Apple iPhone VS Google Android Market Share

Let me first start off by saying that Apple and Google are two different companies with different core businesses. Apple is in the hardware business and Google is in the software business. That is a bit of an over-generalization obviously, but I think you get the point. However, in order to gain market share Google has recently been combining its software and data capabilities into hardware, such as the Google Wallet service which will run on Google smartphones as well as other devices.

google versus apple

Photo created with an image from http://www.flickr.com/photos/quinnanya/

 

Apple has also been increasing its capabilities in the software business most notably with iTunes, which is helping to convert PC users over to Mac. They also create the OS, operating system, for the iPod, iPhone and iPad in addition to the software that is created specifically for Mac users.

There are many people asking, “Does Apple have a larger market share than Google?” or “Is the Google Android phone beating the Verizon iPhone?”. In order to answer that question we have to first look into what market share is.

What is Market Share?

Market share is a simple concept to understand. If there are 10 smartphones sold in a year and Google sold 4 with the Android operating system, Apple sold 4 with the iOS, and Research in Motion sold the last 2; we could assume that Google owns 40% of the market share, Apple owns 40% of the market share, and Research in Motion owns 20% of the market share.

How to Calculate Market Share

Market share is calculated just as in the example above by taking a specific company’s sales revenue and dividing it by the entire possible number of sales revenue. The companies must operate in the same industry, for obvious reasons. Typically a market research firm like NPD, would calculate these numbers.

How Does a Company Gain Market Share?

A company can gain market share in a variety of ways. Because part of the market share calculation is made up of sales, a company with a higher price point that generates as many sales as a company with a lower price point will have a higher market share. In order to gain market share, a company will need to increase unit sales by selling more, or raise prices.

What is the Market Share of Google’s Android Smartphone?

In May of 2010, the market research firm NPD found that Google’s Android operating system took second place in the US smartphone market. The most recent update posted by NPD in August 2011 shows Google Android operating devices to have about 52% of smartphone sales. See the change from the first quarter in this previous release.

What is the Market Share of Apple’s iPhone Smartphone?

Although Apple’s iPhone is a very popular phone and currently on available on the two major mobile service carriers, AT&T (T) and Verizon(VZ), it still lags in market share. Both carriers have to compete with each other in order to have the cheapest iPhone plan. According to the same market research conducted by NPD, the Apple iPhone currently boasts only 29% of the smartphone market.

How Can I Use Market Share to Invest?

This is ultimately what we want to know, right? How is this information going to put cold, hard cash in your pocket? The larger a firm’s market share, the better suited they are to generate more returns for the individual investor.

A quick way to get an idea of what firm has the largest market share in the industry, is to look at the firm’s market capitalization. For firm’s like Google and Apple, this will be a little difficult because the market cap takes into account all of the firm’s operations.

Remember that market capitalization is the number of shares outstanding multiplied by the share price. When compared to their peers, you can quickly see what firm has the largest market cap, or in other words, what firm has investors that are willing to pay more for a share of the company’s business.

To find market cap, head over to Morningstar.com and login to your free account. Type in the stock symbol and on the far right of the quote page you will see Market Cap. Currently Apple (AAPL) has a higher market cap than Google (GOOG), but I’m curious to see how this will change. Especially since Google is expanding into services such as Google Wallet and Google Plus.

What is your take on the two smartphone titans?

Disclosure: At the time of this writing, I do not own any GOOG, T, VZ, RIMM or AAPL. See the full disclaimer here.

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About LaTisha

"Money is a tool. Use it to get where you want, but don't let it control you."- LaTisha

Author, motivational speaker, entrepreneur. Love to laugh and make others laugh. Focused on helping you build success and stay motivated along the way. Start investing now and let’s build wealth together.

  • http://yesiamcheap.com/2010/09/the-government-gives-free-appliances-yup/ Sandy @ yesiamcheap

    It doesn’t really matter who controls what percentage of the market. Apple is sitting on a pile of cash that is larger than the market cap of Goldman Sachs. It’s a serious war chest that they can do anything with. Who’s to say that they won’t make a bid for a rival company and instantly up their market share?

    Mind you, I am NOT a fan of Apple and I think that Google is turning into big brother, but I have to give credit where it’s due. Google core “product” is still ad sales. What happens if advertisers pull back?

    • http://www.fsyaonline.com LaTisha

      Apple does have that choice but I’d be very surprised to see them make a move. They seem reluctant to spend any of that cash anytime soon.

      Also I don’t think Google is just a search engine or only dependent on ad sales by any means. They have Google TV being released soon, and they have yet to harness the wealth of information that they gather each second through each of their free services. (Big brother for sure.) Although I do agree that ad sales make up a large part of their revenue, I see them being adept enough to reorganize if that revenue ever dried up.

  • http://www.krantcents.com krantcents

    Apple is gaining market share, RIMM is losing market share! RIMM is using old technology which is part of the reason they are losing share. The next few years should be very interesting!

    • http://www.FSYAonline.com LaTisha

      I’m just waiting for RIMM to become completely obsolete and be bought out, just like Palm.

