Archive for the ‘Strategy’ Category

Android Users Aren’t Cheap (but cheap people use Android)

Thursday, May 30th, 2013

This is a follow on from Wednesday’s post Mobile Market Share vs Usage .

I’ve been thinking a lot about why web usage numbers for Android devices (and app purchasing/usage) is so much lower than iOS. Specifically, it seems that the majority of Android users don’t use the “pocket computer” capabilities of their smart phones like iPhone users do. I think the answer is really quite simple: Android phones are “selling” so well because they are the easiest & best phones to get for free.

So who uses Android?

Most of the Android users I know are hardcore geeks and many of them are developers and from the very beginning, I’ve understood why these guys were Android users. You can customize anything and everything on an Android phone. Don’t want the phone to ring when an ex-girlfriend calls? There’s an app for that. Don’t have the latest OS because your carrier sucks? Easy-peasy, just root the phone and update the OS yourself. Wrote your own app and want to give it to your friends? Yay! No stupid Apple hoops to jump through to get it working.

“I Just Want a Phone”

The other set of Android users I know are people that are far from geek. These non-geeks seem to use their phone a lot differently than the hard core geeks I know. They actually use them mainly as phones. Weird, right? And where, 5 years ago, I bought a pocket computer that occasionally rings, this group of people only need a mobile phone to make and receive calls.

Jitterbug

NOTE: Not actual Android users

They don’t really care that you can check Facebook on the go. They don’t want to capture, edit and share a movie trailer they made with their kids. The don’t need see LOLcats while waiting in line for the grocery. And they certainly don’t want to play Words with Zombies.

They want to make and receive phone calls. They might want to take pictures. They might want to send and receive text messages (or they feel compelled to by others). Most importantly, they don’t want to spend anything on a mobile phone. And based on usage data, I suspect that is this group of users make up the majority of the Android base.

Free is powerful

I have a hypothesis that many people who would have normally bought a feature phone (or “basic” phone in telco parlance) are now buying smartphones and while I think there might be a lot of reasons for this, I think the biggest reason is that it’s hard to not buy a smartphone. More specifically, it’s hard to get a feature phone for free.

To illustrate this, let’s go on a walk down the virtual aisles of the major US mobile carriers and see what they have available for free (as of May 30, 2013):

  • AT&T – 2 basic and 21 smartphones
  • Verizon – 6 basic & 6 smartphones
  • Sprint – 9 basic and 28 smartphones
  • T-Mobile – 2 basic and 4 smartphones

Free feature phone selection is pretty slim at most carriers and many of the “basic” phones look a great deal like smartphones further confusing customers who might be looking for “just a phone.” If a customer comes in looking for a free phone, it’s not hard to imagine a Verizon salesperson pushing last year’s excellent (and free) Samsung Galaxy S III over Apple’s (free) 3 year old iPhone 4. I love my iPhone and if you asked me which free phone to buy, I’d be hard pressed to recommend the iPhone 4.

So basically, a person who wants “just a phone” and doesn’t want to pay anything for it, is now getting a smartphone and that smartphone is undoubtedly an Android device. And that brings us back to where we started – I’ve never thought that all Android users are cheap, but the cheap users are definitely using Android.

Mobile Market Share vs Usage

Wednesday, May 29th, 2013

When I started developing a mobile strategy for Cheezburger, I dug into the data to discover which devices were most popular and what platform(s) my company should devote our limited money, time & developers to and quickly came to two conclusions: there were more Android devices on the market, but iOS users were more active.

Android is winning?

It felt like every month there was a new report regarding the ever increasing number of Android phones being sold and how Apple was losing the mobile OS war 1 just like they lost the PC wars. Most recently, Gartner reported first quarter 2013 sales of Android phones were four times greater than iOS. Given the sheer numbers of Android users, why would anyone develop for iOS first or at all?

Usage matters more

As an app developer, number of phones shipped or activated is interesting, but somewhat irrelevant. 2 Usage is what really matters and looking at that data is pretty convincing. Given that app usage number for (at the time) a non-existent product are hard to come by, I used our mobile web traffic as a proxy for demand by platform. iOS web traffic for our sites was roughly 2 to 1 over Android and according to Netmarket, worldwide mobile Safari (iOS) had a 59% market share vs the default Android browser’s 23%. Most other browsers are pretty much a rounding error.

Mobile browser data q2 2013 4

(Source: Netmarketshare)

Pocket computers vs phones

So there are 4x the number of Android phones sold in a quarter, but 2 to 3 times as many iOS users actively using web sites, what’s wrong with this picture? I’ll get into theories about that in a future post, but currently, iOS users are using their phones more as pocket computers than Android users are. Given that, I know that I wanted to devote most of our efforts into iOS.

At last night’s kickoff to the All Things D Conference, Tim Cook laid it out a bit more succinctly – “What the numbers suggest over and over again is that people are using our products more.” If you are developing mobile products, you have to ask yourself, do you want to be exposed to the largest number of users or the largest number of possible devices?

Should you ignore Android? Well, no. Android’s usage numbers are growing and I think perhaps before long Google’s strategy may overtake Apple. That said, I think it’s safe to adopt the strategy that many have and to develop for Android second depending on the product you are developing.

How did it work out?

We released both apps around the beginning of December and when I left at the beginning of May, Cheezburger’s Android app usage trailed iOS by a larger margin than the web stats, but my hypothesis that web stats would be an indicator of app usage was correct and the bet was a good one to make.

Notes:

  1. I’m not going to talk about profit share vs market share. Go read Daring Fireball for that.
  2. I say “somewhat” here as a hedge for a possible future when people start to use their Android devices as pocket computers instead of just a big screen phone