Google's Android vs. Apple: History Repeats Itself 35 comments
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Nice chart from ChangeWave showing Apple (AAPL) challenging RIM's (RIMM) market share. Been negative on RIM for a while and I think the share losses will continue--not just from Apple but most especially Android.
Click to enlarge:
Forget the current chart though, what will the chart look like 4 years from now?
I think the lines may look somewhat similar, with Apple up as the top blue line, and Google's (GOOG) Android as the challenger. Here are a couple of reasons why with a final prediction at the end:
- Apple's software platform and OS are too closed. It's a bit too capricious and is rather blatant about keeping competitive apps off the iPhone. This pattern is very similar to the OS wars between Apple and Microsoft. In the end, the crappier software won the day because their platform was open.
- Google is a bit different than Microsoft in the sense that they are not horrible coders. In fact, they are quite good at software which is the most important piece of the handset puzzle. Google also has a huge base of web users that can be leveraged into the mobile handset world. And again, unlike Microsoft (MSFT), Google does not make bad software.
- Apple's strategy gets it higher margins in the short term, but what happens in the long term as Android starts to challenge its growth? The same thing that occurred in the war for the desktop can happen again in the war for the handset.
- Android is really quite good. The platform has a lot of potential.
- My last call was that Apple would trounce Blackberry and Nokia (NOK) would continue to lose share. I think that trend will continue. My next call--3-4 years out is that Android will eventually cap Apple's market share growth and eventually win this war--or at least most of the major battles. I think Apple risks the same outcome as before--snatching defeat from the jaws of victory if it doesn't loosen its grip on its platform.
To appease the disclosure gods. Minor position in Apple Calls (most of the position was sold after earnings), and Long Google Leaps.
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This article has 35 comments:
Why couldn't one argue that Android is like Linux and the iPhone is like windows? And what has happened there?
I realize Apple can still capture huge percentage of smart phone market but it is nice to have an alternative option to keep their prices in check.
The iPhone costs about the same as other smartphones and does way more.
On Oct 29 04:39 AM parv wrote:
> apple will lose if it makes bad products with expensive prices. It
> lost the pc wars because of bad products in the 1990s and expensive
> prices. So far the iphone has been a good product with reasonable
> prices (as compared with its rivals).
>
> Why couldn't one argue that Android is like Linux and the iPhone
> is like windows? And what has happened there?
They better start with RIMM, NOK, and MSFT....
in any order.
Steve Jobs understands the consumer and the figures speaks for itself.... 74% are very satisfied with the Iphone....
GOOGLE will be profitable with SEARCH only....
nothing else.
There's a lot of hype about "open" systems, but, lest we forget, Windows is NOT "open," yet 90+% of computers run it. What happens with some "open" systems can best be demonstrated by the older Palm devices. There was no control, no certification, no checking. The result was that some applications routinely crashed the system. A friend had a Treo (don't know which, but it wasn't a Windows Mobile version). He installed a game and, within a day, the Treo started crashing DURING CALLS--and the game was NOT running. I had a game on my Palm TX that would turn the TX back ON if I turned it off while the game is showing. The TX looks like it turns off, but, 5-10 seconds later, it turns back on. It caused the battery to run down dozens of times before I noticed the behavior. (I keep the TX in a metal case and would shut the case after turning it off.) I contacted Palm, who told me it wasn't their problem. I finally contacted the developer, who told me to go p*ss up a rope. He wasn't supporting the game any more.
That's the beauty of an "open" system: you can get hosed and even pay for the privilege, and no one will accept responsibility.
Google's 'open system' will have to have severely reduced functionality, or android phones won't be safe enough.
imho
N
User Base: iPhone has been popular amongst Universities (see iPhone Universities such as Abilene, www.acu.edu/), and personal use (see iPhone Mom, www.theiphonemom.com/). There is no evidence that iPhone will see widespread use in any corporate deployment, and I have never heard anyone say "the business case for Apple is this..." In the corporate world, it has always been about RIMM. Can you even integrate iPhone with your back-end mail server, without paying for MobileMe?
