The iPhone's Falling Behind Android; Here's Who to Blame

Nielsen's been busy reporting on the shifting sands of the mobile market. Last time, the researcher found that new smartphone buyers were most interested in handsets featuring Google's (Nasdaq: GOOG  ) Android operating system. This time, Nielsen is telling us why.

"Texting is currently the centerpiece of mobile teen behavior," Nielsen reports in a blog post. "43 percent claim it is their primary reason for getting a cellphone, which explains why QWERTY input is the first thing they look for [when] choosing their devices."

 

More than safety or convenience, texting is what attracts teens to converged devices, and judging by Nielsen's findings, teens are much more likely to buy Motorola's (NYSE: MOT  ) Droid than they are Apple's (Nasdaq: AAPL  ) iPhone, because the Droid is blessed with a keyboard. You can scoff at the idea of some Android phone's inclusion of a keyboard as a differentiator, but there's data to back this up. Nielsen's research says that Android users tend to skew younger.

Perhaps Android Thumb will succeed BlackBerry Thumb as the malady of choice for mobile addicts?

Teen titans
Maybe, but for all my joking, these findings aren't to be taken lightly. According to data cited in Direct Marketing News from researcher Packaged Facts, American teens control $208 billion in buying power, and most of that amount is disposable income available for purchasing gadgetry.

To be fair, Apple attracts plenty of younger buyers with its game-friendly iPod touch, which the Mac maker positions as a gateway gadget for the iPhone. That's a logical bet that will take years to pay off, and it should eventually. But for now, America's youth is still in love with a robot.

Now it's your turn to weigh in. Do you think the rise of texting hurts the iPhone's growth opportunity? Please vote in the poll below, and then leave a comment to explain your thinking. And if you're interested in Apple, add it to your Foolish watchlist.

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Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool owns shares of Apple and Google and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is off for a morning run.


Read/Post Comments (18) | Recommend This Article (16)

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 October 23, 2010, at 2:31 PM, aeosfool wrote:

    Duh, dude...Android is beating iphone because it is manufactured by many handset makers and it is on every wireless network.

    As you know, iphone is made in basically one model, by one manufacturer, and most importantly is on one wireless carrier(AT&T). Look for iphone market share to rise when Verizon/T-Mobile/Sprint are allowed to sell the iphone.

    Right now, Apple cannot make the iphone 4 fast enough to meet demand. Good thing the iphone doesn't have the market share of all the android phones put together as the AT&T network would be

    shut down from overuse.

    By the way, the iphone is top rated compared all phones out there...and when things are top-rated and at the same time priced the same, sales usually follow.

  • Report this Comment On October 23, 2010, at 2:51 PM, Henry3Dogg wrote:

    Yawn

    "The iPhone's Falling Behind Android"

    No. iPhone is a phone. Android is an operating system.

    "iOS falling behind Android" makes sense, but is untrue. iOS is pulling ahead of Android.

    "iPhone is falling behind the sum total of all the dozens of different Android based phone models made by a dozen different manufacturers" is true but only in terms of units sold and given away. In terms of revenue or of income iPhone is still well ahead.

    Since Android itself is [apparently] given away, why would that matter? Because it means that the Android App base will dominate.

    But this is untrue because the iPhone does not have an app base. It's iOS that has an app base.

    And iOS is outselling Android.

    iOS also has over twice as many current apps as Android and the fragmentation of Android means that the typical Android user must choose from even less still.

    So, in every meaningfull way, you headline should be

    "Android is falling behind iOS"

  • Report this Comment On October 23, 2010, at 3:03 PM, dstb wrote:

    Yawn. These stories really get old after awhile. Teens will outgrow the texting thing and want a better phone at some point. By then, the iPhone will be on Verizon and they will switch over.

  • Report this Comment On October 23, 2010, at 4:32 PM, btblomberg67 wrote:

    Wow, the physical keyboard argument again. Lame. Plenty of people are texting just fine on iPhone and Android virtual keyboards everyday. This story is even more lame on the news that Verizon it cutting back their commitment on the Droid. Is Nielsen polling the brian dead at the mall again.

  • Report this Comment On October 24, 2010, at 12:11 AM, dspee70 wrote:

    I bought a Motorola Droid phone because it has a exchangable battery.

  • Report this Comment On October 24, 2010, at 3:53 AM, gslusher wrote:

    The major problem with the survey is that it is biased toward 2004-era phones. It asks no questions that would be specific to smartphones, whether Android or iOS-driven. For example, "Play games," "Surf the Internet," "Get email," "Use Twitter," and more. The very fact that they used the same questions in 2009 and 2010 shows that they are making no attempt to keep up with the real world. One might as well ask people if they want a Pontiac or a Saturn car.

    What the survey REALLY says--and what connects with the teens I teach--is that teens may prefer "feature phones" with keyboards, cameras, etc. They aren't as interested in Internet access (and for many, their parents won't allow it or won't pay for it), they don't need email, etc. OTOH, quite a few I know have an iPod touch in addition to their phones. (Some, especially girls, seem to prefer phones that are smaller than the iPhone, Droid, etc.)

