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Business - Written by on Monday, December 14, 2009 8:27 - 7 Comments

Laura M.  Carrillo
Apple vs. Google – Who will own the “third screen”?

Over the weekend Twitter exploded with tweets about the new Google smartphone, rumored to be launched in January 2010 and named the Nexus One. With the iPhone still dominating the market, what does Google need to deliver to meet and exceed the market giant?

Yesterday, a blog post on mashable.com outlined  four issues that Google and Apple will face. Below are my thoughts on those comments and a couple other considerations.

The Google Name – “Much like Apple, Google has its own huge pool of impassioned fans who could be easily converted into buyers…All signs are pointing to the Nexus One being released by Google with their branding, so we can count this as an advantage in Google’s favor.”

I agree that Google has an edge here based simply on the sheer number of people that are exposed to Google on a daily basis from any platform. While Apple has developed a large following, and claims over 17 million iPhone users,   if Google can convert most of its Google Apps users, estimated at 20 million, Apple is in for a battle. That battle could be difficult given the millions of other Google search users that could be open to adopt a Google device .

GSM Unlocked – “..users could insert a SIM card from their preferred wireless service provider…buyers wouldn’t have to lock themselves into a contract with one carrier over another simply to get the new Google phone.”

I agree that this has potential to be a substantial factor in Google phone sales. Given that Apple’s contract with AT&T is set to expire in 2010, Apple does have the opportunity to open up to more carriers, however this would require many carriers to switch to GSM networks or for Apple to add a chip to the iPhone to access CDMA networks (currently used by carriers like Verizon and Sprint). I wonder who is more apt to change? The carriers or Apple?

Price Point – “The iPhone continues to sell exceptionally well because AT&T subsidizes about half of the actual price tag, making it a cost-friendly device.”

There is still no information about what the price will be for the Nexus One, however based on what we know about the technology and what the phone offers, it will be difficult to compete with the iPhone on price. Would enough Google users be willing to pay a premium in this economic climate? I don’t think so. Google could look to partners to help defray costs, but Apple definitely has a leg up in that department.

App Advantage – “..now that they (Apple) have well over 100,000 apps, their slogan “there’s an app for that” rings true”

Google definitely has a ton of ground to make up here. The iPhone has grown a large and loyal developer base, focused on making new, exciting and useful apps for the iPhone. “Apple has clearly mastered the application experience.” I could not have said it better myself!

The other primary issue that Google will need to combat is Apple’s brilliant development of not only the iPhone as a product but the iPhone as a business platform. The iPhone is not just a smartphone it is a platform that Apple has leveraged to develop and launch other new products, improve it’s own existing products, as well as create entirely new markets and communities. As my colleague Nick Vitalari discussed, “Apple’s platform was so successful that competitors were forced to launch competitive products.” If imitation is the sincerest form of flattery then Apple has been taking that praise all the way to the bank. iPhone sales grew 245% in 2008.

While Google’s Nexus One sounds like it has some very promising attributes it still has some significant hurdles to clear to give Apple a run for its money. What do you think? Should Apple be concerned? Will the Nexus One be a game changer? Either way, it’ll be fun to watch!


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Dec 16, 2009 14:01

Did you miss the Droid boat? There are a lot of positive trends you can already start looking at for Google phones. The Nexus One is only one of many Android based phones to come to market. I don’t think the Nexus One is at all considered or targeted to be _the_ direct competitor with the iPhone. It is one of many competitors in the vast array of Android phones coming to market in Q4 2009 and throughout 2010.

Dec 16, 2009 16:23

I agree re: Droid. It’s gaining respect and customers. I assume the new Nexus phone will have an improved Android OS – improved over the Droid OS anyway. In the Droid vs. iPhone head-to-head comparisons I’ve read, the conclusions are generally that each has advantages and disadvantages that generally balance off and the choice is kind of up to the buyer – and more often than not depends, I’d guess, on the provider the buyer wants or has. AT&T ads push the quality of the experience with their network while Verizon pushes vast availability. There have been complaints about AT&T from people I know personally when it comes to availability. Google is not likely, IMO, to automatically going to gain all 20,000 Google Apps users for its phone; they did not flock to the existing Google phones as far as I can see. If all phones were available on all networks, then you’d see a valid head-to-head shootout that would tell you something. If iPhone were available on Verizon, I expect people would be buying even more. Right now, I don’t expect iPhone to take a major hit from the Nexus; I actually expect more Droid buyers since it’s here first and the Nexus will be on the T-Mobile Network.

Wikinomics – Going Vertical: The New Reality of Vertical Integration in the Era of Business Platforms and Ecosystems
Dec 18, 2009 2:34

[...] (for commentary on the pending handset war between Google and Apple, see Laura Carrillo’s post). With the hardware, Oracle has the potential to involve more partners and grow the business beyond [...]

Dec 21, 2009 10:46

How HTC Wins And Loses With Google Phone – http://tinyurl.com/yfj3ub3. Contains more on the Nexus phone but focuses on the company most closely associated with Google when it comes to phones, HTC.

Dec 21, 2009 13:24

I’m surprised you say the iPhone dominates the market. Which market? It’s share of the smart phone market is down around 14%. Google has stepped into the smart phone production market becuase no-one is making enough os search on the Android platform – ie diminishing Google’s chances of dominating search advertising in mobile environments. That too is a measure of lacking penetration right now.

Dec 22, 2009 12:38

Wikinomics – Collaboration as competition. Microsoft decides to “collaborate”.
Jan 26, 2010 0:51

[...] month my colleague Laura Carrillo asked if it will be Apple or Google to own the third screen. Recent events have provided an opportunity for a third contender in the quest for the third [...]

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