Chart: Internet Access by Device

As our readers know, every now and then I like to post a chart and tease out the highlights. Today, I want to do that with some updated data. Across many global markets, consumers were asked which devices they have accessed the Internet on, either through an app or browser, over the past 30 days. This data is updated frequently so we can track the growth of internet access by device over time.

Screen Shot 2014-11-07 at 9.30.04 AM

Mobile/Smartphones: This is be obvious and we can expect continued growth in internet access by smartphones for the foreseeable future.

Tablets: Tablets remain the other growth area. Given the slowdown of tablet growth overall, we can make a few observations. The first is the tablet is continuing to steal internet time from other devices, mainly the PC. The second is the tablet market is actually growing. However, it is doing so by the secondary market. Meaning that many of those initial rush of iPad buyers are continuing to hand down older iPads to other family members as they upgrade their iPad. Since this upgrade isn’t happening all at once but is trickling in over time, we see slower sales but larger use of tablets. Another is the continued explosive growth we see of Chinese white box tablets. In certain markets like Russia, India, Mexico, Brazil, and to some degree China, these low cost, no name brand tablets are quite popular. Most are dedicated game players or portable TVs, but internet access at some level should also be assumed. This is happening to a degree in the US as IDC highlighted RCA being in the top 5 of tablet vendors for Q3 2014.

As I see this data on tablets and see quarter after quarter of more people say they are getting on the internet with a tablet than the quarter before, it shows us the category is still viable and still growing.

PC/Work PC: I like that these two categories are separated in the survey. It helps us get an understanding of how much larger the consumer PC segment is vs. those who use a PC at work. When you look at both numbers, it is possible to interpret their lines and believe the PC market is simply not growing. This certainly looks to be the case. We are not adding brand new PC users at anywhere near the rate we once were. Also, as I alluded above, more PC users’ internet use is likely shifting to other devices.

I point this out in many of my focused PC industry analysis reports through my firm Creative Strategies. What we discover when we study PC behavior in both consumer and enterprise environments is the device is becoming a much more focused product than a general purpose one. People use it for specific tasks and have now defined what tasks it is better for vs. others. A great example of this is Facebook. In our studies, we found over 75% of daily US Facebook users access Facebook on their phone but while sitting at their work PC. Facebook has a browser based version so why not just use it? We find people simply prefer the mobile version, so we see this dual use of a PC and smartphone at the same time. Responses we’ve heard were that it was faster, more private, more convenient, and they could use the mobile app to get a particular task done, even though they could have done the same thing on the PC. If general purpose computing moves from the PC to devices like the tablet and even more so to the smartphone, it will bring dramatic implications to the PC ecosystem.

Television: Increasingly, more people are accessing the internet from their TV. It is important to note in this data that a game console or set top box is included. This is not referring to a dedicated connected internet TV, but to the use case of connecting to the internet in some way from your TV. Clearly Netflix, online console gaming, and other use cases drive this, but the fact it is slowly increasing tell us quite a bit about the role the TV will play going forward and the internet services are poised to be monetized from the big screen.

Given this survey comes from over 30,000 responses, what the lines also show approximates volumes. The higher the percentage of the line, the more people using the device to access the internet. Like most surveys, it does not include mobile only consumers, but we can be assured there are more people accessing the internet from a mobile device than a PC, even though these lines don’t show that. What this chart sheds light on is what the internet by device landscape looks like in the multi-screen user world. The “internet embedded into everything” is the theme. What devices dominate its usage is the interesting part to watch going forward.

Research: Who’s Buying What Tech around the Globe This Holiday Season

We have some research that gives us insight into what tech products are on the interest horizon for purchase over the next six months. While intent to purchase surveys don’t always lead to purchases, it does give us an indication of what products are top of mind and more importantly how that may differ from each region across the globe. This research comes from surveys across 32 different regions and over 30,000 people in total. With as much data as I have, I struggled with the best way to display it. Since percentages did not equal 100% and were also based on sample size from each region making the percentages vary, I decided to weight the values numerically by priority. 12 is the highest priority / interest to purchase over the next 6 months and one is the lowest.

Here is the chart from a global standpoint with all 32 regions included.

Screen Shot 2014-11-03 at 8.31.48 AM

As you can see, globally tablets, smartphones, and a PC (laptop) have the highest interest level/priority to purchase over the next six months. While mobile phone numbers shouldn’t be surprising, it is interesting that, in all regions, the tablet still remains the highest priority with the PC (laptop) third. As I look at what we see happening in the market, my gut tells me there is still a large number of global consumers struggling with whether to get a laptop or a tablet. I’ve been saying for some time that, when the consumer market moves and finally upgrades their PC, we will see how the tablet and PC conundrum plays out. Still, looking at the data, one has to believe companies like Microsoft and Intel look at this and believe the 2-1 value proposition is strong if a buyer is struggling between both products.

To look at the data more granularly, I’ve broken it out by some of the larger regions by population. The sample sizes were also quite a bit larger in these regions giving us better detail of who intends to buy what.

Screen Shot 2014-11-03 at 8.43.14 AM

As you see, most regions are prioritizing the tablet from a purchase intention standpoint. A few markets like China and the US are prioritizing mobile, thanks to these two regions being extremely seasonal with mobile purchases. When it comes to the PC, it still ranks high, but only Brazil consumers have it as their top priority over the next six months. What is interesting to me is other categories on this list which can also be served by a tablet should the consumer desire. Take the e-reader for example. While lower on the priority list, a tablet can also be an e-reader. Perhaps, as a consumer gets savvy to this, it sways their decision more toward a tablet or a 2-1 rather than a desktop or clamshell? The tablet or 2-1 could also conceivably fill the role of a game console or even a DVD player where access to digital movies exists. What this highlights is my point about the tablet as a much more diverse device due to its form factor than previous heavy computing devices like notebooks and desktops. The tablet form factor can simply “morph” into so many things thanks to the software and services. As consumers become more knowledgeable, I believe the value of the tablet increases.

