While much has been written about the ever-increasing market share leads being established by Google (GOOG +2.53%) Android devices over Apple (AAPL +1.18%) iOS when it comes to global device shipments, a recent report from Jumptap shows that the lead in U.S. mobile traffic still belongs to the King of Cupertino. Samsung, the clear Android leader, continues to gain on Apple's lead, but it has a long way to go before it becomes truly competitive. Samsung, and Android devices in general, may be shipping more units on a worldwide basis, but with Apple leading U.S. mobile traffic, the company is in great shape.
The report and what the numbers mean
Though research from IDC showed that Android's global market share of smartphones had jumped to 79.3%, while iOS fell to 13.2%, the Jumptap research examined at mobile usage in the U.S. On this basis, the iPhone was able to grow by 9.6% to a 41.4% market share from 2012 to 2013; most of this growth seems to have come from Apple's iPod Touch, which saw a decline in market share of 10.1% to 15.4%. On an overall basis, Apple's position remained quite strong, commanding well over 50% of mobile traffic and remaining significantly ahead of competitors. The largest gain outside Apple was the 3.6% gain for Samsung's Galaxy S line, bringing it to a 13% market share.
In tablets, while Apple was able to grow the iPad's share of mobile traffic to 70.1%, the Kindle Fire declined significantly to 10.1%, allowing Samsung's Galaxy Tabs to edge them out for second place, with 11.1% of the market share. The overall message is that while Samsung is gathering steam, Apple still has a healthy lead in terms of growing mobile traffic.
Why this matters for investors
When thinking about Apple, especially with the imminent release of the iPhone 5C that is believed to be targeted at helping Apple grow its emerging market business -- among other things -- it is important to remember that the U.S. market is still vital. Mobile advertising, which still remains in its infancy, is becoming increasingly important to monetizing the smartphone and tablet revolution. Apple makes a significant percentage of its profits selling iPhones, but becoming more fully integrated in the ad world will grow in importance as the U.S. market becomes more fully saturated.
New early-upgrade plans from three of the major U.S. carriers may accelerate the replacement cycle of smartphones, but finding additional ways to profit from established ecosystems is critical to the long-term success of each of these players. That's why developments like iOS in the Car and iTunes Radio are so important. The fact that Apple devices still heavily command the breadth of mobile traffic is great news for Apple shareholders because it means that, at least for now, the company has a captive and active audience that can be tapped for additional revenue with the introduction of new products.
Regardless of what you think of Apple's product cycle, which I believe will need to accelerate at some point, the Jumptap report shows that the company continues to be the dominant portal for bring U.S. mobile users online. With the stock still trading at a price-to-earnings multiple just over 12, this dominance is cheap and the stock belongs in your portfolio.
