Forget Game of Thrones; Game of Smartphones Is On

Preetam is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

The ongoing saga of tech giants battling for control over the Smartphone world is turning out to be such a compelling story replete with intrigue and plot twists, that one can be forgiven for thinking it the creation of a master storyteller in George R Martin mold. Such is its similarity with the Game of Thrones fantasy world, with technology giants taking over the role of feuding noble families in their battle for the iron throne….. sorry, Smartphone world. The war is being played out on so many different fronts, with alliances breaking, battles being won, tenuous stalemates being agreed upon……the mobile devices market is an exciting place to be in these days for the spectator. As for the consumer, well, a few casualties aside, they seem to be having the time of their lives as well.

Apple vs Google: A Study in Contrast

Ever since Android powered devices from companies like Samsung started threatening iPhone for supremacy in the Smartphone world, the clash between Google and Apple was in the offing. These are two of the biggest companies in the Smartphone market, with a total 87% share in the US Smartphone OS market as of 2012. Google (NASDAQ: GOOG) leads the race handsomely thanks to their Android OS seemingly running on everything out there, except the iPhone. And iPhone is considered the best smartphone by many (although Samsung Galaxy is a worthy contender). Apple’s monolithic structure of control over hardware and software allows them to build a one of a kind device, and sell it at a premium price. Google on the other hand, has created a flexible software platform which can run on many hardware platforms with minimal tweaking. This allows them to dominate the smartphone market with their Android OS.   

The Maps App Fiasco: How It Played Out

Apple (NASDAQ: AAPL) had a long term agreement with Google to run their Maps app on the iOS. But disagreement arose between the two as some key features available on the Android version of the app were not available on the iOS version. Google’s demand for better visibility on the iPhone environment was naturally turned down by Apple, who decided to go solo with their homegrown Maps App rather than provide their competitors with more market ammo. It was never in doubt that the guys from Cupertino would struggle to match Google’s 7 year lead in maps technology. But by how much they failed was a bit of a surprise. Comical fiascos’ galore, and a public apology from CEO Tim Cook was followed recently by the ignominy of watching Google’s new Maps app for the iOS 6 break the records for downloads.

What Is at Stake With Maps?

As more and more people start depending on Map apps for guidance, the data that can be mined from their queries for marketing purposes grows. Location based services and ads are the way to monies in the mobile space right now and the trend is here to stay. So there is a sound logic behind Apple’s decision to make their own maps App and monetize that aspect on their own rather than let their biggest competitor have their way in their backyard. Though they may be on the back step with the recent maps fiasco, Apple is no ordinary company to take it lying down.

Money talks, and Apple Has the Biggest Voice

Google may have near supremacy in the Smartphone OS market, but on Wall Street, Apple has the decisive edge. Touted as the most valuable company in the world at roughly $500 billion, and with this year’s profits in the region of $60 billion, they have near unlimited reserves in their war chest. That is one arena where nobody, even Google, can compete with them now. They still have that aura that is the legacy of Steve Jobs, both in the minds of the consumers as well as the investors. The latter are an especially happy bunch, with ROI at unprecedented rates. And despite the maps fiasco, the sales of the latest iPhone haven’t gone down.      

The Aftermath

Google may have handsomely won this round, clearly stamping their authority on the maps arena, with universal consumer support. But Apple will surely work behind the scenes to improve their nascent maps app to strike back later. With the potential of Siri, they wouldn’t want to miss out on the opportunity that a seamless integration between Siri and their own maps app would offer. In the meantime, the tech world has been abuzz with the bizarre news of the two rivals teaming up for the acquisition of Kodak’s imaging patents that are up for grabs. This has already sparked off rumors of an alliance between the two rivals to muscle out any attempts by Microsoft to enter the market with the Windows phone. Though they have the PC market for now, everyone knows that the future is in mobile devices. Neither Google nor Apple would want Microsoft to make any foray into their arena, though the latter has an insignificant presence at the moment.

The market is very dynamic right now, and nobody can clearly predict what 2013 has to offer. But one thing is for certain, like the planned 8 seasons of Game of Thrones, this is a saga that will take a while to reach its climax.  

preetamkaushik has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services recommend 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!

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