One point that stands out and is worth highlighting is India’s intent to buy a mobile phone. Look at the data point and you would think buying a mobile is simply not a high priority for Indian consumers. When in reality it is the highest priority among the masses from a tech purchase standpoint. Keep in mind, to take this survey, you have to be online already in some capacity with a smartphone, PC, or tablet. The online population in India is still very small in contrast to India’s population (somewhere over 200m people are actively online). So people who are answering these questions from every region are already online in some way, shape or form. Google’s head of India estimated 5 million new Indian consumers are coming online every month. Most of those are coming from mobile devices. For the unconnected, the mobile phone is the highest purchase priority since it is most people’s first computer. Looking at the data, we are focusing a bit more on what the purchase intent of the already connected is for the next few months.

Where that reality stands out is when we look at what tech was purchased over the past six months. This is a question I like because it brings a bit more clarity to the picture since consumers are stating what they have actually purchased rather than what they intend to purchase. Similar to the above chart, I weighted the percentages numerically. The most purchased product over the past six months is a 12 while the least purchased product is a one.

Screen Shot 2014-11-03 at 8.59.54 AM

Here we see the clarity of the mobile priority. As expected the mobile phone has dominated purchases over the past six months. We also see the strength of the notebook and desktop rebound we are seeing as it shows up in this data. The desktop in particular was a frequently purchased product globally over the past six months. We had a hunch early last year the PC would do well this year and we were right. Partly based on similar intent to purchase data we got this time last year. In fact, the above chart showing who purchased what was very similar to the same intent to purchase data from a Q3 2013 survey.

We know about the centrality of mobile, but what intrigues me about this data is the continued interplay between tablets and PCs. As a part of my overall industry analysis of both categories, this remains a story line and one that does not have as crystal clear of an ending as other categories. I get this data every few quarters so we will check back early in 2015 and see how the story is playing out. My guess is that Mobile is still high, but where PCs and tablets fall is the key question.

Tablet Report: The Next Frontier of Personal Computing

I’m about to make some updates to a tablet report I publish through my firm Creative Strategies. Usually, this type of report is reserved for our clients only, or to purchase a-la-carte for $499. I decided to give Tech.pinions Insiders a promo code to download and read it for free. The code expires at the end of the month, August 31st, so make sure to download it before then.

We have, of course, been observing some interesting trend shifts in the tablet market. This report still represents the basic foundation of my thinking for how the tablet will evolve, and the future role it will play, particularly in emerging markets as you will see. The updated report, which will we will offer a brief version for free, will highlight some of the usage trend changes we are observing, and include a more clear outlook of the tablet’s future.

To download the report go to:

Use the code at checkout: TPinsiders08

Below is an overview of topics covered, and screen shots of the entire .PDF.

Topics covered:
– Global Statistics of Internet Penetration
– Infographic “If the World was a Village” – global technology statistics
– From Click to Touch
– The State of the Tablet Market
– Growth in Emerging Markets
– Tablet Usage Trends
– The Touch Generation
– Food for Thought
– Key Takeaways


iPhone and iOS Usage in China

Every few months, I update some unique data I have access to that allows me to monitor the usage of device models actively being used in China. I have this for Android but will focus on iOS for now and do Android later. For the first time, the iPhone 5s is now the most used iPhone in China for apps, the web, etc. This data comes from a proprietary dashboard from Alibaba and their recent acquisition Umeng. It is a combination of network usage data and app usage data.

Screen Shot 2014-08-15 at 3.55.57 PM

This is a monumental moment for Apple in the region. As you see when you look at the chart, the iPhone 4 and 4S have been the dominant iPhones in China. The vast majority of these devices came in through the grey market or the secondhand market. A key takeaway is that many of them were not purchased brand new. The iPhone 5s, on the other hand, likely was. The iPhone being available now on most major network providers in China is a help. The 5s running on the China Mobile 4G network, which they are pushing pretty hard, plus the fact the iPhone 5s is the most recent device, is a help. Combined, we can easily conclude the bulk of these iPhone 5s are new and not used. This is significant and it is underscoring the upside for Apple that was not there prior to the moves they have been making to be available in the region.

I remain entirely convinced, from my research and study of the Chinese market. that Apple is in full control of their destiny in the region.

All iOS Devices

If you are wondering why the market share does not add up to 100%, it is because I did not include all the iPad models in the data. Mainly because there is a number of models being tracked and color coding all the data points so they can be specifically recognized is a pain. But I did it anyway since I knew this question would come up. So below is the chart of active use in China by each device.

Screen Shot 2014-08-15 at 4.54.01 PM

Deeper Dive on Android vs iOS Web Usage

I gave a brief overview of my thoughts on global web usage in the Tech.pinions Insider weekly newsletter that goes out each weekend. But I wanted to dive into a few more points I think are interesting.

When it comes to the business model of so many companies in the smartphone, tablet, and PC market, usage is an essential metric. For online companies like Google, Facebook, Amazon, app vendors, and more, web usage or the extent to which one gets on and uses the Internet is even more essential. What we are seeing is the early signs of the problems connecting the next billion customers for many companies. For a long time, iOS dominated Android as a whole in terms of web usage. Interestingly, an online metrics service I track points out this specifically in their FAQ on their site.

Screen Shot 2014-08-13 at 8.45.59 AM

Android ships in larger quantities, but iOS dominates usage. Point number two is perhaps the most insightful. Not only are iPhones typically supplied with generous data plans but they are purchased by people who can afford to liberally use the web. Someone who can afford a $500 or higher phone in non-subsidesd markets can also afford a premium tier data plan. I’ve started using the term “data budget” to describe this. iPhone users have a higher data budget than the average Android user. Another point is broadband is not equal in many parts of the world. Many emerging markets have spotty and slow broadband. It makes the web challenging at times due to the lack of speed. These are part of the complexities I feel led to Android taking so long to pass iOS in terms of web usage, despite having more than double the usage base for quite a while.

While I recognize the disparity in methodologies of StatCounter and NetMarket Share,  I still find them both useful. StatCounter, measures total usage of a user and will count the same user as a page view every time that person views a website they track. That is why StatCounter has Android ahead of iOS in web usage and says it has been for some time.

