Wednesday, April 6, 2011

Google (GOOG) Vs. Apple (AAPL) in Smartphone War

There is no doubt Google's (NASDAQ:GOOG) Android mobile platform is winning the smartphone war at this time, at least as it relates to market share, as the company gained a huge 7 percent in market share over the last three months, according to Comscore.

Google Android now has a 33 percent market share, with Research In Motion (Nasdaq:RIMM), maker of the BlackBerry, coming in second with 28.9 percent, followed by Apple (Nasdaq:AAPL) with 25.2 percent. Microsoft (Nasdaq:MSFT) is in fourth with 7.7 percent share.

"The Android gains matter because technology platform markets tend to standardize around a single dominant platform (see Windows in PCs, Facebook in social, Google in search)," noted tech analyst Henry Blodget.

"And the more dominant the platform becomes, the more valuable it becomes and the harder it becomes to dislodge. The network effect kicks in, and developers building products designed to work with the platform devote more and more of their energy to the platform. The reward for building and working with other platforms, meanwhile, drops, and gradually developers stop developing for them."

Some will probably note that are bullish on Apple that they carry the premium segment of the smartphone market, meaning they are able to compete on price and wider margins, generating more earnings.

But that could change if Android starts to carry the day in an even bigger way, and also the response to iPhone 5 when it eventually is released. That has given some opportunity to Google and other rivals, which could hurt Apple over time.

At this time the growing consensus is Google will gain market share in the mobile market, and that will put downward pressure on Apple.

Google was trading at $573.70, gaining $4.61, or 0.81 percent, as of 1:14 PM EDT. Apple was trading at $338.75, falling $0.14, or 0.04 percent.

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