Can Anyone Beat Apple at Its Own Game?
Apple's devoted customers love the company's ecosystem, which weaves the company's devices and software together with users' content almost seamlessly. That ecosystem has become the envy of some rival businesses that actually have better sales and a bigger market share than Apple does.
You may not know, for instance, that in October 2011, Samsung beat out Apple as the world's top smartphone maker, according to the Wall Street Journal. Or that Google's Android OS is currently the most popular U.S. smartphone platform, with nearly 47 percent of the market, according to the latest numbers form metrics firm ComScore.
In the U.S. PC market, Apple claim only about 11 percent of sales, market research firms Gartner and IDC have reported, and its share of the worldwide PC market share is so small that the Mac maker usually gets merged into the "Other" slice of the pie chart. (in 2007, Apple dropped the "Computer" from its name Apple Computer to represent the company more accurately as a consumer electronics firm and not just a PC maker.)
But Apple does have its extraordinary ecosystem, which raises the question: Can any of its rivals beat Apple at its own game? In this story, we'll look at why Apple is so far ahead, and we'll examine the top five contenders--Amazon, Google, Microsoft, Samsung, and Sony--to see what they have, what they don't have, and how they may or may not succeed against the technology industry's most visionary company.
Let's start with why Apple has such a big lead.
CES: Apple's Shadow Presence
Apple doesn't participate in the biggest U.S. technology show, CES, which is held every January in Las Vegas; for that matter, it doesn't even participate in Macworld|iWorld (formerly Macworld Expo), which will begin next weekend in San Francisco. However, the company's influence can be seen every year in product debuts from other companies at CES, including Acer, Asus, Lenovo, Samsung, and Sony.
This year's show was no different. CES 2012 was yet another parade of Apple wannabes touting new iPad challengers in the tablet division, and MacBook Air knockoffs known as Ultrabooks in the ultraportable laptop category.
Some companies aren't shy about focusing on Apple. Samsung's Apple imitations came so close to the original that Apple responded by suing the Korea-based manufacturer for creating products that borrow heavily from Apple's designs. Meanwhile, in November, Sony CEO Howard Stringer acknowledged that his company has spent the past five years creating a platform to compete against Apple, according to the Wall Street Journal.
During last week's CES 2012, other companies such as Acer, Lenovo, and Samsung discussed strategies to create a device ecosystem similar to Apple's that would include seamless content and personal data sharing. Lenovo even went so far as to call itself a "personal cloud solution provider" instead of a lowly PC manufacturer.
Imitation: Sincerest Form of Flattery?
It's no surprise that technology firms want to imitate Apple's success. Cupertino makes some of the most interesting and exciting consumer electronics products on the market, including the iPad, the iPhone, and the MacBook Air. And all of Apple's devices function within a larger ecosystem that has evolved over time.
Starting in 2001, Apple's devices melded together through the use of iTunes and with the PC as a hub for all of a user's digital content.
In 2011, Apple announced a move away from iTunes and the desktop onto iCloud remote servers designed to make users' personal files, music, movies, and apps available to them at any time, anywhere. To access your content, all you need is an Internet connection and an Apple-approved device such as an iPod Touch, an iPhone, an iPad, or a PC running OS X or Windows.
Technology companies trying to emulate Apple's success have devised strategies that focus on four distinct areas: apps, cloud, content, and devices. Apple's competitors only recently figured out this "magic formula," and they are now trying to create their own version of it.
Let's take a look at what Apple's top five rivals bring to the party.
Apps: Appstore for Android
Cloud: Amazon Cloud Drive
Content: Amazon MP3 Store, Amazon Video on Demand, Kindle Books
Devices: Kindle and Kindle Fire
Amazon is the clear front-runner among Apple challengers, thanks to its wide array of digital content, which includes movies, music, and television shows. The online retailer's weakest point may be its devices. The Kindle Fire tablet has received mixed reviews, with some critics calling it a great piece of hardware for the price, and others calling it an unfinished product.
Amazon will need more than just one device to push its content platform, and the next addition may happen soon; every few months, a new rumor surfaces about an Amazon smartphone.