Screen Shot 2014-08-10 at 1.00.03 PM

StatCounter’s data will favor the heavier of web users, thus their data will give us a broader picture of how active on the web each platform may be. But it is also skewed toward the top percentage of users who more liberally use the web. It leads us to the conclusion that the Android data collected by StatCounter is likely heavily influenced by those Android users who are more like iPhone users in terms of disposable income, data budget, quality of connectivity, etc. That point is well understood when we look at the device vendor breakdown of StatCounters data. We see Samsung users have been driving the bulk of Android’s global web browsing in their network of sites. Samsung’s premium and mid-tier devices would have similar users where usage would be impacted.

Screen Shot 2014-08-13 at 10.27.27 AM

NetMarketShare presents a different picture and for different reasons. NetMarketShare only counts each user once per day on their network of sites, so we get a bit more holistic view of platform usage which is not skewed by the power users of either platform.

Screen Shot 2014-08-10 at 12.58.55 PM

One thing to point out on this chart is it is measuring absolute share. iOS’ line is not going down because iOS is being used less, only because Android is growing as a percentage of overall web traffic on their network.

It was inevitable Android would pass iOS in terms of overall usage. What this brings up though is the striking point that usage is not equal between the two platforms per users. Meaning the average iOS consumer will still use dramatically more Internet services than your average Android user. Given the many points I’ve made before that Google’s Android already has the heaviest web users and the most profitable customers to their ecosystem as they are ever going to get, the longer term trend is problematic to their growth if it remains solely tied to usage of Internet services. The same is true of Facebook. In both cases the next billion will have a lower data budget, less reliable and likely slower connectivity and will have to prioritize that data budget accordingly. In short, this next billion will prioritize survival over entertainment. They will likely use a messaging service like WhatsApp because that is how their commerce or trade gets done. That is a worthwhile spend of data budget. Those needs will trump entertainment for the foreseeable future.

While looking at iOS vs Android web usage is helpful, it is really still only part of the story. I track a range of developer toolsets that show web usage by particular devices as well. Often many of these include app usage as well since most of these analytics services are for app developers. Here are a few select countries of interest because they are big but also because they qualify as those I consider with a stringent data budget.

Screen Shot 2014-08-13 at 10.45.33 AM

Screen Shot 2014-08-13 at 10.43.17 AM

Screen Shot 2014-08-13 at 10.45.11 AM

All this does is emphasize in countries where the iPhone has a presence, even if only small, those users dominate the usage the landscape and often by a healthy margin.

Take Aways

What is becoming increasingly clear to me is at a platform level, the opportunity within iOS and Android for app developers, providers of web services or services in general, are simply different on each platform. You could make the argument the opportunity within iOS is very different than the opportunity within the Android ecosystem. Thus, each ecosystem may have an entirely different set of developers, services providers, and more.

For a more detailed view of this angle, listen to the latest podcast with myself and Andreessen Horowitz partner and analyst Benedict Evans on our latest mobile focused Tech.pinions Podcast.

PC Computing Market Shares

Lastly, I’d like to take a look at the PC category. This is the one area where Microsoft is dominant. However, there is a clear shift happening in the PC segment many fail to realize. Let’s start with the platform share of traditional PC form factors.

Screen Shot 2014-08-05 at 10.05.01 AM

I estimate the total installed base of the desktop and notebook form factor to be 1.52b devices. While PCs were significantly impacted by the monumentally fast rise of tablet adoption, we are starting to see PC sales return to balance as many enterprises begin refreshing old terminals, point-of-sale terminals, workstations, and laptops. 2014 will certainly be a better year for PCs than the past few years. Yet there are still many questions facing the category.

  1. Windows: Microsoft still has a lot of work ahead for them. Luckily they have a partner in Intel who is equally hungry to right the PC ship. Annual shipments of PCs are in the low 300m range and I don’t expect to see a massive jump any time soon, excluding tablets of course. We are seeing a refresh cycle bump, which I alluded to, but I’m not sure the low 300m range of PC sales is the bottom for traditional form factors like desktops and tablets. After the next few years of refresh are complete it, is likely to be a famine again for PC vendors.This is what Microsoft is hoping to address by evolving Windows to be both a touch based computing system and a mouse and keyboard based computing system. If they are successful in this, their single platform can cover the range of use cases from desk to mobile. This attempt would be deemed a failure in my eyes if we were to just use Windows 8 and the existing 2-in-1 and convertible PCs. However, Microsoft never gets things right the first time so we must wait for Windows 9 or even Windows 10 to see if they have the right recipe to keep Windows dominant in the PC category.
  2. OS X and iOS: While Apple with OS X is around the 4-5m Mac sales per quarter, I remain bullish that Apple has an opportunity to gain share with OS X in the overall PC category. More aggressive price points with products like the MacBook Air could be a catalyst. Should Apple move from Intel for a more mainstream priced notebook, this could also be a catalyst for lower priced Macs. Apple is sticking to their philosophy of the right OS for the right form factor. Counter to Microsoft but the right strategy I believe. Apple may be also looking to blur the lines even more between iOS and OS X. Tim Bajarin writes here about the possibility of an Apple-like 2-in-1 form factor. Looking at what Apple could do to start to move the iPad up into broader computing capabilities is interesting thinking. Should they do this, it would still run iOS in my opinion, since its primary uses would be more mobile, but the addition of an Apple designed keyboard, and perhaps a larger screen, could evolve iOS even further to become more capable as a general purpose personal computer.
  3. Chrome OS: Chromebooks, while a small percentage of the installed base and annual sales comparatively, are devices to keep an eye on. They are continuing to rise in sales in the education channel and are challenging tablets in education. It is the commercial sector where Chromebooks are doing well today, but should they crack the consumer nut we could see these devices rise rapidly as a percentage of quarterly sales and overall installed base.

Now for the twist. The conversation, perhaps debate is more accurate, around tablets and PCs is relevant. Referring to my prior post on tablets, there are tablets that are being used for specific things like games, kids, TVs, etc. I would not consider those tablets more general purpose computing devices. The iPad, a few of Samsung’s tablets, and now even some Windows slate tablets fit this build. However, I believe at least the larger iPad should be counted among PC sales. For the sake of the point, I’ve created a chart looking at PC sales by vendor each quarter and have included Apple. For Apple, I added the sales of Macs and iPads.

