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« Lets Discuss the iPhone 6 Models - Apple now in 'me-too' mode only following the leaders | Main | Notes from the Smartphone Wars - Panasonic, Blackberry, Jolla, Xiaomi, Tizen »

September 22, 2014




> they'll keep their current customer base

That is the part I not agree with. Yes, iOS customers belong to the most loyal and probably brand aware customers. But things can change and in mobile it can happen fast. Nothing is granted.

That was my point when writing its not 2007/2008 any longer. Apple's iOS has strong competition. Apple cannot ignore that and they not ignore that. The iOS7 redesign, the iOS8 feature catchup, the (supposed to be) split of productlines into a lower/mid and high segment with iPhone5, the larger screen with iPhone 6+, its all to keep relevant, to keep in the game. Apple needs to move, needs to improve and they do so else they are gone and done.

Are they fast enough? It doesnt look so. Peak-iphone and the falling market share are clear indicators that steps done are good but not good enough to just keep what they had. Letting alone growing again and taking share from Android. No, its not enough. But Apple under Cook isn't blind, ignorant like Microsoft uncer Ballmer was. They do adjustments, they improve. I think they can accelerate and make things like there productline-split into low/mid and highend segments actually happen in a successful way.

Unlike Nokia with Elop and Microsoft with Ballmer the Apple under Cook doesn't seem to burn itself down anytime soon. Still I have doubts left about the current speed they improve there products and, even more, in there expansion plans/execution. iPhone turned part years into a second class outsider in large parts of asia and I don't see them solving that.

> which to a large extent are blissfully unaware of the competition's qualities

I see how that applies to US and maybe to parts of europe but not for any of the larger, more dynamic markets. Its more the opposite what I see. The peak was reached and Apple is fading out. Network-effects, like all this 3th party offerings and services are winding down. Trend within last years is that Apple customers switch to Android/Samsung's highend segment. In asia its all full of Samsung, Apple on decline.

How fast it goes? Look not future then Nokia. It was all Nokia just some years ago. There last products where N8 and N9 and that was it. Lumina wasn't even sold here let alone there was awareness. Today all what is left are remaining cheap $10 devices in 2th and 3th hand markets, thats it. There is no Nokia any longer.

Naturally, whats happenening here is how it will be in europe in some years and in US some years afterwards. Still, I think Apple could reverse this trend. I think open up iOS and services, partnering, improving and innovating are more vital then ever for Apple. Just because the competition is there and it eats huge chunks of the cake that was previously Apple's.


> I disagree that Apple has the strongest business in Mobile. Google has it.

Exactly. More so once you realize that mobile is the present and future door to the internet and Google does open that door, to there servi es, using Android. There services are there business model and Android is a tool to that just like Chrome is. Apple's business model is very different and comparing profits, e.g. via appstores, is comparing apples with oranges.

Or in other words: just because Google does offer Chrome (the browser) for free (no license fees) doesn't mean it brings no value to there business and drives profits higher. The huge investments Google did into Chrome, WebKit (past years before Blink) and so also into Safari, the investment into Firefox, into WebM, etc etc, all that lead to an open web bringing more customers closer to there services. You have to see the whole picture to understand how much of value even AOSP-offerings, not preinstalling Google services, are for Google.


> Google actually makes more money from it's services running on iOS than on Android

Look no future then the maps-situation to know why this is irrelevant.

> AOSP [...] about 40% of the market take Android and put their own services on it.

And yet they all use Blink, the Chrome engine (when running kitkat). They all offer a rich experience to enter the web and bring internet to the masses. Remember how the situation was past years? With Internet Explorer dominating and crippling the web, introducing ActiveX, propitary media and codec extensions, slowing down w3c on purpose to stop the move from a propitary clientside to an interconnected serverside world. Google's world, its profits, are not at the clientside. They won that battle using Chrome and Android and today evdn Microsoft goes platformneutral mobile & cloud first.

