Sales Versus Surveys

When comScore released their latest U.S. smartphone market share numbers earlier today, I was a bit confused. According to comScore, Google (Android) usage surpassed 51% last quarter. Apple (iPhone) meanwhile, was at 30.7%. Those numbers alone aren’t necessarily surprising, comScore measures overall market usage, not just new sales and Android devices (as a whole) had been outselling iPhones for much of the last couple years.

But something happened last quarter. On the nation’s two largest carriers, Verizon and AT&T, the iPhone actually outsold all Android devices — combined. The nation’s third-largest carrier, Sprint, did not give a number for total smartphones sold last quarter. But they did disclose that they sold 1.5 million iPhones, which was higher than expected. Given the numbers, it sure seems like the iPhone is the majority of their smartphone sales as well — maybe by a lot — but it’s hard to know for sure. Yet, according to comScore’s numbers, Android market share rose 3.7% versus 1.1% for the iPhone.

This leaves two distinct possibilities.

First, that T-Mobile and regional carriers (which don’t offer the iPhone) more than made of the difference between Android and iPhone sales at the big guys. Eric Slivka of MacRumors notes there are around 70 million wireless subscribers in the U.S. without access to the iPhone, so it may be possible. That assumes that basically all of those people chose Android devices, but that’s also possible given the shrinking market share of Microsoft and RIM.

Second, that comScore’s method of measuring smartphone market share is flawed.

It certainly could be the case that the first scenario is correct, but it just doesn’t feel right. I’ll concede that the people without access to the iPhone could have offset the iPhone dominating Verizon, AT&T, and Sprint, but enough for Android to see nearly 4x the growth rate of the iPhone? That seems suspect.

Then consider the numbers from NPD. As a rival to comScore, NPD has their own methods for gathering smartphone market share. In their most recent report, they had Android controlling 48% of the U.S. smartphone market versus 43% for iPhone in Q4 of last year. In the same span, comScore had Android at 47.3% and the iPhone at 29.6%. 

Forget the actual numbers, focus on the differences in the numbers. It’s pretty clear that the methods these firms are using to measure smartphone usage aren’t an exact science.

Digging deeper, you’ll find that the way comScore gets its numbers is through a service they call MobiLens. How is MobiLens calculated?

MobiLens data is derived from an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older. Data on mobile phone usage refers to a respondent’s primary mobile phone and does not include data related to a respondent’s secondary device.

A survey. 

So on one hand, we have actual, verified and legally reported public data from the three largest U.S. carriers. On the other hand, we have a survey. 

I’m not denying that Android still has the larger overall market share in the U.S. I’m just disputing comScore’s stats that it’s still growing faster then the iPhone. 

Regardless, one thing is very clear: when the iPhone is available on a carrier, it dominates. This is backed up by cold hard sales numbers, not surveys. If Android is still “winning” in some segments of the market in the U.S., it’s only because Apple is allowing it to. 

Update: comScore has written to clarify things a bit. It turns out their numbers do show iPhone subscriber growth outpacing Android on the “Big 3” carriers (13% vs. 11% from December to March). But the overall growth Android saw came mainly from other carriers (T-Mobile and regionals) where Android is dominating.

Fair enough. This reinforces the last point: that Android is dominating the areas where the iPhone isn’t competing. Yet.

Apple’s stock took a dip today back below $600 a share. Some are citing concern that carriers will cut the subsidies they pay Apple for the iPhone as the reason for the drop.

There hasn’t been much in terms of tangible evidence that this is even a possibility, but the writing does seem to be slowly appearing on the wall. The carriers are all still extremely profitable and they do very well selling the iPhone, but they do better on a per-device basis selling other phones because of the subsidy they must pay Apple. 

Because the iPhone is the most popular single device across the carriers, they’re all seeing certain numbers slip as a result. The question becomes do the three U.S. carriers with the iPhone (Verizon, AT&T, and Sprint) have enough leverage to push back and make Apple take a lower cut? 

I don’t know, but I do know the leverage they will try to use: Android.