Next: Google, Microsoft, Samsung, and Sony
Apps: Android Market for smartphones, tablets, and televisions; Chrome Web Store
Cloud: Google Web Apps
Devices: Sony NSZ-GT1; Motorola Droid 4; Samsung Galaxy Nexus; Asus Transformer Prime; Samsung Series 5 Chromebook (laptops in this series use a glorified version of Google's Web browser and exist in their own app universe)
Google's biggest problem is that its product lines are all over the place. You can rent and download movies on Android via the Android Market, but YouTube also maintains a movie rental service. Chromebook laptops, smartphones, and tablets, meanwhile, run a dessert-themed smorgasbord of Android OS flavors such as Gingerbread, Honeycomb, and Ice Cream Sandwich.
Google TV remains an open question. The search giant recently launched a reboot of the Web-meets-broadcast TV platform, but the popular video site Hulu is still a no-show on Google TV.
Google's plans for its Motorola buy (assuming the acquisition gets regulatory approval) are a major unknown at this point. Another big question is whether the search giant's other Android partners stick will with the platform if doing so means competing against a Google-owned device maker.
Cloud: SkyDrive; Windows Live
Content: Zune Marketplace; Xbox Live Marketplace
You might expect Microsoft to be the front-runner in the competition against Apple, since the overwhelming majority of PCs sold worldwide have Windows installed on them, the Xbox 360 is a thriving gaming and entertainment platform, and for some time the company has offered syncing via Windows Live Mesh and 25GB of free online storage via SkyDrive.
But Microsoft is weak in mobile; and its most recent smartphone platform, Windows Phone 7, has seen sluggish sales since its launch in late 2010. Microsoft hopes to change its smartphone fortunes in 2012 through a partnership with Nokia, one of the world's largest mobile handset manufacturers.
Another big question for Microsoft is whether its plan to install touch-centric Windows 8 on tablets will convince tablet buyers to forgo an iPad in favor of a "WinTab."
Apps: Android Market; Samsung Apps for smartphones; Samsung App Store for televisions
Cloud: Samsung AllShare
Content: Samsung Media Hub
At CES 2012 earlier this month, Samsung focused on networking Samsung smartphones, tablets, and HDTVs into a single ecosystem that permits messaging and data and content sharing between devices. The crucial challenge for Samsung will be to ensure that it has a wide range of content to rival its competitors' offerings.
Apps: Android Market
Cloud: PlayMemories; 50GB Box.net storage promotion for Xperia users; PlayStation Plus Game Saves
Content: Sony Entertainment Network (PlayStation Network, Music Unlimited, Video Unlimited), Crackle; Reader Store
In 2011, Sony took full control of its device line-up after buying out mobile device partner Ericsson. In 2012, Sony plans to implement its four-screen strategy to make gaming, music, and video content from the Sony Entertainment Network available across your Sony PC, tablet, smartphone, and television.
Sony appears to be primarily focused on entertainment content, however; it doesn't yet have a cohesive structure for syncing user-generated data such as photos and documents. Instead, it relies on a collection of offerings such as PlayMemories, a video- and photo-sharing service; a recent Box.net storage giveaway for Xperia smartphone users; and online game saves for PlayStation Plus subscribers.
Though each of these five companies may rival Apple's four-pronged strategy, all of them lack another key Apple ingredient: complete control over hardware and software. Melding devices to software allows Apple to control important hardware factors such as responsiveness and battery life in a way that Windows and Android vendors can't.
Amazon layers its own interface on top of Android, but it doesn't create its own tablet software, and it has yet to improve its tablet hardware. Google's purchase of Motorola could help it create a more fully integrated software-hardware model for Android, but in doing so it risks alienating other Android makers. The same could be said of Microsoft and its partnership with Nokia. Sony and Samsung, meanwhile, are at the mercy of both Google and Microsoft to supply operating systems for their mobile devices and PCs.
It's hard to gauge precisely how important having complete control over hardware and software is. Apple fans would argue that it's essential, but the legions of Android and Windows users suggest otherwise.
The good news for consumers is that they have a wide range of cloud-meets-device ecosystems to choose from, at least for now. Each of these five competitors, along with others such as Acer and Lenovo, is making a serious play to attract more customers in 2012. But you have to wonder whether device makers will still be touting their own cloud-device platforms come January 2013.