Has Android reached its peak?

The latest comScore data shows consistent growth in US smartphone penetration. The rate is now 58.4 per cent of adult consumers who own phones. This is up from 20 per cent only three years ago. The rate of growth remains a remarkable 1.2 per cent per month. That’s 700,000 new-to-smartphone users every week. The historic average over 3 years has been 1.07per cent per month This after having crossed over 50 per cent on schedule in August 2012. There appears to be no slowing.

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The next milestone I have pencilled in is the 80 per cent mark which I extrapolate to be achieved by October 2014. 80 per cent could be considered “saturation” which would signify a rapid slowing of new user addition. However, that might still not happen until 100 per cent, depending on the availability (or lack thereof) of non-smartphones to buy.

This time frame is important because it would imply that essentially all mobile users in the US (some 234 million) would be a part of one ecosystem in about 2 more years. That’s less than the life cycle of the typical mobile contract (and thus the life of one phone). Put another way, by the time a new buyer today is ready to buy the replacement to their phone the market will be saturated.

This implies the mode of competition will be changing to smartphone replacement rather than smartphone adoption. To some degree this is already happening but as the net user gains data shows only BlackBerry and Windows platforms have had any net user declines in the last two years. “Platform churn” is still a relatively rare phenomenon.

How that will change post-saturation will be a crucial determinant to platform growth. The data today points to a higher degree of loyalty for iOS users and potential erosion in the Android user base as a result. There are ways of forecasting this on the basis of survey data as Carl Howe did. However, the data from comScore has already begun to show that Android may have peaked around 54 per cent share. Android share is now at the same level it was in July while iPhone share has grown by more than 6 points since then.

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There is a pattern of higher growth into the end of the year and an iPhone plateau into the first quarter, undoubtedly due to holiday buying favoring the iPhone. I don’t want to discount the possibility of some change in this pattern but so far there seems to be a plausible reason for it: with iPhone pricing and availability in the US offering no advantages to alternatives, Apple’s product is the most popular. Nearly more popular even than all the other competitors combined. 

Horace Dediu is founder and managing director of Asymco, a Helsinki-based app developer/industry analysis advisory firm. You can find his blog here.