Screen Shot 2014-08-05 at 8.50.52 AM

From this chart, you will notice by including the total of Macs and iPads, Apple becomes the leading vendor in PC shipments. Now to fully see this landscape, we would also need to include Samsung’s PC sales plus their tablet sales but I don’t have Samsung PC sales. Vendors who sell Android tablets should also be included but those are very minimal and wouldn’t up their numbers much. But the point with regard to Apple is the role the iPad has actually played for them when it comes to the PC arena. The iPad no doubt either gave many consumers the ability to hold off refreshing their PC, or not refreshing their PC entirely. I view the iPad as a part of Apple’s play for the the PC market. Either way, the tablet, and in this case the iPad, is a product that steals time from the PC. ((Yes the smartphone does as well and ultimately we will have to debate the degree the smartphone steals time from the tablet)) That is why I’ve included their iPad sales in this chart. Apple was once almost entirely irrelevant in computers, and the iPad has helped them in a variety of ways in relation to the PC category.

The line blurring between traditional PC form factors and tablets is the narrative to watch in this market going forward.

Tablet Computing Platform Market Shares

The tablet market share story is quite different. While the market appears to be slowing, it is, in fact, still growing. Our data shows year-on-year increases in user numbers have dropped from around +200% at the start of the decade to less than +15% in 2014. This product may be even more subject to seasonality than many other consumer tech products. Therefore, before anyone starts selling the tablet segment short, we need to wait to see what happens in the holiday season. The tablet story is still one of market shares, but with the usage of these products more like PCs than smartphones, the device represents a distinct opportunity. Here is the breakdown of platform market shares as a percentage of the current active tablet installed base.

Screen Shot 2014-08-04 at 6.04.29 PM

In my tablet model, I estimate the total active installed base of tablets to be 501m devices. As I said, annual shipments of tablets are slowing but still growing – albeit slowly. Thus we must conclude the TAM for tablets is still larger than the current installed base. We just don’t know how much larger. Over the next few years I have a feeling we will get a true sense of the size of the market. That being said, there are still two distinctly different tablet markets we must be aware of as we analyze the category. I will cover that below in the AOSP bullet point.

  1. iOS: Unlike in smartphones, iOS is the dominant platform as a percentage of the installed base. It was common for a while to say there wasn’t a tablet market but only an iPad market. If we just look at Google’s version of Android vs. iOS then this story may still be true. iOS captures 65% of the share of tablets without AOSP. Just like the smartphone platform, the iPad owns the bulk of the most profitable customers in the tablet ecosystem. In the consumer market, tablets remain a luxury rather than a necessity. But we may see if this changes as Apple evolves the form factor, makes it more capable in terms of computing, and the app ecosystem catches on to its full potential. Apple gaining ground in the enterprise could be a likely catalyst for the iPad ecosystem as well.
  2. AOSP: Here AOSP means the same as it did for smartphones. The only difference is AOSP is increasing significantly as a percentage of quarterly shipments. However, these devices are not being used in the same way as iPad and even Samsung tablets. These devices are largely made up of no-name white box vendors and they sell anywhere from $40 and $80. All our research indicates these devices are simply portable video or game players and not much else. There is very little web browsing, commerce, app purchasing, or other functions that would classify it as a healthy ecosystem. Where AOSP tablets start to get interesting may be as service providers like a broadcaster, content provider, or other company who can leverage an existing business model (but not a hardware model), can use the device as a giveaway in order to capture subscription upside. For example, a broadcaster or content network in China can offer the device for $50 but tie it specifically to their content portal or services for a monthly fee. AOSP will continue to open doors for unimagined and creative business models around the tablet form factor.
  3. Google Android: Oddly enough, Google’s version of Android for tablets is the odd man out in my opinion. Given what we know about the tablet market, Google’s Android tablet solution remains unfocused. Their priority is smartphones and there is nothing wrong with that. However, Google risks missing out on a significant opportunity if they are not willing to take leadership in advancing the tablet platform. Nearly all sales of Google’s Android tablet solution have come from Samsung and many of those due to promotional giveaways and extremely aggressive pricing in emerging markets.One interesting trend, however, has been the rise of carrier branded tablets like the Verizon Elipsis. This tablet is now offered for free with a two year contract from Verizon and has captured a 0.4% share after slightly more than 8 months on the market. Tablet solutions like this are ones to watch as it is possible this is the angle which challenges the iPad.
  4. Windows: Windows is in this category thanks to the 2-1 form factor pushed by Intel and Microsoft with the Surface. To be included as a Windows tablet in ours and other analyst firm’s data the device must have a detachable screen. To date sales of these devices have been very low — making up far less than 1m shipped per quarter. While Surface 3 is a positive step forward, and the best of all 2-1’s in my opinion, I still have my doubts this form factor is the future of the PC or, more importantly, that it will ever ship more than 20% of the annual PC volume and perhaps even less as a total of the tablet market.

The story on tablets is still being written. Questions such as, “Is it a one per person device or a one or two per household (like the PC)?” still remain to be seen. Ultimately, there are many specific use cases for tablets in which they add value. We will still see experimentation along with further segmentation in the segment.

Next article, PC computing market shares.

Smartphone Computing Platform Market Shares

Unlike the PC computing era where the industry was made up of “market share” of only one company, the “Post PC Era” is poised to be made up of market shares. That means many platforms competing in different segments, each with a share of each market. As we dive into several of the charts I’ve created, this point will stand out. It will also highlight this isn’t simply a case of iOS vs Android vs Microsoft in every segment. More to the point, it is wrong to look at the industry as purely a platform battle. The right big picture view to have of the industry is to think about what each platform means to each segment and, more importantly, what opportunities exist within each platform independently. I will cover the platform market shares in a three part series. I’ll start with smartphones, then tablets, then PCs.


Yes, Android ships the majority of smartphones each quarter. But what most analysts estimates don’t do is break out the sales between AOSP (Android Open Source Project) and Google’s version of Android. We essentially have three viable mobile platforms. We have iOS, we have Google’s version of Android tied to Google services and Google’s app store, and we have the AOSP version which is what is on over 95% of smartphones sold in China. The best way to understand AOSP is as China’s proprietary smartphone platform. With that context, let’s look at the percentage each platform has of smartphones in active use.

