Google Leads Apple in One Key Area

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In what could be described as the umpteenth report from comScore
SCOR
regarding mobile data, the market research firm has revealed that while the iPhone is very popular, the award for the most successful platform still belongs to none other than Google
GOOG
. “91.4 million people in the U.S. owned smartphones during the three months ending in November, up 8 percent from the preceding three month period,” comScore wrote in a
company release
. “Google Android ranked as the top smartphone platform with 46.9 percent market share, up 3.1 percentage points from the prior three-month period. Apple maintained its #2 position, growing 1.4 percentage point to 28.7 percent of the smartphone market. RIM ranked third with 16.6 percent share, followed by Microsoft (5.2 percent) and Symbian (1.5 percent).” Wow, you mean Microsoft
MSFT
has a phone platform? I
had no idea
! As far as mobile usage is concerned, comScore said that that 72.6% of U.S. mobile subscribers sent text messages on their mobile devices, amounting to an increase of 2.1%. Roughly 44.9% of mobile subscribers used downloaded applications – a 3.3% increase. Mobile subscribers also increased their use of Web browsing to 44.4%, up 2.3%. Considering that
everyone
uses the Web, you might wonder why this number is lower than the number of subscribers who use downloaded applications. I suspect it's because there are still phones on the market that cannot load full websites. There are also lousy data plans that restrict mobile usage. But almost anyone can download a cheap game to their phone. Thus, downloads are currently more successful. “Accessing of social networking sites or blogs increased 2.1 percentage points to 33.0 percent of mobile subscribers,” comScore added. “Game-playing was done by 29.7 percent of the mobile audience (up 1.2 percentage points), while 21.7 percent listened to music on their phones (up 1.0 percentage points).” Kudos to comScore for differentiating between downloads and games. Contrary to popular belief by marketing guys everywhere, there is a big difference between the two. FYI: “app” is just another word for “software.” People don't lump software from Adobe
ADBE
and Electronic Arts
EA
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into the same category, so why do they insist on combining apps in this way? In addition to the aforementioned data, comScore reported that for the three-month average period ending in November, “234 million Americans age 13 and older used mobile devices.” “Device manufacturer Samsung ranked as the top OEM with 25.6 percent of U.S. mobile subscribers (up 0.3 percentage points), followed by LG with 20.5 percent share and Motorola with 13.7 percent share,” comScore wrote. “Apple strengthened its position at #4 with 11.2 percent share of total mobile subscribers (up 1.4 percentage points), while RIM rounded out the top five with 6.5 percent share.” Despite this,
Apple's profits still trump
that of any other smartphone manufacturer. Going into 2012, the profit-trumping is expected to continue. Hype for the iPhone 5 – which
doesn't even have a release date
– is reaching an all-time high. Consumers were temporarily distracted by the iPhone 4S, thanks entirely to
a woman named Siri
. But now that the 4S out, and now that consumers have already purchased/tested/experimented with the latest model, they are ready for what promises to be the next evolution in smartphone technology. The iPhone 5 is not expected to arrive until next fall. Before then we'll see the iPad 3, another MacBook iteration (which may or may not be a significant redesign of the MacBook Pro), and maybe a brand-new TV. Despite all that, consumers still can't wait for the next iPhone. Nothing will satisfy their craving until they're holding it in their hands…at which point they'll begin to salivate for the iPhone 5S and the eventual iPhone 6. Frankly, I can't wait for the iPhone 7.

ACTION ITEMS:

Bullish:
Google has proven that the Windows strategy (where a company licenses its OS to anyone and everyone) can be just as profitable with smartphones as it is with computers. What does this mean for 2012?:
  • Consider going long Microsoft. Windows 8 could still be massively successful on computers even if its tablet strategy fails. (If its tablet strategy is successful, watch out Apple!)
  • Despite bringing the iPhone 4S to Sprint S and Verizon VZ, the iPhone is not yet successful enough to completely overtake the Android market. For better or worse, Google is likely to maintain its market lead in 2012.
Bearish:
Who are the potential losers in a world where Google dominates the smartphone market?:
  • While Glu Mobile's GLUU apps are spread across Android and iOS pretty equally, Electronic Arts has invested heavily in the iPhone. The App Store is currently the leader. But that could change very soon.
  • Research in Motion RIMM has already given investors several reasons to short the company. If Android continues to expand, it will have the greatest (and most negative) impact on RIMM, a company that once provided the leading iOS alternative.
Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
Follow me @LouisBedigian
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