Books written by Ray Sullivan

Thursday, 19 December 2013

2014 - Downturn for Apple?

Apple have had it all their own way for the last seven years or so, and justifiably so given they gave the mobile phone market a massive kick in the rear and created the tablet market.  And did they dominate? You bet.

Then along came Google with Android, playing a long game on the apps and the OS.  Now they have the lion's share of the mobile phone market if not the revenue.  Apple have maintained their traditional pricing structure, positioning themselves as the premium product and for a while that was certainly true.  However their reputation is wearing thin, their products are not as diverse as the competition and critically they are failing to win market share in developing regions.

While mobile phone growth has remained steady in the western markets the effects of the credit crunch on disposable income has slowed down discretionary spending, although the queues around the Apple stores seem to belie this.  Android phones are seen as more versatile in the developing regions - it has a similar number of apps to Apple now and there is a wide variety of products at virtually every price point available.

Google aren't getting it all their own way, though.  In these critical markets Microsoft are seeing major growth.  They're late to the party, but in these regions they're catching up. Their alliance with Nokia means that there are some competitive phones in the developing regions and Microsoft are expected to see serious growth and market share in 2014.  They'll not get anywhere Android, but they could equal or better Apple worldwide.  Apple may have a certain cache with discerning customers, but their product line is looking limited and not at all diverse.  If you want a larger screen, better consider an iPad mini, because the mobile phones are all pretty much the size they were when they were launched many years ago.

But it is in the app sales that the war will really hot up.  Google are recompensing app developers pretty much the same the same amount as Apple do, an area they haven't previously competed well in.  Given the larger market share of Android this may affect development choices, which have traditionally favoured Apple.  Microsoft's app store, although only one fifth of the size of Apple's and Android's, is growing at a faster rate than either, possibly through developers cashing in on existing code as they get used to Windows 8 programming requirements.

Apple may have to consider expanding its range of products to retain its market share in both hardware and apps, but due to its long established principle of only developing in-house it will struggle to compete with the range of Android and Windows 8 mobile phones coming out.  Consequently it will have to change its model or see itself side-lined in 2014.

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