John Kirk for Techpinions:
Not only do the high priests of market share have it wrong, they have it exactly backwards. The company with the lower market share and the higher profits has all of the leverage. The goal is to INCREASE, not decrease, the ratio of profits to market share. Increasing market share at the cost of profits is a recipe for disaster, not a formula for success.
Apple may or may not do well in the future but right now, and contrary to popular belief, they are winning the smartphone wars and winning them handily.
John’s analysis is correct, in my opinion, with regard to Android device manufacturers. However, he is missing the point of Android. In fact, he doesn’t mention Google even once (other than in a quote from ReadWrite). You need to consider all of the players before you can declare a winner of the game.
Google created Android as a defensive measure. It needed to be sure that a single company, such as Apple, did not gain control of the entire mobile market. If that were to happen, the possibility of Google’s services being shut out of the market loomed. Clearly, Google’s doomsday scenario never happened and likely never will. In this way, Android has won, and has performed better than Google ever imagined.
Android is a huge win for Google. It’s true that most Android device makers have little to no profit. But it’s Android’s large market share that is the winner for Google. The more Android devices being used, the more Google services with Google ads are being used.
People often forget that Google and Apple are playing the same game with different goals in mind. Apple strives to maximize profitability in hardware sales. Google, on the other hand, is striving for maximum market share, providing the most users for its services. This is a rare, if not unique, war where both Apple and Google can win, and that seems to be very confusing to people.