Take a look at the Chart Below. It shows Marketshare by manufacturer. Going by that chart its easy to think Apple is Killing it.  Actually they are killing it. (Have you seen the margins on an iphone sale?) They’ve got an incredible revenue stream and an abundance of cash in the coffers.

So why should Apple be worried? Well, Apple and Google appear to compete in the same space but there is one huge difference.   Apple is a Hardware company. Google is an advertising company.  Apple, like most hardware manufacturers have to come up with innovative ways to keep those margins.  They must do this even in the face of CRT’s (Cost Reduction Technologies) that reinforce the belief that new technology should be cheap while making old technology even cheaper.  I’m not sure if cost cutting has happened in other areas of the process, but it should always be noted that if Verizon, Sprint or AT&T only sold iphones , they would operate at a loss.  The carriers made this “deal with the devil” because at the time it was the device that brought in the most new subscribers.  The reasoning was that the landscape would eventually change and the costs could be partially mitigated by subscription revenues.  The reality is that we can now very easily breakdown exactly what it costs to build a mobile device.  Thus providing us with the most important piece of the picture when determining Apple’s Margins.  If component prices are falling and new technology is presented daily, how does Apple explain its rising profit margin while consistently delivering “less” technology in it’s offerings? They’ve decided you don’t need to worry about that.

Here is where the “evil empire” references begin to sound plausible….. Apple (not an ad company) is in fact the undisputed “King of Spin” in the tech world.  This is not an opinion.  The Cupertino company has provided us with more than enough factual proof of their fantastical abilities:

Jobs -”You’re Holding it Wrong”

Jobs –  ”if you see a stylus, they blew it. In multitasking, if you see a task manager… they blew it.”

People (read: isheep) used this rational in defense of their overpriced products with the zeal of religious pundits.  If a Phandroid  is literate enough to tell you why they love their device, you’re going to hear about some apps, some customization and probably an example of how it makes their life easier.  Ask the most literate iphone user the same question. Most likely you’ll hear “I love how it just works.”  Unfortunately the more information we are provided the more we find that Apple “Just isn’t working” as well as the other guys.    Anyone who is familiar with Apples technology life-cycle is aware that since the success of the original “Droid” on Verizon and subsequent rise of Android, Apple has unsuccessfully attempted to duplicate android features like the Notification bar, “True Multitasking,” and Augmented Reality Mapping (Navigation).  Google, in the meantime, has the most downloaded application on IOS (Google Maps).  Additionally, Google’s voice assistant application which includes “Google Now” is described by most users as being a more advanced, intuitive and useful application than Siri which is Apple’s most advertised mobile application.  This is hitting Apple where they live.

If you really want to see an example of Android Just working while Apple fails, compare Google Music to Itunes

Now, based the chart above the landscape still looks very positive for Apple.  The chart below gives you a hint as to why Apple should absolutely ignore the chart above when thinking long term.

I can hear the IOS enthusiasts already– “Shipments have nothing to do with actual sales”   Right…..and perception has nothing to do with reality.   Remember when the iphone held so much weight people wouldn’t switch to Verizon until they got it?  Imagine if Verizon then decided –”You know what? We had the iphone4, but we’re gonna skip the 4s, and maybe we’ll carry the iphone5.”  How many people at that time would have left Verizon for another carrier?

Unfortunately for Apple the perception has changed.  Who knows exactly when it started, or what the biggest nail in the coffin was.  I think awareness of Samsung phones shot up ten fold when Apple called them a copycat. The problem with calling someone out is that everyone is gonna want to find out if your full of shit. I’m sure there were millions who would have never even picked up an Android phone before.  Now every iphone buyer who is 95% sure about the purchase is gonna ask…..”What about that galaxy phone?”  Have you seen an iphone screen next to a Galaxy S3?  Its laughable. I can’t imagine the difference when comparing to the HTC One or Galaxy S4.   Lets be honest, when you’re dealing with noobs and sheep a bigger brighter shinier object is usually going to win.

So back to the second chart vs the first one.  Apple is doing its thing in the US.  They’re even moving more units.  Whats the problem?

Apple is a hardware manufacturer that has its own software.  Google is an Advertising company. Not a hardware manufacturer with an advertising wing.  Not a software designer with an advertising wing.  Hell they aren’t even you’re average ad company as they don’t make ads for others.   Google is an advertising company that makes things for you to advertise in, on and around.  The perception is that it’s Apple vs Google, but  how many IOS products are there on Android?  None.   How many Google products are there on IOS? Quite a few.

When people say that market share doesn’t matter they forget whatbusiness Google is in.   The better Apple does….the better Google does.  The more people that buy android phones the less people that are invariably buying  iphones. It should also be noted that Apple’s tactic of using high-profile litigation against its competitors did not include a lawsuit directly aimed at Google.

It is my opinion that the Android operating system has more to offer users than IOS does.  Whether or not this has led to Android’s success is certainly up for discussion.  What is painfully obvious is that if  IOS and Android are competitors then apple will constantly have to redefine its measure of success.  They have effectively lost the worldwide smartphone market as it relays to market share.  This only bolsters the perception that its competitor Google is delivering a better product, even if that product delivers a fraction of the revenue of Apple’s product.  The part that should really scare Apple is that Google’s Primary product includes every iphone on the planet.