Apple Must Think Differently to Slow the Android Invasion

| Particle Debris

For new readers to Particle Debris, I usually start with a preamble where I discuss something of interest to me, often triggered by the week's events. Then I follow with a section, "Tech News Debris," that highlights some of the offbeat but deeper technical news that didn't make the TMO headlines. Or sometimes just really good food for thought.

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Apple is now faced with the prospect of an inflection point. At some point, perhaps as early as mid 2013, the shipments of Android devices will surpass those of iPads.

We shouldn't fool ourselves here. Apple has made snarky comments about how these Android tablets don't seem to be making an appearance on the Web and that the iPad commands 91 percent of Web traffic originating from tablets.

I see that more as a marketing comment than a technical observation about the popularity of products. The fact is, Apple's competitors are making solid, quality tablets now and backing them with ecosystems. The Kindle Fire HD is gaining ground, along with Samsung tablets, and the aggregate of all Android tablets is evolving to eventually become dominate. That includes not just the process of catching up but also thinking about moving forward faster. This is objective reality. It doesn't take a physicist to figure out what the competition is doing.

Is there anything Apple can do about that? Is there anything Apple wants to do about that?

Marketing - Fighting the Wrong War

Apple's iPad ads started out fine. Those soft ads depicted the glories of using a tablet and appealed to PC owners. But nowadays, we're in the Post-PC era and the emerging war is with the other tablet competitors. Yet Apple isn't making the case for the iPad in its current commercials. The company isn't clearly differentiating why the iPad is the better choice. Instead, Apple is still running the warm fuzzy ads designed to lure people away from their PCs while the real threat comes from Android.

Perhaps it's time for a revival, "Get an Pad" commercials with John Hodgman and Justin Long. That won't happen, but it characterizes the position Apple is in, just like it was against the PC of old.

So far Apple hasn't done anything in its marketing to make the case that the iPad is the better choice, even if it costs a little more. As a result, down the road, the iPad will end up being the premium tablet product with a corresponding market share. Who would love the idea of Apple targeting 10 percent of the 2016 tablet market?

Jeff Or with ABI Research summed up one reason why Apple stock is descending. "With the introduction of a smaller, lower-cost iPad Mini, Apple has acknowledged Android's beachhead of 7-inch-class tablets, though at the same time, it has failed to deliver a knock-out punch through innovation, pricing, and availability during the most critical selling period of the year."

Apple  is fighting the wrong war with the wrong approach.

Feature Parity

Tablet customers are not generally highly technical. They're fleeing from the tyranny of their PCs and they just want to browse, shop, email, Facebook (if that's a verb) tweet, and play games. All the prospective tablets look a lot alike.

When they look at the specs charts that all the websites love to run, including TMO, one thing becomes clear. Apple's competitors are keen to differentiate themselves from Apple by adding notable features. The Kindle Fire HD advertises Dolby sound from twin speakers. The Nexus tablets have NFC and Google Wallet. And stereo speakers facing the user. The Nook HD has multiple login accounts for family members and better resolution than the iPad mini. (But all is not well with the Nook.)

Customers can't help but draw the conclusion that a more aggressive feature set means that the manufacturer is providing a more complete tablet experience and is more technologically agressive. Check out this clever ad from Amazon to see what I mean. Customers just assume that there is OS and app parity because of the hardware similarities. That's not the case, but it's the mistaken conclusion customers are led to draw.

Some of those new Android tablet customers soon become disappointed and put the device in a bottom [desk] drawer, as Tim Cook suggested. Some discover to their dismay that the selection of full screen apps is so much more limited than for the iPad, with 275,000 native apps. Some customers discover that the Twitter and browser clients are awful. Some tablets get returned. But it's not a good idea to single out those events as a rationalization for the iPad's superiority and inevitable, perpetual dominance. Many tablet customers are all too happy to save some money and live with a simple consumer tablet. In their minds, if simple and cheap is good, simpler and cheaper is better.

Getting Out Front Again

Apple got out in front with the iPad in 2010 and embarrassed the technical community. In 2013, the iPad mini doesn't have the best specs, and it's not the least expensive choice. Plus, iOS has its share of notable issues, including maps and timekeeping now and in the past. It's the best overall choice however, but Apple, it seems to me, hasn't been able to shift gears and articulate to the buying public why that's so.

Left to their own, customers are making choices dictated by massive efforts to cash in on Apple's innovation (patent wars) and massive spending to develop hardware that can leverage competing ecosystems. Apple's lack of aggressive, hard-nosed marketing and conservative approach to features, is just aiding the invasion.

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Tech News Debris

Speaking of being technologically challenged, USA Today had a great article over the holidays about how parents are struggling to keep up with their kids in high tech. Worse, parents are losing touch with how the digital world is influencing their kids. This is food for thought: "Bridge the digital gap with your kids."

