Sunday, January 23, 2011

Competition Hurting AAPL?

With the advent of cell phones based on Google's Android, and the report that Android devices have sold like hotcakes, one wondered what this meant to Apple.

Far from resulting in pricing pressure and lowered profits, the new competition hasn't affected prices in an apparently negative way: since their launch Apple's average device's sales price has increased.

Apple's integrated hardware/software system has caused emulators some grief: Microsoft has advanced a challenge to Apple's "App Store" trademark as generic (this, from the holder of the "Windows" mark for interfaces that depict windows). The name of Microsoft's own software portal? "Marketplace". No, really. Does anyone think the name of these stores is really at the heart of their value to their owners? Who do they think they are fooling?

Discount manufacturers might not seem vulnerable to attack by Apple's high-margin line-up, but apparently Acer's sales have been clobbered by iPads.

I think the day I hoped for when I heard Apple had bought NeXT is upon us: we are finally seeing the Unix money I bought in to ride. Virtually everything Apple sells is a Unix tool (everything material outside music and some music players). 65% of Apple revenue may be iOS devices, but 85% comes from something running NeXT-derived Unix. The hardware is definitely slick, but as Apple repeats, the secret is in making everything all work together – and that's not just about the box, it's about the software performing as expected.

Apple's expected performance is to sell iPads in more and more countries while rolling out improved phones and computers, all in an era in which file-format lock-in means increasingly less to users, who are more accepting of Apple's brand. Even as competition pursues Apple in the marketplace, things are looking good.

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