Google’s Strategy: My Simplistic View

  • Posted: 26 May 2010 01:17 PM #31

    jeffi - 25 May 2010 05:26 AM

    ...
      Apple:
          -Apple can continue to generate massive profits and growth by producing the best combination of hardware and software at a premium price as well as leading in innovation. Apple has/ had successfully beaten MSFT, and all other companies in the smartphone space because of the application store. (Ironically, in the same way that Microsoft had previously beat Apple on the desktop). Unfortunately, Apple?s proprietary OS strategy cannot win market share against Android?s free OS without a clear advantage in applications. Unfortunately, Apple?s first mover advantage was not fast enough.

    ...

    It would be good to see both companies experience explosive growth without having to beat the other into the ground.

    For all we know, Apple is probably aiming for the magical 1 billion mark in iPad / Tablet market share in 5 to 8 years, according to Asymco’s analysis. Read also, Will Apple rule the iPad market? (part II).

    The market’s likely big enough to accommodate both Apple and Google, plus it remains to be seen whether the eventual market share in absolute numbers is a reliable predictor of stock price / company value / market capitalization.

         
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    Posted: 26 May 2010 02:12 PM #32

    Mace - 26 May 2010 03:32 PM

    What happen when those currently twenty something took over top management?

    That could very likely go against the cloud. The execs of today have learned the hard way about data security. The twenty-somethings of today grew up with data security. I would not be surprised to see them even less likely to assume that data on some genericcloudstorage.com site would be secure.

    However I should add one disclaimer: I have never been a fan of Cloud Storage. I thought it was a bad idea when I first heard about it in the earliest 2000s and my opinion hasn’t changed. This is probably colouring my view of the issue.

    [ Edited: 26 May 2010 02:14 PM by geoduck ]

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    Posted: 27 May 2010 09:23 AM #33

    I have to agree with your title for this thread. From Google dictionary:

    simplistic   /s?mpl’?st?k/
    A simplistic view or interpretation of something makes it seem much simpler than it really is.

    Overly simple; In a manner that simplifies the issue to a degree where many important details are lost


    It’s obvious you really got into what you wrote but, no offence intended, your post isn’t a usable competitive business or financial analysis and tells me nothing about how likely Google is to either continue to generate revenue growth or deserve a growing share value.

    GOOG: All this for about 14 times next years earnings (net of cash, YouTube and the Android/ Chrome platforms)!

    :-?  Doesn’t work for me.

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  • Posted: 27 May 2010 10:16 AM #34

    relentlessFocus - 27 May 2010 12:23 PM

    I have to agree with your title for this thread. From Google dictionary:

    simplistic   /s?mpl’?st?k/
    A simplistic view or interpretation of something makes it seem much simpler than it really is.

    Overly simple; In a manner that simplifies the issue to a degree where many important details are lost


    It’s obvious you really got into what you wrote but, no offence intended, your post isn’t a usable competitive business or financial analysis and tells me nothing about how likely Google is to either continue to generate revenue growth or deserve a growing share value.

    GOOG: All this for about 14 times next years earnings (net of cash, YouTube and the Android/ Chrome platforms)!

    :-?  Doesn’t work for me.

    No offense taken as I meant it literally. I see a different and bright future unfolding for Google as I believe their broad strategy is sound. I presented my views so that they could be either expanded upon or disputed. So far, I have not read a single post that leads me to believe that the future won’t unfold well for Google (no offense intended) smile I encourage a continued discourse…

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    Posted: 27 May 2010 10:46 AM #35

    Just saw this web site, an open source effort to keep track of Android Fragmentation

    Android is open for apps. If you write an app once, it should run on all Android devices, in theory. In practise Android application developers are facing an increasing fragementation problem caused by different OS versions, hardware form factors, OEM specifics, device types (car computers, set top boxes, routers, ..), etc. Building apps that run on all (or at least most) Android devices is getting extremely difficult and expensive, thus the reach of apps is significantly reduced. The fragmentation problem is just starting and most certainly it is going to grow rapidly as more and more devices, firmware images, device types and OS version will enter the market. Fact is that fragmentation is there and that will be there always. What can we do about it? Embrace it!

