's not an Apple product. I am not going to be locked into an ecosystem that is closed, anticompetitive, and treats developers like garbage.

  • Report this Comment On November 14, 2009, at 12:57 PM, techmom09 wrote:

    Bought the Droid-out of AT&T, so happy. By, By iPhone-I'm really glad to not buy something because everybody worships Apple. iPhone is played out and I'm happy to see it go by the wayside. Silicon Valley and their cult following is really creepie. It's similar to Star Trek nerds (much to geeky for a housewife) All my friends are buying Droid too. Thanks Moto for finally creating a product worth buying since the Razr. However, I'm keeping my iPod - LOL

  • Report this Comment On November 14, 2009, at 8:05 PM, robthewalrus wrote:

    Stay with Rimm (hugely undervalued) and Apple and compare your profit with Motorola one year from now!

    Everything Google tries beyond their search engine capabilities fails and Motorola is not very impressive. Hard to believe Droid will replace blackberrys or IPhones on a any large scale. People love their cool smartphones and don't expect many to switch.

  • Report this Comment On November 27, 2009, at 11:46 PM, anothafool1 wrote:

    Nice pessimism once again provided by Eric. This was probably the worst thing I've ever read from him though:

    "managed to sell 1 million units of the iPhone 3GS during its first weekend, and this was done without the kind of overwhelming media blitz that Verizon unfurled for the DROID"

    WHAT? Where were you when this iPhone was launched? Under a rock apparently. There was so much hype from MacWorld, Mac this and Mac That and not to mention all the blogs and media hype you would have thought it was the second coming of Jesus. I honestly dont think Motorola, Google or Verizon where thinking this was going to be an iPhone killer. Like you said, this is an uphill battle and the Fanboys are already so thoroughly brainwashed (like yourself Eric) that it is hard to see the Forest for the Trees. That is evident with the features you listed out which was pretty shortsighted. What about larger screen size than the iPhone, Free turn by turn Google navigation, removable / expandable memory, Android 2.0, etc. and oh yeah, Verizon's superior network?

  • Report this Comment On December 04, 2009, at 9:03 AM, wdzeus wrote:

    Its abiased article (I can smell apples). Droid features have been downplayed.

    I am not against iPhone, I have been an iphone user for a couple of years. Once you are past the initial hype you realize how limited iphone is in terms of services it provides. That is unless you jail break it.

    I got a Droid a few weeks ago and am not looking back. (My iphone3G is on sale on ebay).

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