Can Google Swallow Apple? (Google is going after the iPad market)

Verizon (VZ) has revealed to The Wall Street Journal that it is working with Google (GOOG) to develop an Apple (AAPL) iPad competitor on Google's Android platform. The source of the information is probably reliable: Verizon CEO Lowell McAdam. All this comes from Clint Boulton writing at eWEEK.com. The revelation by McAdam comes as confirmation of a New York Times report last month that Google was working on a tablet device. According to eWEEK, Google has yet to comment on the story.

The news about Google going after the iPad market follows Google's Droid phones surging ahead of iPhones in the smart phone market. Gannett News Service (Chicago Sun-Times) reported yesterday (May 11) that Droids had 28% of the market in the first quarter, ahead of iPhone's 21%. Both trailed Blackberry (RIMM) which continued to lead the category with 36% of sales. Gannett indicates the data quoted comes from market research by NPD Group.

This is not the first time that Apple has been challenged by a new arrival. Last fall the Palm Pre was touted as an iPhone killer but it has dropped out of the top four smart phone suppliers, as HTC has moved into fourth position. HTC is traded on the Taiwan Stock Exchange. Fading Palm has agreed to be acquired by Hewlett-Packard (HPQ).

So it's way too early to think that Google can have Apple for lunch. To consider it even reasonable to consider, Google needs to grow some more. The market capitalization of Apple ($233 billion) is 44% larger than Google.

-- John B. Lounsbury Ph.D., CFP is a financial planner and investment advisor in Clayton, NC.

Everyone knows Lexus is from Toyota.

Everyone knows Lincoln is from Ford. Few people are going to pay $50,000 for a Toyota sedan. They will for a Lexus. Market segmentation.

The cheapest BMW and Mercedes models cost a liot more than the cheapest Toyota, Hyundai and Ford models

Irrelevant. BMW and Mercedes do have a low-end, comparable in price to all but the tiniest ford cars (like the Ka, which they don't sell over here either, too small). To my point, they don't differentiate between regular and luxury brands as is necessary in our market. Remember the Acura NSX? It was Honda NSX for most of the world. We would have had a problem paying close to $100K for a Honda.

Which still got them very low smartphone market share.

You are still missing the point: Google didn't have to start from scratch as Apple did. Pure fact, you can try to spin it down however you want. The iPhone marketshare was a great accomplishment. Android marketshare was expected even for a just fairly good mobile OS, as soon as the major manufacturers decided to use it.

Nokia had already acquired majority and controlling interest in Symbain(56%) as far back as 2003

Funny, you're learning a lot on this thread. You're still completely missing the point.

Everyone knows Lincoln is from Ford. Few people are going to pay $50,000 for a Toyota sedan. They will for a Lexus. Market segmentation

It wouldn't make one whit of difference if Toyota called the Lexus, Toyota Lexus. It'd still sell the same, because of its quality and reputation.

“BMW and Mercedes do have a low-end, comparable in price to all but the tiniest ford cars (like the Ka, which they don't sell over here either, too small).”

BMW don't have low end cars comparable in price to the Toyota Corolla which sells in the huge quantities the Corolla does.

“Google didn't have to start from scratch as Apple did. “

Sure they did.
Going by your theory, Apple never started the iPod from scratch either, given that it was a guy named Tony Fadell(an an independent inventor) who came up with the whole iPod idea, shopped it round to various companies, until Apple hired him to develop it. I don't hear you screaming that Apple never started the iPod from scratch.
Plus the iPhone is manufactured by contract manufacturers in China just like most other smart phones anyways.

“The iPhone marketshare was a great accomplishment. “

The Android market share is an even bigger accomplishment in a shorter time period.

“Android marketshare was expected even for a just fairly good mobile OS, as soon as the major manufacturers decided to use it.”

There were plenty of mobile OS’s out there long before Android. If it were so easy to grab market share, someone else woulda done it long before Android.

"Funny, you're learning a lot on this thread”

You mean you are learning a lot don't you?
You just claimed Nokia never took control of Symbian till 2008, when in fact Nokia already had control of Symbian way back in 2003.

Might I submit a humble opinion.

There is an adage, of how ‘good’ is ‘good enough’. Sure, a Rolls Royce is pretty darn good; but you know, for me the Lexus is good enough.

