In the past, if your teenager or 80-year old mother wanted a phone, she would buy whatever phone the mobile operator had on offer for $0 with a contract or the lowest price phone on a pay-as-you-go plan. These phones are commodities.
Nokia was a strong competitor in the non-Smartphone space. However, Smartphone are quickly becoming commoditized. And that is the reason Nokia has linked up with Microsoft to move up into the Smartphone arena.
The problem is Android is a free operating system as far as handset makers are concerned. There are no licensing fees. That makes Android an attractive option for the lower end of the phone market.
Nearly three-quarters of Android sales in Britain during a twelve-week period ended June 12 came from people upgrading from so-called feature phones to their first smartphone. In addition, only 1.8 percent of new Android sales came from iOS users jumping ship, a Kantar Woldpanel ComTech survey reveals. The research didn’t take into account corporate sales or contracts and was based on extensive interviews with up to one million consumers in Europe alone.
Android has grown its share of total US handset market to 9.2 percent in June of this year, up over just one percent a year ago. The platform had a 45.20 percent share of the entire smartphone market in the country, while iOS fell from 30.6 percent share in June 2010 to 18.3 percent share in June 2011. A big part of this was price: Apple’s is among the priciest consumer smartphones and only 45 percent contracts offer the device for free versus 90 percent for Android phones.
That tells me Android’s adoption is all about upgrades and not about switching. I see this as a land grab right now. The operating systems that can grab as much share as possible while people are upgrading from cheapie phones to inexpensive Smartphones will win. Right now Android is leading the charge.