Google Is Beating Apple in Smartphone Sales

"Math is hard. Let's go shopping!"

Thus spoke Barbie nearly 20 years ago, and the sentiment still holds water today. Why do your own math when you can just wait for someone else to do all of the hard work?

So I'd like to thank uber-blogger John Battelle for doing some math today. Using nothing more than middle-school subtraction and division, John shows that Google's (Nasdaq: GOOG  ) Android is beating Apple (Nasdaq: AAPL  ) on the open market by a wide margin.

According to Battelle's math, Apple has moved about 130,000 iPhones a day since the debut of iPhone 4. Back out the mad rush to get one on release day and the run rate drops to maybe 65,000 a day. Not bad. But Google reports that 160,000 Android phones get activated each and every day, which blows even the more generous iPhone stat to smithereens.

"As far as I can tell, Android-based phones will far outnumber any other smart phone by year's end," Battelle says. "Apple, meet your new Windows. It's name is Android."

Indeed, Google seems like a closer head-to-head rival for Apple these days than crusty old Microsoft (Nasdaq: MSFT  ) . Mac vs. PC debates are gathering dust now while iPhone versus Android is the new hotness. The funny part of that is, Google doesn't really want to beat the iPhone in sales. After all, the company gets about zero dollars in license fees from Android-powered smartphones. Now that the Nexus One is obsolete and only available to Android developers, there's no value to Google in Android sales. What Google wants is better smartphones in general, so that we all click on more online ads while on the go.

Apple, on the other hand, profits handsomely from every iPhone sold by Apple stores, AT&T (NYSE: T  ) , Vodafone (NYSE: VOD  ) , and other retail outlets the world over. The two companies have entirely different stakes in this two-horse race. Sorry, Nokia (NYSE: NOK  ) and Research In Motion (Nasdaq: RIMM  ) : You're both losing global market share to these smoking-hot upstarts.

So thanks for doing the math, John. Now let's see what Apple plans to do about these embarrassing figures. (Embarrassing figure? Ask Barbie, perhaps.)

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Microsoft and Nokia are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers choice. Apple is a Motley Fool Stock Advisor recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (14) | Recommend This Article (10)

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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 July 21, 2010, at 3:13 PM, shanghaid wrote:

    The profit gig is indeed the key story. It is less certain how this will fall out in the long term. Will Google just displace Nokia as the largest installed poorly profitable mobile software? The claim of "making millions" from online ads is different from making several billion from phone and app store sales. I have not seen Google translate the AdWords platform to the mobile environment. They just sell regular ads through AdMob. This is troubling and invites a great deal of competition. Additionally troubling is their investment in platforms to make the PC and Google search sticky - maps, etc., that are easily challenged and less differentiated on the mobile platform.

  • Report this Comment On July 21, 2010, at 3:18 PM, fool94085 wrote:

    The title is really misleading, it should read "Google beats Apple in Smartphone OS sales" Here we are talking about the OS only, not Nexus One versus iPhone smartphones. Who cares if Android beats iOS, Apple makes money on iOS.

  • Report this Comment On July 21, 2010, at 3:28 PM, dstb wrote:

    You are comparing profitable phones with software that is given away for free. Google has practically shut down the Nexus One so they are not selling hardly any phones. Additionally, Apple makes boat loads of money (as you know) on their phones and software whereas Google does not. Try comparing Apple to HTC or Motorola individually and see who is selling more.

    This endless media blathering about Google's software share compared to Apple's phone share is tiring and pointless. Google is pursuing a different strategy (a far less profitable one so far) which by design will give them greater software share with more phone makers. So who cares? Apple is still growing and will make the most money and as a shareholder that's what matters the most.

  • Report this Comment On July 21, 2010, at 3:55 PM, safefool1 wrote:

    Thank god something is competing with Apl instead of letting it dominate the market.

    IMO: considering their closed / lock-in nature, misleading PR, and so on, they're not very ethical.

    It does matter Android OS vs i OS vs RIM vs Symbian. One sale on one platform typically takes that sale out of another platform.

    Also, the article is inaccurate in that Google DOES care about Android sales. It does, as most of the default (user-replaceable) software is using Google services, which means they have more data for user-tracking / capturing -- contact list, maps, voice search, GVoice, market purchases, etc. It can't get *all* of this data on any other platform, tho it can get some out of RIM, APL, etc.

  • Report this Comment On July 21, 2010, at 3:57 PM, makelvin wrote:

    There is nothing Apple needs to do about Google. They are selling the iPhone as fast as they can make them at the moment. Google is only achieving the high Android adoption because they are giving it away to anyone who want it.

    Since Apple is not licensing iOS to anybody else, other mobile phone manufacturers really does not have any other real good, low cost alternatives other than Android. Windows Mobile is so far behind is simply embarrassing and to make matter worst is that they cost manufacturers real money compared to Google better free alternative.