And there we are now. Googles heavy investment into Chrome and Android introduces billions of humans into the web, the cloud, Googles world. That there is competition in that online world is of no surprise. That Google does insane profits, more then any of its competitots, in that online world is what counts. That they just layed the future by making sure that everybody in this world will effort and have access to that, to there world, is paying out. Now and in the future.



Great blog.

However, i have to correct you on one matter.
Apple (Steve Jobs) did not steal their UI ideas from Xerox.
They licensed it, fair and square.
Billy Gates and his cohorts stole these (and other) ideas & tech, from apple, and others (btw, good riddance :).

Keep it up.



I do not disagree with what you say about Apple, but the main issue I stated still stands:

Apple can currently afford such a lackluster strategy because of their built-in customer base, for which a major catastrophe needs to occur before they start looking beyond their tiny walled garden. And that's why - at least for now - this doesn't cause a customer revolt - yet! This doesn't contradict that there is some erosion in Apple's customer base - as it's not completely this ignorant type of users - those who do know their stuff are far more likely to quit.


You clearly do not understand Google. What Google needs is open competition to prevent some monopolist from shutting them out. Apple would gladly and very quickly do that, if they thought they'd get away with it. But with Google controlling the majority of the smartphone market through Android, this threat is currently averted because such a move would harm Apple's competetiveness seriously - just look at the Maps fiasco they had some time ago.


Google's profits are less than Apple's. Both are outstanding money makers. MApple is making its money from mobile, Google is making its money from PC advertising still.

Yes, things can change. Why is it only Apple that they can change for? Why doesn't yet another blockbuster opening show that Apple is still doing well?

Peak Apple? Only on one metric and only because feature phones and smartphones are now indistinguishable.

Has Apple sales gone down? No. Has Apples revenues gone down? No. Profits gone down? No. Margins? No. Customer base? No. Customer satisfaction? No. Customer/brand loyalty? No. Money paid to developers? No.


@RottenApple - Google brought on the maps war by withholding features from iOS. It was Google, not Apple, that was playing the monopolist. Cost Google dearly even with the fiasco release of Apple maps.

And Google did not end up in a safe environment as Samsung totally dominates Google Android sales and is developing their own replacement for Android.

Don't forget that advertisers go where the money is. Google needs those Apple customers just like everybody else.


@Spawn - "Look no future then the maps-situation to know why this is irrelevant."

Not sure what you mean by that. I'd argue the opposite.

Google forced the removal of their Maps from the default position in iOS by withholding turn-by-turn directions. Even with the subpar Apple Maps intro, iOS users overwhelmingly use Apple Maps. Even after Google rushed its Maps back onto iOS as an app. Since then, Google hasn't pulled any service from iOS, and has actually made most of its apps equal to what they have on Android. Google's actions since then indicate they know that their business model is best pursued by being on iOS.


@Markj - good point. Not only did Apple take away 60% of Google's map traffic on iOS, Google was forced to put their best map forward on the iOS platform. Google and Samsung both have felt the pain of biting the hand that feeds them.



As I said, you really do not understand Google.

Especially this:

"And Google did not end up in a safe environment as Samsung totally dominates Google Android sales and is developing their own replacement for Android."

And that's supposed to succeed - how?
First, Samsung doesn't 'totally dominate', sure, they are the single largest Android manufacturer, but they don't come even close to a 'dominating' market share. Plus, they actually lost last quarter.

So, if Samsung quits the Google ecosystem, so will most of its customers. We've been hearing this FUD nonsense from the Apple camp for years but ultimately it will all fall flat for one simple reason: It just can't work because it puts corporate interests before the customer. A monopolist can do that or a niche player like Apple can do that - but someone participating in a competetive market absolutely can not isolate itself from its customer base - they'd have far too many options to defect. Samsung knows this, sure, they make some noise, but in a larger scheme of things they are just the mouse that roared. They do not really have that much influence. In the past they have been pretty incompetent when it came to software solution. It's hardware that they are good at.

