The perfect example dates back to the Mac vs. Windows wars which began in the latter part of the 20th century. The Mac is a personal computer. Windows is an operating system which runs on non-Apple personal computers. They are not the same but were compared and contrasted incessantly. Yet, here we are in the 21st century doing exactly the same thing.
Money Maker vs. Money Loser
The Mac vs. Windows wars of yesteryear were interesting because so many of the participants made money. The Mac was Apple’s cash cow. Windows was Microsoft’s cash cow, yet PC makers were part of the profit chain.
Today members of the technorati elite compare and contrast Apple’s iPhone with various and sundry Android-based devices. The iPhone is a smartphone. Android OS is an operating system which runs on non-Apple smartphones and tablets. They are not the same but the comparisons are incessant.
There are differences, though, when comparing the Windows hegemony of the last century and early part of the 21st century with Android’s dominant mobile platform. Microsoft grew rich and fat and complacent selling Windows Everywhere.
What of Android? Like Windows, Android is a monopoly operating system, dwarfing Apple’s iOS devices in market share; iPhone and iPad. Yet, unlike the Mac vs. Windows wars of yesteryear, Android doesn’t make money in the same way Microsoft raked in riches for nearly two decades on Windows and Office.
Most statistics point out that Apple’s iOS devices, specifically the iPhone, account for almost 95-percent of the industry’s profits. Samsung, which ships more smartphones in total, but makes less gross margin on each unit, captures the remaining five percent or so. The rest of the industry either breaks even or suffers heavy losses, including the cheap knockoff makers in China.
As a platform to be compared to Windows, Android is a huge money loser for everyone involved. Except Google. And even Google struggles to turn a decent profit on the mobile device advertising market which Android devices are supposed to spearhead. Even Google admit that 75-percent of its mobile device ad profits come from… insert drum roll here… Apple’s iPhone and iPad.
Just as Microsoft’s Windows was installed on the vast majority of personal computers back in the day, Google’s Android, in its various flavors, occupies a similar monopoly among mobile devices. There the similarities end. Windows was (and remains) wildly profitable despite declining sales and market share. Android, as a platform, dominates in every category except where it counts. Profits and usage.
It’s time to stop comparing apples to oranges and recognize that hardware is what people buy so they can use software. The hardware is less important at the low and middle range of the market segments, but very important at the premium end of the spectrum.
Android vs. Windows
One aspect of these platform wars is common between Android and Windows. Both are associated with the cheap end of the product spectrum. Google gives Android away for free to cell phone and tablet manufacturers.
Microsoft gives Windows away to manufacturers of inexpensive devices. All Android manufacturers compete with other Android manufacturers and, for the most part, the only point of differentiation is hardware and price. All Windows manufacturers compete with other Windows device manufacturers and, for the most part, the only point of differentiation is hardware and price.
That rush to the bottom creates a vacuum at the premium end of the product spectrum occupied by Apple which easily differentiates its products by hardware, software, and ecosystem. Why buy a $2,000 PC notebook when it runs Windows just like the $399 plastic versions at the other end of the aisle? Why buy a $900 Galaxy smartphone when it runs Android just like the $299 plastic version at the other end of the aisle?
I don’t see how either Windows PC manufacturers or Android device manufacturers can get out of that death spiral without emulating Apple, and that’s very difficult because the iPhone maker’s ecosystem is broad and deep.