         
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    Posted: 27 May 2010 10:55 AM #36

    pats - 27 May 2010 01:46 PM

    Just saw this web site, an open source effort to keep track of Android Fragmentation

    Great find pats, I’ve been looking at user comments on Android sites to get a sense of what frustrations Android users are having. This site is a convenient aggregator.

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    Posted: 27 May 2010 02:41 PM #37

    relentlessFocus - 27 May 2010 01:55 PM
    pats - 27 May 2010 01:46 PM

    Just saw this web site, an open source effort to keep track of Android Fragmentation

    Great find pats, I’ve been looking at user comments on Android sites to get a sense of what frustrations Android users are having. This site is a convenient aggregator.

    Will you be summarizing those comments in your blog?  Good and bad of fragmentation and implications for Apple business.

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    Posted: 27 May 2010 08:45 PM #38

    Mace, I’d summarise as follows
    1) the problems around fragmentation are real but not yet significant enough to cause a general product backlash. Whether this will change I’m not sure. I would think the bigger problem is not a consumer one but a manufacturing one of product differentiation when so many competitors are running the exact same OS. But I don’t think even these problems will dent the sheer numbers of Android phones sold (more below).
    2) most people posting on the carrier forums are very happy with their Android phones, occasionally there are grumbles, particularly about battery life, incompatible apps, lack of OS finesse and then of course, updating.

    The implication for Apple from my POV is that they’re going to have to up their game.

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  • Posted: 28 May 2010 01:08 AM #39

    David Chin - 26 May 2010 04:17 PM
    jeffi - 25 May 2010 05:26 AM

    ...
      Apple:
          -Apple can continue to generate massive profits and growth by producing the best combination of hardware and software at a premium price as well as leading in innovation. Apple has/ had successfully beaten MSFT, and all other companies in the smartphone space because of the application store. (Ironically, in the same way that Microsoft had previously beat Apple on the desktop). Unfortunately, Apple?s proprietary OS strategy cannot win market share against Android?s free OS without a clear advantage in applications. Unfortunately, Apple?s first mover advantage was not fast enough.

    ...

    It would be good to see both companies experience explosive growth without having to beat the other into the ground.

    For all we know, Apple is probably aiming for the magical 1 billion mark in iPad / Tablet market share in 5 to 8 years, according to Asymco’s analysis. Read also, Will Apple rule the iPad market? (part II).

    The market’s likely big enough to accommodate both Apple and Google, plus it remains to be seen whether the eventual market share in absolute numbers is a reliable predictor of stock price / company value / market capitalization.

    David:

    Welcome to the AFB.

    Jeffi:

    This app battle isn’t over. Don’t look at the app stores as a battle for app numbers. It’s a battle for monetization turf and for now Apple is at least one year ahead. Comparatively the Android app store is lacking in substance no matter the number of apps. Revenue generated from app activity will remain decidedly in Apple’s favor for quite some time.

    That doesn’t make Google a “loser” in this contest but much of the Android market wasn’t and isn’t share Apple would have earned.

    Bottom line: Google is scared and is acting accordingly.

         
  • Posted: 28 May 2010 01:55 AM #40

    DawnTreader - 28 May 2010 04:08 AM
    David Chin - 26 May 2010 04:17 PM
    jeffi - 25 May 2010 05:26 AM

    ...
      Apple:
          -Apple can continue to generate massive profits and growth by producing the best combination of hardware and software at a premium price as well as leading in innovation. Apple has/ had successfully beaten MSFT, and all other companies in the smartphone space because of the application store. (Ironically, in the same way that Microsoft had previously beat Apple on the desktop). Unfortunately, Apple?s proprietary OS strategy cannot win market share against Android?s free OS without a clear advantage in applications. Unfortunately, Apple?s first mover advantage was not fast enough.

    ...


