Android Holds the Future of Smartphones

The battle for smartphone market share isn't just a battle for market share. It's a battle of demographics and the opportunity to build a loyal customer base for the future. Android appears to be pulling ahead in this contest in the U.S., while Apple (Nasdaq: AAPL  ) is following closely behind and rivals such as Hewlett-Packard (NYSE: HPQ  ) , with WebOS, and Microsoft (Nasdaq: MSFT  ) , have a decidedly older mix of users.

According to survey results from Nielsen, 14% of all smartphone users between the ages of 18 and 34 are using an Android phone, while this age group posted a 12% share for the iPhone, 11% for BlackBerrys, 3% for Palm OS, and 2% for Windows Mobile. The three leading platforms -- Android, iOS, and BlackBerry -- now claim 37% of the user group that largely defines the trends in the smartphone arena.

Android appears to be growing in this space and seems to have found the key to attract a substantial share in this demographic segment. Compared with iOS, Android has greater market share in younger demographics while falling behind in the age groups above 55. iOS has a similar advantage over BlackBerry devices. HP/WebOS and Windows lack enough market share to be directly comparable, but it appears as if both platforms have an even number of users across all age groups. In a relative comparison, WebOS posted the highest average age.

Android is now also pulling ahead in overall U.S. market share. It is now at 29%, followed by Apple with 27% and BlackBerry with 27%. Windows Mobile/WP7 is at an estimated 10% and WebOS at 4%. Apple and Research In Motion (Nasdaq: RIMM  ) are the dominant device manufacturers, with a share of 27% each. HTC is at 19%, Motorola at 11%, and Samsung at 7%.

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Read/Post Comments (9) | Recommend This Article (3)

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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 March 05, 2011, at 10:46 AM, laramr1 wrote:

    US figures I believe? Aren't you forgetting about the rest of the world?

  • Report this Comment On March 05, 2011, at 11:05 AM, daveshouston wrote:

    Android is an operating system that Google gives to handset manufacturers for free. Google is in the advertising business. They don't make money from cell phone sales.

    The large number of hardware companies entering the smart phone and tablet business via Android are going to find themselves competing against one another in addition to going up against Apple, HP, Microsoft, Nokia, and Research in Motion. They're going to try to differentiate their products by adding features and modifications. They're not all going to be running the same version of the Android OS at the same time. The resulting fragmentation can be problematic for developers and customers. Here you will find a long list of these companies http://en.wikipedia.org/wiki/Comparison_of_Android_devices

    This reminds me of the UNIX workstation boom that attracted so many competitors. AT&T Bell Labs gave away the UNIX operating system which similarly attracted many competitors. The resultant shakeout was rather severe. Here is a partial list of defunct companies who fell on their sword using that free OS: Apollo Computer, Ardent Computer, Callan Data Systems, Computervision, Digital Equipment Corporation, Evans & Sutherland (operating, but no longer manufactures workstations), Intergraph, InterPro, MIPS Computer Systems, Stardent Inc., Three Rivers Computer Corporation, Torch Computers, Xworks Interactive

  • Report this Comment On March 05, 2011, at 12:10 PM, btblomberg67 wrote:

    Profit wise the Android market is a race to the bottom. Android handset makers are competing against each other to differentiate the same OS on different devices. They keep having to put out a series of new devices and neglect the older ones. Soon it will be a mess for the Handset makes as well as the customer in a market all about churning out the latest and greatest on specs as well as trying to go cheaper and cheaper. It's true Android may end up winning on OS volume, but in the long run user experience and quality is going to suffer.

    Android is a win for Google who get the drive of clicks and advertising dollars but in the long run these handset makers will loose their margins to their own internal platform battles. On top of that Android users look to be cheaper and so far what as much for free as possible and aren't willing to pay for software, so developers will start programming for it, but won't make as much there.

    Android is a good platform as an OS, it just may not hold up well as an ecosystem. In the mean time Apple will be making all the money in the market as it has been while others keep having to give things away to keep going.

  • Report this Comment On March 05, 2011, at 12:41 PM, marv08 wrote:

    A 2% lead in a crowded and growing market is "holding the future"? A headline like this and asking for "respectful" comments does not really go well together.

  • Report this Comment On March 05, 2011, at 2:24 PM, techy46 wrote:

    The mobile phone (featured and smart) market is about 1.5 bllion devices per year. Smart phones (20%) are 300 million per year. As with all emerging markets, it will be fetaures vs price that determines evolving market shares. The smart phone OS is only 10-15% of the cost; $15-20. It's very unusual for any brand to keep 30% of a market; Nokia sold 466mil mobile devices in 2010 with avg price of $91. Apple sold 44mil iPhones in 2010 with avg price, I'm guessing, of $550. Do the math, there's lots of room in these markets as the devices move from featured to smart. Apple's closed software platform will eventually hurt market share but help margins. Android's open software will have the opposite effect. WP7/8 will also be open so it's far from certain who will end up with what but I won't be surprised by anything 3, 5 or 7 years from now.

  • Report this Comment On March 05, 2011, at 5:16 PM, Henry3Dogg wrote:

    OK, here is a clear demarkation.

    Everyone who wants something for nothing, and believes in a free lunch, and who will worry about how it's all paid for layer, should buy Android.

    Everyone who wants value for money, and a supplier with a vested interest in meeting their needs, should go Apple.

    And the rest don't matter much. Which is about right.

    Oh, and there are apps for WinPhone7, but most of them are disk defragmentation tools.

  • Report this Comment On March 05, 2011, at 6:25 PM, czmyt wrote:

    These statistics don't make sense. 42% of the smartphone users between ages 18 and 34 are using one of the top five smartphones; what smartphone are the other 58% using?

  • Report this Comment On March 05, 2011, at 11:47 PM, techy46 wrote:

    LOL - The remaining 58% are age 35-65+ and are also using the OS's but they don't define the market they just make up the major share of it. You have to love the way the statistics get quoted.

  • Report this Comment On March 07, 2011, at 11:05 AM, Melaschasm wrote:

    Ios is to macintosh as android is to dos/windows.

    Things may turn out differently this time, but I suspect history is going to repeat itself. 10 years from now android likely will have 60% of the phone and tablet markets.

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