Android Had 67 Percent Tablet Operating System Share in 2Q 2013

By Gary Kim July 29, 2013

Global tablet shipments reached 51.7 million units in the second quarter of 2013. This fact represents one more bit of data shedding light on the larger question of changing computer appliance preferences by consumers and business users globally.   

Android had 67 percent market share, while Apple iOS declined to 28 percent.  Windows got 4.5 percent global share, Strategy Analytics estimates.

Observers disagree about the value of Android to Google, as valuable as it seems to be for device manufacturers and end users. By definition, Google gets no licensing revenue from use of Android in smartphones or tablets.

Ironically, Microsoft gets a royalty on each copy of Android used, and can quantify what it earns from each sale of an Android device. In fact, Microsoft makes more money, directly, from Android than Google does.

Some estimate Microsoft earns $1 per Android device, from those manufacturers who have decided to pay Microsoft to avoid patent lawsuits. Others peg the costs higher.

So unless Google is mistaken, there has to be some indirect revenue involved. Some might try to glean Android’s value by looking at sales of Google Play revenues, which has been estimated at $679,000 for the 200 top-grossing apps.

The indirect value of Android for Google's revenue prospects arguably is large, if hard to calculate directly, looking at advertising.

Some argue that Android is important because Android users tend to make more extensive use of Google apps. In part, that is because each of the major operating systems tries to drive usage to ad networks and apps affiliated with the ecosystem.

So Google might be said to rely on the Android ecosystem to drive a certain portion of an expected 2016 $12 billion in ad revenue. But that’s an analysis that is quite subtle, in comparison to what Microsoft possibly makes from each Android device.

If Microsoft earns an average of $8 per Android device, Microsoft would earn $3.4 billion in 2013 from Android device sales, assuming Microsoft gets royalties on half of Android devices sold globally.

By 2017, Microsoft could earn almost $5.9 billion from Android royalties. If Microsoft collected royalties on 75 percent of Android devices sold, by 2017 that could be worth over $8.8 billion.

To argue Google has a strategic rationale for giving away Android is easy enough to say. Demonstrating that value directly is quite difficult. But assuming Google is right, Google is “winning,” even if many would question the direct value or near-term benefits.

Edited by Rich Steeves

Contributing Editor

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