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In a World of Androids, Apple Walks Tall

In a World of Androids, Apple Walks Tall

The Android world is exploding, and its market share may surpass that of iOS quite soon. Despite this, Apple's ability to succeed in key areas give investors much hope. In the tablet field, Research In Motion has become the latest challenger to iPad's throne, yet critics gave its PlayBook a generally cold reception.

By Richard Adhikari MacNewsWorld ECT News Network
04/19/11 5:00 AM PT

Android's charging into the mobile OS ring like a bull on steroids.

Google has announced that its Android Market is going great guns and that Android smartphones are being activated in droves.

Further, Gartner has predicted that the Android OS will increase its share of the worldwide media tablet scene to 39 percent in 2015. Further, it has predicted that Android will become the most popular smartphone operating system worldwide by the end of this year and will account for 49 percent of the smartphone market by 2012.

However, Apple may be able to shrug off all these concerns.

Android and Apple's iOS are taking a bigger share of mobile games, Flurry Analytics has reported. Apple is taking the lead here.

Google is stumbling, with news that its talks with music labels as it tries to develop its own counter to Apple's iTunes are going nowhere.

In another plus for Apple, the Research In Motion PlayBook was given a cool welcome by critics, many of whom remarked that it didn't feel like a complete product.

Meanwhile, there are reports that Apple may further beef up its presence in the cloud, and strong iPad 2 sales have analysts salivating.

The March of the Little Green Men

During its earnings call Thursday, Google officials remarked that more than 3 billion apps have been downloaded from the Android Market so far, and about 350,000 Android smartphones are being activated every day.

Taken together, Gartner's forecasts essentially mean that Android will soon rule the mobile market, consisting of both smartphones and tablets, Carolina Milanesi, a research vice president at the analyst firm, told MacNewsWorld.

"The smartphone market is the main contributor to the overall numbers," Milanesi explained.

It's Going to Be All Fun and Games

Android and iOS together increased their share of the U.S. video game market from 5 percent to 8 percent between 2009 and 2010, Flurry Analytics stated. Translated into cash, this means they raked in more than US$800 million in 2010 as compared to about $500 million in 2009, Flurry said.

The bulk of this revenue was generated by games for the iPhone, and Flurry pointed out that smartphone and tablet game revenue surpassed that of PC games in the U.S. for the first time in 2010.

Over 2011, Flurry expects to see continued and significant smart-device game growth, fueled by the iPad 2, the iPhone's availability on Verizon Wireless' network, the expected release of the iPhone 5, a "relentless expansion" of Android devices by leading OEMs across all major U.S. carriers, and Google's enablement of in-app purchase billing.

However, over the next two years, Flurry does not see Android surpassing iOS in game revenue, Peter Farago, its vice president of marketing, told MacNewsWorld.

"There are other underlying factors that allow iOS to remain a better business opportunity than just having great hardware," Farrago explained. These include Apple's having access to the credit cards of its more than 150 million customers, a one-click billing system, and more content than the Android Market, he added.

Also, the installed base for iOS is "still formidable," and is "well ahead of Android" in terms of total units in the market, Farago pointed out.

The Enemy of My Enemy Is My Friend

Google has also reportedly hit a roadblock in its attempts to set up an online music service to rival iTunes.

The online search giant's negotiations with the major music labels have broken down, AllThingsD reported.

Amazon, which launched its own cloud streaming service recently, has locked horns with the music labels too and has sent a letter that, in effect, says it doesn't need to negotiate for licenses, Hypebot reports.

All that's good news for Apple because it means challengers to its iTunes service may vanish in a cloud of acrimony.

The Preemie PlayBook Gets Panned

Out in the tablet market, the long-awaited RIM Playbook was finally launched Thursday, and several reviewers regarded it as half-baked. The device lacks native email, a contacts database, a calendar, a chat application and both 3G and 4G capabilities. In order to use those abilities, the user must link it using a BlackBerry smartphone.

Further, the device only has access to about 3,000 applications, compared to the iPad's more than 160,000.

The criticism spurred RIM CEO Jim Balsillie to do the media rounds in defense of the device.

Still, a preemie tablet is no competition to the iPad 2, which is still selling like hot cakes.

"I'm on the train back to Boston from the RIM Playbook event," Carl Howe, Yankee Group's director of anywhere consumer research, told MacNewsWorld."At the moment my PlayBook is tethered to my iPhone because RIM hasn't yet released the BlackBerry tether app. That about sums up the PlayBook experience so far: Incomplete," Howe added.

Apple's Own Plus Points

Sales of the iPad 2 remain strong.

"I currently conservatively forecast Apple will sell 30 million iPads in calendar 2011, but I suspect the real number will be closer to 35 million," Brian Marshall, an analyst at Gleacher, told MacNewsWorld.

The iPhone and the iPad collectively represent about 70 percent of Apple's profits now, and Marshall expects this figure to continue to rise.

Meanwhile, there are reports that Apple is looking to expand its presence in the cloud. These reports are based on speculation that it has hired Kevin Timmons, the general manager of Microsoft's Datacenter Service.

However, cloud services will only "have a small impact" on Apple's share prices over time, Gleacher's Marshall remarked."It's more of an additional feature to fuel the ecosystem," he elaborated.

Apple did not respond to requests for comment by press time.

AAPL gained 1.34 percent Monday to close at $331.85, despite a painful day on Wall Street that knocked the Dow and NASDAQ down by 1.14 and 1.06 percent, respectively.


MacNewsWorld's Cupertino Business Report will return to its regular Wednesday slot on May 4, 2011.


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