According to IBM—long an expert in shopping analytics—Google was a big loser in one aspect of the online shopping experience of Black Friday 2012. Roughly one quarter of all online buying happened on mobile devices, IBM's data says, and of this a staggering 77% happened through iOS devices. That's despite the fact that Android devices clearly outnumber iOS devices in the U.S. Here's what this means.
IBM's data suggests over three quarters of all mobile online shopping on Black Friday (and thus roughly a fifth of all online shopping, whether fixed or mobile) happened on Apple's iPhone, iPod Touch, and iPad. That kind of figure is so large that it covers many sorts of statistical or data errors.
The trouble is that this 77% is in direct contradiction with data like the recent analysis from ComScore that placed Android at 52.2% of the U.S. smartphone market versus just 33.4% for Apple, and a recent Pew survey that placed Apple with 52% of the U.S. tablet market versus Android's 48% (including Amazon's contribution). In other words, Apple is punching well above its market share weight in online shopping.
That's led to many a headline extrapolating it to a greater "engagement" issue for Google, with consumers seemingly not choosing to use their Android devices to do much that's really concrete. This is a position that's backed up when you look at mobile browser use on the different platforms, where Apple's iOS still has a considerable overall lead. In other words, though Google is well ahead of Apple in market share in mobile devices, its clients simply don't use these machines as ravenously as iOS users do, at least not for spending money.
We know Google doesn't directly try to make money from Android, preferring to leverage it as open source software. We also know that Google's own statistics show that early in 2012 Google was making four times as much money from iOS than it was from its own Android endeavors. This money comes from Google's position as iOS's default search engine option and the fact it supplied the crucial (but limited) Maps technology for the iPhone and iPad.
But this year Apple supplanted Google's maps with its own, and though the deal is still said to be valid for some time yet it means Google may be looking at a curtailed income stream from iOS in the near future. Radically curtailed perhaps, especially since Apple is potentially shifting some search traffic out of Google's path with technology like Siri.
Google's machinations with Apple show how hard it is to pull levers inside another company to slightly adjust the flow of money into your company. But of course Google owns Android, so it's very easy to pull those levers to adjust how much money it makes—or rather, easyish because Google's Android partners have their own ideas about what they want to do with the OS.
And Black Friday's data says even though plenty of people are buying Android, they don't appear to be using the devices. It's proof positive of something Tim Cook joked about a while ago at a press event saying that all those tablets and smartphones must be "on store shelves or in someone's drawer." And of course, if they're not engaged in their devices, they're not using them in a manner that would send revenues Google's way.
An engaged client will use their device more often under more and varied circumstances, and is thus setting themselves up to be exposed to more advertising. They may also find themselves tempted to buy more apps, from which Google extracts a 30% fee.
Improving its customer engagement in 2013 is going to be tricky for Google. It's plausible that some of the dis-engagement in Android comes from platform segmentation. Recent stats show that just 23.7% of Android users have the recent Ice Cream Sandwich edition of the O.S. and just 1.9% are using brand new edition Jelly Bean. Earlier Android browsing and app experiences under perform what the OS can do today, and the lackluster earlier editions of Android may be putting users off the kind of serious browsing you need for activities like online shopping. Platform fragmentation is also a continuing issue for developers, and this may be affecting the quality of apps on the Android app store, again dissuading buyers from buying—and using—apps.
Solving platform fragmentation may be one of Android's biggest challenges.
Then there's the consumer demographic issue. Apple aims at the upper end of the consumer spending spectrum, selling premium devices that it assures us have premium engineering in them, for which you must pay premium cash. Android, on the other hand, is targeted across the spectrum from extremely cheap pay-as-you-go smartphones (at least outside the U.S.) and cheap on-contract smartphones. These phones by their very nature do not offer the best hardware experience to temp users to engage with their software the way the iOS premium effect works. Plus the consumers themselves may have less disposable income than iDevice buyers.
Google could counteract this by setting minimum acceptable device standards for using its OS, the way Microsoft has for Windows Phone. But this doesn't seem like a thing Google is planning to do, given that it's been almost completely laissez faire with Android all along—even to the extent that Amazon has cut the beast down to the bone for its Fire devices, and then dressed it in so many layers of Amazon services that it's hardly even a Google product any more.
But Google can't simply get out of this niche by pulling on the strategy lever marked "make high quality devices that are a delight to use," in the hope it'll amaze consumers into buying and engaging more with high-end Android devices because it doesn't really control this lever. That's the job of its hardware partners. Instead it's limited to pulling stunts like releasing its own Nexus-branded 7- and 10-inch tablets, and, crucially, a smartphone. The hope is that either by selling directly, or by stirring Android partners into action (something akin to Microsoft's hope with the Surface) that the overall quality of Android devices will go up.
Which leaves it with Android itself. Google is facing some rather unique challenges here. Its main competitor Apple is apparently on a resurgent streak, and brand new stats say it may even have re-stolen the market share lead in the U.S. among smartphones. The company has also radically reshuffled its executives, including ditching a controversial figure some commentators say was holding back iOS design, and evidently has much incentive to dramatically overhaul iOS in 2013.
Google's recourse, then, is to innovate Android like crazy. It must strengthen and simplify Android itself, and turn it from the platform high-end geeks love because they love to tinker with the guts of any computing device, and from the cheap low-end platform that "just about does" to serve as a gateway device for newcomers to smartphones and tablets, into something people love to use. Instead of confusing UI changes and too many bells and whistles, it needs to make Android into something rewarding for its users.
[Image: Flickr user Ѕolo]