Looking Beyond Numbers

We all love numbers, specially when it comes to Market Research firms releasing the sales numbers of competing brands. Apart from quantifying public opinion about products, it gives us something to talk about (fight over) on various fora. Seldom do we understand, that the reporting of numbers never tells the whole story, deliberately or inadvertently. You see, statistics is a wonderful tool in the hand of the expert, as these quotes will amplify :-

Torture numbers, and they’ll confess to anything.  ~Gregg Easterbrook

Statistics can be made to prove anything – even the truth.  ~Author Unknown

Do not put your faith in what statistics say until you have carefully considered what they do not say.  ~William W. Watt

98% of all statistics are made up.  ~Author Unknown

The Hidden Numbers

Well, without being too disparaging to statisticians (Could you say that word correctly in the first try? There you are, that’s how complicated they can be), we can always look beyond the numbers and get to the bottom of things. Let’s take the comScore data, for instance. They release their monthly results for US Mobile Subscribers market share ( here’s the most recent ) and the same is dutifully reported in all leading tech blogs citing the percentage gains of Android, solidifying status of Apple, falling fortunes of RIM and  lacklustre support for WP7. All of this is true but it does not tell the whole story that is hidden within those  numbers. Just translating the percentage figures to absolute numbers reveal many new facts as I was astonished to find just by analysing data of the last six months (Mar – Aug 2011). Here’s a summary of what I uncovered.

  • The US mobile market has achieved a solid plateau and no new subscribers are being added. The total number of mobile subscribers has remained at 234 million for almost, would you believe it, last 2 years!
  • The number of smart-phone owners has steadily increased from 42.7 million (18% of total) in Jan 2010 to 84.5 million (36% of total) in Aug 2011, but the rate of growth has been a flat 1% per month. Its clear from this that the whole battle in mobile phone market is of attrition & conversion. But only about 1% are being converted every month, which gives an idea into how difficult it would be for Microsoft to gain market-share or why HP decided to dump WebOS.

Lets take a look at the gains (and losses) by smart-phones OSes in the last 6 months in absolute numbers. I converted the percentages reported by comScore from Feb 2011 to Aug 2011 into corresponding numbers and calculated the difference between months to arrive at how many subscribers each OS has added (or lost) in the given month. Here’s what it looks like for the top 5.

[table id=1 /]

The one thing that is immediately evident from the above table is the huge gains being made by Android (and huge losses by BlackBerry OS).  But the numbers also reveal how the mobile landscape is changing across types of phones and OSes.

  • Android is adding over 2 million new subscribers every month. But where are these millions coming from? In the month of March a total of 3 million people upgraded to smart-phones while Google and Apple gained 3.2 million subscribers. This means almost all the new smart-phone buyers went to the big two.
  • In the months of April and May, however, Google and Apple gained more subscribers than people upgrading to smart-phones. Seeing the losses of RIM and Microsoft, it is evident that almost 1.7 million existing smart-phone owners abandoned RIM and presumably Windows Mobile, in two months to buy Google/Apple phones.
  • Microsoft was able to turn the corner in Jun since when gains for WP7 have exceeded the losses of WM, but the picture is getting starker by the day for RIM. In the last month for which data is available, about 1.2 million people abandoned RIM and almost all of them seem to be going the Android way.
  • Microsoft has approximately 5 million subscribers at the end of August, compared to 37 million of Droids, 23 million of iPhones and 16.6 million of BlackBerries.
  • Symbian and Palm have been bit players in the smart-phone landscape which have not made much impact. Palm was in the top 5 but slipped off in May to below Nokia which itself has been receeding.

The big question however remains about how the Google gains are being distributed among the OEMs. Perhaps some insight can be had from analysing the loss/gain data of OEMs.

[table id=5 /]

Considering that the total number of mobile phone owners is 234 million, the monthly variations are quite minuscule. However they become significant for individual OEMs.

  • Every OEM except Apple has lost numbers at some time or the other during the past 6 months. The ensuing gains, I assume, would be going to HTC, which isn’t yet in the Top 5 and hence its numbers have not been disclosed by comScore.
  • The situation for Motorola is very alarming. Motorola owners have fled in droves and more than 5 million people have dumped it for other brands in the last 6 months. If Nokia was likened to a burning platform by Steven Elop, Motorola certainly seems to be a sinking ship. However they must be credited for pulling off an awesome deal from Google. How much the change in ownership will affect its fortunes will be seen in the coming months.
  • The numbers for Apple and RIM should have been the same as Table 1 but since the sample size of comScore is only 30,000 (just 0.01% of 234 million), some variations are expected.

Effect on WP7

What does it mean for Microsoft and WP7? It is apparent that WP7 faces almost impossible odds in the face of the Android Juggernaut where Google’s green robots have begun to poach into even their own OEMs. It will be foolhardy and suicidal for Microsoft to mount a large offensive at this time. Much like the French Resistance against the occupying Nazi forces during World War II, Microsoft has to build up strength and conserve resources, spread the word by mouth and wait for an opportune moment to launch the counterattack. Perhaps this is the reason we haven’t seen a media blitz from Redmond till now. I have a feeling that we are not likely to see anything on a grand scale in the near future either. The WP7 foot soldiers, camouflaged in mango fatigues, are in for a long drawn war of attrition against the mounted robots drawing their energy from unending supplies of desserts. It will probably take some deft foot manoeuvring in the Tango style before they find a suitable launch vehicle in Apollo to take the campaign to the stratosphere and finish off the robots in true Sci-Fi fashion. We, at WP Sauce will be watching it all very closely.

Image courtesy – Matrix

Data courtesy – comScore