The punchline

Harry Marks corrects Dan Lyons.

  • IK

    The “shipping vs sold” distinction makes sense, if one wants to discuss the number of phones sold during a particular time frame. It makes less sense if the focus is on general trends across longer time frames. In other words, if Android was outshipping Apple 5 to 1 in the latest quarter and 4 to 1 in the previous, isn’t is plausible to assume that the retailers are not constantly building new storage shelves in the stores and that the long term average of “shipped” approaches the long term average of “sold” (with a lag)? Or is the assumption that the retailers are giving away old Android stuff once they run out of shelf space and new Android gadgets still continue to be “shipped”?

    • studuncan

      No, it doesn’t make sense to assume they’re selling more. They could just as easily be shipping back the(old) phones that aren’t selling at all.

      • EzraWard

        If companies are shipping more Android phones now than they were previously, I would think you could look at the general trend of them selling more. I don’t think that most companies would over-ship many months in a row. So maybe the best analysis would be to wait and to look at the numbers in hindsight. I guess that’s the problem with using ‘shipped’ phones as a metric.

        • studuncan

          You may not think so, but go look at the profits/revenues of most of the phone mfgrs. HTC for one is about to go out of business. Their revenues are going down about 20% per month.

          • EzraWard

            It’s a comparison of Android and Apple, not any individual company and Apple. We’ll know more next year. All I was saying was that if more phones are being shipped means that more are being sold, or a bunch of companies will be hurting because they’re over-manufacturing. Like I said, with shipped stats, you can’t make absolute assumptions because of it.

          • studuncan

            “All I was saying was that if more phones are being shipped means that more are being sold, or a bunch of companies will be hurting because they’re over-manufacturing.”

            No, you said the first, I said the second. In fact you said the opposite of the second.

            ” I don’t think that most companies would over-ship many months in a row”

          • EzraWard

            I’m not even sure what we’re disagreeing on.

          • studuncan

            Heh, not so much disagreeing as clarifying.

          • EzraWard

            Awesome. Here’s a question, do you think there will be fewer Android manufacturers next fall? I see several dropping out because they can’t make money. I bet Samsung and Motorola will be among the few manufacturers that survive.

          • studuncan

            I imagine it won’t take until next fall. HTC is failing, Nokia is failing, RIM is failing, LG is going downhill, MOT is going downhill. I really don’t see how it’s anything other than AAPL, SAM, and whoever MSFT actually uses as a partner (or they buy out NOK) at the end of the first round of the smartphone wars.

          • EzraWard

            Interesting, thanks for the response.

      • IK

        So, would you expect the return rate to be significant enough to change the qualitive conclusions one would draw from the shipping numbers? If yes, why do you think the retailers keep ordering significantly more Android phones than there is demand for, quarter after quarter? After all, it’s expensive to keep the phones dusting on shelves, just to send them back later, and one would expect the retailers to change their ordering behaviour, if they, quarter after quarter, send a high share of them back.

        • studuncan

          Yes, I do. Because retailers think the latest & greatest will sell the best. And new Android phones come out literally every month, so they keep doing that. Plus the mfgr sales guys keep telling them this one is the one that will sell. And bribing them to do so.

          • IK

            Ok, I think we just need to agree that what we consider “a plausible” interpretation of the shipping numbers differs. Out of curiosity, what do you think the real ratio between global Android and iPhones sales is?

          • studuncan

            Haven’t thought about it. But I believe Android shipping numbers are about 20% more than sales to end users. And with most of them being $0 up front, the cost of getting a new one every year is a lot less than an iPhone. Thus lots more turn over as well.

          • There’s also always the question what one wants to say by posting these market share numbers.

            If you want to point to the profits the manufacturers of devices for a certain platform are making – we already know that Apple is leading here.

            If you want to point out which platform is more interesting for developers to develop for – Apple paid out 6.5 billion to developers, Google is by far behind that, for all that we know.

            And if you are not exactly targetting possible profits on each platform, but just want to increase the use of your applications, which platform should you concentrate on first?

            Even then, Apple is most likely not as far behind in the number of users, as these marketshare numbers want to make you believe.

            Numbers like these have also been released for Germany and there’s something very obvious in them.

            From september last year to last september, the marketshare of Android increased from about 27 percent to about 50 percent.

            Apples marketshare stays at around 20 percent.

            And the marketshare of Symbian fell by 16 percent, Windows Mobile by about 4 percent.

            So, marketshare of 2 kinda outdated mobile OS fell by 20%, market share of Android increased by 23%.

            Great, so all those who were still using their old Windows Mobile devices and old Nokia feature phones in 2011 switched to Android.

            Do you really think they bought Samsung Galaxy S IIIs?

            No, they most likely got those free phones you get when you get one of those 10-20$ per month contracts.

            Samsung Galaxy Y or Galaxy Ace.

            Do you really think these people will start buying tons of apps or use their device 2 hours per day?

            No, they will be used to call, text and perhaps once in a while use facebook.

            Those devices are used as feature phones.

          • IK

            Now that’s an entirely different question and you may well be correct in many of your points. However, there is also inertia in some of the numbers, Android has been playing catch-up with Apple and if Android phones would continue to outse… outship Apple 5 to 1, I would expect this to start eventually affecting the choices of the developers, even if per phone Android users would continue to buy significantly fewer apps (as they probably will). I’m not holding my breath for seeing more evenly distributed profits, though…

            Also, Symbian is, at least on paper, also a smart phone OS, which would suggest that it’s unlikely all the old symbian users would use their new Android phones only for making calls. My father, for example, was using a Nokia Communicator for emails, faxes and whatnot already in the 90s and switched away from Nokia only a year ago (he has an iPhone now).

            You’re probably right in that the group of people hanging on to near obsolete phones for quite long before switching are unlikely to be the most active “power users”, but if the ratio would continue to be 4:1 or 5:1, the sheer numbers would be so strongly on the side of Android that I would expect to eventually see a similar situation as with Mac and PC (i.e. there are much more PC users, but the share of people owning a PC that is used very little is probably clearly higher than the same share for Mac users).

  • lucascott

    He also forgets to account for unit returns after end user sales.