I think the hard/soft discussion has been done to death elsewhere, so I'll leave it for people who are smarter than I. Having said that, the small market share that iPhone has established is fanatically loyal, and each purchase generates monthly recurring revenues in iTunes, AppStore, and (currently) AT&T usage. It sounds obvious, but please don't make the mistake that AAPL is a phone maker alongside RIMM and Nokia. AAPL's larger-than-IBM market cap is about a lot more than the sum of its parts.
1. Apple is now an extremely well-run company, highly focused, tight logistics chain and its mobile offerings (iPod/iPhone) are extremely price competitive.
2. Apple has HUGE developer momentum this time around in the mobile space.
3. Microsoft gave the OEMs lots of leeway with hardware but the OS was locked down, it was NOT open. Google is letting all the OEMs screw around quite a bit with the OS. OEMs need to make their devices "unique" which opens the door to all kinds of developer/user nightmares. Look at the Droid, it is very different from previous Android phones.
4. Google has software chops, but can they really effectively shepherd a mobile OS, a desktop OS and a browser and all their cloud apps?
5. Mobile is all about hardware/software integration, Google has no experience in hardware.
6. Apple has figured out a way to make money off of every aspect of the iPhone--hardware, movies, music, TV shows, software, peripherals, subscriptions and even an extra bonus when they sell iPhones at their retail stores! No one else has figured this out yet.
you will ditch a lot of gadgets...
There are now additional barriers for entry -- the iPhone/iTunes/OS X is a *platform* the includes the iPodTouch which is selling nearly as well as the iPhone itself without the benefit of carrier subsidies. When someone starts selling an Android based iPod Touch competitor in the tens of millions, please call me.
The only thing that is allowing competitors to flourish even a little bit is that the iPhone is AT&T only in the US. That obviously will not last.
@a4ism: "In the corporate world, it has always been about RIMM. Can you even integrate iPhone with your back-end mail server, without paying for MobileMe?"
Yes you, can, indeed a lot easier than you can a Blackberry -- it integrates directly with your corporate exchange server. And the corporate world is being taken over by the iPhone, one employee at a time. My Wall St. financial industry office has more iPhones than Blackberries at this point. The jig is up.
the last 20 years was just the first skirmish? Really? Sorry but you are out of your mind. The PC war is over, ended a long time ago.
The next war is a global war for SAS/cloud. I dont even see where apple fits in that battle. Do you somehow think a couple of data centers and phone will bring apple to enterprise level?
Or are you expecting apple to roll out some good TV slots telling everyone just how bad IBM SAP MSFT ORCL are?
Tell me because I would really love to know how you see apple leveraging its phone users into some sort of global platform that can displace the other 99.999% of the existing infrastructure?
Oh wait, the engineers are all going to start using an iphone instead of their desktop, thats it, I got it! The devs are all going drop everything and get to work making fart apps.
On Oct 29 07:47 AM Tom B wrote:
> Apple did "lose" the PC wars; they just lost the first skirmish.
>
>
> The iPhone costs about the same as other smartphones and does way
> more.
>>>>>&g... this point there has been recognition that for pocket devices tight single vendor integration a la iPod/iTunes is necessary.<<<...
wtf, Please back that up. That is a stupid statement. You are suggesting that because the device is small, it requires that the hardware and software are made by the same company? THat is just the dumbest POS I have heard in years.
I guess we should send a memo to the rest of the tech world and tell them to stop shipping consumers devices, becuase they just paid a license fee for the software instead of writing . Oh well off to throw out my player, after all , they did not write the software, they just paid some fees, and outsourced the UI, so I guess it does not work........
On Oct 29 12:20 PM Ted13 wrote:
> Many of the same arguments were made about how Microsoft's Play-for-sure
> was going to win the war against the iPod. We all know how that turned
> out, and indeed at this point there has been recognition that for
> pocket devices tight single vendor integration a la iPod/iTunes is
> necessary. Thus Microsoft chucking Plays-for-sure in favor of Zune.
