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Competition Heats Up In The Mobile Computing Space On Many Fronts – Prices Driven Down Once Again By The Big Players
What do you get when you add…
The world’s most prolific mobile OS with the largest market share and greatest growth rate
+
The world’s greatest advertising company
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The world’s largest cloud computing company
+
The world’s largest online retailer???
A hell of a lot of competition for everyone else in the mobile computing space. Amazon app store: Launchpad for mobile dominance! Amazon is opening it’s Android app store Tuesday (today).
It will run as a subset of Google’s Android Marketplace and will be
heavily monitored and moderated by reviewers, very much like the Amazon
store is – which will set it apart from Google Marketplace and be
similar Amazon’s running of the FAO Schwatz and ToysRus websites.
The tech media has multiple reports of Amazon focusing on competitively lower prices for apps to gain a competitive edge.
…the store represents the first attempt by a major
retailer to offer a “curated” selection of Android applications for
sale. That means the apps that stock Amazon’s virtual shelves will be
reviewed and tested. According to Amazon’s rules, the apps must work
properly and be safe, both in terms of consumer data privacy and the
impact to the mobile device itself. In other words, it’s a selection of
mobile applications that won’t slow your phone to a crawl or drain your
battery. You can also stop worrying about whether or not an app is safe
to use when it’s downloaded from Amazon, as all will be screened for
malware.
Apple has gained much success and experience in selling self branded
mobile computing gadgets in its 3 iterations of the Kindle ereader. It
has long been rumored that they will be coming out with their own
Android tablet, which should be interesting because if they are paying
attention the Barnes and Noble ereader for $190 can out run an iPad 1 if
unleashed. See Customized Nook Color vs Ipad – part 2. If management is on their p’s and q’s, their is market share to be taken from the industry leader. GigaOm’s Ostatic agrees:
[Amazon] has content assets that it can build around a
device designed to be more robust than today’s Kindles are. As a
platform, Android represents a huge opportunity for Amazon, and one that
it could leverage with its own Android app store. There are already rumors
that Amazon is working with Android. This year, look for Amazon to push
forward with a more ambitious tablet device strategy, and watch as it
produces the most direct competition to the iPad yet.
All of this comes at at time when Apple, the current category leader
has alienated many developers and content providers (who still feel they
must use Apple’s portal anyway – thus there are no significant losses
yet) by forcing them to share all revenue generating transactions with
Apple at a 30% cost – not to mention banning Flash, etc. On the topic of
Flash, Adobe has released version 10.2 for Android and it (finally)
works flawlessly. I use my HTC Evo to stream movies on demand from
Amazon with a glitch with no stutter, pixelation or material delay. It
is at this point that I feel Jobs has erred and may have to back track
on the Flash decision. Whether he does or he doesn’t it appears as if
Google will attempt to take advantage of what is now a significant
platform advantage and marketing angle. Now…
What Do Dominant Companies Do When Threatened With Strong Competition & the Potential for Margin Compression?
From Endgadet: Apple sues Amazon for App Store trademark infringement:
You had to know this was coming. Apple, which is already engaged in a heated battle with Microsoft for the protection of its “App Store” trademark, has filed suit against Amazon for its “improper use” of the same. Amazon’s Android Appstore
seems to have been intentionally contracted to a single word to
differentiate its name, but that difference isn’t enough for Apple,
which has asked a California court to grant a ruling preventing Amazon’s
use of the moniker and asking for unspecified damages. Apple claims it
reached out to Amazon on three separate occasions asking it to rename
its software download offering, but when faced with the lack of a
“substantive response,” it decided to take things to court. Its big task
remains unchanged — proving that the term App Store is something more
than a generic descriptor — and this was a somewhat inevitable move
given Amazon’s choice of name. The legal maneuvering, as always,
continues.
