Best of the Week
Most Popular
1.Putin’s World: Why Russia’s Showdown with the West Will Worsen - John_Mauldin
2. Stocks Bull Market Grinds Bears into Dust, Is Santa Rally Sustainable? - Nadeem_Walayat
3. Gold and Silver 2015 Trend Forecasts, Prices to Go BOOM - Austin_Galt
4.Gold Price Golden Bottom? - Toby_Connor
5.Gold Price and Miners Soar on Huge Volume - P_Radomski_CFA
6.Stock Market and the Jaws of Life or Death? - Rambus_Chartology
7.Gold Price 2015 - EWI
8.Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - Nadeem_Walayat
9.Gold, Silver, Crude and S&P Ending Wedge Patterns - DeviantInvestor
10.Is the Gold And Silver Golden Rule Broken? - Michael_Noonan
Last 5 days
UK Christmas Sales 2014 High Street Start Dates List - 22nd Dec 14
Ruble Takedown Exposes Cracks in Putin’s Defense - 20th Dec 14
Oil Drilling Our Way Into Oblivion - 20th Dec 14
Stocks Bull Market Resumes - 20th Dec 14
Gold And Silver Nothing Is Ever As It Seems And No Respite For PMs - 20th Dec 14
What Are Technical Indicators Saying About the Stock Market? - 20th Dec 14
Here’s How You Can Still Make 27% With Apple Even if You Buy Now - 20th Dec 14
Gold Stocks to Shine in 2015 - 19th Dec 14
Why Alibaba Stock Shares Are a Screaming Buy - 19th Dec 14
China, Dollar, Japan, Europe Burning Questions for 2015 - 19th Dec 14
U.S. Economy is in a Sweet Spot! - 19th Dec 14
US Dollar and the Gold Fairy Tale - 19th Dec 14
Show Me The Money (Flow)! Tracking Money-Flow Through Value Shifts In Stock Markets - 19th Dec 14
The Commodities Market Is Not Dying, It’s Just Hibernating - 19th Dec 14
The Price Of Gold And The Art Of War - 18th Dec 14
Euro Succumbs to ECB QE Expectations and FOMC - 18th Dec 14
John Williams: A Downhill Run for the U.S. Dollar in 2015 - 18th Dec 14
Outrage at Taliban Islamic Fundamentalists Massacre of 132 Pakistani School Children in the Name of God - 18th Dec 14
How Inflation Changes Retirement Benefit Choices - 17th Dec 14
The Real Reason It's Tough to Beat the Stock Market - 17th Dec 14
Russian Currency Crisis and Debt Defaults Could Create Contagion in West - 17th Dec 14
How to Profit From Russia's Stock Market Crash - 17th Dec 14
Russia Crisis - If You Put Your Money in the Bank Will You Get it Back? - 17th Dec 14
Crude Oil Price Crash, U.S. Employment and Economic Growth - 17th Dec 14
Opposing Forces At Play In Gold and Silver Precious Metals Complex - 17th Dec 14
Wall Street Will Always Find An Excuse For Not Raising U.S. Interest Rates - 17th Dec 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Dramatic Stock Market Selloff

Why Google Android Can't Compete With Apple's iPhone

Companies / Google Apr 04, 2012 - 07:42 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleDavid Zeiler writes: There's an inherent flaw in Google Inc.'s (Nasdaq: GOOG) Android operating system.

The flaw isn't a technical glitch.

In fact, most agree that Google's Android is a first-rate mobile operating system that has gotten better with each update. Some even prefer it to Apple's iOS.


It's not adoption either.

According to recent data from Nielsen, Android's U.S. market share among smartphones has reached 48%, compared to 32.1% for Apple's iPhone. And Google says it has activated more than 300 million Android devices.

The problem is partly the result of Google Android's overall success.

The biggest flaw is fragmentation and it will be what prevents Google from defeating Apple Inc.'s (Nasdaq: AAPL) iPhone in the mobile computing wars.

There are simply too many versions of Android running on too many (over 1,400) different pieces of hardware. And the issue gets worse with each new version of Android, as older devices are rarely updated.

That's a huge problem for Android developers, who need to write apps that will work on a bewildering array of possible configurations. And it's starting to have an impact.

According to Appcelerator's most recent quarterly survey of developers, interest in writing apps for Android phones fell 4.7 percentage points to 78.6%, and interest in writing apps for Android tablets fell 2.2 percentage points to 65.9%.

By comparison, 89% of developers were interested in writing apps for Apple's iOS, a number that has remained steady.