But the fact that Apple has a fourth carrier, T-Mobile, chomping at the bit to pay them the same subsidy, doesn’t speak well for this strategy. Collectively, they all still need the iPhone more than Apple needs any one of them. So unless they team up (collusion?) to put Apple in a position with no carriers willing to pay them what they want, I just don’t see things changing.

Sadly, I still think the carriers will keep on screwing with customers (rate hike here, rate change there) before they screw with Apple.

I always knew he’d be back. There’s only so long you can use shit before your hands start to stink. 

Update: Alright, alright calm down. I was mostly joking. The truth is that Mike was using a Nexus One, which is a decent device, but already old by today’s standards. In fact, all the Nexus devices seem decent enough — including, undoubtedly, the forthcoming Galaxy Nexus. But why settle? 

If you can buy the best, buy the best. Mike was hung up over the Google Voice deep integration issue. Now that’s apparently been solved thanks to a deal Google did with Sprint on the backend. If it works well, I’d consider switching to Sprint as well. I’m also a Google Voice user, but the iOS app ranges from craptastic to gone to slightly-less-craptastic depending on what day it is. 

Now that that iPhone 4S is out there, the biggest question seems to be: which carrier to go with in the U.S.?

AT&T gives you speed — they’re the only network currently supporting the 14.4 down that Apple mentioned on stage yesterday. But AT&T blows in big cities like San Francisco and New York. It’s hard to vote for speed when you can’t even get a connection at all.

Sprint gives you unlimited. Their plans are clearly going to be the best from a cost perspective. And, as the new kid on the block, they will likely have the least congested network. But they’re also the third-place carrier.

Verizon gets you reliability. They’re the most expensive and don’t offer speed or unlimited. But you pay for the quality of their network.

Right now, I’m torn. I won’t go back to AT&T because of my awful experience the last time. But Verizon versus Sprint seems to be a toss-up.

I think having the iPhone on three carriers in the U.S. is ultimately going to be a very good thing for consumers. Instead of taking features away and raising prices as AT&T and Verizon have been doing for years, they may be forced to actually compete with incentives for users. 

Huge win for Sprint — especially if they offer it with their deals that are typically cheaper than AT&T and Verizon. 

I’m also very interested to see what this means for Android U.S. market share in the fall. 

Also, Joann Lublin and Spencer Ante are reporting that the device will not be released until mid-October. This is the latest date reported yet, and goes against a report from Reuters earlier today saying “late September” once again. This back-and-forth will never end, apparently.

For the record, all I’ve heard is “October”. 

A nice thought by former Apple executive Jean-Louis Gassée, but not gonna happen.

Even if Apple was able to pass regulatory scrutiny for this (they’d argue that they’d still work with Verizon and AT&T and that Android is closer to a monopoly), such an undertaking would undoubtedly be a massive headache for Apple just from a logistics perspective. 

Could they offer a better service than any other carrier right now? Of course. But that isn’t saying much. In fact, it’s saying next to nothing — that’s why this is such a nice thought.

But as a carrier, Apple would have to worry about things like upgrading networks, getting local governments to approve towers, even more customer service, etc. It would be a huge distraction from the core business: selling devices.

Gassée also hits on a key point at the end: sure Apple could buy someone like T-Mobile or Sprint in the U.S. market, but the greater opportunity is worldwide. Such a buy here would mean nothing for the larger pie.

Having said all of that, I would not be surprised at all if Google eventually tries to buy a carrier. They also shouldn’t, and would face an even rougher time from a regulatory perspective. But Google wants to do everything. So they’ll try someday, I imagine.  

Every Phone Needs This

I’m going to write about this further — maybe tomorrow, on TechCrunch. But basically, I’ve been using the EVO 4G a lot over the past week or so. The device itself I’m not too fond of, but I would almost consider buying one just because it’s so damn easy and useful to turn it into a WiFi hotspot and tether it to your laptop. In fact, that’s how I’m writing this post right now in a cafe in New York.

It’s amazing.

And it’s fast. I’m not even using 4G (which doesn’t work in NY yet), but the Sprint 3G is about as fast as the WiFi in this cafe.

All of this just reiterates what a piece of shit AT&T’s network/feature set is.