Since the inception of the very concept of smartphone, the two major names that have always been associated with the technology are Google and Apple. After all, both of them own the two biggest mobile operating systems around – Android and iOS, respectively.
Sure there are other mobile operating systems around, but none has been able to make the kind of impact similar to the likes of Android and iOS. In fact, that can be seen from the mobile usage all around you, where most of them are either hooked on to Google's Android or Apple's iOS (via iPhone and iPad).
However, it might somehow seem that Android controls a tad bit more territory in the mobile OS ecosystem than Apple's iOS, owing to the fact that Apple's iPhones are costlier than a regular Android smartphone. But those are just assumptions, until the numbers start kicking in.
There are new reports that are claiming that even if Google's Android mobile operating system might seem like the dominant mobile OS worldwide, but it isn't really a big deal when it comes to bringing in profits for hardware makers. Apparently, Android claimed just 11% of all smartphone profits during the fourth quarter of 2014.
The latest data on the matter, courtesy well-known research firm Strategy Analytics, shows that Android's meagre 11% smartphone profits in the fourth quarter of 2014 was a significant slide from a 29.5% share in the year before.
In comparison, Apple's iOS claimed a massive 89% profit in the fourth quarter, raising their game from the 71 percent share it had in the same period back in 2013, according to the figures released on Thursday.
"Global smartphone operating profit grew 31% annually from US$16.2 billion in Q4 2013 to US$21.2 billion in Q4 2014. Android hardware vendors combined took a record-low 11 percent global smartphone profit share, down from 29% one year ago. In contrast, Apple iOS captured a record-high 89% profit share, up from 71% in Q4 2013," the report stated.
It also adds that Apple's iOS, riding on the newest numbers, continues to tighten its grip on the smartphone industry. Whereas Apple's strategy of premium products and lean logistics is proving hugely profitable, Android's weak profitability for its hardware partners still continues to be a cause of worry for Google.
"If major smartphone manufacturers, like Samsung or Huawei, cannot make decent profits from the Android ecosystem, they may be tempted in the future to look at alternative platforms such as Microsoft, Tizen or Firefox," it further adds.
This is bad news for hardware makers. If the current un-profitable run of Android continues, there will be a time when the hardware makers will shift to something else, thus diminishing the partner support for Android. And with major names pulling out, more and more users could slowly shift to other ecosystems, mostly iOS.
The cause of worry here, however, is more than just the fact that Android is not proving to be profitable. Data shows that profits in the smartphone business are, in fact, on the rise, growing 31.4 percent year over year to $21.2 billion. This means, not only has Android lost profit share, it's missed out on a noteworthy amount of dough that only went into Apple's coffers via its iOS operating system.
But why would Android go through such a less-profitable state if there are so many Android smartphones in the market from a boatload to manufactures? Well, as CNET puts it, "unlike Apple, which makes a handful of smartphones, there are a slew of Android devices by various hardware makers all vying for customer attention."
Hence, with varying price points ranging from the lowest budget handsets to the high-end ones, and so many manufacturing names trying to draw customers, it's hard for a single company to generate a respectable profit.
The biggest example to that could be Samsung which reported a 64 percent drop in fourth-quarter operating profit for its IT and Mobile Communications division, which also includes smartphones. This is compared to the 95 percent of Android smartphone profits the company was generating not long ago.
But whatever may that be, Apple's iOS is now in control of approximately 89 percent of the smartphone industry's worldwide operating profits. And eagle-eyed buyers will surely take a note of that. However, it will be interesting to see what hardware manufacturers come up with if the current trend for Android continues.
As far as assumptions are concerned, if Android fails to generate suitable profit for the hardware makers, they will surely be tempted in the future to look at different platforms such as Microsoft, Tizen or Firefox. However, everything depends on how Android fares in the current year for the makers in the market.
