Apple Has Huge Quarter — But There’s A Big Concern On The Horizon - Techist - Tech Forum

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Old 04-22-2011, 03:42 AM   #1 (permalink)
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Default Apple Has Huge Quarter — But There’s A Big Concern On The Horizon

Apple reported another strong quarter yesterday. Sales of Macs and iPhones were tremendous. The only potential concern was weak iPad sales, but this appears to have been due to Apple's inability to make more iPads, not a lack of demand.

The strong iPhone sales temporarily banished concerns that Apple is experiencing a repeat of the 1990s -- in which Apple introduces a new integrated software and hardware product that blows everyone away, only to see its industry lead disappear as hardware vendors compete against it by adopting a common software platform.

In the 1990s, the product that got eclipsed was the Mac, and Apple almost went bust. Now, the product is the iPhone, which has taken the industry by storm but recently lost its market-share lead to Google's Android platform.

The iPhone now accounts for half of Apple's revenue. And, in short, Apple is fighting a similar war to the one it fought and lost in the 1990s. This time, Google is playing the role Microsoft played the last time around. And Android has come out of nowhere to grab the industry lead.

The good news for Apple fans is that there are several key differences between this war and the last one.

First, Apple has learned something from the 1990s, which is that it needs to sell its products at the same price (or better) than the competition. Last time around, Macs were consistently more expensive than PCs, and most consumers and businesses opted to save money rather than shelling out for the "premium" product.

Second, Android is a much more fragmented platform than Microsoft's Windows ever was. Instead of iPhone vs. Android, it's really the iPhone vs. many flavors of Android. And because the advantage of having more market share is that developers can develop for a single platform and reach more people, the fragmentation can be a problem.

Lastly, Apple's platform extends beyond the iPhone to iPods and iPads as well. When you include all of these devices in the "market share" calculation, Apple still maintains a market-share lead over Android.

So, Apple fans should certainly be concerned that the history we saw in the 1990s will repeat itself this time around. But there are also several factors that suggest it will be different this time.
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