Another thing is: Google does not need an Android monopoly. All they need is sufficient influence that they cannot be ignored and cannot be shut out. They do not make money directly from Android, they make money by offering web/cloud services and selling advertisement.
The biggest threat to Google would have been a successful Windows Phone launch, because Microsoft actually does compete with Google in many areas. (Apple does not!) Of course so far they have failed dismally due to their ineptitude.


" iOS users overwhelmingly use Apple Maps."

Source, please! The iOS users I know certainly do not.

adi purbakala

@markj & @appletufer

News flash today. Apple have secret weapon fight samsung & lg. Bend apple 6. After using apple 6 for some day it will bend like lg g flex


@RottenApple -

I did not say that it would be easy for Samsung to dump Android but they are actively working on NOT being dependent on Google. Google is working feverishly to make sure everyone is.

None of these companies are "nice people". They are huge corporations out to maximize their own best interests. Yes, Apple is a walled garden, not allowing any other app store. Google doesn't allow manufacturers to have Google Android unless that's the ONLY Android option sold. So Samsung can't come out with an AOSP version of Android replacing Google's services.



Adding to AppleTurfer's response, here's another more recent anecdotal from EE in UK -

Comscore data has Apple Maps reaching 23 to 27% of the total app audience over the last year, while Google Maps is at 41 to 46%. (For comparison, Facebook is the highest with 72 to 78%, followed by YouTube at 45 to 54%, and Google Play at 51 to 54%.) That's in the US environment where 40 to 42% of the user base are iPhone users, while 51 to 52% are Android users. You can parse the numbers and ratios, but the best conclusion is the majority of iPhone users use Apple Maps.


@AppleTurfer @MarkJ
Whoa, there's quite a bit of revisionism here.

Google was ready to bring turn-by-turn navigation to Google Maps on iOS, but in exchange they wanted to include other functions like Latitude. Apple refused, so Google refused as well.

Samsung can release AOSP phones if they want to, they are only required to pass certification by the Open Handset Alliance. There is no requirement to put any Google app or service onto their phones.

Tizen phones will have an extremely hard time in the market. Until Tizen becomes a well-known brand they can only compete on value, which means that Samsung would have to sell low-end phones at or below cost. Kind of like the Nokia Lumia 520, and we know how that one worked out in the end.

Also note that the next global Android brand after Samsung will probably not be Xiaomi. I expect that it will be Huawei or maybe Lenovo.


@chithanh: "Whoa, there's quite a bit of revisionism here. Google was ready to bring turn-by-turn navigation to Google Maps on iOS, but in exchange they wanted to include other functions like Latitude. Apple refused, so Google refused as well."

More or less the same thing - Google refused unless it was bundled.

Where do you get that Samsung can release AOSP (outside of China) while also being a full Android partner? Link? Document?

Agree with you on Tizen having a hard time. Would Samsung take Tizen to the high-end instead where differentiation matters? Of course, Samsung would have to build out an ecosystem for it - which also will be difficult to do.

Agree on Huawei or Lenovo likely being the next global Android brand.


@chithanh you are misinformed

BTW, I don't fault Google for this. They gave away Android to get traction in the market and have worked ever since to control it. Any company would.

Under the agreement, you can't put out both a Google Android phone, and your own AOSP phone. If you put out a Google Android phone you must include all of the google services. You can't, say, replace the maps.

Google has also stopped working on many important features of AOSP, like the browser. Google puts all it's new advances only in the Google restricted version of Android.

Which, makes sense. It's a logical thing for them to do.


@chithanh/ Apple Turfer:

Apple Turfer is right: If you are a member of the OHA, you may deliver Android with the Google services (Maps, Youtube, PlayStore etc.) and you may also use the name 'Android', which is a registred trademark.

Of course then you must not release a device with a forked Android version (except of countries like China). So Amazon is free to do anything with the AOSP-part, but is locked out of the Google services.

But, as we already discussed here several times, Apple Turfer is wrong when he states that this is solely done to make life harder for vendors which are no OHA-members, because this has two sides:

In the past, Google was criticised because some devices never received any update. So these users were stuck with outdated browsers, unfixed security holes, old PlayStore versions etc.

