It’s a multi-ecosystem world [TUPdate]

Dan Ness, Principal Analyst, MetaFacts, July 8, 2021

Building and maintaining an ecosystem promises untold benefits to companies. However, companies will not enjoy benefits unless customers see value in the collective experience. Encouraging customers to stay within a company’s family of products can reduce the expense of acquiring new customers and increase revenue from ancillary offerings. This TUPdate reports on the most pragmatic measure of acceptance – market penetration status of broad technology ecosystems. In this analysis, MetaFacts measures the market’s adoption of the three prominent operating system families: Microsoft Windows, Google Android/Chrome OS, and Apple iOS/iPadOS/MacOS.

Google’s penetration

Google’s Android operating system has made substantial inroads around the world, primarily with smartphones. Analyzing penetration spanning smartphones and including PCs or tablets, Google’s reach on devices ranges from one-third to six-tenths of online adults.

Google’s OS penetration in context to Apple and Microsoft

No ecosystem exists in a vacuum, and Google’s OSes are no exception. The penetration of Apple’s OS ecosystem, also fueled by smartphones, is roughly comparable to Google’s, ranging between one-third and one-half of online adults. Because most online adults only use one smartphone and only one smartphone OS, the strongest countries for Apple are weaker for Google and vice versa.

While Apple and Google are relatively new on the block, the venerable leader Microsoft Windows leads in all markets surveyed. Microsoft has established its market dominance over decades of PC use. The last decade’s rapid rise in smartphone use has not unseated the customary PC, nor have Apple’s Macs nor Google’s Chromebooks.

It’s a multi-ecosystem world

It’s all about the users. Looking from the user’s perspective is a powerful way to understand the dynamics of technology ecosystems deeply. The following analysis divides the market by combinations of operating system families they’re using within generational age groups.

There are two important takeaways. First, the market is not monolithic. When we analyze the market by as broad and straightforward a measure as the user’s age, we can see different segments behave differently.

Second, the majority of users are straddling two or more OS ecosystems. Across all age groups, the largest number of users are using either Windows and Google or Windows and Apple. Only one OS ecosystem stands out for exclusive use – Microsoft Windows – most prominent among Boomers and older adults.

Measuring ecosystem by association

The promised benefit of an ecosystem is some perceived goodness from network effects. The actual value is contingent on users finding benefits from having more than one device within the same ecosystem. In Apple’s case, users are acting on perceived ecosystem advantages with their choice of tablets. Market penetration of iPads among iPhone users is substantially higher among iPhone users than users of Android smartphones. The reverse is also true: market penetration of non-Apple tablets (primarily Android) is more substantial among users of Android smartphones. However, the association is not as strong, a mark of Apple’s success.

Looking ahead

Many users may not have understood that choosing between an Android smartphone and an Apple iPhone meant buying into an ecosystem. Users’ demands for open platforms have restrained developers from fully closing their ecosystems, which has kept open the possibility of switching. However, most of the market growth and shifts have come from growth by more broadly serving a customer base instead of overtly focusing on luring away competitor’s customers.

Microsoft, Google, and Apple have managed their OS ecosystems differently. All three will continue emphasizing broadening their offerings rather than dwelling solely on narrow device turf battles. As key competitors, they have each responded to moves by the other two. As innovators, these three have led the charge to outdo each other and hold off challenges from newer entrants. For example, all three have found their ways to contend with juggernaut Amazon. With Amazon’s historical success in dominating (and crushing) the e-book reader market, these three market leaders have gingerly tread into voice recognition with mixed results.

Microsoft’s earlier push into mobile phones fizzled. Users of early Microsoft mobile phones didn’t experience a high enough level of integration with Windows PCs to encourage users to stay within Microsoft’s OS ecosystem. Only recently has Microsoft made the most progress to integrate smartphones with Windows PCs – and that has been with Apple and Android smartphones.

Users of Google’s Android smartphones haven’t chosen en masse to move to Android tablets or Chromebooks. Although there is a positive association indicating some ecosystem value by users, Apple’s iPad has a more tangible link with iPhones than Google has within its ecosystem. Also, hoards of Android users haven’t given up their Microsoft Windows PCs to jump to Chromebooks. The sudden mid-pandemic move to remote work increased demand for in-home computing power and had users and employers scrambling for tech devices, especially PCs. This higher demand coupled with supply shortages may have boosted Chromebooks temporarily, but any momentum is likely to be brief.

Although Microsoft arguably addresses tablet and notebook competitors alike with its Surface line, market acceptance has been underwhelming. Instead, Windows PCs continue as the technology backbone for most market segments.

Apple is likely to continue to broaden its suite of services and devices to its growing host of faithful. Well beyond periodic device updates, Apple’s customers are increasingly buying into a collection of offerings. Furthermore, Apple will continue to emphasize more than the core functionality of a device or service, emphasizing valuable intangibles such as privacy and trust. Also, Apple will continue to dance along that fine line between deep integration within Apple’s ecosystem and supporting more open standards. Apple will work from the small to the large, enticing new customers with several products, services, or benefits. From services like music or TV, devices like smartwatches or tablets, to issues such as privacy, health, or entertainment, partially-Apple-faithful users will find themselves considering Apple for their next device upgrade or service expansion.

Interestingly, during all this cross-adoption, most users won’t even think of themselves as part of an ecosystem.

About this TUPdate

TUPdates feature analysis of current or essential technology topics. The research results showcase the TUP/Technology User Profile study, MetaFacts’ survey of a representative sample of online adults profiling the total market’s use of technology products and services. The current wave of TUP is TUP/Technology User Profile 2020, which is TUP’s 38th annual. TUPdates may also include results from previous waves of TUP.

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TUP Waves: TUP 2020

TUP Lenses:  Technology Ecosystems, Devices, Mobile Phones, PCs, Tablets

TUP Tags: Windows, Microsoft Windows, PCs, Desktops, Desktop PCs, Notebooks, Laptops, Smartphones, Devices, Operating Systems, Android, Apple, Apple iOS, Market Penetration


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