When it comes to a beautiful user interace, the Mac is pretty tough to beat. But, Windows is ‘good enough’. They used to be considerably cheaper than the average Mac - now not so much. But, all things considered - Windows is and continues to be ‘Good enough’. Now with the huge financial investment and just plain old inertia - they are the market leader.

Comparing the Enterprise Server marketshare with a Consumer market is a fairly biased tactic. Yes, there are Macs that can compete in this market - but given the need for seamless interoperability, Apple is pretty much locked out of this market.

But, for the average user, Apple seems to fit a niche’ quite nicely. My 78yr old Mother figured out how to use my iPad in about 3 minutes. No technical training required, I sat in the back of the car, Dad drove and Mom played - and after a bit was enjoying the ease and beauty of the Mac.

Now, trying to tech parents in their late 70’s how to navigate in Windows XP is an experience I would not wish on anyone. But, this is exactly the sort of audience that Apple seems to engage with.

Who’s better? That’s like asking who is the most beautiful woman in the world - it’s a personal decision. Who has marketshare? That’s hardly an indicator of who makes a better product.

Consider, who makes better chocolate? Some would say Godiva, some would say Sees, others would claim that the best chocolate comes from Germany ... yet Hershey manages to crank out an awful lot of waxy chocolate flavored candy bars.

Windows is and continues to be ‘Good enough’. Now with the huge financial investment and just plain old inertia - they are the market leader.

Windows 7 is at the very least as good as Snow Leopard.

“Comparing the Enterprise Server marketshare with a Consumer market is a fairly biased tactic.”

I wasn't.
I was comparing server OS market share between Unix, Linux and Windows server. I never even mentioned Apple in my server comparisons, because Apple is virtually non-existent in server market share.

” Yes, there are Macs that can compete in this market - but given the need for seamless interoperability, Apple is pretty much locked out of this market”

No market is locked out for anyone. Macs can and do read files from Windows servers, and the server market itself is pretty much open for anyone to compete in if you want. After all, Microsoft themselves came from way behind and fought their way to the top of the server market share.

It wouldn't make one whit of difference if Toyota called the Lexus, Toyota Lexus. It'd still sell the same, because of its quality and reputation.

Nope. That's not the way the market works. You couldn't sell a $50,000 Toyota sedan to the average person in this country who could afford it. You can sell a Lexus, being the same car except the badge, to those same people. Honda/Acura NSX, the perfect example. There are enthusiast exceptions to the rule (Nissan GT-R), but that's a very tiny market.

BMW don't have low end cars comparable in price to the Toyota Corolla which sells in the huge quantities the Corolla does.

You said they don't have a vast low-end. They do. Mercedes has an even larger low-end. Mercedes even has a vast low-end of commercial vehicles (like standard white vans), and they make the Smart. You just didn't know it because you've probably never been outside the US.

It seems that high-end car manufacturers have been having a hard time surviving without a low-end. BMW didn't used to have the 1 series, and the Mercedes A and B classes are relatively recent to that company. Many have been bought by low-end manufacturers to serve as their high-end brand. Example, when Ford owned Jaguar, the S-Type was basically a Lincoln LS/Ford Thunderbird, but with a different name, extra features and a higher price. In other cases, the lower of the merged brands took older high-brand cars as the current model low-brand cars (the Chrysler Crossfire was built on the previous-generation Mercedes SLK platform).

Going by your theory, Apple never started the iPod from scratch either

It was from scratch. He had an idea, Apple made it what it is. The same idea executed by any other company could have easily been crap. Also, at that time Apple had no presence in the consumer electronics market, no current distribution agreements with the major retailers, no shelf space purchased. Apple started selling itself, eventually later establishing retail agreements, before founding Apple retail stores. And it still quickly became the #1 digital media player, far above established consumer electronics companies.

The Android market share is an even bigger accomplishment in a shorter time period.

Back to the original point: Getting a bunch of large, established manufacturers to use your OS and thus gaining marketshare quickly is nowhere close to the accomplishment of developing your own OS, phone and carrier relationships, yet still establishing marketshare quickly.

