No, Android Is Not Just for Poor People
In an attempt to explain the popularity Android phones over Apple's "superior" iPhone, Gizmodo's Sam Biddle comes to the not-so-nuanced conclusion that "Android Is Popular Because It’s Cheap, Not Because It’s Good," an explanation that only explains part of the phenomenon. Android has captured 75 percent of the smartphone market because it offers something for everyone. Unlike Apple, Google has lets its Android run on cheap phones along with more expensive offerings. So, it's not just for "poor people," as Biddle put it so nicely in a tweet, but it's also for people who like a good value or people who want an expensive, quality smartphone, who happen to not like Apple's product.
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Take the most popular Android phone out there: The Samsung Galaxy SIII. Reviewers love it. Biddle himself calls it "tremendous as both pieces of hardware and containers for smart, thoughtful software" and "a pleasure to use." The Samsung Galaxy S series even has itself an Apple-style hype cycle. That phone safely falls in the same "good" category as Apple's iPhones. And, it's not just "good enough for what it costs." The most recent make of the phone retails for $199 at a Verizon store with a two-year contract—the exact same price as the iPhone 5. Without the two-year commitment, it goes for $599, just $50 less than an iPhone without a service agreement.
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Biddle, however, claims "Android's success isn't really about these phones," without giving any sales numbers that show otherwise. In fact, these phones do explain a part of Android's popularity. The Samsung Galaxy SIII has outsold the iPhone 4S, in certain quarters. And the SII was last year's second best selling Android after the SIII. Those two phones alone don't eclipse Apple's total 2012 sales. For the financial year, the company sold 125 million iPhones. The S series has sold 100 million units during its entire existence, according to Samsung.
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The most popular Android phone, however, is just one of the many, many phones that offer the Android experience. That's Google's real winning point: It offers something for everyone. Samsung has crappy cheap-o phones, too. Like the Captivate, one of Biddle's example, which retails for one cent with a two year contract. And then there are a whole bunch of other hardware companies—HTC, Huawei, LG, etc.—hawking their Android wares, which vary in price and quality.
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This diversification has helped Android in its conquest for market share dominance as its lower-budget offerings have helped Android conquer Asia and other emerging markets. Almost half of Android's sales come from China and India. And this chart from Gartner chart via The Guardian shows that Android is pulling past "featurephones," or what the industry charitably calls dumbphones.
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A lot of that has to do with middle class people upgrading to their first fancy phones, according to Quartz's Christopher Mims. These Android hardware makers have also glommed on to the phablet trend, noting that people will pay a little more money for more screen. Apple, on the other hand, has so far refused to put out a new phone that retails for less than $650. And it doesn't look poised to get into the Phablet game any time soon. Apple doesn't care to play the market share game. Up until now, the company has survived on profit margins. The iPhone costs a lot, but people will pay for it.
That strategy might not work for too much longer, though, as The Atlantic's Derek Thompson explained. "The world is eating into Apple's markets faster than Apple is building new markets," he writes. As it exhausts its niche market, its margins will start shrinking. (This may have already started happening, as this week's quarterly earnings report could show.) And without a new product, just like Samsung, Apple will need to get popular and, in addition to the fancy iPhone 5, put out products that compromise on quality for value.
In fact, the company has already started doing this. The iPad Mini is a product of that thinking. The company compromised on screen quality to put out something cheap that appealed to a wider set of people. Whispers of a cheap iPhone suggest Apple will continue down that path.
The difference between Apple and Android isn't cheap versus quality. The distinction, rather, is "cool" versus "popular." The iPhone has something special, Android has it all.