War Of Smartphones
Rekha is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Apple’s (NASDAQ: AAPL) iPhone and iPad business is under a direct threat from Google’s (NASDAQ: GOOG) Android, which at present is world’s leading platform for smartphones. The success of the Android is the reason behind the bitterness between Apple and Google who previously worked hand in hand. The competition reached to such a scale that Apple refused to rely on Google and did away with YouTube from iPhone 5’s preloaded selection of the apps. They even made a foolish decision to replace Google’s mapping software with their own mapping service. These decisions somewhat blemished Apple’s reputation and the company’s CEO Tim Cook apologized for the mistake. Google’s Executive Chairman Eric Schmidt said that the company had invested heavily on “satellite work, airplane work, drive by work to get map accurate”. He went on to say that Apple should have kept Google’s map, had such been the case it would have saved Apple from the glitches.
Schmidt thinks that the fight between Apple's iOS and Google's platform is more significant than the PC wars as the smartphone market has dwarfed the PC industry. He commented that the Android platform was larger. It is expected that within a year more than a billion mobile devices would run on Android software and this could probably intensify the competition between Apple and Google.
Google at present is already leading and is deemed to remain there for quite sometime. Surveys indicate that sales of the Android devices are much higher than the sales of Apple devices. Schmidt commented that, “The sheer volume of mobile sales dwarfed any platform battle that came before it in technology industry including Microsoft (NASDAQ: MSFT) and Apple in the desktop computing market." By the end of the year Google is planning to release an official Google Map and Apple would have to approve it. Schmidt is reported to have said, "One way to think about Apple and Google is that these are two very large and important institutions and they're always in communication with each other." Things appear rosy for Google as it is now commanding the US search market by 66.7%. The company’s stocks reported a surge of 0.93% to the closing price of $751.48 in its last trading session.
Apple on the other hand is witnessing a slump. This could probably be because of the non-impressive sales of the iPhone, the supply problems or maybe that their competitors are fast catching up with them. The chief technical analyst at Greywolf Equity Partners said, “While near-term pattern has got worse, the longer-term trend is still very much intact.” He even predicted that there were no doubts that Apple shares would soon reclaim the $700 level and will rally $740 to $765 range in the near future. Many may think that fulfilling such a huge target may not be so easy but nothing is impossible for Apple. The holiday season and the launch of the new iPad Mini will greatly benefit the company.
Even as Microsoft is preparing to launch the newest version of smartphone software, there are speculations that the company is planning to make its own handsets. They are already challenging the iPads with their Surface tablet and now want to enter the market as a "devices and services" company just like Apple. If this is really what the company wants to do, then this would be the most "insane thing" that the company has ever done. Microsoft is not a hardware company and all it earns is from selling "Office and Windows". Though assumption may have been made after the launch of Surface Tab that things were changing within the company. However, Microsoft is still dependent on component providers unlike Apple which is known for building its own software and hardware. The launch of their handset may be looked upon as an encroachment that will only bring wrath and their component providers might start viewing them as their competitors. On the other hand, the success of the smartphone can be a boost to the Windows Phone 8 ecosystem
Google has benefited from the diversifications, as other mobile makers struggle with their device related problems. Apple is also working to overcome all the glitches. Despite all hurdles Apple is in the lead. Even Schmidt acknowledges it, when asked if he would rather be a CEO of Apple, Amazon or Facebook he replied "Which one has more cash." Apple definitely has loads of money. The competition between the companies is good both for the companies and consumers because this competition keeps them on their toes. They work to get the best for the growth of the company, as for the customers, they also benefit by getting the best of products and services.
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rekhamarwah has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Baidu, and Google. Motley Fool newsletter services recommend Apple, Baidu, 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.If you have questions about this post or the Fool’s blog network, click here for information.
