Android sales to outstrip iPhone by '12?

The iPhone's lead over smartphone upstart Android may be short-lived, according to an industry watcher's predictions.

Android smartphone sales will outstrip iPhone sales by 2012, market researcher Informa Telecoms & Media has predicted in a new report.

Last month, Telefonica Europe said that sales of the iPhone topped 1 million in the U.K. Although T-Mobile UK--the exclusive carrier of the first Android device, the G1--wouldn't say exactly how many of the devices had been sold, it did say the handset now accounts for 20 percent of its contract sales.

Photos: Hands-on with the HTC Magic Android phone

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Web behemoth Google released the first beta developers kit for its Android open OS platform in August, with the first handset--the G1 smartphone--launching the following month. A second handset, the Magic, is expected to arrive next month.

Apple's iPhone has a slightly longer heritage--with the first device arriving in the U.S. in June 2007. However, the iPhone 3G hit stores last July, giving it only a few months' head start on its Google rival.

Both Android and OS X are eating into the market share of the best-selling smartphone OS maker, Symbian. Last year, just under half of smartphones sold were based on Symbian--a drop of 16 percentage points from the year before when it had 65 percent market share. BlackBerry OS, Linux, and Windows Mobile are also gaining popularity and eating some of Symbian's share, according to Informa.

However, London-based Informa believes Symbian's switch to open source will help the Symbian Foundation maintain its leadership over Android, Linux, and Microsoft over the next few years.

Nearly 162 million smartphones were sold last year, surpassing laptop sales for the first time, according to Informa. The market researcher forecasts that smartphone penetration will reach 13.5 percent of new handsets sold this year and that the figure will reach 38 percent by 2013.

Informa also suggests smartphone sales will be immune to the global economic downturn, maintaining a prediction of "robust growth" of 35.3 percent year over year.

Total handset sales, by contrast, won't be as resilient and are set to fall 10.1 per cent year over year, Informa predicts.

Natasha Lomas of Silicon.com reported from London.

[Super2online]

I'm not an iPhone fan, but I think this prediction may be a we bit ambitious. Apple is not known for sitting on their laurels and a whole lot can change between now and 2012!

[mrcjacobs]

They may not sit on their laurels but if they don't start giving the customers what they want; copy & paste, MMS, message forwarding, the ability to add any app you want, etc. they're going to see their iPhone sales slip to companies that offer those things. The iPhone is a great iPod, I own both generations, but it utterly fails as a smartphone.

[rapier1]

Something to keep in mind is that the phone market is different than the computer and PMP market. Handsets are often seen as a style choice and there tends to be a rapid turn over in styles, feature sets, and handset leaders. I'm not saying that the iPhone will lose its market position only that it will likely, over time, lose it's role as being the 'must-have' handset brand. Obviously, I'm talking about general market trends and not individual experiences.

[Gimpymw]

Dear mrcjacobs.

If the iPhone utterly fails as a 'smartphone' according to you then why the hell do own both generations of it? If it's such an awesome iPod why wouldn't you have just purchased an iPod touch? People like you should keep your non-sensical comments to yourself.

[JCPayne]

Google wins by getting fewer eyeballs on Microsoft closed mobile handsets. And they get to embed their tools and technology in an operating system that gets *them* more eyeballs... Google is after all a search company that makes huge profits by advertising. (Plus a few more things.)

[infinitely]

Rapier, people said the same thing about the iPod. The reason these markets were based on style alone over substance was because there was no substance. Every device was crappy and hard to use. Also, Apple has consistently been the one to set the tone for electronics style for the past decade, whether it's the computer or the interface. Everyone follows them.

[stockyjoe]

Google is run by Eric Schmidt. The same guy who was with SUN when they kept telling you java was going to change the world and the way we use the internet. I'm no Apple fanboy, but they have a hit with the iphone and I doubt looking at Google apps and Android they will surpass it anytime soon. Google is a bit like the linux world. A lot of very bright geek types who somewhat miss the boat when it comes to creating intuitive polished UI in their apps. Although I have no idea what Apple was thinking with their latest ishuffle.

[flickrz]

Shouldn't it be 'Android giveaway' instead of 'sales'. Android is just an OS which is given away for free by Google to hardware makers. Even if more android OS based phones are sold than iPhone; Apple would have generated billions in direct revenue where as '0' for Google.

[mornindew]

flickrz,
This is a common misunderstanding about open source. Open source doesn't necessarily mean free it means that the source code is shared with the whole world. As opposed so Microsoft and Mac who hide and don't allow any one see their source code. This is one of the reasons that individuals are forced to buy certain hardware with a mac and drivers are written only for the Microsoft OS. It is analogous to scientists not sharing information about their findings, imagine if Einstein never shared E=MC2 with any other scientists. We would be much further behind in terms of scientific development. Generally Open Source is cheaper but this is because their is not as many "in house" developers who are developing the tool, this is done by the tech community. Google is one of the most successful businesses in the last 15 years and they would not build a product like Android if they did not think that they would make money.

