At first glance, its already a done deal — Cupertino’s Apple inc is way ahead of Google in commercial value and thus can comfortably keep the mountain view based tech giant behind itself. Outclassing and outpacing Google inc. , Apple inc is ahead of Google both in terms of market cap and annual revenue. The title of the world’s most valuable public company still sits with Apple — and the iPhone makers are holding firmly to it — considering Google’s parent company Alphabet made a move for it but could only stay with the title for few days before ceding it to Cupertino. From a $400 million revenue in fiscal year 2002, Google pushed its way billions up to a $74.54 billion revenue standpoint. However, Apple makes this looks like child’s play — from a $8.2 billion revenue in 2004, Apple went astronomically high to a $233.72 billion revenue technology empire. Google doesn’t make a ton of cash on Nexus devices. Apple, on the other hand, makes a masssive amount of cash from iPhone sales as well as from iPods, iPads and other Apple hardwares. All these points to the fact that Apple is indeed deserving to be ahead of Google in the commercial value chain — but there’s more to it.
Though Apple currently enjoys massive cash inflow, brand loyalty , good sales and of course is ahead of the pack — just how long can it keep its crown?
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In the first quarter of 2012, Apple had a global smartphone OS market share of 23 percent. Rather than experience an improvement, the company’s market share in this area has dropped to 17.6 percent as of the fourth quarter of 2013. Thanks to an army of OS partners, Google’s Android global smartphone sales stood at 758.72m units while Apple’s iOS global smartphone sales 150.79m units as at fourth quarter of 2015. Though more Android powered smartphone sales does not necessarily mean more revenue for Google as it would mean for Apple, nonetheless it represents a huge market for Google’s better half — Advertising!. Though Apple’s iOS, which dominated the smartphone market when it hit the market in 2008 keeps putting up a good fight, the Android OS has proven itself a worthy competitor and officially took over as the market leader in the fourth quarter of 2010. The number of new Android devices being activated each month
continues to climb at a staggering rate and Google’s Android commands a 78.4% market share as of the fourth quarter of 2015. More and more android users are embracing the Android ecosystem — a web of android apps, ads, payment platform and related hardware — once again a good indicator for Google’s potentials. Apple’s iOS ecosystem is not in anyway a pushover, in fact it is much more spiralled and sophisticated than Google’s. However, that’s the very problem, iOS ecosystem spiraling has as some industry expert would say “peaked”. Today’s new iPhones while undisputedly better than they were years ago, lack that exceptional killer features to convince the average consumer of the necessity to upgrade. Not only have iOS markets reached a certain level of saturation, but the pace of innovation with Apple hardware has also slowed down a bit. Apart from traditional Apple fans, new Apple products like smart watches and other connected devices have failed to make a significant impression on the broad public.
Unlike Apple, who focuses on a section of the population who like niche products, Google’s (Alphabet) business model is sound and is Incorporated into nearly every facet of existing and emerging technology. Alphabet’s core business of internet advertising through its search engine is still growing rapidly. The company’s paid clicks number, a key metric that measures how often Google gets paid by advertising clients reportedly grew 31 percent year-over-year in the fourth quarter of 2015. According to Likefolio a social media tracking firm , Google operates the most talked about search engine, video site, and email program on
social media. As time goes on, the breadth of Alphabet’s market dominance across multiple categories may give it the edge on Apple, which primarily only leads the smart phone hardware market. Heavy is the head that wears the crown. When companies become as big as Apple it just becomes harder and harder to grow at a pace that will continue satisfy the giant expectations that come with being No. 1. Alphabet may be well trailing behind Apple inc, but in a matter of few years when Alphabet’s multifaceted investment pays off, Apple may well be on a recovery attempt by then.