Sometimes, to make progress in technical thinking, you have to go out on a limb. Even be a little foolish. But then a cool thing happens. The far reaching idea is absorbed and then re-imagined, re-integrated by others, and true progress is made. Here's one of those articles, by Mike Elgan, one that should be read in that frame of mind. "What If the Next iPad, iMac, Business PC and Apple TV Are All One Device?"

Apple is not happy with Samsung. Apple has claimed that Samsung tablets and smartphones infringe on Apple patents, and Apple won a huge court case against Samsung for infringement. But Samsung will be penalized even more because Apple is transferring most if not all its semiconductor business away from Samsung. Here are the details, along with charts that drive the point home. "Apple Is Blasting A Multibillion-Dollar Hole In Samsung's Business."

One of the themes I'm seeing for 2013, at least in the tech community is the idea of decluttering one's life. The Internet can be all consuming, and wasting your time signing up for all these services, with attendant user names and passwords, and account maintenance, makes for a cluttered, distracted life. That in turn, leads to external intrusions on our lives through marketing (incessant nagging if you will). Instead, we all have ambitions to create something great, and we can't do that amidst the clutter. Here are some year-end thoughts that tell those stories in various ways.

Finally, privacy issues continue to plague us. In lieu of really good behavior by merchants, a pull back by the bad guys, and sound, comprehensive government legislation, it falls on us to secure our privacy. Here are some thoughts to kick off the year "3 Big Privacy Issues Of 2013 - And What You Can Do About Them."

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Battleship photo via Shutterstock.

Richard Feynman Think Different image via Apple.

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Comments

mjtomlin

Of course as more and more companies push tablets onto the market Apple’s share is going to come down. The real issue will arise when the number of iPad’s being sold starts to decline. That hasn’t happened and likely won’t in the near future.

There’s a reason Android took off in the smart phone market - it was a halfway decent smart phone operating system and freely licensable by OEMs. Android is not an optimal tablet operating system and when they tried to make a tablet OS, it failed miserably. The specs of those devices were higher then the iPad at the time, but they still didn’t sell, nor will they now.

The only real threat will come when a single company starts down a path that Apple began a decade ago in building a viable ecosystem. There are just too many companies with a vested interest in seeing the iOS platform flourish. This includes Google and Amazon. No one is really invested in Android other than Google - OEMs will switch to the next great mobile OS as soon as one surfaces. “Android” is merely a buzzword soon to become synonymous with cheap phones.

amergin

Apple was in a very similiar position a couple of decades ago and blew it then too… but survived and then thrived again. Perhaps Steve Jobs was bright enough to understand that all things move in cycles and that Apple’s meteoric rise could only be followed by a fall. And that the best thing to do was to plan for that, to put a second John Sculley in charge, to scupper all short term development ideas and make Apple once more an elitist company selling to a dwindling minority. In another twenty years we might once more see the great innovator take over the world’s stage.

Darwin

Where is the threat to Apple from Android?
Android numbers come from people who use cheap or free Android phones and never install apps, use services or browse the web.  Also from Googles fuzzy math about Android activations numbers.
The carriers prefer to sell Android phones because they cost less, they get spiffs, and they can load them up with their logos and bloatware.
Most importantly nobody is making money from Android except Samsung and they won’t say how much they are making.  All the other manufacturers are losing millions of dollars for years now making Android devices.  Google makes more money from Google services on iOS than on Android devices!
Developer and accessory revenues are a tiny fraction of iOS.
Tablets are barely sold for Android except for the Nexus 7 which sells at cost in order to get someone, anyone, to buy and Android tablet and not return it.
Corporations are not buying Android because it is very insecure, including from Google snooping, and there are no mass management tools.
Apple makes almost all the profits in mobile while everyone else is losing money.
Where sis the threat from Android?  It’s laughable unless you believe market share is better than actually making a profit.

 

AlfieJr

i’m sorry, JM. it is not about Apple fighting the wrong war. it is about you having the wrong fantasy/metaphor.