"Massive platform fragmentation is a big reason that we're seeing this decline in interest," Mike King, Appcelerator's principal mobile strategist, told Network World. "If you look at all the other numbers such as Android smartphone market share it's on the upswing, but for app developers it's a real challenge."

It's a headache iOS developers don't share. Most Apple customers stay current with the latest version of iOS.

And because Apple makes all the hardware, limited to just a handful of models, it's much easier to write an app that runs on nearly all of the millions of iPhones, iPod Touches and iPads in use.

Google Android Users Not Big Spenders
Making matters worse for developers is that Android users tend to spend less money on apps than owners of Apple devices.

According to a report last year by Piper Jaffray's Gene Munster, the Google Android Market (recently renamed Google Play) generated just 7% of the revenue of Apple's iTunes App Store.

Munster estimated that in terms of dollars spent on mobile computing apps, Apple has an 85%-90% share. He expects Apple's dominance of app revenue to remain over 70% for the next three to four years.

Some defenders of the Android market claim Munster's methodology is flawed. They point out that Android apps, unlike iOS apps, are sold in multiple online stores.

But that, too, creates issues for developers, who need to make sure they cover all their distribution bases with each release.

Put it all together and it means Android developers need to put in more effort while making less money than iOS developers. And it's driven at least one developer to throw in the towel.

"Our Android apps aren't making money," wrote Mika Mobile, creator of such games as Zombieville USA and Battleheart, in a March 9 blog post. "Android sales amounted to around 5% of our revenue for the year, and continues to shrink. Needless to say, this ratio is unsustainable."

Much of the money Mika Mobile's Android sales did generate got swallowed up by extra development costs - time spent tweaking apps to work properly on the proliferating combinations of new hardware and versions of Android.

One more thing: The lower Android app sales have pushed prices in the Android Market higher. A recent survey by Canalys showed the average cost per app for the top 100 offerings in the Android Market was $3.74, but just $1.47 for the top 100 in the iTunes App Store.

The higher prices tend to further discourage buying, which in turn helps keep the prices high.

Hitting Google Android in the Apps
Despite is successes, Google needs to do something about Android's fragmentation to keep its developers from jumping ship. Google needs to make sure the developers can make money.

Disenchantment on the part of many Android developers could result in a falling number of quality apps and increasing compatibility issues as older apps are no longer updated.

"Developers go where the money is. End users go where the apps are. Developers create apps where users are," writes veteran tech pundit Joe Wilcox in an article called "iPhone is Unstoppable."

Wilcox theorizes that Apple's ecosystem will be difficult to disrupt. Google will need to fix its fragmentation issues quickly to avoid the fate that Apple's Mac platform suffered in an earlier OS War.

"In the 1990s, Microsoft sought to achieve a "standard' platform for developers and succeeded with Windows. Apple is quickly doing the same around iOS, iPhone and iPad," Wilcox said.

The Windows Wild Card
Speaking of Microsoft Corp. (Nasdaq: MSFT), its plans for Windows 8 gives Google something else to worry about in the mobile computing space.

Microsoft, until now left on the mobile computing sidelines, will aggressively market Windows 8. And it will likely do a better job of preventing the sort of fragmentation that's stinging Android.

A wave of Windows 8 tablets and smartphones arriving in the fall no doubt will end up competing for the same cost-conscious customers that have been buying Android-powered devices.

With only about 70,000 apps, the Windows Phone Marketplace is far behind the leaders, (which have over 500,000 apps each) but Microsoft plans to woo developers in an effort to catch up.

Microsoft and hardware partner Nokia Corporation (NYSE ADR: NOK) announced just last week they'd jointly invest in a $23.9 million mobile app development program over the next three years.

Should Windows 8 get traction in the mobile computing market - and history shows that Microsoft is nothing if not persistent - it could further undermine Android.

Still, Android isn't going anywhere. It's certainly not in danger of disappearing. But neither is it going to race to dominance, as some predicted last year.

Ultimately, Android's status in the mobile computing market largely depends on how seriously Google and its hardware partners take the fragmentation problem.

"Android is not facing an imminent crisis amongst developers," writes Jeff Duncan for Digital Trends.com. "But, looking out over the next two years, Android (and Google) are clearly going to have to move application development and revenue generation to the same priority level as [hardware] adoption and device activations, or face a stagnating software and content ecosystem."

Source :http://moneymorning.com/2012/04/04/why-google-android-cant-compete-with-apples-iphone/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014