  • Report this Comment On July 21, 2010, at 4:10 PM, DefunctAcct wrote:

    Sorry, more misleading information for investors :-).

    As others have pointed out, Android is Open Source and generates no revenue while iOS fetches a tidy profit. The comparison is meaningless.

    What is meaningful is looking at manufacturers who build their phones using the Android Open Source OS. They create different unique OS that runs on their own hardware. So instead of just Android vs. iOS, we suddenly have Mot OS, HTC OS, LG OS, Archos OS, T-Mobile OS, Droid OS, Samsung OS, may be even a Meego/Android OS and then there is Apple's iOS.

    We do not really have just Android versus iOS now, do we?

    At last count, there are 40 models (2010) of Android phones offered by 15 manufacturers (see here http://www.androphones.com/2010-android-phones.php) through multiple carriers in the US and overseas. Add in the very aggressive buy-one-get-one-free program, can anyone expect phones whose OS runs on Android Open Source to not sell well in terms of overall number? Anyone?

    Now let us look a little deeper:

    (a) 160,000 a day into 15 manufacturers averages 11,000 units a day per manufacturer.

    (b) 160,000 a day into 40 models (2010 only) averages 4000 units a day.

    (c) It is not meaningful to do carrier averaging because some phones are only offered through one specific carrier.

    Apple cannot be complacent because Android is indeed a nice Open Source OS but just to play along with this article: iPhone 4 is one model selling at 65,000 units per day.

    Just for fun:

    (a) 11,000/day < 65,000 /day.

    (b) 4000/day < 65,000/day.

    Numerically speaking, can anyone explain which company has the more embarrassing figures? Apple? Really?

    This sort of exercise is fun for lunch time bantering so I decide to play along. For real investment analysis, it is not very meaningful.

  • Report this Comment On July 21, 2010, at 4:19 PM, DefunctAcct wrote:

    Safefool1,

    Can you please clarify your claim of "not ethical"? That is a strong claim by any measure.

    Misleading PR? Lock-in nature? What are those?

    One sale on one platform DOES NOT automatically imply it will take a sale away from another platform. I happen to own a Berry (Corporate US), a Nokia (Corporate Europe) and a personal iPhone. I am upgrading my iPhone. Am I taking a sale from RIM or Nokia?

    Your comment regarding getting user info is mostly on target.

  • Report this Comment On July 21, 2010, at 4:44 PM, DefunctAcct wrote:

    Correction:

    There are only 21 models (2010) from 9 manufacturers that are available at this time. See here: http://www.androphones.com/2010-available-android-phones.php

    So, let us play some more with numbers :-):

    1. 21 models vs 1 model.

    2. 9 companies vs 1 company.

    3. 7620 units / model / day vs. 65000 units / model / day.

    4. 18000 units / company / day vs. 65000 units / company / day.

    If "embarrassment" is somehow relevant in business and product strategies and should play into an investor's investment strategy, it is suddenly very clear who should be "embarrassed" by a simplistic and purely numerical comparison study.

  • Report this Comment On July 21, 2010, at 5:24 PM, Davewrite wrote:

    Andy Rubin said 160,000 Android 'devices' activated a day not phones. What does Android 'devices' mean? Android is also loaded onto tablets and stuff like the Dell streak.

    Don't forget iPhone OS (iOS) is also loaded onto other devices like iPod Touch and iPad which sells in the millions (some quarters like Christmas iPod Touch exceeds iPhone sales), these don't seem to be counted in the iOS 130,000 phone numbers. (3 million plus iPhone 4s sold in 3 weeks comes to over 140,000 a day and there are dozens of countries that don't have iPhone 4 yet so plenty of uncounted 3GS sales). Counting iPad and Touch numbers and iOS numbers would be doubled.

    From other sources it seems that Android is only doing well in U.S and China (which are huge markets) but where iPhone is limited to one carrier. Where iPhone is available on multiple markets Android doesn't do well. In China iPhone is not carried by China Mobile with some 500 million subscribers but only by the much smaller China Unicom with 100 m + subscribers. In China Android is loaded onto all kinds of cheap phones (not in the iPhone super smart category). If Android is loaded onto large numbers of cheap tablets, 'music' phones, 'feature' phones etc does it matter?

    Don't forget also all those Android buy one get one free sales. Are those 'real' sales? Apple could 'give' iPhones away too and boost numbers.

  • Report this Comment On July 21, 2010, at 5:49 PM, will750 wrote:

    Google only sells the Nexus. The Nexus is a failure and is leaving the market. Google gives away android..google is not outselling Apple.

    Battelle might want to go back to school. He is using his 130k number based upon the over 3m iP4's sold in less than one month. That disregards ALL iP3gs sales and ALL international sales...

