Mary Meeker’s 2016 Internet Trends presentation is a source of immense knowledge about the world of technology. Although its primary focus is on how consumers use the Internet, it also throws substantial light on the smartphone industry. This year’s report had some interesting and surprising revelations to make about the smartphone markets the world over.
From this slide, it’s clear that:
- The total number of smartphones shipped have grown, but the rate of growth (red line) has fallen.
- Android and iOS, although they started late, have captured nearly the entire market in a little over five years.
- iOS has started seeing a recession in its overall smartphone market share.
It might not be apparent from the first look, however, if you analyse the numbers with a little more care, the result is clear. Look at this slide:
In 2009, iOS had 14% of the market, while Android had only 4%. By 2015, Android had shot up to claim the lion’s share of 81%, while iOS trailed behind with only 16%. In 6 years, Android had gained 77% of the market, growing by almost 20 times over in the process. In the same time period, iOS managed to gather merely 2 percentage points.
Not only Apple lost a very big head start it had over Google, it also failed to capitalise on its market dominion at that time by capturing the market lost by Blackberry and Nokia’s Symbian.
Why does it matter?
Smartphone markets are an integral part of the tech industry today. More importantly, they are also emerging as the leading source of ads revenue.
As more and more people ditch the desktop and switch to mobile phones to surf the internet, ads have naturally started moving from desktops to handheld devices. Look at this graph:
Just within half a decade since their emergence, mobile ads have captured over a third of all the ads revenue. And that percentage is only going to rise. So, in a world ruled by market forces, those who control the money, control the game. Therefore, it matters who is winning this Game of Smartphones. (Yes, that was a Game of Thrones reference. Hee-hee-hee!)
The Indian Wager
There is a clear case for Apple’s insistence on fighting for India. We are one of the few markets experiencing growth. We are probably the only smartphone market that’s even projecting growth. The slide below shows the surge we’ve seen in the number internet users over the past decade.
So it’s natural to see Apple vying for a position in India. However, the Indian market is already flooded with cheap Android sets. This makes the fight even harder for Apple because they also have to contest with insanely low prices.
Now, there’s no way that Apple can win the price war in India, not when you have the likes of Karbonn selling a “fully loaded smartphone” for Rs 5,999. So Apple will have to come up with new and innovative ways to gain the market. And given that innovation is what Apple does best, we can’t help but wonder what strategy Apple is going to use to move ahead in the race.