Android had HTC (which originally made it big off of Windows smart phones), Samsung (big smart phone maker, and the #2 maker overall), Motorola (first smart phone to ship with Windows Mobile) Sony/Ericsson (one of the original smart phone makers, major Symbian user) and others to carry its OS. There, happy, I restricted that list only to established smart phone makers. Pretty much the only major player not using Android is Nokia.

That's a lot of power behind Android, while Apple and RIM had nobody.

You just claimed Nokia never took control of Symbian till 2008, when in fact Nokia already had control of Symbian way back in 2003.

You said "their own Symbian OS." I corrected you. And about their market falling fast, that started with the iPhone. Of course even Nokia seems to be realizing that Symbian is getting old. Their latest flagship phone, the N900, runs Linux (not Android).

But, to be fair; MS had to re-create an OS for the Enterprise Server market. Thus, they not only support the various flavors of WinXP (32 and 64 bit varieties; in Home, Pro and Premium flavors), plus Win7 (again, 32 and 64 bit; in multiple levels).

To compete, MS had to create new OS’s that competed in the arena that Novell, Unix, Linux and others enjoyed. The Desktop inertia worked well for them, for once a person was well-versed in the Desktop OS, the server OS was merely an extension of what the IT knew. With Unix, Linux, Novell and others - it’s was learning from the ground up.

For Apple to compete in this area would not be the decision I personally, would make. Too much inertia to overcome, I think that there is market saturation in this segment; plus with 3rd party suppliers (LSI, EMC and others) making proprietary solutions for mass storage devices, running and supported on Windows - getting traction in this market would likely be difficult at best.

As for the statement saying that Snow Leopard is comparable to Win7 - well, that’s like saying that Angelina Jolie is the most beautiful woman in the world. Some may share that opinion, others may not.

What I do find interesting, is the ease of use in the Mac OS. Quite literally, the Mac OS is designed such that the part-time Kindergarten teacher can double as the IT pro at most schools.

You couldn't sell a $50,000 Toyota sedan to the average person in this country who could afford

You could sell a $50,000 Toyota Lexus to the above average person, if the car is exciting and invokes a deep desire in anyone who examines it, and still has the reputation for quality a d reliability that a Toyota Lexus has.

“You said they don't have a vast low-end”

They don't have anything even at the same level as the Corolla, that even comes close to selling in the same vast quantities that the Corolla does. A so-called “low end” BMW costs a heck of a lot higher than a Corolla or a run of the mill Hyundai.

“It was from scratch. He had an idea, Apple made it what it is”

It's the original idea that matters. The one that starts it all. That's why firms regularly have to pay hundreds of millions for patent violations, just because someone else thought of an idea first.

“The same idea executed by any other company could have easily been crap. “

Same idea executed by Google could have been equally great, just like their execution of Android, which they acquired from someone else, has been great.

“Also, at that time Apple had no presence in the consumer electronics market, no current distribution agreements with the major retailers, no shelf space purchased”

Same thing can be said about Google before they entered the smart phone business. Google was strictly a search company, then aquired Youtube. They had never been in the consumer electronics business before. At least Apple had been in the hardware business for DECADES before they started the iPhone business.

“Apple started selling itself, eventually later establishing retail agreements, before founding Apple retail stores. And it still quickly became the #1 digital media player, far above established consumer electronics companies”

Same with Google. And they will soon by the # 1 smart phone OS seller on the planet, maybe as soon as next year. That's pretty impressive.

“Getting a bunch of large, established manufacturers to use your OS and thus gaining market share quickly is nowhere close to the accomplishment of developing your own OS, phone and carrier relationships, yet still establishing marketshare quickly.’

Oh Puleeze!
Google’s achievement is much more impressive.Again, after all, Google had never been in the consumer electrics or hardware business before. Apple had been in the hardware business for obver 30 years!

“Android had HTC (which originally made it big off of Windows smart phones), Samsung (big smart phone maker, and the #2 maker overall), Motorola (first smart phone to ship with Windows Mobile) Sony/Ericsson (one of the original smart phone makers, major Symbian user) and others to carry its OS.”

Again, there were plenty of smartphone OS’s out there. Samsung and LG both used to own stakes in Symbian, and have been using Symbian for years, long before Android even came out. Samsung has even developed their own smart phone OS.
It's not like the market was just sitting down waiting for Google to come take it over. Other OS’s were busy fighting over the market before Google came in. That's why having been able to so softly shoot past the iPhone is a very impressive achievement.

