BII_Android_CumulativeBI Intelligence

Key Points

  • Android is among the most popular media and tech platforms in global history with 1.2 billion active users globally by the end of this year. Android is one of the very few computing platforms to have ever reached this scale (Facebook and the desktop version of Windows are also in the billion-user club). Android’s success is not isolated to a few geographies. It is the top mobile operating system in all but a handful of countries.
    • Just to put its scale into context: We estimate Android has accounted for about twice as many cumulative device activations as iOS devices, ~1.6 billion versus ~775 million for iOS. (See chart, above.)
  • Despite this audience success, Android remains underappreciated as a commercial platform — as a revenue driver for e-commerce, advertising, and app businesses. Too many analysts remain attached to an outdated idea of Android as a fragmented, malware-ridden, low-end platform. They believe Android users don’t spend money on mobile and lack lifetime value. 
  • Mobile business models that neglect or ignore Android risk severely limiting their market potential. Android is solving its fragmentation problem and coming into its own as an advertising, e-commerce, and app economy platform: 
    • To begin with, the fragmentation problem is overblown from all perspectives: device fragmentation, screen size, and operating system version. Globally, 80% of Android devices are running the two latest available versions of the platform. 
    • Google has also made strides in addressing the quality of apps in the Google Play app store, and that has translated to revenue growth. Spending on apps and in-app purchases is seeing healthy growth within Google Play, with global revenue more than doubling year over year in the first quarter of 2014. 
    • Android is quickly gaining on chief rival iOS in channeling ad revenue. Android gained 11 percentage points in ad revenue share over the most recent 12 months for which data is available. Its share stands at 39% including Android tablets. Android phones account for a 36% share of ad revenue, compared to 43% for iPhones. 
    • Android is also driving an increasingly large share of e-commerce traffic [...]