Apple Inc. (NASDAQ:AAPL) shares were down a fraction on today’s market after days of a sustained rally that have seen the firm’s shares gain more than 10 percent. More good news emerged today, this time from famed Apple analyst Gene Munster, indicating that the company’s iOS platform is much more valuable than those of its competitors.
According to the Piper Jaffray report, iOS users generate much more web traffic than users of other platforms. The numbers speak for themselves. iOS accounted for 69 percent of traffic in April, while Android accounted for 26.5 percent of web traffic. The Apple Inc. (NASDAQ:AAPL) share of traffic is increasing as well, in March iOS accounted for 66.4 percent of mobile traffic, while February’s number was 65.3 percent.
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Why is the proportion of web traffic an important metric, and why does it make Apple Inc. (NASDAQ:AAPL) users more valuable than Android users? There are a couple of mechanisms at work.
The first is on the side of mobile carriers who generate more revenue from users who use their data connections more often.This means that the company might be able to justify higher subsidies for iOS devices than it can for Android devices.
The second major mechanism, mobile ad revenue, is even more powerful. Users who spend more time on the web on mobile see more advertisements and are more likely to click on them, meaning more revenue for sites, like Facebook Inc (NASDAQ:FB) trying to up their monetization. To these firm’s, iOS users are many times more valuable than those using other platforms.
The proportion of web traffic in this report was obtained by studying ten of the websites on the top 100 mobile sites visited. The sites used in the analysis were: Answers.com, Tumblr, ChaCha, Examiner, LinkedIn, Bleacher Report, Hubpages, White Pages, Squidoo, and Dictionary.com.
The Piper Jaffray report goes on to enumerate the reasons that iOS users are so valuable. The first is that iOS is likely the most popular smart phone platform in the United States, the second is that iOS users tend to be more engaged with their devices, and the third is that the tablet market, which iOS still dominates, generates more mobile traffic than smart phones per capita.
Apple Inc. (NASDAQ:AAPL) users are more valuable to the market place than Android users, and the difference is readily apparent. That’s why Apple Inc. (NASDAQ:AAPL) still dominates the smart phone market.