  • Report this Comment On October 24, 2010, at 5:45 AM, Henry3Dogg wrote:

    @dspee70

    Did you consider a duracell flashlight. They also have interchangeable batteries.

    I had to pay Apple to replace the battery on a 3G. They charged me less than I paid for a replacent battery for my last Motorola.

    Funny old world.

  • Report this Comment On October 24, 2010, at 5:51 AM, Henry3Dogg wrote:

    @gleslusher

    You say "What the survey REALLY says... they aren't as interested in Internet access ... they don't need email, etc."

    How can it show this if, as you say, it doesn't ask questions, or offer options, about such recent things.

  • Report this Comment On October 24, 2010, at 10:17 AM, iphonerulez wrote:

    Android smartphones are outselling iOS smartphones, that's all. That's not beating iOS or Apple. iOS is thriving and making plenty of money for Apple and carriers alike. When it comes to a business, the thing that is most important is financial success. iOS is certainly a financial success and it is still growing in numbers. Android's rapid growth may affect Apple to a small degree but consumers that want Apple products will buy them and consumers clearly still want iPhones.

  • Report this Comment On October 24, 2010, at 11:18 AM, FreeRange1 wrote:

    Only people with blinders on think that Android is "beating" the iPhone. It is only in the US, where iPhones are still only available on a single carrier, that Android is doing well. In every other country in the world (except China), Android only has 1 or 2 % share. I REPEAT - 1 or 2% share. In China it is 13%, but the iPhone is just now starting to take off with China Unicom, and the new versions of the iPhone will also go to China Telecom (not just Verizon) expanding Apple's reach further.

  • Report this Comment On October 24, 2010, at 1:11 PM, TMFMileHigh wrote:

    Thanks for the comments everyone, I appreciate it.

    While I understand the passion of those here who think Android isn't much of a factor compared to iOS devices -- Apple has been dominant for a long while -- Nielsen isn't the only one who projects the ascendancy of Google's mobile OS. IDC poured a cold cup of water of its own here:

    http://www.idc.com/about/viewpressrelease.jsp?containerId=pr...

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 24, 2010, at 1:20 PM, dspee70 wrote:

    @Henry3Dogg

    Droid's interchangeable/backup battery is a must have for me. It comes in very handy when I'm on a long flight. Just carry a couple of them and never have to worry about running into low battery while you are playing game, watching movie or listening to music. Beside, Droid's battery are not expensive at all. You can buy it from Amazon for $5-6: http://www.amazon.com/Motorola-Droid-1300mah-Standard-Batter...

  • Report this Comment On October 24, 2010, at 4:28 PM, CalBubba wrote:

    I hate to burst Nielsen's bubble, but texting isn't some new thing that the teenagers just discovered this week. As their study indicates, kids spend plenty of time on phone calls and are beginning to use apps and data as their parents allow them to have richer phones with better Internet access and app stores.

    If all you want to do is text and phone, there's no reason to have either and iPhone or an Android, a traditional feature phone will please the parents since they don't have to pop for a data plan.

    The future of smartphones, for the kids and otherwise, is about devices, apps, and operating systems that allow people to send links to rich media content to each other.

    Nobody in the industry thinks Symbian has any kind of a future, and its sponsor, Nokia, is rumored to be playing with Android.

    Hard keyboards are more popular with the Blackberry set than with the kids.

    The future of smartphones will be dominated by iOS, Android, and Blackberry. Don't expect Windows Mobile to grow, and do expect Symbian to shrink rapidly.

    Apple is simultaneously developing more manufacturing capacity and more markets for the iPhone.

    Currently, the 38 Android phones outsell the 2 iPhones in aggregate, but there are three times as many iPhone apps as Android apps because iPhone app developers make more money than Android developers.

  • Report this Comment On October 24, 2010, at 6:55 PM, gristan wrote:

    HaHaHaHaHaHaHaHaHa!!!!!!!!!!

    HERE IT is " ANOTHER IDIOT " Writing " TRASH ARTICLE " like THIS!!!!!!!!!

    >The iPhone's Falling Behind Android; Here's Who to Blame

    i-Phone is Falling Behind Android???????

    WHO CARES????????????????

    If YOU'VE GOT A Product Which Sells MORE THAN " 14 MILLIONS PCS. " per JUST ONE QUARTER!!!!!!!!!!!!

    IT MEANS Almost " 5 MILLIONS PCS. " PER MONTH!!!!!!!!!!!!!!!!

    Gosh!!!!!!!!!!!!!!!

    IT'S REALLY " STUNNING FIGURE "!!!!!!

    'Cause Before Last Monday's Conference Call Announcement, When One ANALYST Predicted i-Phone 4 Must HAVE SOLD Around 13 Millions, People Laughed, STREET ANALYSTS Concensus Having Been Around 11 MILLIONS!!!!!!!!!!!