So Google introduced the 'Play Services' as a separate app. This contains the foundations for the Google services and can be updated without the need to update Android as a whole.

This means that even if your phone is stuck with Android 4.0, you still receive updates for Chrome, PlayStore, Maps etc. along with security fixes. Some new features can even be used with Android 2.3, so even those users aren't left in the dust anymore.

OTOH this also means that parts of Android were moved from open source to closed source, e.g. the Chrome-browser or Google search.

So you have 2 effects:

- Updates for users with outdated Android versions
- For vendors which fork Android it is more difficult to stay competitive

As a sidenote, there are lots of Android-ROMs developed by enthusiaists, e.g. CM, OMNI and Paranoid Android.

These ROMs are AOSP-only, but you can easily install the Google services on top with a separate ZIP-file - which Google allows.

So in the end, for all end-users the advantages of the open Annroid eco-system remain, only the companies which fork Android are effected.


@Huber - so you think there is a reason the AOSP browser doesn't get updates but Chrome does?


@Apple Turfer:

Chrome R E P L A C E S the AOSP-browser. Hence new devices rarely come with the AOSP-browser installed.

Also note that users did not receive ANY update to the AOSP-browser without updating Android itself (I hope I don't have to explain what this means for security). With Chrome, updates to the OS and to the browser are separate, so the browser is up-to-date even when the OS itself is outdated, even for users still using Android 4.0.

And Android-forkers like Amazon don't get the browser for free anymore, which is a nice side-effect for Google.

I already explained that in my last post - Can't you read?


@Huber - I completely concur with you that Google is trying hard to address one of the major weaknesses of Android -- lack of updates.

However, Google is doing NOTHING to improve the unupdatability (new word) of Android AOSP.

Google is working for lock in like any company should. Google is putting out Google specific apps, services, tie ins such that as developers take advantage of them, those apps will not work on AOSP or will work with reduced functionality.

And you still can't justify that Google won't allow folks to replace Google maps with Nokia maps and keep using the rest of Google services. You can't justify that Google won't allow folks to make more than one product line with some Google Android and some AOSP. Not unless, of course, you cheered Microsoft on when they did those monopoly building tactics.

Folks like me....who understand that Google is not really in the business of creating a free operating system for OTHERS to make money off of.



> @chithanh you are misinformed

No, he is spot on. You just totally failed to read and understand what he wrote :-/

> Google has also stopped working on many important features of AOSP, like the browser.

Hint: Chromium/Blink are opensource and Google did not stop working on them.

> Google puts all it's new advances only in the Google restricted version of Android.

So, your line of argumentation is: cause its not all opensource nothing is opensource? And then on top you argue Google doesn't work and release AOSP any longer? Serious?



"Folks like me....who understand that Google is (insert random nonsense)"

Yeah, right. Folks like you who clearly drank too much Apple-Kool-Aid.
I had problems taking you serious before, but that nonsense quote of yours clearly prove that you are not even interested in a realistic perception of the smartphone market.

So, the question is: Why is Google doing this? They clearly do not have much to gain from it; offering their services freely for everybody would certainly be better.

The sad truth is, if they didn't keep some control over what is allowed in a licensed Android phone, all we'd have to deal with now is a hopelessly fragmented mess, where every manufacturer would do their own stuff as they like, screw compatibility. Just like the Linux desktop world is now. It's in such a hopeless shape that it'll never get out of its geek corner unless someone took the reins and imposed some clear rules - just like Google is doing with Android. The OHA vs. AOSP thing is also sadly a necessary means to keep some abusive manufacturers from playing both sides.
I firmly believe that without these checks in place, Samsung would have long outmaneuvered Google by now, but also sinking the entire Android platform in the process. The fact that nobody could ever win with such an abusive strategy wouldn't keep some boneheads from trying anyway, creating a lot of damage just by trying.

Or maybe you know but are FUDing around anyway because the current situation with the OHA is not precisely in Apple's favor, right?

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