You don't have to be rich to iOS

(but it helps)

Elements of this article were featured in The Register. You can see the article here.

The battle between iOS and Android is usually played out in the battlefield of the high street, where the two key mobile operating systems compete for sales. The relative performance of each operating system can therefore fluctuate greatly: the month after a new iPhone launch iOS devices tend to do very well and the same is true when a new Android phone is launched or a price drop takes place.

The question we asked ourselves at 51Degrees.com was what does the battle look like out in the real world – in other words, when you take your eye off sales numbers alone, which represent a snapshot in time, and instead focus on what people are using on a daily basis on the ground. What lessons can be learned?

51Degrees delivers device detection information for more than 1.5 million websites around the world, detecting more than 3 billion data sessions to websites each month. This also provides a strong global sample of what devices people are using.

From this data 51Degrees.com looked at the five countries where iOS holds the largest lead over Android, where the opposite is true and where the two compete most closely.

Looking first at countries where iOS most dominates Android, we see the following:

Next we looked at the countries where Android most dominated iOS

In itself this list is interesting as it shows that, even where iOS dominates Android, it does so much less than the countries where Android dominate iOS. In all five of the top five countries where it dominates, Android has more than 80% market share. There is only one country where this is true of iOS dominance and, even within the top five countries where iOS dominates Android, there are two countries where Android has more than 30% market share – not inconsiderable.

Where this data gets really interesting is when we add in the GDP per capita ranking (where 1 is the richest country per capita) of each country as an additional column. For this exercise we have used the nominal GDP per capita for each country, as sourced from IMF data 2014:

Countries where iOS most dominates Android

Countries where Android most dominated iOS

Perhaps unsurprisingly, all but one of the countries where iOS dominates are in the top 10 richest nations per head in the world. Only two of the countries where Android dominates are in the top 100. Aggregating each GDP/capita ranking across the five countries shows an average score for iOS of 11 and an average score for Android of 111.6.

Ok so we know that Apple devices are very expensive but this is still an extraordinary difference – one that suggests that the market for iOS is only in the very richest countries.

Yet even this does not tell the full story. Check out below the countries where iOS and Android have the closest market share:

Aggregating the GDP/capita scores across these five countries shows an average score of 42.4.

Strategy Analytics reported that, in 2014 Q3, Android and iOS accounted for 96% of all smartphone market share. Even assuming that these numbers did not include the successful launch of iPhone 6 (which took place late in Q3 2014) it is fair to assume that iOS accounts for less than 20% of all new smartphone sales. In other words, globally, four out of five phones purchased are Android.

With this in mind, and assuming a very conservative 25% smartphone replacement rate annually, it is highly likely that, within 12 months, all of the five countries listed above where the battle of the OS's are closest, are likely to be countries where Android leads. In other words, whilst the countries where Android dominates most are still some of the poorer countries on earth, the trajectory for Android is upwards into wealthier countries too.

What is most interesting is where this leaves Apple? Having flirted briefly and not entirely successfully, through the iPhone 5c, with a very slightly lower price point, both iPhone 6 models were premium models, costing more than £500 retail. It is entirely possible that, having entirely redefined the smartphone market in 2007, it will need to be content with sales in the top 30 countries in the world to sustain its future over time (with possible notable exceptions). This could well be wise and chime nicely with the premium product position that its personal computers took against Windows OS. The thorny issue only comes when you consider the country ranked 78 in the world rankings of GDP per capita: China; or the country 142nd in the rankings: India. The challenge for Apple remains the same: global market player with a range of solutions for all pockets or niche player earning rich pickings in rich countries. The jury is still out.