Be aware that I don’t believe Apple has a patent trademark on the term “app
store”. They applied for one and were denied and have appealed the
denial with said appeal’s decision pending. It should have be denied due
to the generic nature of the term app store. Nonetheless, the
competition is thick and as I said many a time, margin compression is a
coming. Amazon is the greatest internet retailer in the world and the
2nd or 3rd greatest cloud operator for the enterprise. They have clearly
stated that they are entering the app market at cut throat pricing to
capture market and mind share. They invariably have to give Google their
cut, and since Google has minimum costs they could care less about
pricing while Amazon’s infrastructure is well suited to engage in a
retail price war, particularly since their OS development costs are nil
thanks to Google. The loser here if this kicks off, is Apple. The store
is supposed to launch today… Compression!
store”. They applied for one and were denied and have appealed the
denial with said appeal’s decision pending. It should have be denied due
to the generic nature of the term app store. Nonetheless, the
competition is thick and as I said many a time, margin compression is a
coming. Amazon is the greatest internet retailer in the world and the
2nd or 3rd greatest cloud operator for the enterprise. They have clearly
stated that they are entering the app market at cut throat pricing to
capture market and mind share. They invariably have to give Google their
cut, and since Google has minimum costs they could care less about
pricing while Amazon’s infrastructure is well suited to engage in a
retail price war, particularly since their OS development costs are nil
thanks to Google. The loser here if this kicks off, is Apple. The store
is supposed to launch today… Compression!
Those who follow me know I have been singing the compression song
for some time now. Well, Amazon should make it more evident to those who
don’t believe. Stiff competition always brings lower margins, and
Amazon is STIFF competition once it comes to Internet retailing. From Cnet
(for those who don’t play computer phone games, Angry Birds is, by far,
the most popular and successful of all the games ever to be released on
smartphones – iOS, Android, any):
for some time now. Well, Amazon should make it more evident to those who
don’t believe. Stiff competition always brings lower margins, and
Amazon is STIFF competition once it comes to Internet retailing. From Cnet
(for those who don’t play computer phone games, Angry Birds is, by far,
the most popular and successful of all the games ever to be released on
smartphones – iOS, Android, any):
In case you haven’t already looked at the top products list on your iPhone or iPad today and noticed that a new Angry Birds is now available, we’re giving you the heads up.
Angry Birds Rio is 99 cents on the iPhone, $2.99 on the iPad, and is free today as part Amazon’s Appstore for Android launch (Amazon scored the Angry Birds Android launch exclusive). You you have to download the Amazon Appstore app to your Android phone to download the game. (Click the “Get app” link on Amazon’s site and follow the directions).
This version of Angry Birds is
actually a licensed game that’s a tie-in to the upcoming “Rio” animated
movie, which hits theaters April 15.
When the world’s biggest Internet retailer launches a store next
store offering your most successful product for free, it sounds an awful
lot like what this gentlemen said in September:
store offering your most successful product for free, it sounds an awful
lot like what this gentlemen said in September:
:
Please upgrade your browserThe Creative Destruction Caused by Android Continues to Erupt on the Hardware Side As Well
On the hardware side, the Android onslaught continues as refresh
cycles come at a breathtaking clip of over once per year. Below is the
world’s “thinnest” smartphone at 8.49mm thick, for those US centric
chaps – that is exactly 1/3rd of an inch thick. Packed into that tiny
space is a 4.3 ince super AMOLED plus HD screen (Samsungs makes the
brightest, most vibrant screens in the market), dual core 1 GHz chips,
Gingerbread, 1080P 8 mp camera w.2mp front facing counter and a full
gaming suite. The competition is truly heating up. This is about where I
expect the iPhone 5 to come in terms of feature set. Expect a small
form factor version of Honeycomb (pure touch screen experience OS that
avoids the need for any hardware buttons besides on/off) to be released
by the iPhone 5’s debut.
See Endgadget for more: Samsung Galaxy S II official: dual-core 1GHz CPU, 4.3-inch Super AMOLED Plus, coming this month (hands-on with video).
