Can Apple Profit From This Dominance?

 
on March 12 2013 11:56 AM

There’s something of an inversion when it comes to smartphone ownership and use of smartphones to watch videos, and it could be to the benefit of Apple (NASDAQ:AAPL).

Worldwide, Apple had a 19 percent share of the smartphone market for 2012. Meanwhile, Google (NASDAQ:GOOG) was far more prevalent, with a 68 percent market share. Despite the Android’s expansive presence, there’s a big divide between its users and iPhone users.

According to Ooyala — a company that prepares video content for various devices — Apple actually has a much larger share of total video-watching time than Google. Of all the hours spent watching videos on mobile devices, 67 percent was done on iOS devices while only 33 percent was done on Android devices.

This is a major flip for the two lines of devices. Even though Android more widely used, it is used differently, and may in turn bring in less ad revenue for Google than iOS does for Apple.

If Apple puts enough advertising into its video applications, it could pull in a decent sum of mobile ad revenue, while Google would have a harder time of it and likely have to look to other areas to place ads.

According to eMarketer statistics, Google held a 51.7 percent share of all net mobile ad revenue in the US in 2011. That share increased to 54.5 percent in 2012, and is expected to level off to 54.1 percent for 2013 and 2014. Meanwhile, Apple moved up from 2.6 to 2.9 percent between 2011 and 2012, and it is expected to drop to 2.3 and 2.2 percent in 2013 and 2013, respectively.

So, even though Apple has such a major share of video viewership, its share of mobile ad revenue in the U.S. is far more miniscule. The reason for this may be related to the amount advertisers spend on different media. Between rich media, banners, and video advertisements, video received the least investment from advertisers in 2013, and is expected to remain far below the other two in the years to come.

So, while Apple may show a strong difference between its users and Android users, it may not be so easy for the company to monetize on this characteristic of its user-base.

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