The story goes like this: The iPhone comes out, and it's the only smartphone anyone wants, because there's never been anything like it. It is the smartphone. Step forward a few years, and Apple is losing to Google — at least in sheer numbers of phones being sold. What happened?
Giz AU editor's note: This post focuses heavily on the US market.
People without money happened.
The split between the ever-pricey, ever-coveted, newly chamfered iPhone and everything else is glaring: The iPhone is universally considered good. A lot more Android phones are considered good enough — or, more to the point, good enough for what they cost. And it's that trait more than any new feature that's guaranteeing Google its role as Phonemaker of The People, a democratic gadget, while Apple succeeds only in cementing its grandfathered slot in the gilded pockets of the overly-discerning overclass.
From the day it slipped out of Steve Jobs' womb and onto credit card bills, the iPhone was a dearly coveted bourgeois object. It was expensive, fancy without ostentation, and semi-affluent white people loved it like their own progeny. It is the phone of actors, models, rappers, academics and graphic designers living beyond their means. There's never in history been an electronic class beacon so clear as the iPhone — remember how expensive it was when it launched?
In the US, a measly 4GB model set you back $US500 and the 8GB version was $US600 — with a two-year contract. That didn't stop Apple from selling hundreds of thousands of them out of the gate — so many that AT&T's servers crashed under activation pressures.
Then Google sold its own touchscreen smartphone for around $US200, the first Android handset of all time, and no one except geeks of the tightest niche gave a damn.
But today the tables aren't just turned — they've been flipped over and turned into firewood. Android phones dominate Apple across the world — earlier this month, the San Francisco Chronicle reported the trouncing:
In the third quarter of 2012, worldwide manufacturers - among them Apple, Samsung, HTC and Research in Motion - shipped 181.1 million smartphones, according to market analytics group IDC. Google's Android operating system was installed on 75 per cent of them, says IDC; Apple's system, iOS, was on about 15 per cent. That market share for Android was a 91 per cent jump from the previous year's third quarter.
That's monster success. That's a routing. And while Android has finally come into its own as a sophisticated, refined mobile OS that deserves to be purchased in large numbers, Android isn't winning just on merit. Phones like the Nexus 4 and Galaxy SIII are tremendous as both pieces of hardware and containers for smart, thoughtful software. Each is a pleasure to use, but that's not Android's sharpest knife.
Android's success isn't really about these phones. It's about the ZTE Warp, LG Motion, and Samsung Captivate — which retail for $US100, $US50 and a penny, respectively. It's about these marginal, middling phones that can be sold like bags of Doritos or bargain-bin sweaters — they're priced to move, not priced to be ogled at or aspired towards. And it's working.
The last study conducted by the Pew Research Center's Internet & American Life Project shows that Android is the chosen smartphone of people without money. Among respondents, 22 per cent of those with annual incomes below $US30,000 were Android owners, as opposed to just 12 per cent for iPhone. With those towards the lower-middle class, the trend holds: Android owns 23 per cent of incomes up to $US50,000, with iPhones at 18. The data makes it clear: the less money you have, the more likely you are to opt for an Android phone over something more expensive.
And it's not purely an income game — other socioeconomic factors that correlate heavily with the amount of money you've got in your pocket line up perfectly. US census data pegs black and hispanic households at median income (and ergo spending) levels tens of thousands of dollars below their white peers — and statistically, those same households are going Android at higher rates. A full 12 per cent more black and hispanic smartphone users are Android users compared to Apple customers, and owners of any race with a high school diploma or less made up 38 per cent of Android owners, over iPhone's 31 per cent mark in that cohort.
This is no accident. Check out the flyers or sidewalk storefronts of Boost Mobile or MetroPCS — two US carriers that cater to lower-income customers — and all you'll see is Android. Even Asian corporate giants like Samsung are trying to lure more lower-earning buyers. As NBC's Griot news site pointed out late last year,
[Samsung's] new commercial, titled "Family Photo," features a mostly African-American family attempting to take a holiday portrait with the new Samsung's Galaxy Note II..."Family Photo" isn't the first attempt that Samsung has made to showcase African-Americans in their ads. Sports Illustrated‘s Sportsman of the Year LeBron James was featured in a series of Galaxy Note II commercials in November that gave a snapshot into Miami's black urban community. With his Galaxy II in hand, LeBron gives a tour of his day-to-day activities in the ad, which include breakfast in his lavish Miami home, a stop at an urban street food truck, a haircut at the local black barber shop and finally a Miami Heat's game.
Indeed, Samsung may have the right idea to target African-Americans, who happen to be one of the fastest growing demographic within the smart phone market.
In the meantime, Apple's closest stabs at diversity star the universally beloved Samuel L. Jackson eating gazpacho and the Williams sisters playing ping pong. Black people, but massively wealthy black people. Beyond that, it's a nebula of pale-handed closeups and consummate white human being Zooey Deschanel.
Apple won't play this game. Partly because it's too stubborn (or too smart) to undercut the likes of HTC and Motorola and hit buyers for whom the price of entry matters more than almost anything. Maybe it's what keeps up the iPhone Mystique. Maybe it's good business. Maybe it's both. But iPhones have always been the expensive alternative to an Android, and there's no reason to think the company will tack away from that status.
Android makers aren't beholden like that. Manufacturers are free to use Android, pay nothing to Google, and then pass on that massive savings to consumers in the form of cheap-o handsets. Most of them are pretty chintzy, slow and generally bad, but they're still smartphones. For millions upon millions, that's more than good enough; not everyone needs top-of-the-line. Cheap Android will still run Instagram, still check Twitter, still play music and read email. We might turn our nose up at this — who would ever get anything but the best phone with the biggest screen? You use a handset with fewer than two cores? But that's a low echo from the nerdy silicon tower: a lot of people can't afford a $US200 or $US300 phone, and won't ever be able to. A lot of people just want the basics — no need for the spiff of retina display or LTE — and only want to put up what it costs to get in the door.
This isn't just a good strategy for Google, it's a diabolical strategy for Google: carpet bomb the phone world with as many easy ways to use Google products as possible. Forget prestige. Just get people signed up. Apple might remain the most valuable company in the entire hoary history of capitalism, but Google's playing the slow con. As long as Android can keep feeding itself to companies and drive budget electronics, it'll have its foot on the iPhone's throat as a populist standby — and the Zooey Deschanels among us will start to feel like the real minority they are.