> I am yet to hear any credible argument about how the challenges against
> the iPhone are any different.
>
> There are now additional barriers for entry -- the iPhone/iTunes/OS
> X is a *platform* the includes the iPodTouch which is selling nearly
> as well as the iPhone itself without the benefit of carrier subsidies.
> When someone starts selling an Android based iPod Touch competitor
> in the tens of millions, please call me.
>
> The only thing that is allowing competitors to flourish even a little
> bit is that the iPhone is AT&T only in the US. That obviously
> will not last.
>
> @a4ism: "In the corporate world, it has always been about RIMM. Can
> you even integrate iPhone with your back-end mail server, without
> paying for MobileMe?"
>
> Yes you, can, indeed a lot easier than you can a Blackberry -- it
> integrates directly with your corporate exchange server. And the
> corporate world is being taken over by the iPhone, one employee at
> a time. My Wall St. financial industry office has more iPhones than
> Blackberries at this point. The jig is up.
Try it with a religious zelot
Try it with a political zelot
Try it with an Apple zelot
Apple will never lose its zelots, hence its market share.
It's not worth arguing with these people over Apple, Steve Jobs is Jesus and has come to save the world.
Just buy a phone that works for you and don't worry about why Apple will never make a mistake or suffer any bad press anymore.
competition is good...it'll keep Apple on it's toes. This a company that's superior in fast, GOOD innovation...with the $$$ to do it.
On Oct 29 09:46 AM MisterNL wrote:
> Open systems are a healthy environment for viruses. Viruses may
> be OK on PCs but absolutely not on phones.
>
> Google's 'open system' will have to have severely reduced functionality,
> or android phones won't be safe enough.
>
> imho
>
> N
www.apple.com/iphone/b.../
If this is the case, then AAPL is set to sell out its inventory and then some!
I have seen the Droid release videos and -- while the device is pretty feature-rich and technically very capable -- it just doesn't have that "plus alpha" factor that the iPhone has, yet. I have no doubt that it will sell well, but comparing Droid to iPhone is like comparing a Toyota Camry to an Audi TT.
In any case, as far as traders go, I am sure that there are no wrong calls in the mobile device market. Just remember that, once you have sold the device, AAPL will continue to gain revenues through App Store and iTunes -- a big long-term advantage (I am always in favor of passive income).
Full disclosure: Long AAPL DITM LEAPS and calls, since October 2007. No AAPL devices until last week, but am very impressed with the iPhone 3GS.
On Oct 29 12:58 PM jack dee wrote:
>Yes you, can, indeed a lot easier than you can a Blackberry -- it integrates directly with your corporate exchange server. And the corporate world is being taken over by the iPhone, one employee at a time. My Wall St. financial industry office has more iPhones than Blackberries at this point. The jig is up.
Google makes nothing on Android it is merely a conduit for mobile search and services. If anything Apple is an ally. Google makes as much off every iPhone in use as it does Android devices in use.
Google obviously has Android to ensure MS never gets out the huge hole they have dug for Windows Mobile. matter of fact what can MS do to sell their mobile OS? Free versus any $ is going to be a really hard sell. If Android gets much more traction (and it obviously will with DrOID), WinMo is probably dead.
Android has the same disadvantages as WinMo has as far as having to rely on multiple device makers to release compelling hardware and the fragmentation multiple manufactures make for third party software developers.
Android in all it's various renditions may surpass the number of iPhones in a few years, but I wouldn't be willing to bet much on it. The iPhone/iPod Touch ecosystem is huge. Apps, Music, movies, tv shows...etc. Not that alot of this isn't or won't be available elsewhere, but it is now for the iPhone and pretty painless to use.
The iPhone is competitively priced and if the growth curve continues (of both the iPhone and iPodTouch), what single mobile device manufacturer will be able to get the kind of component prices Apple is already undoubtedly receiving? Is Motorola going to be able to pump out 30 million DrOIDS/year anytime soon?
