How Much Does Market Share Matter?

Lessien, on market share:

Essentially, the historical advantage of dominant market share has been the ability to raise (discriminately) the switching cost of competing platforms. […]

The table stakes applications (Facebook, Twitter, Kindle, etc.) are available on most of the leading mobile platforms. If not available specifically as native applications, these services as often accessible as web applications. For apps beyond the main set, a reasonably informed consumer can find ready substitutes.

This is a good piece overall. Me, I can’t resist a sports analogy. The object of the game is to win. Market share isn’t winning. It’s just a component that leads to winning. Focusing solely on OS market share in mobile is like focusing solely on batting average in baseball, or yards gained in football. When Microsoft and Intel grew to dominate the PC industry, there was a very strong correlation between their success and their market shares (for OSes and for CPUs). There’s certainly a correlation between market share and success in the mobile market, but it just doesn’t seem to be nearly as strong.

An Android proponent can look at this and say, “Well, that sounds like what an Apple fan would say, now that Android has taken a large lead in smartphone market share.” But Apple never had a lead in smartphone market share. From 2007 through today, they’ve been behind at least one giant (Symbian at first, now Android), and for most of that time they were behind BlackBerry. iOS’s influence on the market has always been disproportionate to the iPhone’s share of the smartphone market.

As Lessien says, profit share seems a better indicator of success than market share — both today, and historically.

Tuesday, 1 February 2011

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