Best of the Week
Most Popular
1.RED ALERT: Paris Terror Attacks - What to Expect Next - STRATFOR
2.Paris Terror Attacks, Death Pangs of a Dying Religion, and Impact on BrExit EU Referendum - Nadeem_Walayat
3.Paris Terror Attacks, Islamic State Attempting to Spark Civil War in France - Nadeem_Walayat
4.Three Shocking Charts That Prove Gold Price Rally Is Coming - Sean Brodrick
5.Stock Market Nifty-Fifty Becomes Fab-Five; Return of the 'Four Horseman' - Mike_Shedlock
6.Africa Population Explosion - Why Europe's Migrant Crisis is Going to Get A Lot Worse - Video - Nadeem_Walayat
7.Gold Mining Stocks May Be The Buy Of The Century - Jeff_Berwick
8.Grandmaster Putin Beats Uncle Sam at His Own Game - Mike_Whitney
9.BRICS? No, CRISIS - Raymond_Matison
10.UK Housing Market Affordability, House Prices Momentum and Trend Forecast - Nadeem_Walayat
Last 5 days
Turkey Downs Russian Jet to Draw NATO and US Deeper into Syrian Quagmire - 28th Nov 15
Stock Market Quiet Week as Primary 5 Continues - 28th Nov 15
Black Friday, Weekend for Europe's Migrants - 28th Nov 15
HUI and Gold - Who's Leading Whom? - 28th Nov 15
Gold And Silver - No Ending Action, But End May Be Near - 28th Nov 15
Social and Cultural Distress Dividing The Nation - Fourth Turning - 28th Nov 15
Sheffield Houses Prices 2015, Best Estate Agents As Rated by Buyers and Sellers - 28th Nov 15
Stock Market Top Valuations, at a Critical Juncture - 27th Nov 15
The Top Shopping Opportunity on Black Friday - 27th Nov 15
Economics Is About Scarcity, Property, and Relationships - 27th Nov 15
UK Immigration Crisis Hits New Extreme of 336k Net Migration, up 32% on 2014 - 27th Nov 15
Vauxhall Zafira B Fire Danger Recall - What to Do Video - 26th Nov 15
Triggers In US Dollar Collapse - 26th Nov 15
Apple Stock is a 10-Year Short - Bear Market Environment - 26th Nov 15
U.S. Federal Reserve Rate Hike - 26th Nov 15
George Osborne's War on Buy to Let Sector Trending Towards Doomsday - 26th Nov 15
Will Turkey Drag NATO into War With Russia in Syria? - 25th Nov 15
George Osborne’s Autumn Statement and Spending Review Full Text - 25th Nov 15
Will Fresh QE From ECB Boost Gold? - 25th Nov 15
Sheffield, Yorkshire and Humberside House Prices Forecast 2016-2018 - 25th Nov 15
Investors Watch Out For The Auto Industry… - 24th Nov 15
BEA Revises 3rd Quarter 2015 US GDP Economic Growth Upward to 2.07% - 24th Nov 15
Stock Market Supports Are Being Broken - 24th Nov 15
Is Gold Price on the Verge of a Breakout? - 24th Nov 15
Fed’s Tarullo: U.S. Interest Rates Liftoff Should Wait for Signs of Inflation - 24th Nov 15
Silver Price, COT, US Dollar Updates and More - 24th Nov 15
UK Regional House Prices Analysis - Video - 23rd Nov 15
Crude Oil Swinging For The Fences - A 20 to 1 Option Play - 23rd Nov 15
US Dollar, CRB, Oil, Gas, Copper and Gold - The Chartology of Deflation - 23rd Nov 15
UK Regional House Prices, Cheapest and Most Expensive Property Markets - 23rd Nov 15
Stock Market Rally Losing Momentum? - 23rd Nov 15
Will Gold Price Drop Below $1000 Soon? - 23rd Nov 15
Gold and Silver Sector Big Green Light and Low Risk Entry Setup... - 23rd Nov 15
Limits to Economic Growth - Challenge and Choices - 22nd Nov 15
Long Dollar Trade and Current Copper Price Below Cost of Production - 22nd Nov 15
UK Housing Market House Prices Affordability Crisis - Video - 21st Nov 15
The Fed Has Set the Stage for a Stock Market Crash - 21st Nov 15
Stock Market Primary V Wave Continues - 21st Nov 15
Gold And Silver - Value Of Knowing The Trend - 21st Nov 15
UK Footsie Bulls Set To Foot The Bill - 21st Nov 15
UK Housing Market Affordability, House Prices Momentum and Trend Forecast - 21st Nov 15
GDX Gold Miners’ Strong Q3 Results - 20th Nov 15
End of Schengen, Stock Market’s Technical Strength Grows - 20th Nov 15
Justice for All and The Curious Case of Zambia - 20th Nov 15
Paris, Sharm el-Sheikh, and the Resurrection of Old Europe - 20th Nov 15
Silver Prices and The Management of Perception - 20th Nov 15
Stock Market Nifty-Fifty Becomes Fab-Five; Return of the 'Four Horseman' - 20th Nov 15
Waiting for Goldot Again - 20th Nov 15
Michael Curran Goes Down-Market Shopping for Gold Stock Winners - 20th Nov 15
Why Isn’t This Incredibly Bearish Bond Market Development Making the News? - 19th Nov 15
SPX Appears to have Stopped its Rally - 19th Nov 15
The Great Fall Of China Started At Least 4 Years Ago - 19th Nov 15
Using Elliott Waves: As Simple As A-B-C - 19th Nov 15
Has Deflation Been Ddefeated? - 19th Nov 15
Dow Jones Stock Market Index is Not Going to Crash - 19th Nov 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

Reasons to Get Excited About Japanese Stocks

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

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

By: Money_Morning


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 "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 :

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:

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

© 2005-2015 - 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

Biggest Debt Bomb in History