Google is sliding down a path of unsustainability in an attempt to counter Apple's success. It's folly to think since Android has a bigger share of the market, that Google is somehow winning a war against Apple. I think it's more useful to compare Google and Apple as COMPANIES, in the context of their respective products. When you consider how successful each of these companies and their products are, beyond just market share, the comparison is dire for Google. Here's what I'm getting at:
Google makes 80% of its mobile ad revenue from iOS. Even though Android phones outnumber iPhones, Google relies on its competitor for revenue.
In 4 years, Google made just $550m revenue from Android. Google makes $1.70 per year, per Android device on average.
In 4 years, Apple has made well over $100b revenue from iPhone. Apple makes $576.30 per year, per iPhone on average. Apple has made 180 times the revenue from iOS than Google has from Android in the same period.
Google spent $12.5 billion to purchase Motorola's patent portfolio to defend Android from patent lawsuits by Apple, Microsoft, Nokia, RIM and Oracle to name a few. The outcome of several current lawsuits will likely level significant licensing, damages or even injunctions upon Android manufacturers and eventually Google itself.
99% of Google's revenue comes from web advertising. Web usage is dropping while app usage is skyrocketing. Google has no advertising presence within Apple's app ecosystem.
The last quarter of smartphone sales in the US saw Android drop to almost neck-and-neck with iPhone. Android is a platform with dozens and dozens of models from multiple manufacturers. iPhone is a phone - not a platform. It's one. single. phone. An entire platform barely outsells a single competing phone.
Apple took 75% of the profit generated by the entire global phone market in 2011. If that doesn't strike you as staggering, it should. Every other phone manufacturer on the planet split only 25% of the profit generated by a billion unit-sales market.
80% of installed, 'paid' apps from Google Play (Android Market Place) are pirated. Android developers are not making money, let alone recovering the costs of development. High profile developers are dropping support for Android.
The App Store has crossed 25 billion downloads. Apple's App Store has paid out over $4 billion to developers.
The iPad outsells all Android tablets combined, more than 10 to 1. Dozens of tablets from multiple manufacturers have simply failed to compete with one single competing tablet.
Because of its success, Apple is now worth more than Google, Microsoft and HP combined. They have on hand, nearly 2/3 the value of Google's market cap -in cash.
Android is a failure for Google. It's a money pit. But Google is too blind and ideological to see it yet.
I've said it before: Apple isn't just eating Google's lunch, it's cutting off its air supply. Google decided to go to war with Apple by ripping off the iPhone. Worse yet, it's fighting that war by proxy with Android manufacturers. Those manufacturers jumped into the fray because they saw a cheap, easy way to compete against a superior foe. They were wrong. Google was wrong. But as a company, Google believes its own dogma. And that company is marching to the edge of a cliff that ought to be in plain sight.
Google continues to spend like a drunk sailor on Android. Advertising is Google's single source of revenue. Android is supposed to ensure Google's ad network stays relevant as people transition away from PCs. But how long will Google continue to spend the billions it has earned from web advertising on an effort to prop it up? So far, Android has cost billions, has made next to nothing in revenue, and exposed Google to serious legal risk. Google is going to get a wakeup call from the accounting department this year. It's time to take a sober look at Google and see the chinks in the armour for what they are.