Has Apple outsmarted Google?

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Once allies, now clearly foes, Apple and Google have been in an intense battle to win the hearts and minds of people across the planet. And while Apple has lost its dominance and market-share to Google’s Android, you could argue that the Cupertino-based giant has outsmarted its Mountain View rival.

If we look purely at the numbers then we all know that Google is the clear leader. Relying on various brands, like Samsung and HTC, Android has swamped our markets with phones ranging from the low-cost Galaxy Pocket to the more sophisticated Samsung S3. Samsung has a clear edge on the market.

But while inroads are being made in the mobile arena, Android is still dominated by Apple’s iPad in the tablet market. It’s still the “tablet of choice” for the discerning user and Apple fired three volleys this year with the launch of the “New iPad” in the first quarter of 2012, followed by the “New New iPad” and the iPad Mini.

Google entered the fray itself this year, launching the Nexus 7; low-priced and accessible to the masses.

Which is actually my point.

While we all seem to think that Google and Apple have the same target market, I’d like to suggest that they don’t. Apple firmly remains the world favourite. Thirty-five percent of school students in the US who use a smartphone are using iPhones. Those who use Android wish they were using iPhones (yes, yes, I concede there is a growing group of fandroids out there who prefer Android phones).

But by and large Apple is targeted at the more affluent user. Apple has made very little effort to compete on price. In fact its tablets and phones are substantially more than the Android offerings. While Android offers a range of phones from entry-level to top-spec, Apple chooses to only produce one model at a time. There is no US$100 iPhone (we’re talking cash-prices here).

So why would Apple choose to have only one model?

I do not believe it is as much of elitism and snobbery as it truly is about economics. And this, I believe, is where Apple has outsmarted Google.

When I speak to my friends who are fandroids, they will always bring up the fact that the apps are free. They boast about the “open-source” nature of Android and that apps are readily available. In fact many of them will denounce any app that does not provide a free alternative (even if they are laced with adverts).

Apple fanbois seem to be very different. One of the first things a fanboi will do is link his iTunes account to his iDevice. And then link his credit-card to his iTunes account. While it’s true that there are many, many free apps on the AppStore, the very nature of the iPhone user is to push the button and pay the once off US$1 to remove the irritating adverts.

Because iPhone users have paid a premium for their phones it is not improper to consider they are sitting in a higher LSM bracket. It means they’re more amenable to buying apps. And since the disposable income of this group is so much higher, they are certainly more open to buying apps.

Conversely, the average (and I highlight average) Android user is using a low-specced device. Lower cost, lower LSM group. And far less likely to buy apps on the Google Play store.

So the question about whether Apple or Android is more successful, I believe, cannot simply be reduced to the number of users, but rather the number of economically active users.

In my opinion Apple has strategically targeted the group of people who are more likely to buy apps in the AppStore. Android has gone for sheer numbers, in the vain hope of swallowing out the competitors.

Apple, however, remains resilient. iPhone and iPad sales remain in the millions. And each user is more inclined to buy an app.

Has Apple outsmarted Google? I believe so. It’s not the profit per device sold that matters, but rather what the user is doing with the device. A sneaky strategy, but one that I believe has paid off.

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  • derpington


  • BadzMaru

    As a owner of an Ipad mini and an Google Nexus 7 (2013). I play the same Game on both devices (Clash of Clans) and have noticed the difference. Although the Google Nexus 7 has quad core, its still no match against the ipad mini. The nexus 7 gets very hot when I play this game and I can here noises inside the unit but its cool and quiet on teh ipad mini. Also the graphics seems to be smoother on the Ipad mini, so I’m guessing you do get what you paid for… the Nexus 7 is far more cheaper so they both have there advantages…

  • Esteban

    I believe this idiot owns an iPhone…

  • http://www.vhortex.com Vhortex Morpheus

    Can’t stop not to ignore.. on the launch of iPhone, I want a piece of it. But then they sued Samsung, the phone with rounded corners that I used to have 2 1/2 years before iPhone was launched. I’ll stick with android OS on any Phone company that I will like. When Samsung won a case versus Apple, the US government reversed the ruling simple because Samsung is not an American company and this can “potential cripple” a segment of the economy.

    iPhones now are just plainly a status phone, if you have one then you are the “top of the crop” people who can afford it.

    On the battle on who wins, Google is earning money via ads.. Most developers who build decent programs uses Google ads as a primary ad engine and Google also earns from it. Apple relies heavily on people buying from the app stores.. Google relies on the amount of phones sold and on the sheer numbers of it’s users who want’s an ad supported software. Google only earns a fraction on sales via app store but earn billions on ads being sent to the phones.

  • orthorim

    I don’t think they outsmarted anyone. Apple’s always been about producing the best product they can, and not settling for second, or third best.

    They don’t make crap computers; they don’t make crap phones. So they end up owning the high end, and they’re happy with this; it’s just not that it’s a high-end only strategy per se, it’s their entire philosophy. Making these products is not a “market strategy” for the company – they don’t cleverly market research, and they don’t weigh advantages of selling tons of cheap, crap phones vs selling a few high end ones. Making these products is the reason Apple exists. It’s not their core business, it’s their core.

    Apple’s real challenges lie in ramping production; they make 3x as many devices as they did three years ago, and the machinery is chugging along. All the while they manufacture products that use materials in new ways, from the steel-and-glass iPhone 1 to the glass sandwich iPhone 4 to the aluminium iPhone 5/s. Notice how nobody can touch the fit and finish, the feel of that hardware. It’s Apple’s biggest prize.

    Market share is what analysts fret about. Apple doesn’t care if half the world buys crap Nokias or crap Samsungs. Apple also doesn’t care that Android is getting way better than it was; they do defend their intellectual property, and I personally think they’re wasting way too much effort and time on that. But they’ve been burned by the whole Windows thing so that’s why they do it. I think they’d be better off just concentrating on themselves.

  • orthorim

    Apple’s hardware chips currently destroy the competition. This is the payoff for investing in PA Semi all those years back. It only cost them $100M, now they’re reaping the benefits.
    And guess who is ramping up their own chip design department? Samsung, of course. Late to the game, but not to be left behind, they’re now making serious efforts to design their own ARM based chips. They’re just a few years behind Apple.

  • orthorim

    They’re growing unit sales and losing market share because the switchover to smartphones happens much faster than iPhone sales are rising.

    I think Apple has a rock solid lead in high end smartphones, e.g. $500 and up unsubsidized. They’re wiping the floor with everyone. But hundreds of millions of low end Android phones are flooding in, they are getting better too.

    The US market is entirely subsidized so I think when the 5C is free on all carriers – is it already? – then Apple has basically locked in the US market for good. iPhones already make more than 50% of sales at US carriers, that number isn’t going to go down.

  • Filipe

    I heard apple sued David Copperfield for using the word magic, that was invented by apple.

  • Grek

    Apple $ comes from Apps related to BigBrother-like IT model (aka. “only we decide”)
    Google $ comes from Ads related to BigBrother-like Internet search (aka. “we see everything”)

    simple difference :)

  • tirthankar bera

    apple is the just big papa of android ,, so no more discuss about this point…

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