The Mobile Strategy War On Apple And Google

Steve Faktor ,CONTRIBUTOR

I deliver daring ideas on growth, innovation & tech entrepreneurship

FOLLOW ON FORBES   (57) 

Opinions expressed by Forbes Contributors are their own.

Samsung is gobbling up mobile startups. Microsoft annexed Finland Nokia. And

Google’s mobile ad revenues no longer require tweezers and a microscope to see. Even

Amazon is thisclose to selling smartphones. These are not isolated incidents. Underneath

the mobile kimono is a body of intrigue, backstabbing, dirty secrets, and sabotage. Each

player’s moves reveal strategies that range from brilliant to desperate. As I did

with Deconstructing Google’s Strategy here is my take on where each player is placing bets

and how each plans to tame the mobile beast.Platform Power and Profit Pyramid

The mobile value chain is not a chain at all. It’s a Dali-esque pyramid where each

disproportionate layer teeters uncomfortably on top of another. The chart below, excerpted

from my article on Surviving Platform Risk, shows the relative imbalance of power. Some of

that power has steadily moved towards consumers.

As this chart from Comscore shows, OS preferences change fast – and they’re permanent.

As Apple and Google surge, all of Microsoft’s money can’t buy enough developers, hipsters,

or kale photos.

Primary apps like Facebook, maps, email, messaging, and Twitter make phones as

important as air and bacon. Secondary apps can be free, paid, or games with magic potions

for sale. Combined, they make or break an OS. Individually, they wield little power.

Services are the holy grail for apps. Standouts like Spotify, Netflix, Evernote and Dropbox

collect monthly or annual fees – a feat mostly reserved for carriers.

Where Each Player is Betting

It’s not surprising to see each player betting on the profitable segments, but some appear

to be betting wildly. They’re not insane. The mobile pyramid will evolve and not everyone

will survive.

Recommended by Forbes

MOST POPULAR

Photos: The 25 Most And Least Educated Cities In America

TRENDING ON FACEBOOK

The Single Worst Piece Of Money Advice A 20-Something Will Ever Receive

Google Sleeper Cell

As I wrote in Google’s Strategy Deep Dive, Google services must either make money from

ads or collect info to enhance ad targeting. So it’s not surprising to see Android borrowing

Windows’ old strategy – becoming universal.

Google wants Android on every device, in every pocket. Unlike Microsoft, they’re giving

Android to manufacturers for free and monetizing through ads. This poisons the well for

Microsoft’s paid OS model.

Google’s mobile strategy works like a two-tiered sleeper cell. For high-end users it’s about

infiltrating hostile platforms, like iOS. And someday, consuming its host. Even if it can’t

earn much on iOS, Google’s primary apps (Maps, Gmail, Hangouts) can build loyalty,

collect data, and feed off-platform revenues. It’s a Coup de Goog.

At the low end, Google wants to seed the world with cheap devices. Like adding a vending

machine to the office lobby, eventually the hungry will devour the M&M’s. When data

starts to flow to cheap, dormant Androids, Google will be ready with cat videos, Play tunes,

and ads. Even its devices – Chromebooks, tablets, phones and (soon) watches, are there to

seep into every consumer nook and cranny from classroom to dorm rooms.

There are ways to counter Google’s strategy.

Apple, Brandiose

Apple makes most of its profits from iPhones and iPads. But what it really sells is iStatus.

Despite tough competition and the loss of Steve Jobs, Apple can afford to build

a spaceship but can’t hang on to its market share. Apple customers still buy more apps but

it’s destined to be the American Express to Android’s Visa. Not a bad place to be.

iTunes software was a masterful hub when iPods and wires ruled the land. It nourished the

iLifestyle whose limbs included Macs, iPods, and iPads. Since the world moved to the

cloud, Apple hasn’t quite kept up. The .Me service failed and iCloud gets mixed reviews.

Apple’s primary apps range from serviceable to disastrous. They’re still finding Chinese

tourists in the Pacific after using Apple Maps to drive to Japan. Google is taking advantage.

It’s infiltrating iOS with better apps like Maps, Gmail, Drive, and Voice. Essentially, Google

is Appvertising Android on iOS.

