The iPhone Is Beating Android In The U.S.

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The iPhone overtook Android in the U.S. in October, according to new data from Kantar Media.

Apple has 48.1% share of U.S. smartphone sales, compared to Android which is at 46.7%. Strong sales of the iPhone 5 drove Apple's share gains.

Kantar analyst Dominic Sunnebo says in a release, "The last time we saw iOS overtake Android in the US was when the iPhone 4S was released and Apple managed to retain its lead for three consecutive periods. This time we predict that Apple will beat its previous high of 49.3% and achieve its highest ever share of the US smartphone market within the next two periods."

As well as Apple is doing in the U.S., it's doing poorly in Europe. According to Kantar, Android is 73.9% of sales in Germany and 81.7% of sales in Spain.

Why is Apple lagging in those countries? In Spain, the economy is weak, and carriers don't provide the same sort of subsidies you see in the U.S. People pay full price for their phones upfront, along with prepaid plans, and will generally choose a cheaper phone over a more expensive one. Therefore, they're tilting towards Android. (In Germany, the economy is strong, but the subsidy dynamic is similar.)

This is an interesting dynamic for the platform battle between Apple's iOS and Android.

What it suggests to us is that when price isn't an issue, and people have a choice between Android and iOS, they will choose the iPhone. But, that's not always an option, so Android takes share. In the long run, if Android can win over these consumers, then it can lock them into its platform, and Apple misses out on these consumers.

If Apple wants to go for market share, then it's going to have to figure out how to make a less-expensive iPhone. That means, potentially, a hit to Apple's margins. To date, it's addressed the lower-end market by offering older models for sale, rather than designing a brand-new, low-end phone. Apple has thus far chosen profit margin over market share, and it has been the right choice.

The trillion-dollar question for Apple is whether or not this strategy can work for the next five years.

Don't Miss: Why People Freaking Out About iPhone's Market Share Are Wrong



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