Apple and Google: Two Different Markets?

The smartphone market is enormous. Within it, however, two smartphone designers and manufacturers stand at the forefront. These two companies are Apple and Google. Apple is very much a minority market. They cater to a highly lucrative niche. According to Cheap Phones, the new iPhone 6 sold for a minimum of $650. An iPhone 6 Plus with an astounding one-hundred and twenty-eight gigabytes of memory costs, on launch, an equally astounding $950. Google, on the other hand, have recently released their Android One smartphone in India for a much more manageable $100.

Each company uses a particular business strategy to dominate its section of the market.

¬†Google’s Business Strategy:

While they seem almost universal in the first world, most people in the developing world don’t have smartphones. Google has attempted to serve this gap in the market, in particular by holding its Android One launch event in India. Teaming up with small manufacturers such as Spice, Micromax and Karbonn – Karbonn having gained recognition for their $43 phone – they collaborated to produce the Android One. Their position is to provide an ultimately solid product for a much lower cost than Apple.

Others are attempting to follow in Google’s footsteps as well. Xiaomi and Motorola have both released smartphones for around $100 throughout India. Mozilla launched a smartphone for only $33. Even Microsoft has slashed its prices.

It has been suggested that Google’s ulterior motive for producing cheap yet solid smartphones is a forward looking one. When it comes to computing, the general rule is that, as time goes on, the technology becomes better and the technology also becomes cheaper. The bet which Google and its Android manufacturers are suggested to be making is that, in the future, customers will be choosing between nearly identical smartphones, and that Google would like to produce the cheapest product.

Apple’s Business Strategy:

When the iPhone 6 was released it sold an incredible ten million units within the first weekend. Reportedly, this number would be higher, had enough iPhone 6s been manufactured. The product was sold in ten countries including the United States, Japan and England. Strangely enough, it is not yet available in China. Had the iPhone 6 been released in China, sales would have doubtlessly been much higher. This outstrips the nine million iPhone 5s Apple claims to have sold in the opening weekend last year. By now, the iPhone 6 has been made available to 20 more countries, and by the end of the year are promised to be available in 115 different countries.

Despite these massive sales figures, Apple still remains a minority phone market compared to Google and Android. Apple’s minority following is a hugely dedicated one, however, and as such provides the company with a great amount of safety. In addition, they can sell their products at a significantly higher price point than Google.

Ultimately, both companies, while operating in the same market, have carved the market into two. Time will tell if there’s the space and market sufficient for both companies.

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Author: Kar

Dr. Kar works in the interface of digital transformation and data science for business management domains. Professionally a professor (IIT, IIM) and an alumni of XLRI, he has extensive experience in teaching, training, consultancy and research in reputed institutes. He is a Regular Contributor of Business Fundas and a blogging addict. Note: The articles authored in this blog are his personal views and does not reflect that of his affiliations.