Google chairman Eric Schmidt put it succinctly, his company's Android platform is beating Apple's iPhone. In an interview with Bloomberg, Mr. Schmidt once again likened the fight between Android and iPhone to the Windows vs. Mac platform, and said that his company is "clearly" winning.
“This is a huge platform change; this is of the scale of 20 years ago—Microsoft versus Apple,” Mr. Schmidt said. “We’re winning that war pretty clearly now.”
Google Is Clearly Winning the War
It's a bunch of nonsense, however; like everything Mr. Schmidt says, this statement tells only part of the story, the part that tells Google's side of the story. That's his job, of course, but my job is putting the tech world in context, and in this case I think both sides of the story are interesting, relevant, and, more importantly, not mutually exclusive.
The Background
Mr. Schmidt gave an hour long interview to Bloomberg about a variety of issues. Check out the full article for the other topics. One of the things he talked about was the September quarter, when Android claimed 72 percent of the smartphone market, according to Gartner, compared to 14 percent for Apple.
Ouch, Looks like Apple is taking a whoopin', but is the iPhone maker "losing?" Not by a long shot, and Mr. Schmidt is being utterly disingenuous to suggest otherwise. That's because—and I've been saying this for year—Apple and Google aren't even playing the same game.
Apples & Oranges
To wit: Look at another comment from Mr. Schmidt.
“The core strategy is to make a bigger pie,” he said. “We will end up with a not perfectly controlled and not perfectly managed bigger pie by virtue of open systems.”
Hooray for open systems that are poorly managed, but bigger, because everyone knows that bigger is better and MOAR is MOAR BETTEREST!
I am doing my utmost to not go into a rant about the craptacular awfulness that open systems inevitably lead to (you know, kind of like Windows), but there is something utterly fundamental about Mr. Schmidt's comment. Google doesn't care about the quality of its platform.
There is absolutely no need for the company to do so, because all Google cares about is having market share for a platform that it can mine for user data, user habits, user searches, user Web use, user app use, and even user movement via Google Maps. Google will then slice, dice, and julienne that data to further perfect its profile of we, the user, so that it can then sell ads based on that profile.
And, Google, under Mr. Schmidt's leadership when he was CEO, was smart enough to realize that Apple's iPhone would own the market if Google didn't step in with a viable alternative. More importantly, Google was smart enough to realize that Apple would own all that lovely user data and not give Google access to it.
All Google has to be concerned about is making sure that Android is good enough and free enough to capture the budget end of the market. If you think I'm being unfair, look at Mr. Schmidt's comment about using legal tax shelters to keep from paying taxes all over the world.
“It’s called capitalism,” he said. “We are proudly capitalistic. I’m not confused about this.”
In the meanwhile, Apple is fighting a separate battle, one based on hardware profits. Apple wants share, sure, but Apple's business model is to sell premium hardware at a premium price, and to offer customers a viable whole widget ecoystem that will keep them buying more Apple hardware.
The Real Losers
These are two completely unrelated fights. As long as Apple's platform is big enough to be self-sustaining, and as long as Apple is selling all of the iPhones it can make, Apple is wining its fight.
See how neat that is? Apple can win and Google can win, and ne'er the twain shall meet on the field of battle. The real losers in their two wars are every other platform. I'm looking at you, RIM, and you, Microsoft, and neither company will be able to take solace that they're being beaten by two separate enemies fighting two separate wars with rules that those competitors have defined and exploited.
Mr. Schmidt is a shrewd man. He is intelligent, no, he's brilliant. He is an extraordinary businessman, and he is a savvy communicator most of the time*. When it comes to Android vs. iOS, he has worked overtime to spin the battle, and loves to proclaim victory, even while Apple continues to rake in record profits.
*There was that one thing: “We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”
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