Battle of the Titans Apple Inc (AAPL) vs. Google (GOOG)

As Apple (AAPL) and Google (GOOG) continue to be duke it out for supremacy in the smartphone and tablet markets this coming quarter, it seems that in the position of the dominant discourse of tech news—Apple still reigns supreme. Even though its chief rivals—Google, Amazon and Microsoft—still managed to grab a fair collection of headlines, Apple Inc. got the lion’s share according to an observation made by tech writer Jon Swartz of USA Today.

For some this assertion may seem surprising. Apple’s 14 percent share of the global smartphone market is small as compared to Google’s 72—but it pays in mind to remember that Apple’s success has always come down to filling a market niche and superior branding. This fact has remained true since the 1990’s PC wars. But branding and knowing your market doesn’t always make for total market supremacy, as that battle came to show so long ago.

So what’s different this time? How can Apple remain the dominant player in a game it seems to have started but may not end? Here are three chief reasons Apple may stand in the winner’s circle at the end of the Smartphone wars—and may have yet to see any other company take its place.

For starters, the record profits that Apple still continues to drag in stand to make shares a valuable asset for those who invest long-term, though investors who bought in just before tax fears and overestimation of Chinese units sold may not see a return for the foreseeable future.

A second reason might be found in Apple’s newfound willingness to market devices like the iPad Mini. It’s a product that demonstrates Apple ready to offer a smaller, cheaper product to include markets wouldn’t otherwise—and if the company were ready to offer a cheaper iPhone that is still of Apple’s standard of quality, it would be safe to say that it could override much of the Android platform appeal.

Thirdly, and perhaps most importantly, it seems that ad based revenues might be a real reason Apple ultimately wins the race. According to reporting from The Guardian’s Jemima Kiss, Google draws most of its revenues from advertising, and those revenues are based on search.

Citing Enders analyst Benedict Evans, Kiss reports “Discovery is moving away from typing, but also from search. Apps too are a structural threat to search, because they are vertical search. Behavioral data backs this up; search traffic declined in September this year for the first time since 2006, partly because of more vertical searches through apps.”

So what does this development ultimately mean for Google and Apple? It means the battle may come down to content once again. According to Kiss’ interpretation–it may mean that Apple’s app controlling empire may have a leg up as it relies on location services to determine appropriate ad content.

Only the future holds the answer, and we have yet to see any future developments that Tim Cook can bring to the table. Maybe the case is that Apple needs to worry less about competing with Android platform phones for  the future of curved screens (unless this curved screen patent is really for an iTV after all) and more about reminding consumers of its strong position as an advertiser.

  • Ralph Petrillo

    Both are undervalued, and Google insulted China with its decision to leave for human rights over market share.

    Apple is about to get the largest phone company in China and growth will pass USA market. Second Google dominates in search, however with Apple tv that may be inverted with reverse engineering. For if an Apple Tv user searches through voice command, then ask for various derivative searches, Google search is passed over in the household very fast. If all hardware is part of a future Apple offer, from Cell phone, to Iphone , Apple tv, a new Apple search engine to receive a discount, then in effect one sale may lead to three or four at a future discount.

    Google has search and maintains file base on each search which users dislike, Apple can advertise this by not saving searches through Apple tv. Recent small survey, and there is tremendous interest in upcoming Apple TV.

    Suggestion for both Apple and Google. there is no purpose in paying out a dividend ever. Simply use dividend funds to buy back stock. Less supply of stock appreciates stock prices.