Apple is not engaged in some portable device market share game of Risk where the goal is to conquer (or just dominate) the world. Apple is just trying to consistently sell as much quality hardware as it can make at high margins. that is its core business plan. and it is going to stay that way. it will soon make Apple the biggest single company in the world. this is bad?

cheap smartphones and tablets with all kinds of OS’s will flood the world during this decade. it won’t just be Android stuff. there will be massive OS fragmentation, and nothing can stop that.

but to suggest that Apple’s top-of-the-line portable products will somehow be marginalized down to a tiny market share, as happened once in the ‘90’s with desktop PC’s, is preposterous. right now it has the largest installed base of its products ever in its history, and continues to sell as much hardware as it can make. this fact has firmly enmeshed hundreds of millions of users in the Apple ecosystem - that famous walled garden - where they will generally stay indefinitely due to inertia if not pleasure.

that is not to say Apple doesn’t need to keep up with the Jones’ and incorporate its versions of Android’s most useful features in iOS. which i assume they will (i think that is really why Forstall is gone), since they generally have over the years.

but your hand wringing about pricing and bells and whistles vs. Android is just plain silly. get a grip.

dave

Yes, Apple must switch from expensive, high-margin devices that they can barely make enough of to cheap, low-margin devices that they definitely won’t be able to make enough of, because while in the past, Apple not doing what the rest of the industry is doing has been wildly successful and profitable, this is a completely new situation and Apple will go out of business if they don’t follow along with what everybody else is doing.

And they should send me a pony for helping them.

AdamC

So many analysts had and have been telling Apple what to do such as netbooks, mini iPhone, iWatch, iTV etc.
I think it would be great to let Apple do what is right than to tell them what to do.
The right thing vs what we think is right.

Lancashire-Witch

Apple will never persuade the “specs & price” consumer to move towards Apple products. if it could it would have won the PC wars. Furthermore, in the post-PC era we have people buying tablets in the same way they buy toasters and food processors. A friend recently told me he had decided to buy (after 5 minutes deliberation)  a Samsung iPad. Sheesh!

mjtomlin

@amergin: “Apple was in a very similiar position a couple of decades ago and blew it then too”

Apple was not in a similar situation with the Macintosh. In fact, they are in the same situation Microsoft was in at that time; the DOS platform was so large Microsoft was able to leverage it and help push Windows passed the Mac and to this day is still the dominant operating system. Apple has done the same with iPod+iTunes+iOS to help catapult the iPad to the market leader. Furthermore, there are several multi-billion dollar markets built around the iOS platform, making it an economy all its own. If it were to fail or flounder, a lot of other companies would as well.

No one is making money off Android. No one wants to invest in it - they just grab it because it’s there for the taking. Google makes all its money from search/advertising and Android has nothing to do with that.

On the other hand, Microsoft was raking in the cash with Windows. Not only that they were using the platform to make even more money by selling fairly expensive back-end software and services to support the client side.

amergin

With all due respect @mjtomlin, if you want to use that argument then Apple had the first advantage when they were selling the Apple II which should then have given the leg up with Macintosh. In reality, Microsoft sold their DOS and then Windows operating systems to any and all comers where Apple retained sole rights and tied it to their hardware. With the iPod, then the iPhone, then the iPad, Apple has had products that are far ahead of the field (product including the device and ecosystem). Unless the current day Apple can come up with a product that leaves the others in the dust again we can only look forward to a dwindling market share and more time in the courts protecting the equivalent of ‘look and feel’. If Steve had left Jonathan Ive in charge (if he would have accepted) then we might imagine a new ‘must have’ toy that redefines an existing market or creates a new one, with Jonathan under the control of a suit I can’t quite see that happening.

mjtomlin

@amergin: Apple had no advantage with the Apple II other than brand name. The Macintosh was a completely new computer and platform. The Apple II hardware already on the market and in user’s hands could not run Macintosh software.

When I said Microsoft leveraged DOS, I meant they originally built Windows on top of DOS, which means it could run on hardware that users already owned. There were millions and millions of Windows capable machines already on the market when Windows was introduced. So it was much cheaper for corporations to adopt it over having to buy all new hardware, i.e. Macintosh.

The advantage Microsoft had over Apple then, was that it was solely a software company, it was in their best interest to make their software compatible with as much hardware as possible.


The current market is a consumer market, meaning individuals make their own decisions not IT departments that buy in mass quantities. Consumers aren’t so much interested with interoperability and licensing fees as corporations are. This is why the iPod was so wildly successful - it didn’t have to be compatible with other music players, it just had to play music. Same with the iPad, it doesn’t have to be compatible with other tablets, it just needs to be a general purpose computer that benefits the individual, not an entire corporation.

However, the iPad is making in roads into corporations and once they settle on a platform it is much harder for them to move to something new than it is for an individual.

These are different times and much different markets than what we had in the late 80’s - early 90’s.

MelIal

John,
Why are you so concerned with Android’s large unit sales marketshare?

Why is this any different than back in 2007 when Symbian had 60% marketshare of the smartphone market?

In both cases, that large marketshare did not and has not resulted in a parallel increase in any of the metrics that actually matter.

