A first-ever drop in smartphone sales could be good news for Apple but portend ‘ominous signs’ for the many companies tied to the Android mobile operating system. Despite launching several Android-based phones, carriers AT&T and Verizon both reported a drop-off in smartphone sales during the September quarter, one analyst noted Monday.
“We believe slowdown in Android/Blackberry/[Windows Phone] sales at AT&T/Verizon likely indicates a reasonable number of customers choosing not to upgrade in Q3, but rather waiting to switch to the iPhone in Q4,” Morgan Keegan analyst Tavis McCourt told investors Monday.
McCourt adds that the drop-off in smartphone demand could especially hurt Android vendors, “given that there were a number of Android launches in the quarter.”
Both Apple and Android vendors also must readjust to a maturing smartphone market. Now that nearly half (45 percent) of paid-paid AT&T and Verizon Wireless subscribers have smartphones, the companies will need to experiment with “lower priced plans” to continue to grow smartphone sales, the analyst notes. Already Verizon is testing its BlackBerry Social plan to entice lower-cost plan owners to purchase the RIM smartphone.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
53 responses to “Smartphone Sales Decline: Good News for Apple, ‘Ominous’ Trend for Android”
On one day Cult of Mac reports on line-ups and record breaking pre-orders for the iPhone 4S, the next they quote some fool analyst as saying that people are waiting until the next quarter to buy it. The same article shows that the iPhone is on a much steeper decline than other phones, but this is great for Apple and ominous for everyone else.
I’m just dumbfounded — are you completely disconnected from reality or will you keep trying to push the “Apple is #1” line despite all evidence to the contrary?
I mean, if this is the direction you want to go in, perhaps try pointing to source material that doesn’t entirely disprove what you’re trying to claim.
The “decline” in iPhones by about 2 million in the last quarter was made up at least in half by just iPhone 4S sales in the first weekend, and who knows how many more additional 3GS iPhones (sold out due to high demand), and discounted iPhone 4 models and new iPhone 4 $99 model. Probably already sold 2 million, with some percentage of those switching from other platforms or upgrading from dumbphones. Seems very likely the iPhone will have a huge holiday season.
The reason this could be a watershed moment for Android – from polls these users have less commitment to staying with Android/less brand loyalty, and the first batch of Android users will be out of contract and able to upgrade this year. Also the first time an iPhone may be available on their carrier – Sprint and Verizon. At the least, would expect Android momentum to decrease as they lose carrier distribution advantage.
Maybe you missed the part where these drop-offs are Q3 data…people waiting for new iPhone.
Guess you didn’t read the article.
Apple’s “decline” was clearly due to people holding off until the new model was released. I am one of them. Further, you’ll note that the drop in non-iPhone sales began in Qtr 1 while iPhone sales were still increasing.
I have no doubt that we’ll see the same decline In the quarter leading up to release of the iPad 3. I currently have the first iPad so I’ll be one of those too.
(This should have been posted as a reply to Patrick Bay)
also there were no good android phones coming out in third qtr the bionic got pushed back and galaxy nexus and droid razr are coming out this qtr. Also Samsung galaxy s2 game out in 4th qtr which should help android sells by a lot. Also there are many people with a og droid waiting for the galaxy nexus to come out just like iphone 3gs users that waited for the iphone 4s. This story is very one sided
Paid-paid?
kinda was wondering the same thing lol
it’s certainly reasonable to expect iPhone sales to jump up in Q4 to maintain the 6 million units per quarter average of Q1 and Q2 for the entire 2011 year, given the artificial slowdown in Q3. so Q4 sales for ATT/Verizon could be at least 7.5 million.
that would surpass Android sales by a lot … if the new models coming out now don’t bump them up a lot too. the two year contact cycles of the first wave of 2009 Android buyers are all coming up now, so there could be a real boost, and sales could likely rebound to the 7 million peak level of Q4 2010.
it will be very interesting to come back to this chart in 3 months when the Q4 results are in, and see which of these possibilities actually happened, and which didn’t. so please mark that down, ES.
I think that’s supposed to be “post-paid”, meaning people with contracts.
I know this is gonna get me a bunch of dislikes, but I’m not surprised that Android users are switching to iPhone. Overall the majority of regular consumers are unsatisfied with Android. Google really needs to work hard on improving the Android user experience or sales may continue decreasing.
Android 4.0 (the forthcoming version named Ice Cream Sandwich) looks very polished. But Android has the same problem Windows has: the OS is good, but the hardware lacks and causes problems. Carriers and manufacturers change Android so much and put it on such cheap hardware sometimes that it doesn’t run well. ICS should solve some of that, it’s just up to the manufacturers to make good (cheap) phones (whatever my sister has in Sweden that she got for like $50 no plan) and better (expensive) phones (like the Galaxy Prime).