The upgrade to my personal workhorse device, the HTC Evo is arriving
with baddest hardware on the market (as was the Evo when it launched
last year). From Endgadget:
CTIA snooping is in full swing
today, as the HTC EVO 3D has seen its major specs divulged courtesy of a
document within the exhibition halls of the show. True to our initial scoop and subsequent spec leak, we’re looking at a 3D-capable successor to the EVO 4G, this one rocking a 1.2GHz dual-core processor (Qualcomm’s MSM8660),
a 4.3-inch qHD ( 960 x 540) display, dual 5 megapixel cameras around
back, and the sweet, sweet promise of 1080p video playback. That’s
constrained to 720p for viewing 3D content, but there’s no denying this
new Sprint smartphone’s shaping up to be yet another multimedia
powerhouse. Specs of the EVO View tablet have also been snapped, marking
it as indeed a Sprint rebadge of HTC’s 1.5GHz, 7-inch Flyer slate. Look for both to become official at Sprint’s presser later this week.
Be aware that this is true high definition 3D, not a device that
requires one to wear glasses. The 5MP cameras can most likely combine to
cooperatively snap 10MP pictures through overlay and will probably
feature 180 degree panoramic capablities. To show how powerful these
devices are, my HTC Evo, which is nearly a year old was upgraded with a
customized version of Android’s latest phone OS – Gingerbread (Cyanogen 7
flavor) and is much faster, much more stable and much more capable than
it every was. The drastically improved picture quality from the camera
is absolutely incredible, as is the HD video, the capabilities have been
expanded immensely. It will be weeks before I discover the true
capabilities of this device despite the fact I am an expert at this
stuff, and the hardware upgrade is literally an evolutionary step
forward.
For those interested interest in the proposed Deustch Telekom
T-Mobile/AT&T merger changing the playing field, keep in mind what I
warned subscribers of last year in the very accurate subscriber
research note title
The Race for 4G Next Generation Broadband Deployment…
The proposed merger will have to clear it with the feds which may take
up to a full year. Dan Hesse (Sprint CEO) has apparently scored a very
big win for his roll out via strategic deployment of a less popular
technology. He has captured (arguably) the most 4G market share through
Wimax deployment nearly a year ahead of his much larger competition
while retaining the ability to switch over to net generation technology
as the better funded competition struggles to deploy LTE. He has
achieved several firsts in the industry from the Evo to 4G. Sprint’s
WiMax will mostly likely combine upcoming LTE with its WiMax tech all
the while bypassing the stopgap LTE that all of the other carriers are
trying to rollout – remaining a step ahead of the game. Many fail to
realize that Sprint has the spectrum and the infrastructure to do a
massive 4G rollout after rollng off legacy networks inherited from
Nextel iDen and upgrading to next gen tech that doesn’t suffer from the
inability to penetrate walls which is the major drawback of the current
generation of WiMax. What Sprint doesn’t have is the capital to take
advantage of these capabilities.
See the The Race for 4G Next Generation Broadband Deployment… for the $5 billion capital already injected and the possibility of a takeover by Google – yeah, Uh Oh!
From my most recent post on Shorting Apple…
. In 7 quarters, Android went from last place to first place –
WORLDWIDE! Expect the same to happen in the tablet space where
competition is even worse and the Android camp has a much larger stable
of much more capable competitors ready to jump out of the gate as the
iPad has only one year head start as compared to the iPhone’s 3 year
head start. Does the market see this? At the money, front month puts
jumped 41% while Apple fell faster and farther than Google during the
market rout, and gained less, slower during the government pump up.
I am slowly gathering puts on Apple again, with tight trailings, of
course. Apple’s situation may not become apparent immediately, but it
is definitely in more of a competitive bind than many are letting on. I
have been clamoring that Apple’s margins will get chopped by
Android’s commoditizng the smartphone space – both on the lower and
and the higher end. See Apple on the Margin
and my on air proclamation just hours before Apple released earnings
and declared – surprise, surprise – a drop in margins. Go to 3:40 in
the video…
More reading:
- The Potential Equity Investments Most Likely To Prosper From the Google/Apple/Microsoft Mobile Computing Battle
- The Nokia/Microsoft Alliance & Android’s Commoditization Of The Mobile Computing Platform…
- Apple Gears Up To Combat The Margin Compression That Apparently Only It, Google & Reggie Middleton Sees Coming
- Will Google Win The Mobile Computing War? Let’s Walk Through Where They Stand Now & How To Value Them
- Sony Bites The Bullet & Joins The Android Camp, Adding Its Entire Suite of PSOne Games To The Android Platform
- If You Need More Proof Of Apple’s Inability To Keep Up With Google’s Android & Over 100 Other Android Hardware Vendors…
Subscribers are reminded to review the Apple iPhone Profit Margin Scenario Analysis Model as well as review the Apple Earnings Guidance Analysis
document that details how Apple’s management expertly manages sell side
earnings expectations, and consequently their share price.
