Mobile shoppers spending more from Apple devices

Posted at 3:52 PM, Dec 06, 2013
and last updated 2013-12-06 15:52:39-05

By Steve Kovach

Business Insider

(CNN) — Why wait in line in the freezing cold for a bargain when you can stay at home and buy the same thing while warm and comfy?

As you’d expect, more people did their Black Friday weekend shopping online than they have in years past. Doors at brick-and-mortar retailers may have been busting with deal-hungry shoppers, but plenty of people were content to stay at home and get all those discounts from the comfort of their living rooms.

And since it’s no surprise that people have been shifting from PCs to mobile devices, a lot of that online shopping took place on smartphones and tablets this year.

But what was really surprising was the difference in shopping habits between Android and iOS users. According to research conducted over Black Friday by IBM, iOS users spent more ($127.92 per order) and accounted for more Web traffic on shopping sites (28.2%) than Android users did. Android users spent $105.20 on average and accounted for 11% of traffic.

Wait a sec. How is that possible? Aren’t there way more Android devices in the world than iOS devices?

Yes, according to just about any research report you can find. IDC says Android now has about 80% of the global smartphone market; iOS only has about 13%. Yet every time a study comes out about how people use their mobile devices, iOS is always on top in every metric.

People spend more money shopping on iOS devices. They surf the Web more. They buy more digital apps, books, games and videos.

So what’s going on here? If there are far more Android devices in the world, why aren’t people using them the same way iPhone owners are?

One reason might be that iPhones cost more than Android phones, on average, so their owners may be wealthier people with more disposable income.

But what are those millions of Android phones being used for, if not for normal smartphone activities like browsing the Web, shopping and downloading content?

Let’s go back to Black Friday and Cyber Monday, events that only happen in the United States. Apple’s piece of the U.S. smartphone market is much larger than it is globally. According to comScore, Apple has 40% of the U.S. smartphone market, while Android has 52%. So already things look a bit better for Apple in the U.S.

Outside the U.S., things get a bit more mushy. Part of the reason why Android has such a massive market share is that manufacturers can make phones running the operating system very cheaply. These days, budget Android phone prices are approaching the prices of regular cellphones, which makes them a more appealing purchase to people.

But based on all the data we have, those people are still using their new Android smartphones the same way they used their regular “dumbphones.” Meanwhile, Apple refuses to sell iPhones at a discount. Even the cheaper iPhone 5C costs about as much as many top-tier smartphones.

The issue goes deeper than buying a bunch of stuff at rock-bottom Black Friday prices, though. If mobile devices really do end up mostly cannibalizing regular PCs, the platform wars will shift from the Mac vs. PC era to the Android vs. iOS vs. (maybe) Windows Phone era.

Some argue that having the biggest platform now, like Android does, will be a bigger benefit down the road once we finish that shift to mobile-first computing. These people think that because Apple refuses to sell a dirt-cheap iPhone model, it will continue to lose market share to Android and therefore lose out once developers and content creators decide they can reach more people by making stuff for Android first or Android only.

But the problem with that logic is that we already know what will happen. Even with such a whopping market share, Android manufacturers and Google itself make very little money. (Samsung is the only exception. Samsung and Apple are the only two companies that make any real profit in mobile.)

We already know that most money-making activity on smartphones happens on Apple devices, despite its dwindling market share. We’ve heard Google execs and Android fans over and over again say that this would change, but it hasn’t. If it hasn’t happened when Android has such a large install base, chances seem pretty good it’ll never happen.

We can only go by what we know right now. When it comes to the battle for shoppers’ time and money, iOS is clearly the winning platform.

Opinions expressed in this commentary are solely those of Steve Kovach.

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