    But THE REALITY is " BEYOND ONE ANALYST'S Ridiculouly BOLD ESTIMATE "!!!!!!!

    WHAT'S MORE Do YOU REALLY WANT?

    7 MILLIONS A MONTH???????

    10 MILLIONS A MONTH?????????

    O.K., It's ALL UP TO " PRODUCTION CAPACITY ", NOT The " QUESTION OF DEMAND " AT ALL!!!!!!!!!!!!!

    I'll Show You Retarded Analyst Who Doesn't Know " REAL WORLD " OutSide U.S. " THE REALITY "!

    i-Phone 4 HAS TOPPLED #1 Top Sales Position " 18 CONSECTIVE WEEKS IN A ROW "of All Mobile Phones ( All The Smart Phones + Other Ordinary Cell Phones, So-Called " Feature Phones " ) HERE IN JAPAN!!!!!!!!!

    Precisely Saying, i-Phone 4 32g Has Toppled #1 for 18 Consective Weeks.

    And i-Phone 4 16g Has Been Ranked #2 Position Continuously Other Than Just Once Receded at #3 to Sony-Ericsson " Xperia ", but SOON Toppled #2 Position Back AGAIN!!!!!!!!!!!!!

    So NOW, in JAPANESE MOBILE PHONE MARKET, 2 i-Phone 4 DOMINATE #1 & #2 Position INVINCIBLLY!!!!!!!!!!!!

    That Has Happened in JAPAN for The First Time in Its History, 'Cause HERE IN JAPAN Ordinary High-Specs-END Cell Phones, Feature Phones, Had Dominated Top Positions in The Market.

    But Since i-Phone's Launch ( Especially Roll Out of i-Phone 4 ), Circumbstances Drastically HAVE Changed!!!!!!

    I'M SURE that SAME THING WILL SOON HAPPEN in Following Asian Countries and Developping Countries!!!!!!!!!!!!!

    Do You KNOW WHAT'S THE " HOTTEST THING " at A Moment in MainLand CHINA?

    THAT'S " i-Phone 4 "!!!!!!!!!!!!!

    South Korea ( Pre-Order of i-Phone 4, 300.000 )

    Taiwan ( Pre-Order, 200.000 )

    MAIN LAND CHINA ( Pre-Order, 200.000 )

    Thai Land ( Pre-Order 100,000 )

  • Report this Comment On October 24, 2010, at 9:20 PM, jbelkin wrote:

    Nielsen numbers are NOT based on sales - their numbers are based on anyone who will talk to them so if you don't answer their phone or you don't think being paid $25 to sit in a room is worth your time, the data they get does not include you ... Nielsen is interesting but hardly reliable ... Android has already peaked, Google no longer sits on Apple's board with a glimpse of what's to come so notice, no new features for Android in 6 months? most parents in choosing a $199 iPhone or $.01 Android phone (yes, all the newest ones are $.01 - check amazon) will choose the free or cheap phone ... not all but most - and that's where android biz is ... Verizon is realizing this now - android users are bargain hunters - a nice business but NOT the GREAT iPhone business.

  • Report this Comment On October 24, 2010, at 10:18 PM, TMFMileHigh wrote:

    @gristan,

    Thanks for writing. Can I have more exclamation points, please?

    Sorry ... I couldn't resist. That response was just too much fun.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 26, 2010, at 8:12 AM, TMFMileHigh wrote:

    @CalBubba,

    Thanks for writing.

    >>Currently, the 38 Android phones outsell the 2 iPhones in aggregate, but there are three times as many iPhone apps as Android apps because iPhone app developers make more money than Android developers.

    It looks more like 2.25 times according to the stats I've seen (337,360 vs. 150,000+):

    http://148apps.biz/app-store-metrics/

    http://www.androlib.com/appstats.aspx

    I've yet to see data on what App Store developers make versus what Android developers make, but we *do* know that some iOS developers have struck gold.

    Android has success stories of its own, but so far, they've come on a smaller scale:

    http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2010...

    Still, I think it's important to point out that 11 months ago the App Store had nearly *10* times as many apps as the Android Market:

    http://www.fool.com/investing/high-growth/2009/11/25/how-and...

    That the gap has narrowed this much in so short a period of time speaks well for the appeal of Android as a development platform.

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On October 26, 2010, at 1:41 PM, Aeoran wrote:

    @TMFMileHigh,

    From the article: "More than safety or convenience, texting is what attracts teens to converged devices, and judging by Nielsen's findings, teens are much more likely to buy Motorola's (NYSE: MOT) Droid than they are Apple's (Nasdaq: AAPL) iPhone, because the Droid is blessed with a keyboard."

    I will bet that if texting is the driver, then it's not Android that will benefit; it will be BlackBerry, with its availability on 450 networks worldwide, keyboard (duh), range of form factors, lower price points, BBM, and availability with very cheap unlimited messaging / social network plans not available on any other device.

    There should be plenty of marketing data already to verify teen trends in this space. There's probably no need to guess what teens are buying to text on.

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