Screen Shot 2014-08-04 at 5.08.57 PM

In my smartphone model, I estimate the total active smartphone installed base to be 2.04 billion devices. As you can see from the chart, the smartphone market is not so black and white as to be just iOS vs. Android. What is absolutely essential in this model is to understand what the customer makeup is within each market share.

  1. iOS: We know iOS owns the majority of the most profitable customers. And while iOS currently has 17% of the smartphone installed base, it is likely Apple could raise that to 20% within in the next 12 months. iOS customers are higher value customers and therefore Apple’s share of the market presents certain opportunities. Things like subscription services, hardware add-ons, a-la-carte media purchasing, e-commerce, and more are viable opportunities for iPhone customers.
  2. AOSP: AOSP is not a forked version of Android (like Kindle Fire OS), it is simply a stock version of Android installed without Google’s core services like search, maps, app store, etc. China has all their own local services and they use vanilla AOSP and vendors pre-load local services and app stores on their devices for that region. AOSP must be understood within the China context. Companies like Xiaomi have uniquely benefited from using AOSP to their advantage in China. Other hardware opportunities may emerge as the door is wide open in China for many companies to leverage AOSP and use inexpensive hardware as a giveaway in order to capture monthly revenue from a service or subscription. It remains unclear how much of an opportunity there is for AOSP Android outside of China. If there is not, this piece of the pie will shrink over time.
  3. Google’s Android: Google’s version of Android will remain the dominant market share, especially as big regions like India, Brazil, and South East Asia start to ramp. Yet, Google is still faced with a problem. As Android begins to saturate in markets where hardware is very low cost, the overall value of an Android customer on average will decline. Google’s advertising business model works well now but how much will advertisers be willing to spend on customers who do not have much monthly disposable income? Android will have the largest market share but it will also consist of a large variety of consumers at different economic stages. Ultimately, I believe this will be a challenge for the platform and the ecosystem.
  4. Windows Phone: This is still a minority platform. Its fate seems yet to be sealed. Microsoft has been slow to gain partners other than Nokia and even those who have embraced Windows Phone in markets like India or SE Asia have experienced very slow sales. It is yet to be seen whether Microsoft can advance the platform by chasing the low end of the smartphone market. Given the extremely low installed base of Windows Phone, and the slow sales, it remains hard to be optimistic on the platform.

Apple has a monopoly on iOS. Market share is up for grabs should they be creative with pricing and services offered. Android OEMs will battle it out quarter after quarter and we will see if loyalty to a brand can be established in Android the way it is with iOS. What is clear is different strategies and opportunities are emerging in different regions. What is working in the US is not working in China but rather something different entirely is a success in China. The same is true of India, and early evidence suggest regionally focused strategies are going to also work in Brazil and Indonesia.

It is fascinating to watch a market in real time where there is so much at stake, yet so little is actually settled.

Next article on Tablet computing platform market shares.

Apple Earnings: iPad Struggles and iTunes Revenue Importance

There were several interesting narratives out of Apple’s earnings report yesterday. The most glaring, and most confusing to many, was the struggles of the iPad. I’ll return to that in a moment. The Mac surprised many, but should not have surprised our readers. I wrote this in December of last year, and I explained the PCs upside in 2014. The PC will remain steady but we are still nowhere near the eventual bottom of annual cycles. We are seeing a refresh, mostly by corporations and education, and Apple, like many vendors, is positioned to capitalize on the upside. In an upcoming Insider post, I’ll layout why I think the Mac is actually a strong growth story for Apple.

But the iPad remains an important narrative. The tablet market is functioning exactly like the typical PC market. Therefore, our deep knowledge of PC cycles helps us understand the tablet market. There is one difference though and it is a significant one which has led to many to misunderstand the tablet market.

The tablet is still the fastest adopted technology in our industry history. Take a look at my install base estimates broken down by device.

Screen Shot 2014-07-23 at 8.52.00 AM

Despite what you conclude about tablets, for a category which began in 2010, garnering 22% of the estimated current installed base is impressive. What gets lost is the speed in which this category grew.

Screen Shot 2014-07-23 at 8.56.59 AM

It could be argued the iPad hit the perfect storm of lagging PC cycles, the mainstream’s desire for simplified computing paradigms vs complicated ones (the PC), and the Windows 8 debacle, all of which accelerated the adoption of the category. This burst led many to conclude the size of the tablet market was much larger than it actually is — potentially billions in annual unit shipments. Our forecasts were never that aggressive. While we believe the tablet market will remain a healthy segment, it will also be segmented. Segmentation will be what influences the total size of the tablet market.

With regard to iPad sales slowing, several things need to be mentioned. The first is the iPad had been experiencing solid growth in education and, to a degree, still is. However, new competition in the Chromebook has arisen for Apple in the education market. Every Chromebook manufacturer we speak with highlights to us they can not make enough to meet demand. Google announced they had sold one million Chromebooks to education in the second quarter, and the Chromebook segment is on pace to sell more than 5m units in 2014. While the iPad does more than double that number per quarter, the rising challenge of the Chromebook could be a factor in Apple’s education sector for iPads.

The enterprise is the other significant opportunity for iPad growth. I’ve spoken with a number of job market analysts and have heard numbers in the 300m-500m range for workers who don’t use a PC in their day job today but could benefit from a tablet computer. Things like construction, health, oil/gas/electic, factory workers, etc. Apple’s deal with IBM could help this, if for no other reason than it makes Apple in the enterprise more credible. Being viewed as credible to IT departments means they have more confidence to fully commit to iOS. This lack of credibility regarding Apple in the enterprise has been one of the things we hear from IT on why they hesitate to commit fully to iOS in their enterprise.

Lastly, replacement cycles are central to understand the tablet market. Fellow analyst colleague and Tech.pinions columnist Jan Dawson created a tremendous chart which we must dig into.

