What’s happening in the tech scene we follow so closely could not be more apparent. There are three levels of players in today’s gadget technology. Apple. Samsung. And everyone else.
Apple makes the lion’s share of revenue and profits from Mac, iPhone, and iPad, not to mention the ecosystem of iTunes Store, the App Store, and the retail stores.
No other competing company comes even close.
Samsung also makes a heft profit on the Galaxy line of smart phones and tablets, but isn’t in the same league as Apple, despite shipping more products (Samsung elects not to publicly disclose product sales numbers).
Where is everyone else?
Despite obviously and highly public moves of desperation, Microsoft, Amazon, and Google are falling further behind Apple and are well behind Samsung in the gadget races.
Microsoft’s Windows Phone sales have been alarmingly anemic, and have done little to prop up money losing Nokia and HTC, two former giants in smart phone manufacturing. The Microsoft Surface has generated as much negative reviews as any product since the ill-fated Zune media player. Microsoft has elected not to discuss sales unit numbers of either Windows Phone or Surface tablets.
Amazon’s entry into Apple’s arena is streaming content and the Kindle line of tablets. Amazon says the devices are sold at cost, and the company plans to make a profit on selling books, music, movies, TV shows, and apps. How’s that working out so far? Amazon has elected not to disclose sales unit numbers of any Kindle product.
Google was quick to follow Apple’s iPhone in 2007 with Android OS, a smart phone operating system which looks and feels like iOS, but features many obviously stolen design and navigation features from other products. Android OS also runs on a number of tablet devices, including the Google branded Nexus line. How’s that working out so far? Google has elected not to disclose sales unit numbers, but touts the Android OS installed base.
All those Android device owner eyeballs should be worth something to Google. So far, they are not worth anything to anyone except Samsung (another blatant ripoff artist). It has been estimated that Google has spent nearly $20-billion on the Android effort (patents, Motorola, development), and has yet to develop a positive cash flow, so it’s unlikely Google will ever get a return on the investment.
Apple, on the other hand, makes money everywhere. Macs, iPhones, iPads, applications, online stores, and retail stores.
Apple operates a money making machine the likes of which have never been seen outside of the oil industry. Microsoft, Amazon, and Google have one thing in common with their efforts to compete against Apple.
They operate cost centers. All are losing money in this battle and there’s no sign of a turnaround.
That brings to to apps. For better or worse, applications and content drive hardware sales. And the apps associated with the iPhone and iPad are in a different class– both qualitatively and quantitatively– than those for Windows Phone or Surface, Nexus 4, 7 or 10 (or any Android OS device), or Amazon Kindle. Apps for the iPhone are generally inexpensive (relative to Mac or Windows PC apps), yet sell in sufficient quantity to generate substantial revenue for a large number of app developers.
What of apps for Microsoft Windows Phone, Android OS devices, or Amazon Kindle devices? This just ins’t a fair comparison. Without a growing and improving collection of apps to attract customers, all three companies’ products keep customers in a ghetto of capability.
This is unlikely to change soon.