Non-subscription readers should reference How
Google is Looking to Cut Apple’s Margin and How the Sell Side of
Wall Street Will Enable This Without Sheeple Investor’s Having a Clue and then compare and contrast to Will Google Win The Mobile Computing War? Let’s Walk Through Where They Stand Now & How To Value Them.
- Shorting Apple and Why Software Developers Can Make More Money On Android
- Taking The Challenge To Goldman Sach’s Apple Proclamation One Step Further and Is It Now Common Knowledge That Goldman’s Investment Advice Sucks!
- As The Tablet Margin Crunching Parade Marches On, Consumers Benefit From The Cheapest Prices Of The Best Products:
- The Tablet Pricing Wars Have Commenced, Targeting Apple’s iPad 2 Which Is Not Even For Sale Yet…
- Steve Jobs Calls End Of the PC, We Call The End Of The Fat Margin Tablet – Including The Pretty iPad, With Proof!
- Apple on the Margin
- advertisements -
The android devices work fine for most people, and will be problematic for APPLE only if the hardware is considerably cheaper. By 100 or more dollars. The ANDROID model is free software, funded by search and datamining. It's not a particularly good media device as people have pointed out. The business model is carpetbombing the world with cheap Android OS devices and getting marketshare by dumping on the market. But, FOXCONN can provide APPLE with the competitive price it needs to not retread the windows -Mac OS history problem. Given the Choice, unless Android provides a considerably different device with different features it's just an iPhone clone. Plus, Mainline Google doesn't care what device their apps run on-so maps on iPhones are just as good on iOS as Android(if not better.) So mainline Google is trolling for search cash, and basically not giving their own division a leg up in the race. So, there is clearly no particular reason to by an Android Device over an iphone right now. They are on the same carriers, iPhone app store is clearly easier and better to develop for, the radios on iPhone are just as good as Android, Google apps are on iPhone and networked apps and games run on more Iphones because the OS releases are for all devices within reason and device hardware doesn't get stale as fast as Android. So, we are down to price. Which Apple isn't having a problem delivering superior hardware at the same or close pricepoint. the cheaper, or free Android devices do not run Honeycomb or the latest OS which requires NexusS type hardware and speed. Why get a FORD when you can get a BMW for the same Money? Samsung hardware is pretty clumsey and prone to severe breakage
http://apeakunderthehood.blogspot.com/2011/03/used-house-or-used-lexus.h...
Used House or Used Lexus
Due for an upgrade with Verizon, went into the store twice for about 5 hours total dicking with androids and iphones. Went in there with intention to buy an Android, but 2.2 based phones at least were quirky in comparison to iphone on interface, and lacking in performance especially browsing(10ft away from droids iphone roasted them on playing same youtube video and droids wouldn't display them correctly), then there's the bloatware issue which you need to root the phonje to get rid(not such a big deal anymore). Only wanted 3G anyway, upgraded online to iphone($30 off online). I don't think Apple is any more threatened by Android than it is by Windows at this point.
Amazon, owner of the "patent" for one-click ordering, is criticizing Apple for its app store trademark?
LOL
Reggie, what price are you short apple? we are keeping score now. Smart phone market is growing. Google and iPhone will both be successful.
The Apple trade turned in over 30% with profits locked in. Go ahead and keep score. Don't try and challenge my track record without verifying your own. That's yow you keep score! Be a real man, I am a Man i Am...
Android hasn't figured out the developer, third party sdk and system. Its really bad and surpringly more complicated than the iOS. IOS has xcode, developer tools and a professional apprval process.
The amazon deal is overstated- there just is not a lot of incentive to develop for google.