Jan has created a chart very similar in philosophy to ones used by all the PC vendors. It estimates the age of devices as a part of the active installed base. When I wrote earlier in the year about why I felt the PC would have a good 2014, it was based on a similar philosophy of estimates that there were around 300m PCs in active use five years or older. Knowing the replacement cycle for PCs to be in the 5-6 yr range, it was easy to conclude a large number would be upgraded soon. Using that same philosophy Jan has created this chart.


What we don’t know is the refresh cycles of tablets and, specifically, the iPad. Apple is somewhat cursed by the fact their products last so long without breaking. Consumers, on the other hand, are blessed by that reality. But if we simply look at the number of iPad’s still in use that are in the three yearr old range we can estimate the number to be around 50m units that should be eligible for upgrade in the near future.

Another key point to iPads we realized is the device is often handed down as new ones are purchased. Again, the value of the long life of the product allows this to happen. The impact of this will add to the overall installed base, but also could lead to a larger and difficult to predict refresh cycle at some point in time.

Adding new customers is the key metric to watch in this analysis. Apple reports frequently that 50% of iPad’s quarterly sales are to people who are first time iPad owners. Maintaining that statistic in our model is key as we track the installed base, growth cycle, and attempt to understand refresh patterns.

All of this brings us back to an important point about Apple’s business model. As I pointed out in my article on why Apple is immune to disruption, I specifically mention Apple has not and does not need to change their business model. What they do have to do, however, is capture more value per user. This is why watching iTunes services and revenue grow is a key statistic in the overall Apple narrative.

Insider Report: The State of The PC

The PC has gone through a rough transition. What we are witnessing is a rebalancing of the PC market. As I reflect on the the turmoil of the PC over the past few years, a single important point stands out. It is highlighted in this chart:

Screen Shot 2014-06-23 at 7.34.41 AM

Around 2008-2009, the PC market became heavily weighted towards the consumer market. The implications of this were clear. Consumers operated on different refresh cycles than corporate PC buyers. As we neared 2011, we hit a milestone where roughly half of the PC installed base consisted of consumer PCs. With such a large base of consumer PCs, who operate on different upgrade/refresh cycles, it is no wonder we saw a bit of a collapse in 2012-2013. See the below chart:

Screen Shot 2014-06-23 at 7.47.09 AM

Of course the tablet contributed to this as well, as consumers who already don’t upgrade on predictable cycles got their hands on a device that let them hold onto their PCs even longer. What has been interesting is to watch the PC stabilize a bit. While still off, on average about 5% per quarter, we are seeing some stabilization driven mostly by corporate customers starting to engage in a refresh cycle. While the PC industry will likely not return to a growth industry it will remain a stable industry. That is not in question. What is in question is where the rebalancing of the market will stabilize with regard to annual shipments. Understanding where the bottom of the PC rebalance will end up is the key to resetting expectations of this industry. It is safe to assume we will land somewhere in the 200-300m range, probably closer to 200m annually when all is said and done.

While the PC market’s annual sales will remain steady and driven by corporate PC users, there is still a question of what will happen with consumer PCs? As of today, I estimate there are between 400-500m consumer PCs in active use approximately four years old or older. Do consumers still need or want a PC? This data point suggests they do.

Screen Shot 2014-06-23 at 8.47.29 AM

This chart shows the type of devices most used to connect to the Internet by the online population. As you can see, the PC remains an important tool by the majority of the online population. Many like to focus on the centrality of the mobile device. However, I am continually surprised by the high usage of PCs even in emerging markets like China and other large “mobile primary” regions. What all the data points I see tell me is the PC’s role remains an important one, even if for many it is more in a companion role than a primary one.

Which leads us back to the question of what will consumers do when it is time to upgrade their PCs? One hypothesis is they will look to desktops over notebooks. In this scenario, consumers are content with a smartphone and/or a tablet for the bulk of their mobile/lean back use cases, and look to get a desktop all-in-one that is used as the shared/family PC. Therefore, we could see spikes in desktop sales for a brief period as consumers upgrade their aging PCs with desktop computers.

Another scenario is more consumers gravitate toward tablets as PC replacements. The tablet will certainly increase in its capabilities through the years which can make this scenario increase its probability.

The commercial and consumer divide is the biggest issue the PC industry must work with. For the stability of the PC industry, vendors must focus on meeting the needs of customers for whom the PC is an essential work tool.

For consumers, PC vendors must embrace the multi-screen reality of the consumer market. Where a corporate customer may spend many hours a day on their PC, a consumer will spread those computing hours over many devices. This is where Apple’s strategy around continuity becomes interesting. Windows vendors should look to apply similar solution-based thinking through software and cloud services to meet the multi-device computing flow of the consumer market.

There is also an opportunity for PC OEMs to look at emerging markets and begin to insert more value for the PC into the ecosystem. Markets like China, which are developing extremely quickly, have young generations growing up middle class who will go to school and the workplace and likely need something other than their phone or tablet for work. Even though this area won’t make up growth volumes, these first time PC customers in emerging markets can at least add to the stability of the market.

Overall, the fact that stability is returning is a good sign for the PC industry. Vendors who can manage the lean years will reap rewards as the stability continues.

Global Smartphone Vendor Market Share and OS Installed Base Statistics

I’ve updated our global smartphone statistics and installed base estimates up to Q1 2014. There are several important observations to call out in the following graphs.

First, let’s take a look at the market share of each smartphone vendor going back to Q4 2009.

Screen Shot 2014-06-08 at 6.28.19 PM

The first major observation is what has happened to Nokia. As you look at the graph, you notice the shift in share from Nokia to Samsung. As we all know, Samsung “fast followed” Nokia and the graph tells the rest of the story. The second major observation is how Apple has maintained their share of the market and is holding steady each quarter going between 15-20%.

Another important observation is what happened when Chinese consumers started joining the smartphone conversation. As you can see the ramp in China happened around the end of 2011. At that point you see the local Chinese vendors like ZTE, Huawei, Coolpad, and eventually Xiaomi (Mi) helped make our chart (and the world) more colorful/competitive.

Let’s see how this looks from the volume shipments of the same vendors over time.

