Why Apple Has Gotten Rotten In The Tech Industry (Part 1: Google)

You may be asking yourself, “What’s wrong with Apple?”  If you’ve been following the stock market, you’ll have heard a lot of commentary on what’s wrong with Apple and why its stock price is now barely over $500.  It dropped 8% yesterday, and it has fallen about another .25% or so in pre-market trading today.  Recall that this was the stock in 2012 that hit $700 and had analysts questioning whether it would hit $1,000, long before Google ever would.

Of course, we know that Google is well over $1,000 (it’s actually over $1,100), and it has been over the $1,000 mark since about the midway point of 2013.  And, in addition to the stock market, Google is one of the key reasons why Apple has gotten rotten when it comes to the tech industry, and has done it in two main ways.

1. Google’s Android operating system, the main operating system competitor to Apple’s iOS operating system.

2. Google’s Nexus line of products, including the Nexus 4, 5, 7, and 10.

Regarding the Android operating system, it’s on virtually every major phone and tablet that doesn’t run iOS, Windows, or Blackberry (the latter two are bit players in the mobile industry, with BlackBerry teetering on the point of collapse, while Windows hasn’t gained enough traction to put a real dent in either Android or iOS).  That means that Android is on virtually every smartphone and tablet made by the following companies:

– Google (co-created the Nexus 10 tablet with Samsung)

– Samsung (besides its own line of phones and tablets, also co-created the Nexus 10 tablet with Google)

– LG (in addition to its own line of phones and tablets, it was also the manufacturer of Google’s Nexus 4 and 5 smartphones)

– HTC

– Asus (manufacturer of Google’s Nexus 7 tablets – both versions)

– Etc.

In fact, Android has 81.3% of the global smartphone market, far more than Apple.  In most markets, Android smartphones make up over 50% of sales in those markets.  Yes, that includes the U.S. as well.  Apple still gets plenty of fanfare in the U.S., especially when they release a new version of the iPhone or iPad, but it’s far from the only game in town anymore when it comes to quality smartphones and tablets.

As for tablets, in Q2 2013, Android tablets doubled the pace of Apple tablets, as reported by Mashable.  In Q2 2012, the two operating systems were about 50/50, but in Q2 2013, it was Android with 67% of the tablet market, versus 28.3% of the tablet market for Apple.

Thus, Google has been pulling ahead in both smartphones and tablets for quite some time; this is NOT a recent phenomenon.

In addition, Google’s Nexus series has been turning the tide for the Android operating system against the iPhone.  The Nexus 4 came out to very solid reviews (the only real knocks were the lack of LTE and a relatively average camera), and the Nexus 5 (having LTE and a better camera) is coming out to even better reviews.  Even some Apple fans on various retail sites have said that they’d either consider replacing their iPhone with a Nexus phone, or have already done so.  That was unheard of just a few short years ago, further emphasizing the fact that Apple has lost the innovative edge, while Google and others have caught up to the iPhone in terms of technological usefulness and ease.

The Nexus smartphones are making inroads against the iPhone for several reasons. One reason is the lower cost without a contract ($349 for 16GB version and $399 for 32GB version) versus $199 subsidized on a 2-year contract from main providers AT&T, Verizon, and Sprint.  T-Mobile was finally added as a mobile provider for iPhones, and they do offer the option of paying for the phone upfront, but expect to pay about $610 for the 16GB version and $710 for the 32GB version.

That major difference in price used to not matter to many people, but that is becoming less and less the case, as Android smartphones, particularly those made by Google, Samsung, and LG, have caught up to Apple’s iPhone in terms of technology.  In some ways, they have even surpassed it.  Google’s Nexus phones are quite responsive in terms of their processors and in their touchscreens, similar to Apple’s iPhones.  This is why more Apple users have or are considering losing their iPhones for good for Android smartphones.

In fact, being on Twitter everyday @jchengery, I have noticed an interesting trend of more people taking up Android phones as their phone of choice.  One notable celebrity who is an Android user is Donald Trump.  I’ve noticed other people who were iPhone users in the past, but have recently switched to Android. One such example is CNBC Tech Reporter Seema Mody.

There are rumors that Apple will release an iPhone 6 later in 2014.  Some reports even suggest that it will have charging capabilities without wires.  Well, that’s great for Apple fans, but that’s not a new innovation for the industry.  Another main reason why Google Nexus phones have been making inroads against iPhones is because of Qi.  This wireless charger, for Google’s Nexus 4 and Nexus 10, was released in 2012; then, an updated pad for its Nexus 5 and Nexus 7 was released in 2013.  More and more people are wanting wireless technology due to the fact that they can connect to the Internet virtually anywhere; thus, they want the ability to charge their phone anywhere, even without an outlet nearby.

