iPhone vs. Android: Who Owns the Future of M-Commerce? [SlideShare]

Your boss calls you into his office, as he taps out an email on his shiny new iPhone. “We need to update our mobile site for modern smartphones,” he says, without looking up. “Make it for iPhone. That’s where our customers are.”

Your Android phone buzzes in your pocket. Just this morning you read that Android users make up 52% of smartphone traffic in the US, whereas iPhone accounts for only 42%. Android has already overtaken iPhone in Asia and South America. If you rebuild your mobile site only for iPhone, you think, it will be out of date within the year, and for your business, that means millions of dollars lost.

You’re not going to make such a drastic decision on a whim. You need better data, you need better insight…

Although iPhone constitutes only 42% of the US smartphone market, iPhone users make up 59% of enterprise m-commerce traffic. Maybe your boss was right. The fact is that while m-commerce traffic is growing rapidly on both operating systems, traffic from Android phones is increasing 70% faster than iPhones. Last year, Android comprised only a third of m-commerce smartphone traffic. By next year, it will exceed 40%.

It is important to understand that you do not need to support every version of Android. Only 2% of m-commerce smartphones run Android 2, and that number will only decline over the coming months. Supporting old operating systems is time consuming and costly with dwindling returns. A company should always check their distribution of OS versions before deciding which to support.

Traffic is fine and dandy, but what about commercial concerns? The key is that twice as much m-commerce revenue comes from iPhone users than Android. The per session value of an iPhone visitor is higher than an Android visitor. This means that internet retailers are currently willing to pay more to acquire someone pushing their thumb onto an iPhone than a Nexus.

Why the difference in per session value? It may come at no surprise that iPhone and Android users are not groups segmented by technology alone. Self-selection of these users based on socioeconomic variables explains much of the differences we see in purchasing patterns.

Currently, the type of person who buys an iPhone has a higher propensity to make purchases on their mobile device. Maybe it’s because they’re more likely to be affluent. Maybe it’s because they want to get more use out of their investment. Either way, iPhone users like to spend money using their phones.

However, new Android devices are challenging iPhone as the go-to luxury smartphone. For example, the Samsung Galaxy Round, released in Q4 of 2013, carries an MSRP of $999.99 and offers a more ergonomic design. As more wealthy people switch to these Android superphones, we will see the gap in per session value narrow.

So will Android dethrone iPhone as the m-commerce device of choice? In short, no, but it will give Apple a run for its money in the near future.

Other smartphone traffic is a small, but interesting segment. While not growing in traffic, this segment has more than tripled its revenue over the past year and may continue to do so. This may signify a key, tech-savvy demographic, a segment more inclined to make purchases over their phones. While this group will not by any means overtake iPhone and Android in the market, it does make up a profitable sliver of the pie.

The fact that smartphone revenue is increasing faster than smartphone traffic suggests that consumers are growing more comfortable shopping on mobile.

As these visitors become more accustomed to m-commerce, their expectations of m-commerce will grow. And internet retailers need to be ready.

So, what do you do about the request from your boss?

Let him know the above data while painting the reality of m-commerce for him: mobile success isn’t black and white any more. A successful mobile commerce strategy means building for both operating systems or losing customers today and for years to come.

Your Android phone buzzes at your desk – a text from your boss. When can we go live?

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