Despite Google (NASDAQ: GOOGL ) Android's market domination, Android has had a difficult time converting its market share into smartphone usage. It wasnn't until near the end of 2012 before Android really began surpassing Apple's (NASDAQ: AAPL ) smartphone usage share in terms of web traffic. Fast-forward a few months later and Android's usage share has reached 37%, far above Apple's approximate 25% share. Earlier this year, Apple senior VP Phil Schiller boasted how Apple controls 75% of the profit with just 20% of the share. Is Apple about to eat Schiller's words?
Before we proclaim that Apple is flat-out losing to Android in nearly all aspects, there's an obvious difference between the businesses. For one, Apple is primarily engaged in selling high-end devices for a ridiculous markup and Google is more entrenched in the usage business above anything else. Although Android devices have begun to be collectively "used" more than Apple devices, it doesn't necessarily mean that Apple's profit share is drastically waning. It simply means that Android's existing users have begun to utilize their devices more as mobile computing devices. Naturally, that's a great thing for Google, which is banking on Google Search and its resulting mobile ad business to continue flourishing without the help of overly demanding partners.
Chicken or the egg
What came first: iOS developers or iOS users? To this day, the App Store remains more profitable per user than the Google Play Store, indicating that Apple developers aren't likely to immediately migrate over to Android. However, should Android continue to show evidence of increased usage, and its app revenue per capita starts rising, Apple may be at the mercy of developer attrition. Under this scenario, developers would be likely to prove most loyal to the ecosystem where they have the greatest chances of making the largest potential profit.
Turning a corner?
The running joke of Android has been that its users don't use their smartphone for smartphone purposes. Contrary to comedy, the evidence is beginning to suggest otherwise, indicating that Android users have become more acclimated with using their devices for mobile computing. I do, however, find it humorous to think it took Android needed nearly three times as many users than Apple, but I suppose it's always better to be late than never.
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