[flickrz]

@mornindew,
No, this is not a misunderstanding. As of now Android is being given away for free by Google to hardware manufacturers. Google is doing this to consolidate its search share in mobile market. That is a fact. I understand that open source doesn't mean free. But, in this case, it is.

[dcardozo]

no, the author meant 'Android based devices', of course, not 'Android OS'. If you had read the article you should had noticed.
Of course Android OS is free, but Android based devices aren't.

[random truth]

@mornindew
Its not Mac, its Apple, and also. Right here... Open source bam!
http://www.opensource.apple.com/darwinsource/

[JCPayne]

Actually. Android is now part of the Open Handset Alliance. The mobile makers contribute to Android, private users contibute to Androit and the handset manufacturers and cell phone cos. sell the handsets....

[ballmerisanape]

Apple's iPhone is a single hardware/OS package. Android has more flexibility with regard to hardware.... so it should, in time, match or beat iPhone numbers. My hope is that is does... as it's the only real competition right now.. and has a lot of promise. If Apple and Google have to compete, we will benefit tremendously.

[eldernorm]

While I do think that the TOTAL number of phones running Any version of Android will exceed the total number of iPhones sold, I think the data is meaning less. Like many of the comments here. :-)

The iPhone is one (ish) device with a consistant interface. The Apps store is selling and shipping apps like crazy.

THe phones that run Android will be many different flavors and different features. I really do not think the combined apps for android will ever reach those for iPhone. And the number of developers will be greater for the iPhone.

Just a thought.
en

[stockyjoe]

What you dont get is the UI of Iphone. I have never seen our managers so happy with a smartphone. Its amazing how intuitive the thing is and I am sure Apple is going to open up app development. What you are saying about Android could be said about Symbian, Windows Mobile etc. I've seen android phones Im not all that impressed.

I am curious to get a Palm Pre and test that out but for now its just talk. THe Iphone may be Apples first successful foray into dominating something not just for consumers but business. They have a real opportunity here and knowing Googles typical design and UI mantra I dont see them capable of catching up.

[RoadKill87]

I love my g1. But without Cupcake it still lacks many features that should be in the phone already.

[pcheng]

A complete wast of time article. By 2012, Android could be gone and iPhone could be gone. These meaningless predictions are space fillers. When is CNet going to get some real articles instead of space fillers like this. The research houses are complete waste of times. Get some real analysis and actual companies strategies instead of these blowhard analysts.

[wired_x]

By 2012, CNET could be gone, those actual company strategies could be totally irrelevant etc. What's your point? Not every article is meant to save the world. Lighten up.

[zvonr]

Google CEO is on the board of directors at Apple. Why Android does not have multi touch?
I welcome competition, but I do not envision a fierce battle between Apple and Google...
As a developer what I like about the iphone is the uniform hardware, all iphones have the same resolution, ...
Apple has more volume than Android based competition, higher margins is quite an advantage...

There is quite a few hurdles that android has to overcome...

[stockyjoe]

Apples strength is that its not geek. As in it understands how regular people want to use these devices. I'm not saying Google isnt capable, but their forte was creating an uncluttered search engine. I honeslty have never been impressed by any of their apps other then the Google map thing. For consumer apps they will ned a bit more spit and polish.

[connell83]

It's interesting that folks are saying that comparing iPhone sales to Android usage (it's a OS that appears on phones that are sold by carriers) is really comparing apples (no pun intended) to oranges and that the devices have completely different business models.

I totally agree, but why has no one made this point in the world of personal computing? I mean, don't Apple and Microsoft sell fundamentally different products with completely different business models? Substitute "Mac" and "Windows" for "iPhone" and "Android" and you essentially have the same argument. Android is software that can be applied to any handset -- it better have a larger market share than the iPhone.

[iBuzz]

Seems like a wishful "hockey stick" graph prediction to me. Right now, all of the market dynamics are working in the iPhone's and Blackberry's favor. It's extremely difficult to change market momentum and dynamics to your favor just by introducing an alternative product that matches features. Those who do not recognize this basic fact are very naive and have probably never attempted to do this before.

[forever4now]

Android is free & open source, so it will likely find its way to VERY inexpensive devices/phones. Apple does not normally play in the low cost device market. Thus, it is quite plausible that Android will overtake the iPhone, thanks to low cost, high volume devices/phones.