Screen Shot 2014-06-08 at 8.46.07 PM

What this chart does a good job of showing is the overall growth of the smartphone market in terms of volume.

If you recall from the first graph we saw most of Nokia’s market share go to Samsung. What this graph points out is the size of the scale Samsung reached. While their share of the market basically swapped, Samsung’s volumes were significantly larger than Nokia’s ever were. This graph shows Samsung’s steady and persistent growth when it comes to volume. Where Apple and others see pretty seasonal Q4 spikes, Samsung has stayed relatively steady.

Another important point about this slide is to look what happens when the China smartphone market began to ramp. As we see China coming online, we observe the rise of local Chinese manufacturers who begin moving enough volume to get them out of the “other” category and to be tracked as a vendor. Most notable should be Xiaomi. Xiaomi started selling phones in the third quarter of 2011 and by the end of 2012 were moving enough quarterly volume to get on our radar. Now after the first quarter of 2014 they are nipping on the heels of every other local Chinese OEM. In fact, if Xiaomi’s quarter-on-quarter growth rate continues, they may pass Huawei. That would put them at number three in the ranks of vendor quarter volume after Samsung and Apple.

Installed Base

While calculating the exact active installed base of smart devices is an imperfect science, based on historical sales data of devices factored along with active statistics of operating systems on major carrier networks and regionally dominant web services, we can get an approximate that is defendable. The following charts break down the install base of smartphone operating systems over time and where each stands today as a percentage of the active install base.

Screen Shot 2014-06-08 at 10.35.24 PM

As you can see, Android and iOS have been the biggest growth driver of the smartphone install base. Symbian was the biggest loser with most of its user base moving to Android. Blackberry held relatively steady in install base even though their quarterly shipment declines have been steep. What Blackberry’s numbers highlight was while their install base peaked in 2011, they have not participated in any growth and while maintaining a relatively small portion of the install base even at their peak, the next year will likely show steep declines in their install base.

The pie chart shows each smartphone operating systems as they currently stand as a percentage of the install base. Some of my numbers around Apple’s iOS smartphone share and Android’s seem counter to the narratives we hear that Android has 80% or iOS has 15-18%. This is because when most analysts use those numbers they are sharing the percentage of quarterly or annual sales by OS — not as installed base.

There are many fascinating evolving narratives that will continue to be fascinating to watch over the next year. The primary being as the India smartphone ramp starts to show up. India is where China was two years ago and is ramping fast. Karbonn, Lava, and Micromax to name a few may start showing up in our charts soon enough. I’ll continue to update these numbers each quarter and tease out the key observations over the year.

Insider Intelligence Charts: Global Market Share Mobile OS

I pulled some recent data from Statcounter to get a sense of what the most active platforms were in each region. Statcounter, like NetMarketShare, tracks over a billion websites globally. Therefore, the tracking and market share numbers represent those actually using their devices to access the web in some way, shape or form. Interestingly, I have caught wind of some data that highlights a larger number of consumers than I anticipated in key markets like China who use VPNs or proxies to access blocked sites from within their country. Many of these VPNs or proxies are based in the US or Europe which means there is a high likelihood that some country numbers are skewed because of these consumers who access via proxy. I’ll deep dive on this as I gather more data.

Let’s look at platform statistics for several key regions and tease out some observations.

Global OS Market Share


Looking at the global breakdown of operating systems, broken out by those actively accessing the web, several key things stand out. The first is the noticeable and undeniable trend that Android continues its steady climb. This will continue as billions of consumers get into the market with their first smartphones from price tiers lower than $200 and most likely running Android.

Despite Android’s rise, iOS market share remains relatively steady. For many, this should defy their beliefs about how “open” operating systems crush more closed systems. There is a raging debate around the topic of whether the smaller ecosystem always loses. We are in uncharted territory and history is unlikely a helpful guide. Every time I look at this data, Apple’s ability to maintain share re-enforces the staying power of a premium customer base.

Series 40, while having a smaller market share, also remains steady. This demonstrates Nokia’s ability to maintain brand and solutions in markets like India, Africa, Indonesia, and Brazil to name a few. Ultimately Series 40 will be replaced by Android in those markets. It’s just a matter of time.

Globally, there are around 1.4 to 1.5 billion smartphones in use. That number will be over 4 billion by the end of 2018.



This chart remains relatively unchanged from multiple sources besides Statcounter. In the US, it truly is a two horse market and each have relatively close market share. Statcounter tracks the iPhone as having over 50% share based on their tracking methodology. This also lines up with recent data from Chitika stating that, when usage is tracked, the iPhone remains the market share leader.

If Apple does release a larger screen iPhone, it will be interesting to look back at these charts and see if Apple has indeed widened the gap against Android in the US as many, including myself, believe will happen.

The US has over 190m smartphones as an install base.



Android is the dominant OS in China. This should not come as a surprise. However, Apple’s continued growth in market share lines up with many Insider posts on Apple’s device installed base in China. This remains an under appreciated story. I remain convinced the number of iPhones in China is larger than most other analyst firms’ estimate.

Related Posts on iPhone in China
How’s the iPhone Doing in China
Data on China: Apple’s Biggest iPhone Market

While Android will remain dominant, I’m not sure the vendor landscape is as clear as others. While Xiaomi is all the rage in China, it is unclear if their model is sustainable, particularly as they run into challenges scaling to meet demand. The hardware/OEM landscape in China is nowhere near settled. This is a key storyline to follow.

China has nearly 600m smartphones in active use in the region.


Screen Shot 2014-05-15 at 6.46.59 PM

India as a market could not be more different than China. These are two completely different regions who mass market customers think about technology differently and value very different things. Where in China consumers place a high price tag on status, and technology identified as status symbols, India places a priority on value for the money. This is why India will remain a challenge for Apple.

India has approximately 60-70m smartphones as an install base currently. While estimating total iPhone sales in India has been tough, I believe it to be in the 6-8m range. Likely toward the lower end of that number but certainly less than 10m as a total.



Why am I showing you Indonesia? Every so often, we will look at a market that doesn’t get a lot of attention. I could, and will, continue to show charts from Brazil, and other countries in SE Asia, but I thought looking at Indonesia would be interesting. Indonesia is a huge market and an important one to watch. It is also growing quickly overall as a market for smartphones.