Apple even finds itself imitating focused entertainment companies like Netflix and Spotify.

And Apple TV, like Paris Hilton, is something luxurious but useless you might find on a few

cable boxes.

For now, Apple is betting its ecosystem of gadgets and limitless real estate on iOS will keep

future customers from cheating on iTunes. It’s one of the many perks of platform control.

But Apple’s is far from done. It’s about to add an entire new tier to the mobile pyramid.

Apple’s will transform into full-on lifestyle and fashion brand with a B2B twist.

Samsung, Software Company

No one will ever accuse Samsung of lacking ambition. The Korean giant will do anything to

win. In fact, it will literally do anything. The company owns a sprawling empire that

includes semiconductors, consumer electronics, hotels, chemicals, financial services and

shipbuilding. Yes, shipbuilding. Its mobile strategy is like chili – it has a little bit of

everything but somehow, miraculously, it works.

Samsung semiconductors can be found in almost every major device, including iPhones. In

fact, semiconductors represent 70 percentof the company’s operating profit – a huge

upgrade from the breakeven business I knew when I worked on the company’s global

product strategy years ago.

How is Google’s Strategy is differenet from Android

How is Google's strategy different from Apple's with respect to Android/iPhone?Re-Ask

Follow 14

Comment

Share

Downvote

Ashish Verma, computer engg

Edit Bio • Make Anonymous

Write your answer, or answer later

4 Answers

Dan Rudman, Founder, ClueHunters and President, Kade Consulting, LLC

1k Views

GoogleGoogle Inc. believes it is an innovative software company and is taking a page out of Microsoft's playbook -- control the software and leave the hardware to "the experts".  Google also believes in the concept of an open platform -- that the input of many will improve the power of the one.

On the positive, this strategy allows more money and intelligence to be thrown at building the operating system, which should in my opinion lead to Android releasing more features than iPhone over the long run.  Google also gets the power of a community helping to develop its product which is not only cheaper in the long run, but helps create those features faster and more efficiently.

On the other hand, this will also undoubtedly lead -- as mounting evidence shows -- to incredible fragmentation.  As an example: I am currently engaged in an Android project that deals with Bluetooth and audio, and it is absolutelyastounding the number of differences between Bluetooth and audio drivers across the various phones and across the various versions of Android.  Development is incredibly complex (read: "expensive") when you have to

support that kind of differentiation. 

In addition, the open source community is traditionally more "developer" than it is "designer".  And that community often doesn't have a drummer to control the beat and define the music, to use an analogy.  So you get things which some might call "ugly" and the user experience can often suffer as well.

AppleApple (company) believes it is an innovative product company and is taking a page out of... well... its own playbook.  Control the product and be the experts.

On the positive, this strategy allows control of the end-to-end experience, which puts Apple closer to solving the actual consumer challenges than the Android and which will result in iPhone releasing less features, but instead innovating and creating new solutions.  A perfect example of this is voice technology.  Android was first to get this technology out -- users could use their voice to do data entry, which made it easier to use voice than keyboard.  Not exactly innovative, but definitely a cool and helpful feature.  Apple then -- much later, of course -- introduces Siri (in addition to voice data entry), which allows you to use your voice to accomplish things, which not only addresses data entry but rather the actual problem users were trying to solve: "I want to do a few things with my phone but it takes so many taps and screens to do!".

Apple is all about design and every developer is essentially following the same drummer and working on the same music (or should be, at least).  This leads to things which work well together and a look and feel that is consistent across features, which is ultimately a better "user experience" for many (not all) people.

On the other hand, maintaining hardware is expensive and time-consuming.  And can be very troublesome (e..g, Apple Antennagate 2010). And sometimes when you're trying to control the whole end-to-end user experience, you have to make some cuts to features that some customers might actually want.  

I think this graphic is a good example for visualizing the two strategies when it comes to "features" (Note: I did not create this graphic and I'm really not quite sure where it originated -- I'd be glad to credit its author if someone would let me know who it is):

SummarySo, the two companies are focused on different things.  Google is focused onsoftware, and Apple is focused on user experience.  That's why Google will release hundreds of features while Apple only releases a fraction of that each year.  That's why Apple will release a number of innovative features that change the way we think about using technology while Android will probably turn those ideas into more open, developer-accessible elements.