[Remo_Williams]

The G1 is half-assed. After using it for four months, I miss my Nokia 3650, maybe enough to go back to it and the Dell Axim. I'm just not happy with a bad camera, no video, no Excel editing or PDF viewing. I can't even say the GPS has been a plus since turn-by-turn would cost me $10/month. Battery life is garbage. WiFi is fast, but browsing on a capacitive screen sucks, maybe the worst "feature" of them all.

-R

[MadLyb]

I'm no iPhone fan, but this is complete hooey.

The majority of iPhone users are regular consumers and they don't care about the extended capabilities that Android brings to the table.

[Seaspray0]

Regular? Are you sure they're not trendy elitist yuppies drinking starbucks capachinos upping their noses at the "regular"?

[damiandennison]

I own the G1 and I do not use it because it is tied too close to gmail. I do not like it. The address book is weak, the calendar is also weak. I can go on and on about this. I do not like the iphone or the ipod. I do hope from both ends they can fix allot of the short comings they both have really soon. Competition is always a good thing for everyone, even the companies them self.

[sciontcya]

Hooey is right.
Like Apple will not have made the <whatever it will be called in 2012> lightyears ahead of today's iPhone.
And, sorry, but just where are these HUGE sales?
I have seen ONE of these devices so far.
I see iPhones everywhere - even Melinda Gates wants one.
So, let them predict - they've been doing so unsuccessfully for years when it comes to Apple.

[ibeetle]

Go into a mall and ask 20 people what an iPhone is and you will get 20 people either showing you their iPhone or telling you how much they want one.

Ask 20 people what operating system their phone uses and you will get a shrug, or if you get any answer it will most likely be, "I didn't know phones had operating systems."

Ask 20 people what a gPhone is or what Android is and you will get 20 blank stares.

That will never change. If Android ever climbs out of single digit market share it was not because kids asked... "Now does this run Android 1.5.3 or Android 2.0 or the new Windows Mobile?"

[Seaspray0]

Go into a mall 3 years ago and ask 20 people what an iphone is....
Wow! Things sure can change in 3 years, can't they?

[aMUSICsite]

I am an iPhone user, avoided the first gen iPhone but tried out the 2nd Gen.

If they get a good phone out for Android's 2nd Gen OS then I would jump over to it. Especially if it has lots of good apps, copy and paste and all those things that Apple thinks we don't need.

The only thing that might stop me is if the Android market becomes fragmented like the MS mobile platform with hundreds of different phones. This generally means that the apps may or may not work on all phones. The beauty of Apple is they have one or two products per range meaning that you know if it's made for an Apple product it should work well.

[cardfan1212]

The Pre is coming.

[sciontcya]

Oh no!
NOT the Pre!
Sell your AAPL now folks...
<yawn>

[cardfan1212]

If you haven't sold by now, then its a loss :)

[AppleSuxLeo]

Yes Apple got a head start , but just like in the home PC market , the walled-garden , overpriced Apple will lose out in the end. The home PC OS war was lost to MSFT and the "smartphone" is just in an embryonic stage. Like Ed Colligan of Palm said , there is room in this market for many players.
I personally like MSFT for the home PC , but I am ready to go Palm Pre/Web OS asap.

[RetiredMidn]

Ridiculous to even try to predict relative market share three years out, when both products are likely to have changed significantly.

[sciontcya]

Bingo!

[mikehill33]

Having just bought a Blackberry Storm, The battle lines are clearly drawn here.

iPhone is for the eye-candy, wow-factor crowd.

Symbian is for business users who just don't know better.

Blackberry is for true information junkies.

Android tries to be a little of the three, jack of all trades. I liked the open architecture of Android, but when it came down to business, I had to go with a Blackberry.

It is amazing to watch the stakes get higher and higher, and mobile UI to kepe growing at breakneck speeds.

[sciontcya]

And that's what makes the free-markets great.
Bring on competition.
Is my iPhone perfect?
No.
Will it get better?
Yes.
And your example is why.

[ColbertPutin2012]

Just a heads up Iphone rated number one business smart phone by J.D. so you obviously haven't done your homework.

[Seaspray0]

@ColbertPutin2012. LOL! Don't make me laugh. The email program on the iphone won't synch contacts and it has never been rated secure enough to use in a business environment. Businesses are not touching them in any great quantity.

[mornindew]

Flickrz,
You are correct that google "As of now" is giving away their Android software to hardware manufacturers. The key phrase was "As of now", most experts believe that this will change once they get a larger piece of the market share and can demand more money. They are also charging to join the developer network and also have now started charging for applications. I completely agree that in the next three years IPhone will make more money but I disagree that google will make "0 in direct revenue". In this instance Google's vision is much larger than only 3 years out. With the future potential of smart phones (cloud computing, video improvements 1080P, email, voip, google docs, and almost all necessary personal computing) Google is seeing Android as a way to get their foot in the door of the smart phone operating system. In doing this they will get more market share of mobile searches but their vision is larger than just searches.