Cue my usual list of all the metrics that are the reason why companies aim for large marketshare: iOS completely dominates Android with 80% manufacturer profitshare (Morgan Keegan) 88% mobile e-commerce share (IBM), 91% tablet web browser share (Strategy Aalytics), 430% the developer revenue (Distimo), 4x the number of developers (AppStore HQ), 97.3% business tablet activations (Good Technology), 73.9% business smartphone activations (Good), etc etc.

As you can see, it is Apple and the iOS ecosystem that is actually bringing home the bacon in all these areas.

MelIal

Mind you, I should add that Apple is capturing a much larger unit sales marketshare in many key markets around the world. Flurry reports that the USA has the highest number of iOS and Android devices in the world with a massive 165 million active devices while China is the next largest with 128 million.

The third largest is the UK with a much smaller 31 million Android & iOS devices and every other nation is lower than that, so it is apparent that the USA and China are by far the most important nations on Earth when it comes to these post-PC platforms.

Now, what is happening in those two nations? Why Apple is ascendent that is what.

Kantar reports that the iPhone has now captured 53% smartphone marketshare in the USA (ComScore’s recent numbers are installed base of subscribers, not new phone sales) and Apple sold 2 million iPhone 5’s in China the first weekend which works out at twice the proportion per 3G subscriber as the USA.

Analasys International reports that the iPad had a massive 71% marketshare in China even before the release of the iPad mini and indications are that the iPad mini is selling like hotcakes worldwide.

As such, it is apparent that iOS is doing far better even in raw numbers than many would have you believe.

wab95

John:

I think your assessment of Apple’s marketing strategy, as deployed thus far, as ‘fighting the wrong war’ is spot on. Apple need to make the case to the personal consumer and enterprise alike why there is nothing else like the iPad, and to make direct comparisons, even in the context of humour as with the ‘Get a Mac’ adverts, with their competitors’ devices and supportive services. It would further be helpful to feature real people doing what they do in their respective professions, as they used to do with science and the Mac, on their website. Having now looked at the competition for use of devices in developing countries, and having no choice but to go with Android tablets in some of these, I can tell you that, in most cases, the Android tablets are non-competitive globally.

The ability, furthermore, to synchronise and manage both one’s professional files and apps, and my personal ones, is huge, and is not to be underestimated. After all, the ability to do simple tasks like play one’s music while drafting a presentation is cathartic and enhances productivity, as is the ability to take a break and read a novel or video chat with family and friends while stranded at some far-flung airport.

The smooth interplay, facilitated by Apple’s ecosystem, between personal and professional activities on the iPad is an asset that Apple need to trumpet and underscore to consumers.

I also strongly second your pick of ‘Bridging the gap with your kids’. This has substantial safety and socialisation implications for children that many parents, some of whom I have had to counsel, is a challenge. One may choose not to engage certain social media on a personal level, for example, but to ignore it altogether if you have kids, and they use these, is an invitation to crises.

Well spotted.

kermit4karate

I hate to say it, but during the 2000s, people just got accustomed to seeing Apple release revolutionary features and products on a regular basis. I think with all this competition out there now, evolutionary products just aren’t going to cut it long-term.

Apple needs to get back to being surprisingly innovative again on a large scale, like they were when Steve Jobs was around, or they better just get used to watching a shrinking market capitalization and continued lost market share.

Bazz

In the Video wars of the 70’s (?) between VHS and Beta I went to a shop to help buy a player for a friend and although I loved Beta I advised my friend to buy VHS.
Why?
Because the VHS wall was full of choices - all clones - but Beta had 2 only. And the dumb public only see choice even if the product is a copy of another.

Same with Apple and Android today.
The public are not geeks and buy on eyecandy and perceved variety.

Apple will lose to an inferior product. And it will be the PC 80’s and 90s again.

Bazz

I gave ‘Stevee Baby’ the solution to ubiquitous Apple produces that companies and TV presenters hate and hide the Apple logo of their Macs or iPads in an email some years ago.

If they don’t want Apple’s logo then Apple should put their logo in its place. Those computers are even more expensive. Mold manufacture costs and minimum purchase say 100. And a great resale value! AND a great entrance to corporate use—get them where they’re sensitive—their egos!

I also said he should put the Rolls Royce logo on iPads to be part of that car’s liverage.

Apple’s co-design with BMW would be the perfect place and time to have “Apple Inside” or “iOS iNside” on a BMW logo-ed removable iPad mini integrated seamlessly —car & computer. And another triumph! Oh and petrol-heads will be able to tune and diagnose their cars via their iPhone – SICK!!

The beauty is that consumers will have choice—BMW or GM // ABC or NBC. As Microsoft showed with PCs and Google is doing with Android now—HP or Dell // Motorola or Samsung!  Its a non choice of OS but people believe that it was a choice because the box is different!

With one Apple now as always there are only two choices – have or have not.

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