Google's (NASDAQ: GOOG) chairman, Eric Schmidt, has written a guide on how to make the jump from Apple's (NASDAQ: AAPL) iPhone to an Android-powered handset like Samsung's (NASDAQOTH: SSNLF) Galaxy S4 or Google's own Nexus 5. His post is full of helpful tips, but much of what Schmidt has written is already out there.
Most interesting is Schmidt's claim that "many of [his] iPhone friends are converting to Android." Maybe that's true when it comes to Schmidt's social circle, but in the aggregate few Apple devotees are making the jump — not yet, anyway.
Apple's loyalty remains unmatched
Most iPhone buyers stick with Apple's smartphone, according to a study from Consumer Intelligence Research Partners. The firm found that 81% of iPhone owners bought another Apple device when it came time to upgrade. Loyalty to Google's platform was decisively weaker — just 68% bought another Android handset.
Other studies have produced similar results. Yankee Group reported that only 9% of iPhone users it surveyed plan to ditch Apple when it came time to buy a phone, according to The Guardian.
While the quality and familiarity of Apple's devices is likely a prime factor, the lock-in effects of Apple's ecosystem are no doubt affecting loyalty. In his post, Schmidt explains how iPhone users can transfer their music and contacts to a phone running Google's operating system, but he makes no mention of any iBooks or iTunes videos that have been purchased. That's probably because it's exceedingly difficult or impossible to transfer these files over from Apple's to Google's ecosystem.
Android could lose one of its biggest selling points next year
Moreover, of the many reasons users might choose a handset running Google's operating system over Apple's iPhone is a bigger screen size. The 4-inch screen on the iPhone 5s is positively tiny compared to flagship devices running Google's Android; most, like Samsung's Galaxy S4, offer nearly 5-inch screens, which are ideal for Web browsing, gaming, and watching videos. If you happen to want an oversized phablet like Samsung's Galaxy Note 3, you basically have no choice but to go with Google's operating system. (There's also a Windows phablet coming, but it has not yet been released.)
This will likely change next year. Although Apple CEO Tim Cook has defended the iPhone's display, he's never ruled out a larger phone. According to Bloomberg, Apple will release two larger phones next year: a 4.7-inch iPhone flagship and 5.5-inch Apple phablet. If that's the case, Google's operating system will lose one of its unique selling points.
Dominating the emerging markets
Schmidt cites Android's 80% market share as evidence that more users prefer Google's operating system, but most of these users likely bought Android-powered handsets simply because they had no other choice.
Most of Android's market share comes from emerging markets, where budget handsets priced under US$200 are common. Consider the Chinese market: according to research firm Canalys, Apple's share of the market is just 8%. Samsung's Android-powered phones are nearly three times as popular, with the company owning 21% of the Chinese market.
Samsung's flagship Galaxy phones are equally as expensive as Apple's iPhone — in fact, its US$900 Galaxy Note 3 is far more expensive than the US$649 iPhone 5s. But Samsung is more than willing to offer phones at every conceivable price point, including sub-$100 phones made specifically for the Indian market.
Will Android ever surpass the iPhone in the US?
Google's Android could eventually steal Apple's customers, although it will take some time, and a shift in carrier policies. With heavy phone subsidies, consumers in the U.S. seem to prefer Apple's iPhone. Where there are no carrier subsidies — like in emerging markets — Google's Android is preferred.
For the most part, Schmidt's observation appears to be wishful thinking: There's no evidence to suggest that Apple iPhone are making the switch; rather, Android's growth seems to be coming from emerging markets, adding users who simply cannot afford to purchase an Apple-made device even if they wanted to.