  • http://blog.familymoneyvalues.com Marie at FamilyMoneyValues

    I’ve always used market cap in looking at how to allocate investments in my portfolio. I never thought of it being related to what share of the market a company’s product has.

    • http://www.FSYAonline.com LaTisha

      It’s a good metric to look at if you are testing the strength of revenue growth.

  • http://www.moneyistheroot.com Justin @ Money Is The Root

    All I know is that I need to get rid of my blackberry fast! I just want a non-touchscreen phone with Verizon, that has the Android operating system and is 4G capable…they dont have one yet!!!

    From an investing perspective… you cant look at phones when it comes to those two companies, this just one market of many for them. I think that both will long be in the running, neither will crush the other, but the Android operating system has more apps, and more apps rules the market. Imagine how great the apple iphone was doing, and what kind of force google mustve had to not only compete but to overtake them.

    • http://www.FSYAonline.com LaTisha

      No touchscreen? You might be waiting for a while for an Android that is not on a touchscreen.

      True, the smartphone market share is not the entire picture for either, which definitely explains why Android has captured the smartphone market but Apple still leads in market cap. Yeah, Google did a great job catching up. I think it also helped that ATT service sucks and many Verizon users just would not sacrifice their service just for an iPhone.

    • http://liverealnow.net Jason@LiveRealNow

      I’m ditching my Blackberry in a couple of months when my contract is up. I want a physical keyboard on the Android platform.

      • Wayne

        Wow. This is a very very flawed article. The correct view is not in google vs apple but the handset manufacturers vs apple. As well as the software market of both companies. While worldwide android has more devices it is because they are usually the lower priced phones and lower markets purchasing them. Also the market data will show that the market share of iOS apps versus android is closer to 80-90% of revenue is in the iOS market as most android consumers elect only for the free “ad supported” apps. Most developers struggle to recoup development costs for android vs apple has already paid out over 2.5 billion to developers.

        As well a major income hit is possible in the future for android manufacturers as the ITC has ruled that Android devices are in violation of two key patents owned by Apple. The only solution will be either a royalty paid to apple for each android device sold or a halt put on android device sales. This is only 1 of many patent disputes apple has pending which have been ruled in apples favor. This could cause apple to make more money than some manufacturers off of the sale of android devices. Microsoft in a similar fashion makes 5 dollars on every android device causing it to make more money off android than Microsofts own Windows phone platform.

        • http://www.FSYAonline.com LaTisha

          It was comparing the iPhone OS to Android, not handsets. Also apps weren’t included in the source I tapped so that was not included either. I had to make sure I had facts to support any claims.
          And while disputes pending are important for future valuations, it is also not factored into the current market share of the operating systems

      • http://www.bandxusa.com Ace Macleod

        The physical keyboard, and Steve Jobb’s aversion to one, could be a major reason why Android phones will eventually dominate the market. I personally love my Samsung Epic…the fact that it has a physical keyboard was the initial selling point. My wife just bought an HTC (android) phone, and again she wanted one with a physical keyboard…
        It’s one of the major qualms a lot of people halve with Apple, it’s either “Steve’s way or the Highway”. Give people a choice…

        • http://www.FSYAonline.com LaTisha

          Yeah, he pretty much runs Apple with the idea that they have to be able to control everything. It’s really sucks because openness helps innovation.

  • http://retireby40.org retirebyforty

    I think in the long run open platform will beat closed platform. Yes, Apple has great designs and cache right now, but an open platform will always propagate faster. I doubt Apple will be able to continue on this path, but I guess I’m a little stuck in the past.

    • http://www.FSYAonline.com LaTisha

      I see big things for Apple and Google but as far as who will be more viable over the long term, I would guess Google. Only because, Apple is highly dependent on Steve Jobs for innovation.

  • http://www.thesinglesaver.com Denise @ The Single Saver

    Apple is a big beast, but their closed system is a problem and the reason many people – including me – refuse to buy an iPad or iPhone.

    • http://www.FSYAonline.com LaTisha

      Very true. Although it is a way that they keep out developers trying to hack the system.

      • http://www.bandxusa.com Ace Macleod

        It’s also a way for legitimate developers from writing new apps ;)..Best practice is to keep it open

  • http://onecentatatime.com/ SB @ One Cent At A Time

    Problem is Apple still living on initial hype. Nor Google nor Apple neither is safe the industry they are in is most dynamic one, you never know 10 years from now if these two even exist.

    • http://www.FSYAonline.com LaTisha

      Very true! There is no way to know if they will still be around or even relevant in 10 yrs.

  • http://www.worldoffinance.biz World of Finance

    Sounds just like the research I do at work, the market is becoming more dynamic.

    • http://www.FSYAonline.com LaTisha

      Definitely. I didn’t know you do market research. What type of information do you have to gather?

  • http://androidaccelerate.blogspot.com RJ

    People are choosing android gadgets because they are not that expensive without compromising the specs instead some of the gadgets are actually top of the phones. One thing that deters people buying apple is their closed system they wanted people to only buy their products by limiting their radio connection.

    • http://www.FSYAonline.com LaTisha

      Yes, that is a major plus for the Android OS. The phones are generally less expensive and the open system allows for more innovation.

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