    Jeffi:

    This app battle isn’t over. Don’t look at the app stores as a battle for app numbers. It’s a battle for monetization turf and for now Apple is at least one year ahead. Comparatively the Android app store is lacking in substance no matter the number of apps. Revenue generated from app activity will remain decidedly in Apple’s favor for quite some time.

    That doesn’t make Google a “loser” in this contest but much of the Android market wasn’t and isn’t share Apple would have earned.

    Bottom line: Google is scared and is acting accordingly.


    DawnTreader: I don’t think Google is battling for monetization now, I think they’re battling for Android market share. Apple is all about monetization now. Apple is presently leading in the application space in both numbers and functionality/ usability. The problem is that even with the Iphone growing at 100% YOY, the Android platform has even more momentum. Unfortunately, this is likely to continue and accelerate. Google has a great hand to play with Android. I’d say they like the cards they’re holding. You think they’re scared. It reminds me of Intel’s CEO Andy Grove’s comment “Only the paranoid survive”. Maybe you’re confusing “scared” with paranoia?

    Please see the following article:

    http://www.fool.com/investing/high-growth/2010/05/27/deciphering-androids-smartphone-sales-figures.aspx

    “I think it’s safe to say that Android will soon be one of the biggest smartphone platforms on the planet, come what may. And by the end of this year, they are likely the second largest behind only Symbian.”

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  • Posted: 28 May 2010 03:15 AM #41

    jeffi - 28 May 2010 04:55 AM


    DawnTreader: I don’t think Google is battling for monetization now, I think they’re battling for Android market share. Apple is all about monetization now. Apple is presently leading in the application space in both numbers and functionality/ usability. The problem is that even with the Iphone growing at 100% YOY, the Android platform has even more momentum. Unfortunately, this is likely to continue and accelerate. Google has a great hand to play with Android. I’d say they like the cards they’re holding. You think they’re scared. It reminds me of Intel’s CEO Andy Grove’s comment “Only the paranoid survive”. Maybe you’re confusing “scared” with paranoia?

    Scared or paranoid? Scared often has a cause. Paranoia doesn’t need an external source.

    I say scared. Absent Apple’s presence in the market, Google wouldn’t be working so hard.

         
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    Posted: 28 May 2010 03:26 AM #42

    jeffi - 28 May 2010 04:55 AM

    ... Please see the following article:

    http://www.fool.com/investing/high-growth/2010/05/27/deciphering-androids-smartphone-sales-figures.aspx

    “I think it’s safe to say that Android will soon be one of the biggest smartphone platforms on the planet, come what may. And by the end of this year, they are likely the second largest behind only Symbian.”

    The author of the article is Tomi T. Ahonen from Communities Dominate Brands.  In this thread, Tomi forecasts the eventual demise of iPhone.

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  • Posted: 30 May 2010 04:05 AM #43

    jeffi - 26 May 2010 02:53 AM

    Please explain how Google is “vulnerable in cloud computing, search, and advertising”.

    Allow me to pick just one: Google makes all its money from search. Users of touch platform devices don’t search, they use apps.

    Search is dead.

         
  • Posted: 30 May 2010 08:14 AM #44

    Good post on Google Jeffi,

    I agree with your analysis in large part. [and also hold Google stock at present]

    The part I am undecided on the impact Facebook’s monetization strategies will have on Google.

    Any thoughts or good links on this?

         
  • Posted: 31 May 2010 01:05 PM #45

    deasys - 30 May 2010 07:05 AM
    jeffi - 26 May 2010 02:53 AM

    Please explain how Google is “vulnerable in cloud computing, search, and advertising”.

    Allow me to pick just one: Google makes all its money from search. Users of touch platform devices don’t search, they use apps.

    Search is dead.

    The future I see is one in which tablets dominate as a tool for web consumption. In this new world people will spend more of their time surfing the internet and and using text search. In other words, Google generates more advertising revenues and profits. I do not see a future in which applications replace web surfing. I see them as complimentary in that they will drive usage and popularity of the platform.

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