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It’s hard work building an app. It’s even harder work building two apps, one for iPhone and one for Android. Developers will only do this if the revenue for both is significant. If one becomes marginal, then why bother? This is the “winner take all” dynamic seen in so many technology ecosystems. Apple can do no wrong right now, so is Android in trouble?

This winner take all nature of technology platforms propelled Windows to dominance in the 80s, has already crushed Blackberry and is one of the reasons that Microsoft has difficulty capturing search budgets. Why worry about Bing ad campaigns when the returns from focusing on Google are so much larger?

It is very rare to have two winners in such a battle, unless there is a geographic moat. Messaging platforms like WhatsApp and Viber have strong network effects in a country, but different countries can settle on different platforms. However, these platforms are fairly simple (whatsapp had 32 engineers when it was purchased for $19Bn). Where the technology is much more complex and therefore expensive, the benefits of global scale are much higher and one winner seems more likely. Thus while mobile phone technology was originally fragmented (Europe had GSM, US had CDMA), these moats fell away as we moved to 3G and everyone could benefit from lower costs due to the global scale of chips and software.

Given Apple’s extraordinary recent performance, does this mean Android is doomed? A lot has been written about the relative amounts spent in the two appstores. According to Ben Evan’s ongoing analysis, Apple was twice as big as Google the last time comparable data was released, and about $25Bn in total is now being spent.

But are you making the 10,000th clone of Candy Crush or Clash of Clans? If not, I’m not sure this data matters that much. After all, these figures are very small compared with the amounts spent on mobile commerce. So, is there a better way to see what is going on?

I decided to use Criteo’s Mobile Commerce Report dataset of over $160bn transactions to see if this could provide insight into which platform is capturing the larger share of mobile commerce beyond gaming and in-app purchases.

Android Share of Smartphone M-Commerce Transactions (US)

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The trend is clear: Android has noticeably lost share over the last 6 months, and as a result Apple is almost twice as big as Android now.

However we live in a globalised world today. The global trend is also interesting:

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Here we see Android remains the biggest player in many markets. That said, it is amazing to see that in Korea (home of Samsung and LG) Android has fallen from almost 100% marketshare to only 81% today.

Finally, even in markets where iPhone is the clear leader, Android is growing incredibly rapidly in terms of the amount of eCommerce spend via Android phones:

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So the data seems clear: Android is not out of the race today, but it is under pressure especially in the US.

However, we are in an exceptional situation where the winner take all dynamics have not taken hold. Because of the incredible growth in smartphone usage, both platforms are growing fast in absolute terms. As a result, the dollar opportunity from Android is continuing to grow rapidly, despite Apple’s out-performance. In most cases this means companies are currently under-investing in Android. Smart marketers and developers looking to maximize revenue are likely to increase the effort they put into their Android apps as the total Android opportunity grows.

So: Google continues to be in the race, and the battle will remain fascinating for us to watch.

If you’d like more insight into what’s happening in Mobile Commerce around the globe, take a look at Criteo's latest Mobile Commerce Report, released quarterly.

Categories: Product & Technology Innovation