The story of Android’s success in the domestic US market is no secret. For the past couple of years, Android has been continuing to make strides in their technological innovation and hardware options, while the Android app market continues to introduce ever-increasing numbers of refined and useful third-party applications. While Apple’s iPhone is still the most recognizable smartphone on the market, there are now more users of the Android operating system in the United States than every other operating system combined (Apple’s iOS included).
While the success of Android in the US is readily apparent, the OS has really shown massive success is in the international market. “Over the past few years,” said Jason Hope entrepreneur, “Android has completely and utterly dominated the international smartphone market, far outstripping Apple and everyone else.” According to industry experts at IDC, Android has increased their international market share by over 10% in the last year, giving Android control of about 80% of the international market. The closest competitor is Apple’s iOS, with a meager 13% of the international market according to IDC.
There are a number of factors that have contributed significantly to Android’s sheer dominance in the international smartphone market. The first, and arguably most significant, is pricing. Consumers outside the United States, and particularly in developing countries like China and India (with a combined population of over 2 billion), are much more price sensitive than consumers inside the US. American consumers are also frequently willing and able to defer and defray the full cost of purchasing a smartphone through the use of credit cards and contracts with cell phone companies that reduce the cost of the phone by hundreds of dollars. Access to these types of deals is far less common in developing countries. Despite price sensitivity, members of the rapidly growing middle class in developing countries increasingly want the features of a smartphone, both for the practicality of having a smartphone but also, for many of them, as the first real status symbol they or anyone in their family has ever been able to purchase.
Android’s successful pricing is thanks in large part to the open-source nature of the operating system. Google’s decision to allow hardware developers like LG and Samsung to create Android devices without direct oversight by Google has led to a hyper-competitive market where prices pressures are constantly driving down the costs to consumers. In addition, the ability of third-party software developers to post applications in the Android app store has led to a concurrent price war in the Android software ecosystem, with many useful applications being offered for free or very inexpensively. While the price points for Android devices has driven much of the growth in the international and developing markets, those gains have been secured thanks to the rapidly innovative nature of the hardware, software, and applications within the Android ecosystem.
In addition to their dominance of the international smartphone market, Android has also made significant strides in the international tablet market as well. According to IDC, Apple has gone from controlling about 40% of the global tablet market in Q3 2012 to controlling just fewer than 30% in Q3 2013. The majority of that market share was picked up by Samsung (with an 8% increase), and the trend is not favorable to the long-term prospects of Apple tablets in the global market. Despite the fact that tablets have traditionally been more of a “premium” product (an area where Apple tends to succeed), it appears as though more and more of the market pressures that have led to Android’s success in the global smartphone market are also making them success in the global tablet market. Some of the off-brand tablet manufacturers, who use Android OS because it is the best open-source OS available, have created inexpensive tablets for developing countries. By being introduced to the Android OS first, consumers in these countries now see Android as the familiar standard to use, which has contributed significantly to developments like Samsung’s 8% year over year market increase.