I had both a Droid 1 and Droid 2 (multiple iterations of them because they kept having hardware issues). I am now a satisfied iPhone owner. Android shows promise, but it’s not there yet.
I was put off getting a smartphone by having to argue with the clerk about NOT having a Data Plan. Until I can get a Smarphone without the baggage of a Data-Fing-Redundant plan for an extra 30 to 50 dollars (as I already pay for home Internet) I’ll never consider one.
So yes, if manufactures want to get the rest of us who balk at DataPlans then they need to figure out how to get the carriers to stop forcing us to buy one with their product.
regular people DONT know what the galaxy nexus is or at least never heard about it until last week.
I’m 100% sure regular people did no what the bionic was and im sure many og droid owners do no what the galaxy nexus is. I would of bought an Iphone 5 and of been happy with it (4.3 inch screen or bigger) but im sure there are many people like me that will get the galaxy nexus now. And most anyone that knows anything about smart phones does no what a samsung galaxy s II is. and that came out in .4th qtr also
Good luck with that one. I’m pretty sure the manufactures don’t care too much about the four or five of you who want a smartphone, but don’t want a data plan.
Frankly, I would be surprised if the numbers were even that high. It may be just you.
Patrick,
If you are going to be snarky and go on about how dumbfounded you are at something, it behoves you to at least read the article before you post about it. Otherwise you wind up misunderstanding things and people reading your post are dumbfounded by how dense you appear to be.
A Friend
Um you are vastly overestimating regular people. either ur just one of the many obnoxious android trolls or you really do not understand what life is like for people who do not sit on engadget all day. I think most people know of android yes, but they know it under a google phone or droid moniker. My Dad called me up the other day because he wanted to know if there was any phone on Sprint finally better than his original Evo 4g other than the new iPhone 4s. He thought his 1.5 year old phone was still the best. This is a guy who reads the Wall Street Journal religiously so he knows what’s up in the world. And also anyone who knows anything about smartphones is the minority of the world. Hell I didn’t even know what the droid bionic was until there were comparisons between it and the iPhone on all of these sites. This is because android has so many new models that some *cough* droid razr *cough*just get caught up in all the other announcements made by other companies. How can consumers who usually look at new phones every 18 months at the least keep up with this torrent of new stuff when it usually does not effect them. The truth is that people can’t unless a certain model is heavily promoted like the Evo 4g, the Droid incredible, the Droid, and all the iPhones. If consumers aren’t constantly reminded that a product is there, it becomes irrelevant to them. I don’t know anyone who owns the Galaxy S other than my schools IT director, and no one was talking about the NEW GALAXY NEXUS the day after it was announced where i live. I go to a highly prestigious school in chicago where people aren’t hidden from new tech because their parents get it for them as soon as they want it. The day after the iPhone 4s was announced people didn’t just know it existed but were ooo-ing and ahh-ing over Siri. Over the course of the launch weekend, 25% of the school probably migrated to the 4s judging by seeing everyone talking TO their phones in the hallway. The only people I know who have androids are nerds or people stuck with the crappy t mobile clique cause of they got it without a data plan. Android is for nerds, the iPhone is for everyone else.
Agreed. Get an iPod and a dumb phone.
The Carriers are NEVER going to offer you a smart phone without Data in the U.S.
ICS still lags, there still no UI and UX consistancy across the OS, and the Market is still a cesspool where your device may catch an STD.
classic
Don’t expect a subsidised phone then. Go buy your own unlocked phone and your plan separately. You can even get a prepaid SIM from AT&T or T-mobile.
Oooh, you have ICS? Where did you get it? How many STDs have you caught?
I re-read the article and I stand by my comment. The graph shows a steeper decline for iPhone than for Android devices, and there is no explanation given for why this is great for iPhone and bad for Android except for the statement that people are waiting between Q3 and Q4, something that’s equally applicable to both devices. Perhaps you’d care to explain how this makes any sense?
I have had a droid eris for 2 years, and can hardly wait for my iphone 4s to arrive today… even following the fedex tracker. initially i really liked the phone. but it has not held up. drops calls. wont dial. texting problems. have to take the battery out for a reboot. (a week ago, it left me stranded at 1 am with a flat tire, and no way to dial out) and i am not the only one with a phone at the end of it’s contract experiencing these issues. i know of at least 10 ppl with droid problems. would NOT recommend them. my only decision is do i run the eris over with my car? or throw it in the lake?
That’s what I ended up doing. I can’t be bothered with US carriers’ insistence on data plans, so I ended up getting an iPod Touch and a dumbphone–yeah, I’m carrying two devices, but I’d rather do that than bother with data plans, or use my current carrier and get an Android.
How about … just maybe … that the greater downturn in iPhone sales than in Android sales finally reflects the state (and anti-corporate mood) of the economy, favoring lower priced phones over “cadillac” ones? It’s not necessarily people waiting for iPhone Q4 …