“You said “their own Symbian OS.” I corrected you”

It IS their own OS. Furthermore, they have effectively owned it since 2003, when they took majority share ownership of Symbian. They have been calling the shots since.

Lexus sells because of it's reputation for quality and reliability.

Toyota sells, or at least sold, on its reputation for quality and reliability, just not in the expensive luxury market. That's what Lexus is for. It's about perception: Nobody wants to pay $50,000 for a sedan with the Toyota name on it. Why? Because Toyota is not perceived as a luxury brand. You haven't "moved up in the world" if you're still driving a Toyota. You have if you're driving a Lexus.

The entire Toyota brand has actually moved up-market a bit, as now its low-end cars are not the lowest on the market. That niche has been filled by the likes of Kia. Toyota tried an in-brand push back into the low-end, but it failed. Thus we have the Scion brand, with an xA basically being a rebadged Toyota Yaris with slightly different styling.

So Toyota now controls three brands: Scion in the low, Toyota in the middle, and Lexus in the high. The extisting power of the established Toyota was a large factor in the ease with which it could establish the other two brands.

The Desktop inertia worked well for them, for once a person was well-versed in the Desktop OS, the server OS was merely an extension of what the IT knew. With Unix, Linux, Novell and others - it’s was learning from the ground up

Only thing is, Unix and Novell dominated the Enterprise(as well as AS400’s(System 36/38 at the time) and mainframes, DEC. Tandem etc), long before Windows NT was even written. So they had the advantage in the IT staff with the technical knowledge of their server products.

“What I do find interesting, is the ease of use in the Mac OS. Quite literally, the Mac OS is designed such that the part-time Kindergarten teacher can double as the IT pro at most schools”

I have unfortunately had to use Apple macs on a few occasions, some years back, when I didn't have my own laptop with me, and I never liked it one bit. This business of having a one button mouse was just nonsense to me, and everything was not where I wanted it to be. I'll take my Windows 7 laptop any day, thank you.

That's what they're doing now. Everybody knows Lexus is Toyota. But when people like my uncle buy expensive, they buy Lexus, not Toyota.

They don't have anything even at the same level as the Corolla, that even comes close to selling in the same vast quantities that the Corolla does.

You of course want to compare with the #1 selling car. Fact: They have a low-end that most people can afford, that is competitive in price with non-luxury brands such as Toyota, Honda, Renault and Fiat. They sell a lot more than their high-end (i.e., the only Mercedes that until recently you thought existed). Did you know that in Europe Toyota actually has two car models lower than the Yaris? One of them is a Scion over here.

It's the original idea that matters. The one that starts it all.

Ideas mean nothing without proper development and getting it to the users. How many failed tablet computers have there been? Has the iPad surpassed all their combined historical sales figures yet? If not yet, soon.

Same idea executed by Google could have been equally great, just like their execution of Android, which they acquired from someone else, has been great.

Not as good as the iPhone. I do like it, and use it. It's just not quite as polished as the iPhone OS.

That's why firms regularly have to pay hundreds of millions for patent violations, just because someone else thought of an idea first.

Now demonstrating a woefully inadquate understanding of patents.

Same with Google.

Nope. Google doesn't have to sell phones. They only need to get established manufacturers to carry their OS and marketshare follows.

Google’s achievement is much more impressive.Again, after all, Google had never been in the consumer electrics or hardware business before. Apple had been in the hardware business for obver 30 years!

Google basically created a flavor of mobile Linux. How many Linux flavors are there? Thousands? Apple created a mobile OS from BSD and its desktop libraries, with a revolutionary interface (copied by even Android), and created a phone to go with it. That is a much bigger accomplishment, not to mention Apple pushing the fundamental change in the manufacturer/carrier relationship that opened all new phones such as the Android to new abilities.

And back in 240 you were trying to downplay the role that these two large manufacturers had in pushing Android to its present marketshare. I noticed no response about Sony/Ericsson, a major smartphone manufacturer, adopting Android.

Other OS’s were busy fighting over the market before Google came in.

True, as we now see major manufacturers dropping Symbian and Windows Mobile in favor of Android, instantly giving it a huge marketshare.