And that is, to a degree, the fundamental differences between Google and Apple strategies as it pertains to their mobile platforms.

  

Written 30 Oct, 2011 • View Upvotes

Upvote 23 Downvote

Comments 1+

Share

Josh McConnell, Journalist, A&R Scout, BComm (Entrepreneurship major)

304 Views

To put it simply, the two companies have completely different strategies. Google is a software company while Apple is a hardware company. That really is what it comes down to. Google is trying to get their software on as many

different company's handsets to saturate the market, therefore increasing their bottom line due to royalties and profits from applications sold in their marketplace. 

Apple, on the other hand, is in the business to sell hardware. How does the company move their units? By creating great software to entice you to buy the hardware it's designed for. 

By creating both the hardware and software at the same time, Apple is also able to accurately predict the user's experience and have full control of it. Whereas with Google, while they provide the software, they don't code it specifically for one or two handsets. They don't know how many phones the software they are building will eventually go on, nor the specific specs. It's very much like the Microsoft Windows approach in the PC market. This also means developers have to make as many variations for their applications as there are handsets it will run on (hundreds), whereas iOS developers know there are only a few possible pieces of hardware it'll be on. Typically, Apple developers only have to make two versions: one for the iPhone and Touch and another for iPad. But, of course, they can make additional versions as well to utilize the different specs of each device.

All of this also makes the "marketshare" diagrams a little misleading when comparing Android to iOS. You can count on one hand the number of devices that iOS is available on, meanwhile there are dozens of phone manufacturers that use Android and they typically have a handful of devices under their own umbrella. Obviously Android will have a larger marketshare when you consider the many, many devices it's available on verses only the few from Apple. The fact that iOS is doing so well in marketshare on only a handful of products is a testament to Apple's strategy.

  

Written 29 Oct, 2011 • View Upvotes

Upvote 1 Downvote

Comment 1

Share

Adam Alter, http://www.adamalter.com/

357 Views

Google is taking a kind of hybrid approach of the way Apple and Microsoft work with PCs.  

With nearly all their products, Apple builds and designs start to finish (short of some of the actual chips).  They are directly over the full product and try to pick the highest end components only cutting it short when they feel there could be an issue (like heat, battery life, or stability).  The results are very polished, but limited options and pricey.  They also keep a strong hold on approval methods and quality of the apps published in their app store resulting in a great selection of refined apps.

Microsoft just kicks out the OS with as many features and options as possible and leaving it up the the hardware manufacturers (with limited support) to build compatibility and competitive performance and pricing.  This results in lots of options, low prices, but many more potential bugs and issues due to the huge variation of combination possibilities.

Google appears to be trying to benefit off the advantages of both strategies with Android.  They focus on the OS, but they have more involvement with the hardware chosen and set the standards.  Then with the Nexus phones, they are more active with the build as if they're actual Google phones.  The competition and different groups doing R&D brings up a lot of options and features as well as competition driving costs down.

Unfortunately, for Google, some of the Androids have quite a few bugs.  Also, with the tough competition within Android phone manufacturers, companies are trying to release new phones as fast as possible to get and stay ahead.  Their support developers are spread thin leaving updates to be slow and more buggy.  If you follow some of the communities of 3rd party devs (like XDA developers), you'll see many people are rooting their phones and redesigning the software for lots of the phones for better stability, performance, and features.  They're doing this just as hobbies and in some cases releasing better options than the manufactures themselves.

Google seems to be more open to apps as well, but with so many different hardware combinations, phones, and versions of the OS, apps sometimes don't work well on some of their phones since the Q&A is much more difficult.

I love the competition and hope Microsoft also gets rolling with their mobile OS to create even more solid options.

  

Written 29 Oct, 2011

Upvote Downvote

Comment

Share

Wesley van Dijk • Request Bio

256 Views

Google has a focus on operational excellence. They aim for low cost and high marketshare. Google is focusing on optimizing the software. Apple has a focus on product leadership and aims to make the best products in the world. Apple is focusing on synergy of hardware and software.