Apple Dominates Android ... Again

This Christmas, the Apple (NASDAQ: AAPL  ) iOS and Google (NASDAQ: GOOGL  ) Android paradox continued. While Android may have rapidly snapped up market share in terms of units over the last several years, the quality of this market share appeared to be poor this Christmas for online retailers -- at least when compared to the quality of Apple's iOS market share. Of course, this trend isn't anything new.

iPhone 5s in Apple retail store.

The market share paradox
In the U.S., Android has an installed user base of 52.4%, according to ComScore data earlier this year. Among the top smartphone platforms, iOS comes in second at 39.2%. But despite Android's lead in unit market share in the U.S., Apple continues to dominate in terms of web usage and online spending.

For instance, on Christmas day, sales on iOS trumped Android by an incredible margin. Of total online sales, iOS as attributable for more than five times the sales as Android, according to just-released data from IBM. Even more, when iOS users made a purchase, they spent nearly twice what Android users spent, on average. The same phenomenon was true in traffic: iOS accounted for 32.6% of overall online traffic on Christmas day versus just 14.8% for Android.

This wasn't the first time there was such a disparity between spending on iOS and Android devices versus estimated unit market share on those platforms. IBM pointed to the same pattern on Black Friday weekend.

Notably, IBM's data also includes tablets, and comScore's data of U.S. installed market share is only referring to smartphones. But the disparity between iOS purchase behavior and web traffic over Android is large enough that the conclusion is irrefutable: A unit of iOS market share, in general, is more valuable to online retailers than a unit of Android market share.

Apple's qualitative mission
Of course it shouldn't be a surprise that Apple's market share quality is higher than Android's in the U.S. After all, market share for the sake of market share has never been an apparent priority to Apple. Apple CEO Tim Cook made this clearer than ever in a September interview with Businessweek

Does a unit of market share matter if it's not being used?' Cook asks. 'For us, it matters that people use our products. We really want to enrich people's lives, and you can't enrich somebody's life if the product is in the drawer.

It doesn't take any complex analysis (or even marketing expertise) to conclude that an emphasis on high-quality market share over low-quality market share is likely a better long-term approach in marketing. It's like the comparison of delayed gratification over instant gratification. For example, it may result in greater immediate happiness to eat whatever we want now, despite the quality of the food; but it's clearly smarter to delay gratification and opt for those higher-quality calories. And in an interesting twist, the latter will likely result in greater overall satisfaction in the long run.

Case in point, one study suggests that Apple is going to make massive gains in unit market share in the U.S. over the next few years thanks to higher levels of retention on its iPhones.

For Apple investors, therefore, IBM's latest data is good news. Higher usage on Apple's devices suggests iOS owners find the devices to be more useful. By this measure, high-quality market share seems to still be a priority for Apple. In the long run, focusing on the high-quality market share that likely means greater retention and enduring economics. Ultimately, it strengthens the case for Apple stock, too.

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Read/Post Comments (12) | Recommend This Article (4)

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 December 29, 2013, at 11:56 AM, techy46 wrote:

    Apple sheepies dominating Android robots in extravagant and wasteful Christmas shopping for overpriced junk isn't something I'd brag about.

  • Report this Comment On December 29, 2013, at 12:26 PM, chubbycheese wrote:

    How nice of you guys to have a bit of a misleading title. But I guess the title "Apple Dominates Android in Web Traffic and Online Shopping...Again" is little less sensational. I guess whatever gives your article more clicks.

  • Report this Comment On December 29, 2013, at 12:39 PM, symbolset wrote:

    In the US iPad market share is still huge. These numbers will be very different next year.

