My Journey to the “Dark Side”
Chad is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
It is no secret to anyone that knows me that I love technology. I'm also usually very loyal once I find a good brand that makes quality products. I used to only buy Hewlett-Packard computers, until I got my first Apple (NASDAQ: AAPL) Macbook. Being exposed to Apple's technology made me a fan of the first iPhone, and not long after, I bought an iPhone 3G. Given this background, you would think when Apple introduced the iPhone 5 that I would have been itching to upgrade. However, just like Apple solved a problem for me by allowing the iPhone to replace my iPod and cell phone, I was looking for a smartphone that could replace my tablet as well.
I did a lot of research, watched video reviews, and read reviews about several devices from the iPhone 5 to the Samsung Galaxy Note 2. Of all of the choices, the Samsung Galaxy Note 2 seemed like the one that might be able to replace my tablet and cell phone. Its 5.5” HD Super AMOLED display was the largest of the smartphones I considered, and the S pen and multi-window seemed like cool features. Since this smartphone has been dubbed a “phablet,” I figured if I were to make the jump from Apple's eco-system to Google's (NASDAQ: GOOG) Android system, the Galaxy Note 2 would be my chance.
How did the phablet fare? To be honest, Apple has good reason to worry about Samsung up to a point. The device is fast, the screen is great, there are far more customization options, and the camera options are far superior. If there are customers looking for a smartphone and tablet in one device, the Galaxy Note 2 almost makes the cut. With “1.3 million Android devices activated each and every day”, there are a lot of customers who might choose the Galaxy Note 2 over the iPhone. My main problem with the device to be honest was Android.
Granted this was my first Android device, but there isn't much that's hard to figure out, instead the problem is with the apps. being developed for Android. This is a case where an open system is hurting Google because everyone isn't playing nice in the sandbox. One glaring example is Amazon.com (NASDAQ: AMZN) and their lack of an Instant Video app for Android.
Amazon offers Prime Instant Video as one of the hooks for its $79 a year Prime subscription. On iOS, the company has an Instant Video app that is top notch. Amazon also makes Instant Video apps for multiple game consoles, and their Kindle Fire lineup, but on Android no dedicated app exists. In the past, this wasn't as big of a deal because Android still supported Adobe Flash. However, with the release of Android 4.1, Flash no longer is supported. Amazon probably sees Google as a direct competitor when it comes to video, because of the popularity of their YouTube site. However, the lack of a dedicated app for an eco-system that activates over 1 million devices a day is a colossal blunder.
A second example is the CNBC app for Android. On the iPad or iPhone, the CNBC app gives real time stock quotes, news and charts, information about the Dow, S&P 500, and the Nasdaq. If you look at the reviews on the Google Play store, most users don't even know you can create a customized stock list. However, even if you do get that far, there are no charts, no news, and no index information. You can get this information by clicking on a link to the CNBC web site, but that's hardly the point.
These are just two examples, but there are more I could list as well. The reason for this downfall when it comes to the quality of Android apps seems obvious. The diversity of devices, and versions of Android makes developing an app that works well with all devices near impossible. So how can investors take advantage of this information?
The investment thesis is really quite simple. If you are looking at buying Google because of the Android OS, don't waste your time. Google is a great company, and the plethora of Android devices only serves to extend their lead when it comes to services like Google Search, Gmail, YouTube, and Google Maps. However, the company can't police the use of Android in the way that Apple can control the iOS system. If you are looking at buying Amazon, do it because of their huge competitive advantage of low prices, fast shipping, Amazon Prime, and more. However, if you are looking for a great device company, look at Apple. The company has tight control over its hardware and software offerings, and the difference in quality apps on iOS versus Android is stark.
I've returned from what some friends referred to as the “dark side” of Android, and I'm not looking back. Android might have over 70% of smartphone market share, but because Google gives Android away for free, it will always be at risk. Samsung, “plans to sell a smartphone based on the open source Tizen OS sometime in 2013.” With names like Samsung, Intel, and NTT Docomo supporting the OS, this might be the first real open source challenge Android has faced. Apple reportedly has about 14% of the worldwide smartphone market, but in this case, a smaller piece of the pie is fine. The tight integration of iCloud, better quality apps and consistent iOS experience is just better. Call me a fanboy if you want, but I've tried both systems, and if this is what Android offers, Apple investors have nothing to worry about.
MHenage owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, and Google. The Motley Fool owns shares of Amazon.com, Apple, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!