Google Android Continues to Transform Smart Phone Market
By Jean Crumrine and Paul Carton
March 31, 2010
ChangeWave’s latest consumer smart phone survey shows the Google (GOOG) Android mobile operating system is continuing to have a massive and transformational impact on the smart phone market.
The March 9-23 survey of 4,040 consumers provides an up-close look at the meteoric rise of the Android OS and the resulting pressure it’s putting on smart phone competitors in general, and Palm (PALM) and Research In Motion (RIMM) in particular.
The Rise of the Android OS
The Google Android OS has nearly doubled its market share in the three months since our previous survey in December. Among respondents who currently own a smart phone, 7% say it uses an Android mobile operating system compared with just 4% three months ago.
The Apple iPhone OS (32%) is the only other operating system showing increased market share since December, up 3-pts. While the RIM OS (37%) remains the leader of the consumer market, since December it's down 1-pt.
Looking ahead, the explosive demand for the Android OS is likely to continue – with 30% of those planning to buy a smart phone in the next 90 days saying they’d prefer to have the Android OS on their new phone. That’s a huge 9-pt jump since December and a five-fold increase from just six months ago.
Here's a close-up look at the change in mobile OS preferences among future smart phone buyers. Note the 9-pt Google Android surge since December is by far the biggest increase.
The iPhone OS (29%) is the only other operating system to register an increase, up 1-pt from previously. In contrast, the RIM OS (13%) has suffered a 5-pt decline since December, while Windows Mobile (5%) is down 1-pt and Palm OS/Web OS (3%; unchanged) ranks last among the major manufacturers.
OS Customer Satisfaction
If customer satisfaction is a good indicator of future growth (and it is), then the Android OS wave has only just begun. When we look at customer satisfaction levels, 65% of the respondents using the Android OS on their smart phone say they’re Very Satisfied – second only to the industry leading Apple iPhone (76% Very Satisfied).
These two leaders dwarf the Very Satisfied ratings for the other major operating systems, including the RIM OS (37%), Palm OS/Web OS (37%) and Windows Mobile (32%).
But there is a silver lining for Palm. While the percentage who say they use the new Palm Web OS remains small, they are more than twice as likely to be Very Satisfied as users of the old Palm OS.
The Smart Phone Market
The overall smart phone market continues to rapidly expand, with 44% of respondents now reporting they own a smart phone – up 2-pts since December.
Note that for the past three years our March surveys have registered a seasonal slowdown in smart phone buying plans going forward, and the current survey also shows a slight dip for the next 90 days – with 10.8% of respondents saying they plan on buying a smart phone.
Current Market Share
Research In Motion (38%) is still the leading manufacturers in terms of current share, although it has dropped 1-pt since the December survey to its lowest level in over two years.
Number two Apple (AAPL; 33%) maintains its amazing streak of continuous market share growth in every quarter since the launch of the original iPhone, up 2-pts since December. Palm (5%), on the other hand, has slid 1-pt to a new all-time low.
Thanks to the popularity of its new Droid model, Motorola (6%) has registered a 2-pt uptick in smart phone market share for the first time since April 2007, while HTC (6%) remains unchanged.
But it’s when we look at future buying plans that the full impact of the Android OS becomes apparent.
Future Market Share – the Rise of Motorola. Going forward, Motorola (16%) remains the biggest beneficiary of the monster wave of demand for Android OS phones, with the popularity of its Droid model set to catapult it up another 3-pts in terms of planned buying over the next 90 days. Only six months ago Motorola was virtually dead in the water at 1%.
At the same time HTC (12%), which produces several Android phones – including the Google Nexus One – has also picked up 3-pts in terms of future buying.
Apple. Even midst the powerful wave of demand for Android phones, Apple (31%; down 1-pt) remains the leader in terms of planned smart phone purchases going forward. While all eyes will be on the upcoming iPad launch this April, the survey results confirm that 1st Quarter iPhone sales have been exceptionally strong for Apple and the iPhone has great visibility going forward.
Research In Motion. Future consumer buying plans are far less rosy for RIM, as increased competition continues to take its toll. Going forward, RIM's share of planned purchases (14%) has dropped by 7-pts since December – its second straight decline in a ChangeWave survey. And while we've previously seen bigger one quarter drops for RIM in planned buying, it's weakening inversely to the big momentum surge for Android OS phones – not a good sign.
Palm. Nine months after the Pre launch, Palm’s share of planned smart phone purchases (3%) has slumped to its second lowest reading ever in a ChangeWave survey. As we said back in our December Smart Phone Report, where we picked up a major breakdown in Palm planned buying: “Palm is clearly caught in a squeeze between the surging Android and its two most powerful smart phone competitors, RIM and Apple.”
The following chart summarizes consumer buying plans going forward:
Cell Phone Customer Satisfaction
When it comes to satisfaction ratings, no other cell phone manufacturer comes close to the level of Apple, with 77% of iPhone owners reporting they’re Very Satisfied with their phone.
HTC’s Very Satisfied rating (41%) has leaped 12-pts since December attributable to the big sales uptick for its Android OS smart phones. Palm (39%) has also jumped 10-pts as more owners of its low-rated legacy phones leave the brand or buy the higher-rated Pre and Pixie.
In yet another indication of growing weakness for Research In Motion, its Very Satisfied rating (38%) has fallen to fourth place for its sixth consecutive quarterly decline. To put this in perspective, the following chart compares Apple’s Very Satisfied rating vs. Research in Motion’s over the last two years of ChangeWave surveys:
