Android picks up more US subscribers as Windows Mobile share plunges

Windows Mobile phones continue to bleed US subscribers, with Android devices picking up most of the lost subscriber share. Can you say free falling? Today, ComScore released standard handset and smartphone data for the three-month period of November 2009 to January 2010. ComScore designates the platforms by vendor. Microsoft smartphone subscriber share fell to 15.7 percent from 19.7 percent three months earlier. Meanwhile, Google rose to 7.1 percent from 2.8 percent during the same time period.

What about iPhone, for which American bloggers and journalists are seemingly obsessed? If Apple is gaining smartphone subscribers, it's not substantially showing in the data. Subscriber share rose from 24.8 percent to 25.1 percent, which is statistically negligible. Meanwhile, Research in Motion slightly climbed -- to 43 percent from 41.3 percent.

There were 234 million mobile subscribers ages 13 or older between November and January, according to ComScore. Nearly 43 million Americans owned smartphones. The number of smartphone owners increased by 18 percent compared to the previous three months.

The data is obviously bad news for Microsoft, which is making a major mobile platform switch to Windows Phone 7 Series. First devices aren't expected until late third quarter at the earliest. Next week, T-Mobile is planning a launch event for the HTC HD2. Unfortunately, the Windows Mobile-powered device, considered one of the hottest smartphones on the market, isn't eligible for Windows Phone 7 Series. Can Microsoft gain lost share despite the HD2's non-upgradability? Future ComScore data will tell.

But the numbers aren't good for Apple, either. Huge growth marked iPhone's first three releases. Questions to ask now about iPhone's stalled subscriber growth:

  • Has Verizon Wireless "There's a map for that" counter-AT&T advertising hurt iPhone sales?
  • Is Verizon's other marketing campaign -- for Droid -- slowing network churn to AT&T for iPhone?
  • Are AT&T's well-publicized network problems (dropped calls and failed connections) hurting iPhone sales?
  • Is Android benefitting from the increasing number of handsets, which are available through all US major carriers while iPhone is tethered to AT&T?
  • Do smartphone buyers perhaps care about multitasking, which Apple hobbled on iPhone but is available on all other major competing platforms?

My answer is "Yes" to all five questions. Carrier subscriber data is revealing. During fourth quarter, AT&T gained 2.7 million subscribers for a total of 85.1 million. Verizon wireless subscribers grew by only 2.2 million, to 91.2 million, but beat Wall Street consensus of 1.5 million. Three months earlier, Verizon gained 1.2 million subscribers; 1.1 million in second quarter 2009. For third quarter 2009, AT&T gained 2 million subscribers; 1.4 million in second quarter 2009. Late-year AT&T gains are to be expected following release of iPhone 3GS in June last year. But Verizon's fourth-quarter surge is revealing and follows two major marketing campaigns and introduction of several Android-based handsets.

Marketing is a factor often overlooked by iPhone-obsessed bloggers and journalists. Apple spends hundreds of millions of dollars each year marketing iPhone. Verizon is spending $100 million on its Droid marketing campaign, which has helped raise Android smartphones' profile. Meanwhile, Verizon continues to club AT&T with aggressive advertising about network reliability. Verizon's marketing answer to Apple and AT&T is more bite than bark.

Oh and what about Microsoft? When did you last see Windows Mobile smartphone advertising from Microsoft? The company plans to spend big on Windows Phone 7 Series, but that's months away.

In early 2010, Apple changed tactics with iPhone marketing, and it will be interesting to see the affect on consumer perceptions.  Presumably to combat competitor counter-marketing about there being no real multitasking, newer TV commercials insinuate that iPhone users can do many things at once.

Two of three newest iPhone commercials focus on families and feature female narration. That says heaps about where Apple sees the next big market segment for iPhone. Typically, gadget geeks (many of them male) are the first adopters of products like smartphones. Later, manufacturers tailor the products and their marketing for women and, more importantly, families. Timing is right if, as Sylvia Ann Hewlett asserts, "Women are the biggest emerging market."

As for Windows Phone 7 Series marketing, it's too soon to guess Microsoft's approach or its effectiveness. As for Android, its future looks bright.

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