Apple 2.0

Covering the business that Steve Jobs built

Don't mistake Apple's market share for its installed base

January 10, 2014: 7:33 AM ET

The top chart makes for exciting headlines. The bottom chart is the one that matters.

Source: The Guardian from Kanter and comScoe data. Click to enlarge.

Source: The Guardian from Kantar and ComScore data. Click to enlarge.

FORTUNE -- For investors who missed Charles Arthur's useful primer in The Guardian on the difference between market share and installed base, the charts he published Thursday make the point even more succinctly.

The top chart, created from the U.S. smartphone sales data that Kantar publishes, is the stuff of tech headlines -- the horserace in which Apple's (AAPL) iOS and Google's (GOOG) Android have switched leads four times in three years.

The bottom chart, showing U.S. installed base, is taken from ComScore's monthly reports on the relative ratio of Android, iPhone, BlackBerry and Windows phones in Americans' hands.

"When you look at the installed base share," Arthur writes, "the drama is suddenly gone."

"For developers and everyone considering what platform to target it's that bottom graph -- not the top one -- that is the important one. Android and the iPhone own the US market; BlackBerry and Windows Phone have just 6%, which makes them almost a rounding error. "Market share" stories are exciting, but they often fail to capture the reality on the ground...

"The reality is that the only people to whom market share matters is the people who sell the stuff, and they're probably more focused on total numbers -- and profitability."

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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