I welcome competition. This will only make all mobile devices better.
Just remember why Android exists....
Cheers,
Argosy
Apple did not "lose" in the "90's". Apple did not make "bad products" in the "90's". You are at least 12 years off. Apple "lost" way before the "90's". If anything, Apple's revival started in the 90's right after Jobs returned.
The first Apple computer was built from scratch. It had its own operating system, however primitive at the time. Apple was the first to use a windows approach to its UI. Apple was the first to pay attention to human-machine interactions in its commercial product. Apple's UI was always and still is the easiest to use. That is the reason it survived to this day. So "bad" is a relative term. Your bad is my good. My bad is your good.
DOS was an IBM product that Gates bought to start his Microsoft. DOS then became Windows after a convoluted situation between Apple and Gates. DOS was cheap and ran on PC and PC parts were cheap and I was building PC's left and right for myself with a meager $200 investments. So "cheap" won the day.
At the time, late 70's and early 80's, consumers were not computer users and few could or wanted to own home computers. Businesses picked up on DOS due to its cheap pricing and that got them locked onto the Windows bandwagon. Once that happened, developers swarmed to DOS and Windows and the rest is history.
So please get your history straight even when this is a place that allows any of us to post any and all of what we want.
On Oct 29 04:39 AM parv wrote:
> apple will lose if it makes bad products with expensive prices. It
> lost the pc wars because of bad products in the 1990s and expensive
> prices. So far the iphone has been a good product with reasonable
> prices (as compared with its rivals).
>
> Why couldn't one argue that Android is like Linux and the iPhone
> is like windows? And what has happened there?
From Wikipedia:
"IBM again approached Bill Gates. Gates in turn approached Seattle Computer Products. There, programmer Tim Paterson had developed a variant of CP/M-80, intended as an internal product for testing SCP's new 16-bit Intel 8086 CPU card for the S-100 bus. The system was initially named "QDOS" (Quick and Dirty Operating System), before being made commercially available as 86-DOS. Microsoft purchased 86-DOS, allegedly for $50,000. This became Microsoft Disk Operating System, MS-DOS, introduced in 1981"
Also everybody and their mother "called" Apple to dominate with the iphone.... it had been waited for with breathless anticipation for over a year.... your analysis is primitive and belies no real understanding of the technology markets....
Apple is quality, quality, quality. Everything it does is quality, quality, quality. That's why Apple kills Rim first, and will just sit pretty perching on the throne looking pretty. And yes, the world will always crowd around Apple admiring it, but never let this pretty looking throne sitting thing fool you into thinking it is just lucky to get to sit on the throne, lest you want you head to be on a stake by all this king's men, and ladies.
Apple is king, Google is trying to stir up the mob preaching Google. problem is the people are perfectly content with Apple as king, how can you rally a kingdom that adores its king? The rebels' heads like Reaearch in Motion on a pike would merely serve as warning posts to the scheming dukes and counts, stirring up the crowd is fine if you have the backing of the people, but Apple is the young King Arthur albeit this King Arhur is also Merlin.
I suspect Android would someday sit at Apple's round table as the kingdom of people and businesses gather to forge out a Camelot, joustings are fine and friendly but fiends like Research in Motion would be butchered as sports.
btw, when you see any word underlined in red, that means you should probably check your spelling before you post. particularly if it is a word that is the cornerstone of your post and you use it over and over and over.
On Oct 29 01:38 PM Whoa Nelly wrote:
> One thing you will never do is argue facts & logics with a zelot.
>
>
> Try it with a religious zelot
>
> Try it with a political zelot
>
> Try it with an Apple zelot
>
> Apple will never lose its zelots, hence its market share.
>
> It's not worth arguing with these people over Apple, Steve Jobs is
> Jesus and has come to save the world.
>
> Just buy a phone that works for you and don't worry about why Apple
> will never make a mistake or suffer any bad press anymore.