Also, what Reggie forgets is that even though there are more android devices out there only 5% use the latest OS. 50 % are one OS behind and 45 are on cupcake and cannot run the latest.
So developing for Android doesn't get you every user- a lot less than iPhone still!
The hardware is fractured too - some devices have keyboards, dpads. Some don't. Some are slow, some are faster.
Its a different business model.
When Android does offer a premium device, its not bad but then again Apple offers a premium experience for either less or the same.
Over 92% of users are on Android 2.1+, which is the modern version of the OS. I'm sure only 5% or so of users are on Apple's iOS 4.3, does that conjure the same complaints. Apple is more fragmented than Android but then again the fragmentation issues is truly nonsense. It is not nearly the impediment that the geeks and media have made it out to be. There is no such thing as "cupcake", so that should tell you how accurate the balance of you statements are.
Well I have to agree here. I have become a big Amazon fan because of their cloud services. I also believe they will know how to do an online store correctly unlike the Goog. Ever try to get in touch with someone there?
Sprint, I agree there too, they have managed to navigate into the 4G space after making many stupid moves. I hope they can keep it going.
Meanwhile, Apple is still so much more than a phone or a tablet, though they keep selling as much as they keep making.
So, until I start seeing any drop off in demand, I will not worry about them.
Though, I still don't understand where you think the Goog is going to make their margins?
Google makes their money (mostly) on ads, which is why they want to give Android away for free to get it on as many different phones as possible.
This is terrible. Decreasing prices of smart phones. Deflation. Ben where are you? Drop some billions.
I believe security and malware/virus resistance is a huge factor when picking out a device. My wife ruined her last two PC laptops even with anti-virus software installed. And she has not had one issue with her Mac since I bought it for her in December. I also heard there are Android malware/viruses now. I don't want another device that requires hundreds of dollars of repair every six months.
Maybe this is not an issue for these mobile devices, but I've yet to be convinced it's not.
Security is an issue with ALL networked devices. Sooner or later someone will get in. Apple's products have some of the biggest security holes, covered by the best marketing. So does MSFT and Android. Smart people are also good hackers. Remember, people were able to hack the security for complete admin and root access (jailbreak) their ipads and iphones simply by going to a web page and clicking a picture. A year later, and Apple still can't lock people out of these exploits.
Its a fact of the business.
Hi Reggie,
I had a chance to use an nexus s , the best android device, over the weekend. Its pretty good and I'll lkst the pros and cons quickly:
Pros:
-good notification system
- hardware is getting better
- like some stuff like settings systems
- email and other native apps are good, sometimes better than iOS
- most stuff is free in catalog
- app homepage is customizable with your own apps not all
- open source and basically cheap for carriers
- better sound UI and notifications
- keyboard is sometimes better
- twitter client is better
CONS
- The phone radio is not very good
- the wifi radio was really weak compared to my iPod touch. Sometimes never got a 2 bar signal
- phone sound was not good- and the iphones is not good either
- UI and visual stuff is all over the place. Kind of messy and shows internal staff churn
- scrolling and other effects really hampered by java- its slow and chippy. Bad OS
- hardware not as good as iphone and same price almost
- device software upgrades via o2a once or twice- most devices are out of os compliance after a year
- camera was bogged up with controls and made it hard to navigate
- overall Software is bogged with geeky controls
Hope this helps
- lack of interest in the catalog becuase google wants free apps
- bad developer SDK. Kind of a mess and sloppy.
-
I say good for them. Competition is not a sin. App stands for application, not Apple.
this too. SOLD. OUT. EVERYWHERE.
http://www.centernetworks.com/virgin-mobile-lg-optimus-best-android-deal
An amazon tablet will be interesting to see and will REALLY kick off the pricing wars. IF they stick with the kindle model (all content goes through us), they will fail. Also $600-700 is too steep for a multifunctional toy.
I use a Nook Color that I have rooted and upgraded. ($250)
Half the price of an ipad and is everything I need for reading, internet access, email, games, android apps. Oh and it has full file system access and sideloading allows MY content on it without having to go through cloud computing (and being visible to them).