In fairness to Apple, they did come up with the fingerprint scanner on their latest iPhone, the iPhone 5s.  However, there were some issues of it not working easily for all people.  Plus, it disappointed users somewhat because it didn’t allow them to swipe their fingers to purchase items on the iTunes and App Stores, a feature many were looking forward to.  The main reason that wasn’t included in the iPhone 5s is mostly because it was a test feature that was only intended to unlock the phone for the user. While the scanner created much buzz during the debut of the iPhone 5s, the staying power of that buzz fell away pretty quickly, thus not giving Apple the boost it needed to stem the tide by Google and others in the tech field.

All of the aforementioned circumstances form part of the reason why there is such a disparity in the respective stock prices, with Google being over $1,100, while Apple is just over $500.  Many analysts and even loyal Apple supporters are clamoring for new, innovative products to revolutionize the industry, much like the iPhone and iPad did.  However, that’s been the major problem for Apple: Since the original iPad debuted on April 3, 2010, there have been no new products from Apple, and very few technological innovations, virtually none on the order of the iPhone and iPad.  They made some modifications to the iPad, some of which were very ingenious and innovative, especially with the iPad 2, but Apple has been in the rut of releasing a new iPhone (or two, in the case of 2013) and iPad each year, and nothing else, a pattern that is wearing thin with analysts and many Apple fans.

Google has made similar inroads against Apple’s iPad as well.  Google’s Nexus 7 FHD tablet (2nd generation version) has received rave reviews for its speediness thanks to its Android 4.4 operating system (codename: “Kit Kat”), its lower price ($229 for 16GB version, $269 for 32GB version, and $349 for 32GB LTE version), its high-resolution screen, and its form factor.   The prices are considerably lower than the Apple iPad Mini Retina (the latest version of the Apple iPad Mini), as the equivalents cost $399, $499, and $629 respectively. In addition, Google allowed you to choose any carrier you wished so long as you could use a micro-SIM card, whereas you had to enter into a contract with any of the four main carriers to have an Apple iPad Mini Retina with LTE capability.

In fact, there were rumors that Apple wasn’t even going to release a new iPad and iPad mini at the end of 2013, partly because there were some material shortages at their main Foxconn headquarters in China, thus delaying the manufacturing of new iPads and iPad Minis.  I believe that Apple had no choice but to do so because both Google and Amazon had headstarts into the 2013 holiday season with their latest tablets, both of which received rave reviews, and thus, Apple had to act.  The new iPad Air and iPad Mini Retina received good reviews, though some questioned why Apple didn’t become the first major tech provider to equip its wireless devices with the ability to utilize the new wireless ac protocol, which is reported to be between three to four times faster than wireless n.

This was a missed opportunity for Apple, as they could have set a new standard in wireless devices.  Additionally, if the iPad Air and iPad Mini Retina aren’t updated with new versions until late 2014 or even early 2015, it’s likely that their competitors (Google, Amazon, Samsung, etc.) will have wireless ac capabilities in their phones and tablets before then.  Plus, the fact that ac is backwards-compatible with wireless n and g made this a real no-brainer for Apple, yet it was a feature they did not act on.  This is further proof that Apple has lost its technological edge and is no longer the tech leader it was just a few short years ago.

One other area where Google has caught up to Apple is in the TV industry.  There have been many rumors that Apple is negotiating with major broadcast networks to provide channels such as HBO, Showtime, and others over an Apple TV device.  So far, that has not come to pass – it can stream Netflix, Hulu, YouTube, and others, but nothing beyond that.  Even if Apple can get programming from major cable providers, it’s debatable how much of an effect that will have on Apple’s valuation, since the broadcasting industry is already a well-populated, well-established field.

Google has taken advantage of this lack of cable programming by introducing Chromecast, a USB device that plugs into your HDTV and allows you to wirelessly stream YouTube and virtually any website that is in Google’s Chrome browser on your HDTV.  In addition, it’s only $35 (even less at some places) to gain many of the same capabilities that Apple TV provides, yet the Apple TV costs $99.

Again, Google duplicates Apple’s abilities at a fraction of the cost.  The fact that much of the population is taking price into greater consideration when choosing their wireless devices favors Google and Android (including Amazon, Samsung, LG, Asus, and others).  Apple’s premium brand is losing power and influence in the industry, which is all the more reason why its stock valuation has fallen considerably from the $700+ it was at in 2012.

Thus, Google continues to make up ground on Apple, further showing that Apple has gotten rotten in the tech industry, especially when it comes to innovation and remaining the tech leader, which it no longer is.  At best, it’s near the top, still in the hunt, but it’s no longer alone up there, and in many ways, it’s fallen behind Google, Samsung, Amazon, and others.

The next post in this series will focus on how Apple has fallen behind Samsung in terms of tech innovation. Watch for it. In the meantime, let me know what you think of the battle between Apple and Google in the tech industry, what products you prefer, and what products you’d like to see from either or both companies in the future in the comments below.

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