As you see from the chart, Nokia’s handsets have had a good run in Indonesia. But the trend is toward Android — which is no surprise. One other point worth mentioning is BlackBerry handsets have a higher percentage of the install base than indicated in this chart. The reason they don’t show up higher is because many BlackBerry devices in the region are not used to access the web through a browser or apps. Instead, these devices are used more as secure communication platforms due to a high level of distrust of the government. Some percentage of consumers have two devices. They use the Blackberry for secure communication for business or other uses and the Android or Nokia device for other smart phone features/use cases.

This is a snapshot of the overall platform trends in several key markets. In future Insider posts, we will also break down the vendor market share in these markets as well.

Chart: How’s the iPhone Doing in China?

About a month ago, I went into detail on Apple’s presence in China. Since then I have been tracking and plotting the iPhone’s presence on Umeng’s app and device usage analytics network since 2012. If you recall Umeng’s latest report, it was clear the iPhone had a larger presence in China than many thought. More importantly, the iPhone completely dominates the premium tier in China, a segment larger than many realized at 27%. I dug around and concluded Umeng’s analytics data is fairly comprehensive – likely covering approximately 70-80% of the smartphone market.

I’d like to share the chart I made plotting the breakdown of iPhone models in China over time.

Screen Shot 2014-04-11 at 9.29.55 AM

The lack of popularity of the 5c is not surprising. The price differential is too minimal for the market in China who view premium devices as status symbols. For the group that can afford or aspire to afford an iPhone in China, only the best will do. This explains the rise of the 5 and 5s in the chart. The real observation needs to be made about the plotted lines of the 4 and 4S. The install base of these two devices is largely driven by the secondary market. The bulk of Apple’s install base in China and its continued rise is still driven through illegitimate or “gray market” channels more so than through legitimate channels. I believe this will change over time but a great many Chinese customers still buy iPhones from the secondary markets and having them activated to the network of their choice.

The 5s is on a steady ramp, like the 5 was. This looks to continue. From Umeng’s data, no version of the iPhone saw as high a monthly increase as the iPhone 5s. It is also worth noting there isn’t a single Android SKU in China that shows up as a percentage of monthly activity on Umeng’s network any higher than 4%. This shows how incredibly diverse China’s Android landscape is.

A Mapping Tool for the Rest of Us

Kensington, MD, ethnicity map

Maps are the great data visualization tools. There is something about the ability to take database information, superimpose it on a map, and have an image that makes visual sense instantly pop up.

Unfortunately, this is often a lot harder to pull off than it seems it should be. On one end, there are massive geographic information services, such as ESRI ArcView, that can generate great maps, but are both expensive and complex to learn. At the other extreme, assorted Google mapping services, including web clients and Google Earth, enable all sorts of tricks, but the job of creating really good data superimpositions can be depressingly difficult.

The PolicyMap, a subsidiary of the non-profit Reinvestment Fund, has released a splendid new version of its web-based mapping tool. “For the last six years, we have largely catered to state, local and federal government users as well as banking and housing professionals, college students and researchers looking to better understand geographic data and trends,” said Maggie McCullough, President, PolicyMap. “As interest in data and data visualization has exploded, we’ve rebuilt PolicyMap into a more powerful but easier to use tool that appeals to our traditional customers, as well as newcomers to mapping and web managers looking to elevate their business intelligence, research, analytics or presentation capabilities.”

I created the above map, which shows the percentage of white population by census tract in my neighborhood of Montgomery County, MD, in less than 15 minutes. The original interactive version lets me show the change in pattern over a limited range of time. Almost everything about it is instantly customizable, from colors to data ranges and divisions.

The biggest issue here is an embarrassment of riches as vast quantities of data, often available with good geographic coding, continue to pour online. Federal government data comes from a big variety of agencies: the Census Bureau (including the Current Population Survey and the American Community Survey), Bureau of Labor Statistics, FBI, Health & Human Services, Centers for Disease Control, Department of Homeland Security, and many many others. Data is often available on a variety of of geographic bases, from census-block level up to states, and often additional efforts have been made to normalize the data to get the information onto common bases.

The PolicyMap data also draws heavily from a  variety of private and semi-public sources, especially for financial information. If you want to find American Bankruptcy Institute filing data, Community Development Financial Institutions Fund tax incentive locations, or Environmental Protection Agency brownfields redevelopment sites, it’s all ready to click and pick.

The PolicyMap provides a basic free offering, but the heart is a more expansive subscription service that works to keep prices low (after a free trial), and offers a wide variety of plans that provide great value, considering the richness of the tools and the quantity, range, and quality of the data. A standard service provides up to five seats for $2,000 a year (with some additional charges applying for proprietary data sources.)

It’s well worth a look.

Chart: Android Install Base

Google recently released their latest platform numbers for each version of Android. This chart shows what percent of each platform is still in use on an Android device in the market. A couple of things are worth pointing out regarding this data. These metrics from Google only track a piece of hardware that has passed Google’s certification process and has access to Google services. What Google is showing us with this data is the number percentage of each platform, active in the market, that has access to Google’s services. This is important context because these percentages do not reflect the entirety of the Android install base. They only account for the install base of Google’s version of Android. Most the devices sold in China are not accounted for in these number from google, for example. Here is Google’s chart with a breakdown per Android version.


I have done my own research to work out the non-public data and have come up with estimates on the Android install base of Google’s version of Android. Below is my chart.

Screen Shot 2014-03-05 at 5.57.13 PM

It is incredible to look at the install base of Gingerbread. This version of Android was released on Dec 10th, 2010 and was updated until September of 2011. Even a device updated toward the end of Gingerbread’s lifecycle is over two years old. I am at a loss at how to explain this. The only explanation which seems plausible is that these were customers who purchased an Android phone, but are only using it as a feature phone to make phone calls. This period correlates with strong sales of both the Motorola Droid brands and several HTC phones. Knowing that some manufactures were still shipping Gingerbread into 2012 may also help explain this number. Still, the fact that there are over 200m smartphones in the market, being used, that are over 2 years old is remarkable.