  • Report this Comment On December 29, 2013, at 1:30 PM, thelungplumber wrote:

    Is it just me, or does it seem all the articles are skewed Apple (as if the writers own stock in the company). Folks still buy Apple, that much is true... but clearly the innovation is all coming from competitors. Apple devices have lacked any great innovation since Steve Jobs got sick. It's no coincidence. Without Steve, the company may as well be run by that Pepsi CEO dude back in the 80's. All I can say is I don't like the direction Apple is headed. As for Android, they'll continue to gain market share... and as far as I see it, Apple needs Google more than Google needs Apple. Just so everyone knows, I don't own stock in either company (or their affiliates).

  • Report this Comment On December 29, 2013, at 1:30 PM, johnestromjr wrote:

    Good article - until the last paragraph that states, "Apple's growth days may be over" which contradicts the entire article.

    If Apple makes a higher quality device than Android and generates more revenues for retailers and is more enjoyable to use by consumers and they continue gaining customers from Android at a far greater rate than the reverse and make the lion's share of profits why the last paragraph?

    People all over the world want quality products. Are they suddenly going to change and want poorly made devices? The only company other than Apple that is making a profit on their devices is Samsung. Google isn't, nor Nokia, HTC nor any other.

  • Report this Comment On December 29, 2013, at 2:01 PM, JackBaker1 wrote:

    The astonishing thing is that Apple has continued to flourish despite Samsung's astroturfing and an all out assault for moronic ill-informed business media and "independent" research shops that are either incompetent or paid by slimy Samscum. Read the article on Apple Insider about 2013 posted yesterday. It's a perfect recap of the fraud attempted to be perpetrated on the public. It didn't work. Apple is just completing it's best quarter ever and the biggest quarter ever to be reported by a company in the history of mankind. 2014 will be the year of Apple and the year that the Android and Samsung fraud are finally exposed for what they are.

  • Report this Comment On December 29, 2013, at 2:21 PM, CHKNwing wrote:

    This is trivial. Android is making huge gains on iOS every day - from platform adoption to mobile ad growth. Developers will tell you that they made more $$ on Android (from monetizing apps with Android-savvy ad networks like Airpush and MM) this year than any other year while iOS revenue wasn't growing much at all. That's the important stuff worth focusing on, not whether shoppers brought their junk on an iPad or not.

  • Report this Comment On December 29, 2013, at 3:54 PM, CaffinatedOne wrote:

    So, ios users buy more "stuff" on their devices, and we're just going to use "buy more stuff" as a proxy for "more useful" when it comes to said devices? I'm glad that this clarifies that my primary function in the world is to consume things... I was a bit confused on this point.

  • Report this Comment On December 29, 2013, at 4:11 PM, CaffinatedOne wrote:

    In my grumbling about "buy more stuff", I'd forgotten to make my main point. Apple and Google's business models and goals are quite different, so this entire comparison as a competition is odd.

    Apple's a hardware company that has managed to create a software ecosystem that they can skim decent profits off of. They make a few premium devices and target those at people with disposable income.

    Google is an information company who (likely) created android as a defensive measure to avoid being frozen out of their primary market as mobile devices started to become common and supplant desktops/laptops as internet access devices.

    So, for Google, market share is really quite important..likely moreso than the "quality" of that share since the goal is to have said people use Google services, which is where they make their money.

  • Report this Comment On December 29, 2013, at 8:25 PM, bradkali wrote:

    Motley Fool

    To educate, Amuse and Enrich.

    And this article only does one. Amuse.

    Complete apple fan boy dis-information.

    And complete fabrication of the facts.

  • Report this Comment On December 29, 2013, at 8:34 PM, UnForSaken wrote:

    Here's what I get out of this story...IOS users spend more online purchasing their crap and have more time online....let's see that means android users don't have to pay nearly as much for the apps that Apple users do, and Apple users have to spend twice as much time to do the same thing that Android users do. Hmm, and this is supposed to sell me towards buying an Apple Device or Stock? I think I'll stick with the Android on both accounts, and btw I don't own stock in either.

  • Report this Comment On December 31, 2013, at 10:16 AM, ceez wrote:

    HA HA HA Did anyone else come here just to read all the annoying comments left by fAndroids and Apple haters?

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