Google Inc (GOOG)’s Android Peaks With Slim Growth Chances: Analysts

Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) has been dominating the smartphone market for long with its Android mobile OS, but its market share in peaking. Even though, the internet giant is way ahead of the rivals in the segment, but analysts believe that the Android has reached the saturation, and further growth stands a lower chance.

‘Forked’ version also losing

According to the research firm Strategy Analytics, Android was used in 84% of the smartphones shipped globally in the 3Q while Apple Inc. (NASDAQ:AAPL)’s iOS powered 12% of the smartphones. From the last quarter, Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) lost 1% of the market share.

A report from the WSJ cited Neil Mawston, executive director of Strategy Analytics, who said that the market share of Android is “peaking”, and “Unless there is an unlikely collapse in rival Apple iPhone volumes in the future, Android is probably never going to go much above the 85% global market share ceiling.”

Also, the popularity of the Android “forked” version is also coming down. Google’s open code for Android help third party companies to build their own versions of Android, which is called ‘forked’ version. Such version generally don’t support Google apps, and don’t use Google PlayStore. Amazon is a good example, as it runs its Kindle Fire devices on the forked Android version. Nokia also power its X series of phones with such versions. For the 3Q, share of the forked versions of Android came down to 37% from 39%.

Numbers not good for Samsung too

Apart from the two big players, rest of the market share is held by a number of players including, Microsoft Corporation (NASDAQ:MSFT) and Blackberry Ltd (NASDAQ:BBRY) (TSE:BB). For the 3Q, Microsoft grabbed 3% of the share while BlackBerry commanded only 1% of the market.

Along with Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), the numbers are also not healthy for its biggest Android partner Samsung. In the 3Q, the Korean firm accounted for 25% of all the smartphones shipped, which is a sharp decline from 35% in the last quarter. Samsung is facing tough competition from niche players such as Xiaomi, who are selling better smartphones at lower prices. Xiaomi is primarily targeting emerging markets like India, Singapore and other. Samsung enjoys a hefty gross margin, but Xiaomi sell the devices at almost manufacturing cost, and make money from the sale of accessories and software add-ons.