Google’s primary source of profit is search-related advertising while Apple’s is consumer hardware. And Google’s five-front assault on Apple’s profit model takes advantage of that difference.
Here are five of Apple’s fronts and how Google is attacking them:
Apple lags and has lost share in high end smartphones where 426 million units were sold during the first three months of the year. Gartner reported that in the first quarter of 2013, Apple’s global share of the high-end mobile phone market declined from 22.5% in the 2012 period to 18.2%.
Apple is number two to Samsung — which supports Google’s Android operating system. Samsung’s market share increased from 27.6% to 30.8% in the first quarter of 2013.
Android has already taken the tablet market lead from Apple. IDC expects Android to control 60% of the tablet market by the end of June 2013.
It wasn’t always so gloomy for Apple’s iPad. After all in the second quarter of 2012, the iPad commanded over 60% of the tablet market — but that figure has dropped ”to around 40% in each of the third and fourth quarters of 2012 and the first quarter of 2013,” reports Venturebeat.
And Android has been gulping iPad’s market share. Venturebeat notes that between the first quarter of 2012 and the first quarter of 2013, Apple swapped the lead with Android — in 2012 Apple outsold Android by 11.8 million to 8 million; while in that same period in 2013, Android trumped the iPad by 27.8 million to 19.5 million.
Moreover, IDC expects skies to darken for the iPad. In the second quarter of 2013, IDC believes that Apple will ship fewer than 19.5 million units because Apple is not launching what CEO, Tim Cook, called its “amazing” new hardware until “fall 2013 and throughout 2014.” Thus IDC expects Apple to ship between 17 million and 18 million iPads — leaving Android tablets with 60% of the market in Q2 2013.
When it comes to competing with Android smartphones and tablets, Apple can either cut price and slash its profits or hold its prices and win fewer new customers. Cook has yet to prove that Apple can innovate its way out of that profit-growth dilemma.
3. Apple Maps
Under a year after Apple removed Google Maps from the iPhone, Google introduced a new version that is simpler and can be customized to each user.
By sharing what Google knows about each individual from other services, Google can customize maps. According to the New York Times, “When users who are logged into Google visit Maps, they will see the places they frequently visit highlighted, like restaurants, museums and their home. Google learns the places they go by drawing information from all of Google’s services — including search and Maps history, Google Plus posts and information in users’ Gmail in-boxes.”
Bernhard Seefeld, the product management director for Google Maps, bragged to the Times, “We can build a unique map for every place and every click.” For those who are worried about Google knowing too much about them, this new service is creepy — but potentially useful.
Meanwhile, the memory of Apple Maps six most epic fails lingers.
Google is going after music streaming through the introduction of Google Play Music All Access (GPMAA) — a service that lets users stream music using Google Play for Android. For $9.99 a month, GPMAA combines “users’ current Play collections with access to millions of additional songs,” according to Fortune.
Meanwhile, Google was able to secure content deals with three major record labels—Universal Music, Sony, and Warner Music Group — and beat Apple to market with the streaming service that iTunes has long-been rumored to be developing, says Fortune.
The most important front where Google is trouncing Apple is innovation. To be fair, under Steve Jobs, Apple’s approach to innovation was to introduce a much better product in an established industry. The result was big success from great products like the iPod, iPhone, iPad, and iTunes.
But Google Glass’s big media splash suggests that creating entirely new categories of products can also be a way to spur growth. We can also speak about the Google Cars that can for sure impact also IT solutions.
Google certainly needs help there — since its traditional markets are slowing down.But it looks like Google is winning the war for the future: Google is offensive and Apple only defensive.
- Google’s Five-Front Assault on Apple (forbes.com)
- Who can rescue Google Wallet? Apple. (sivag1.wordpress.com)
- Google’s Five-Front Assault On Apple (soshitech.com)
- Google’s Getting Its Game (Console) On (newsy.com)
- Report: Google developing an Android-powered console (polygon.com)
- Why Apple, Google want to make consoles (stuff.co.nz)