It IS their own OS.

Keep up the weaseling.

That's what they're doing now. Everybody knows Lexus is Toyota. But when people like my uncle buy expensive, they buy Lexus, not Toyota

Same thing. They are buying a Toyota Lexus. You are talking like kids who are playing a game, and taking money from one pocket to another, and thinking their money has increased, when in fact they still have exactly the same money they had before.

“You of course want to compare with the #1 selling car”

Naturally. That's why the Corolla is a low cost mass market, mass selling car, and the lower models of the BMW are not.

“Fact: They have a low-end that most people can afford, that is competitive in price with non-luxury brands such as Toyota, Honda, Renault and Fiat”

Nope.
If they were as competitive, they'd sell as much as the mass market cars from these firms. They don't.

“Ideas mean nothing without proper development and getting it to the users. “

/srac Yeah...Is that why firms are paying billions every year for patent infringements from people no one has even heard of, just based on ideas that they just happened to have before anyone else did, and then patented?

“Not as good as the iPhone. I do like it, and use it. It's just not quite as polished as the iPhone OS”

Android phones are outselling the iPhones. Consumers and the market, have spoken, and are voting for Androids as superior, despite all the spin from the Applebots.

“Google doesn't have to sell phones.”

They do actually. It's called Nexus One.

” They only need to get established manufacturers to carry their OS and marketshare follows”

Those manufacturers had plenty of mobile OS’s that they had been using long before Android was even written That Android came from nowhere, and quickly displaced the other OS’s shows the power and quality of Android.

“Google basically created a flavor of mobile Linux. How many Linux flavors are there? Thousands?”

Again there were plenty of mobile OS’s based in Linux before Android. What market share did they ever get?

“That is a much bigger accomplishment, not to mention Apple pushing the fundamental change in the manufacturer/carrier relationship that opened all new phones such as the Android to new abilities”

Nonsense.
Taking from BSD is not any better than taking from Linux.
Google followed the same manufacturer/carrier relationship that Win Mo, Symbian and other OS makers had. Had nothing to do with Apple.
Only difference is Google gave away their OS for free(something Apple has never done in their lives), and chose to make money from search instead.

“And back in 240 you were trying to downplay the role that these two large manufacturers had in pushing Android to its present marketshare”

Huh?
You are confused ain't ya?
In #240, I said neither of LG nor Samsung had ever had high market shares in the smartphone business. That is correct. That doesn't mean they were not using Symbian in their smart phones does it?
You need to brush up on your logicm buddy.

“True, as we now see major manufacturers dropping Symbian and Windows Mobile in favor of Android, instantly giving it a huge marketshare”

Symbian is still by far the biggest in smart phone market share. By the third quarter of this year, Andriod will be taking big chunks of market share from the iPhone. The iPhone’s market share has nowhere to go, but down. It's inevitable.

“Keep up the weaseling.”

Keep being in denial.

You are talking like kids who are playing a game, and taking money from one pocket to another,

No, it's established business practices called market segmentation and branding. Read up on it.

If they were as competitive, they'd sell as much as the mass market cars from these firms. They don't.

I never said Mercedes and BMW were doing extremely well in their lower market segmentation, just that it existed.

Yeah...Is that why firms are paying billions every year for patent infringements from people no one has even heard of, just based on ideas that they just happened to have before anyone else did, and then patented?

Nope. Would you like an education? One quote from the USPTO should do it.

Android phones are outselling the iPhones.

Now way back to the beginning: Wow, several smart phone models from many of the largest phone manufactures in the world, on most of the cellular networks in the world, combined are outselling one phone from one manufacturer restricted to only a few cellular networks. Serious surprise there. Not.

That is correct. That doesn't mean they were not using Symbian in their smart phones does it?

You downplayed their market in order to pump up Google's accomplishment. Then when it's convenient, you state how far they were in to smart phones. You can't have it both ways.

Symbian is still by far the biggest in smart phone market share.

Worldwide, mainly because of Nokia. As I said, manufacturers are dumping Symbian for Android. That's a lot of fast marketshare. No manufacturer dumped any OS for the iPhone OS -- Apple had to take actual sales away from the established dominant phone manufacturers in order to get its marketshare.

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