    Battelle..figures about 65k per day ..really because up to this point..so far this year that are selling iphones at a rate of 95k to 100k per day and growth is accelerating from this point..they sell every iPhone they can manufacture and still have a backlong...if they could make them fast enough they would have sold 14m in the qtr..based on backlog ..or 155k per day

    Note that Google did nto claim the 160k to be an average and one has to wonder if that figure was not taken from a heavy sales day such as a MOT or HTC intro.

    I would also note that 160k android devices does not equal the over 230k iOS devices activated each day..ipod touch+ipad+iPhone..in fact android the OS (there is no android phone BTW) has an installed base that is MUCH smaller than the IOS and it has a long way to go.

    So Battelle is clearly an android ubergeek and not so much an uber business guy. Apple generates more PROFIT from the iPhone than ALL other Mobile phone makers combined. Further while GOOG is HOPING to get ad revenue from the investment in android apple is getting

    $595 asp per phone, itunes rev., apps rev., iad rev., mobile me rev., accessories rev., Apple retail rev., royalties from accessory makers, and exponential increases from the halo effect.

  • Report this Comment On July 21, 2010, at 7:34 PM, DefunctAcct wrote:

    Now that we have shredded the "numerical comparison" to molecular level, there is that brief passing comment about "Android" being "Windows". That is yet another common mistake by novices who lack in-depth historical view of the computing industry.

    One really has to clearly understand the differences else one will make investment decisions based on incorrect understanding of historical facts.

    IBM was a big business machine vendor in those days. IBM offered DOS with its PCs to all customers. Customers of those days were nearly all institutional buyers. Average consumers had not yet became PC-literate. College students and professionals grew accustomed to DOS and PC and that started the Windows tsunami later.

    PC parts were cheap then. DOS was cheap too. I could pay $50 for a motherboard with Phoenix EPROM, $120 for a "grey market" 12-Mhz x8086 chip from Taiwan, $100 more on fan, hard drive, floppy drive and cables to build a PC. DOS disc were laying around everywhere on college campuses and software key security was not yet prevalent. Geeks and institutions were building their own PC machines to keep cost down.

    Apple later made the mistake of licensing the Mac OS UI to Microsoft. Microsoft was basically handed a business edge by IBM and then a technical edge by Apple and the rest is history. I was already working in the business then.

    Back then, there were literally hundreds of Mom and Pop PC makers all over the SF bay area. People were building them in college dorm and selling them; hint hint.

    Can anyone walk into Radio Shack or Fry's to buy parts for a home-made Smart Phone? How many people possess the technical knowledge to take Android Open Source and craft it into a home-made OS to run on a home-made Smart Phone? Do we have a Michael Dell building Smart Phone in a dorm somewhere selling it for peanuts thus creating an international corporation?

    Are consumers today so enamored with all other phones that they are not willing to look at iPhone 4? Apple just sold 8.4 million units last quarter? And the back log is still 7 to 21 days depending on where we look?

    Is Smart Phone so new and the OS so primitive today as in the days when PC first appeared and DOS first came on the scene? Is Android-Based Smart Phones the only ones in the market? Or do we already have hundreds of versions of Smart Phones by RIM and NOkia? Even before iPhone burst onto the scene?

    Is there any easy one-to-one correspondence or any easy-to-discern similarity between what is happening today between iOS and the Open Source Android based Smart phone OS and what happened between PC and Mac in the 1980's?

    It really is time to put this silly and totally false Android-and-Windows analogy to rest. I hope readers here do not automatically think that analogy is valid.

  • Report this Comment On July 21, 2010, at 8:13 PM, fool94085 wrote:

    Oh my GOD! How can fool.com let someone post articles as childish as this one? This guy does not even know that he is comparing an OS with a smartphone. What a waste of bandwidth!

  • Report this Comment On July 21, 2010, at 8:41 PM, Davewrite wrote:

    @ silivalley

    I agree with much of what you've written.

    People keep comparing iPhone vs Android as Mac vs Pc.

    Why don't they look at more recent history and compare iPod, iTunes which defeated a whole host of competitors (Samsung, Sony, Sandisk, Toshiba, Msft Zune, Playforsure, iRiver, etc) to be dominant.

  • Report this Comment On July 22, 2010, at 12:29 AM, yetanothersteve wrote:

    It's the ecosystem, stupid. And Apple is way out in front.

    They actually have an embarrassment of riches: too much opportunity. Two hottest products are selling out. Much of the world completely underpenetrated. Open retail stores, sell a lot more macs.

    But yeah there are a lot of manufacturers who have with a lot of capacity and they'd rather use Android for free than pay for WinMobile.

    For Android to be "Windows" it would have to be making its app developers 5-10 times as much as Apple. It's likely 50 to 1 the other way. Apple is serious about this too. iAd will be like the iTunes store: a drop in the profit bucket compared to selling devices. But a key to having a healthy vibrant market leading ecosystem.

    And when Apple finally ventures beyond AT&T in the US, we'll start hearing stories of Android users moving to iphones. But they won't be tech gurus... they'll be ordinary consumers walking into an apple store.

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