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Analyst: Apple and Google should watch out for Microsoft

Posted: , by Maxwell R.

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Analyst: Apple and Google should watch out for Microsoft
Saying that Microsoft will crush Google, and muscle out Apple, Charles Sizemore believes Apple’s model is unsustainable and that Google does not have much of a model at all.

Charles Sizemore is the Principal of Sizemore Capital and that firm has taken a long position on Microsoft (fair disclosure). In a written article contributed to NASDAQ, Sizemore reasons that Apple’s draconian requirement that it control every facet of its ecosystem puts the company at a direct disadvantage to “a more flexible Microsoft.” Microsoft appears to be putting energy into exploiting some of those weaknesses with the Surface Tablet, rumored Surface phone and with the possible mainstream OS updates through Windows Blue.  With Nokia, HTC, Samsung and others jumping on the Windows Phone bandwagon he believes the mobile phone market will look markedly different this time next year.

Google has been criticized for its apparent inability to handle the high demand for the LG Nexus 4.

Google has been criticized for its apparent inability to handle the high demand for the LG Nexus 4.

Sizemore then digs into Google and its Android ecosystem hard, especially Google Play, which he refers to as a “shoddy attempt to compete with Apple’s iTunes.” He admits the oddity of his claims given that he too is an Android user. The thorn in his side is that there is no SD card support for syncing content from Google Play. These problems do not exist with Apple and Microsoft he says (never mind that iPhones do not have SD card support at all) is because those are “real companies with real business models.”

Where Apple and Microsoft charge for some services, and thus render support, Sizemore says that Google’s model of giving most consumer products away for free and therefore the company does not take its own products very seriously. At least Sizemore is not forecasting a collapse of Google’s stock. He merely claims no way to gauge the long term prospect of its advertizing model.

We actually enjoy the dynamics we read about from various analysts. Many can be thought provoking, some entertaining, and others downright silly. Throwing down the axe on an entire ecosystem over SD card support does ring as a bit out in left field because not all Android handsets have a storage issue. Where Sizemore does make a valid point is in the no-cost model that Google has for many of its services. As the online advertisement landscape changes, and arguably delivers less revenue over time, Google’s ability to adjust through that change will be the critical factor. Another area where Google has astonished us has been in its inability to process high-demand traffic for orders of the LG Nexus 4

Apple's UI for the iPhone will be 7 years old next year.

Apple's UI for the iPhone will be 7 years old next year.

With regards to Apple, there is no denying that it is still in the midst of a transition, which many of our readers believe will not hold a rosy future for the company.  Apple’s challenges lie deeper than that though. As Apple has polished its hardware design and OS experience (which also needs an update), its services outside of iTunes are at risk of being overwhelmed.  What Sizemore also overlooks is Apple’s seemingly insatiable appetite for litigation as it wages its “thermonuclear patent war” with Samsung.  When those pressures combine along with Apple’s total control policy over its entire line-up, top-to-bottom, it makes one wonder how or where Apple will make the first break out of that mold.

Unfortunately for Sizemore, while he establishes his arguments against Apple and Google, he does not reinforce any arguments in favor of Microsoft.  Therein lies the rub in the great mobile platform contest.  While one might assume that these perceived weaknesses in Apple and Google translate directly to strengths for Microsoft, that is not necessarily the case.  While touting a less than favorable experience Google Play in syncing music and video content, Windows Phone 8 does not sync Xbox Video content at all.  Moreover, while there is a healthy list of manufacturers building Windows Phone 8 hardware, omitting the reality that Samsung is a market leader due to a line-up of remarkable Android offerings is a bit narrow of a vision. 

In looking at the three models pragmatically, where do you see the weaknesses in Apple, Google and Microsoft? Where do you see the strengths?

source: NASDAQ via BGR

78 Comments
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posted on 29 Nov 2012, 15:56 21

1. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)


Sizemore is just putting out self-serving bloviation to bump the value of his long position in MS. MS is not going to crush Google. Apple likewise won't be crushed by MS. Remember all of the statements last year about how Win 8 was going to crush Apple and Google? This is the latest effort at re-cycling the blather.

posted on 29 Nov 2012, 16:10 9

6. Aeires (unregistered)


Exactly, even if MS did pick up major speed and take off, it's going to be years before they catch Android (sales) and Apple (mobile profit). By then, any number of things could change so this is just analysts being analysts.

posted on 29 Nov 2012, 19:52 3

34. MeoCao (unregistered)


This after all is about competitiveness, and that's MS weakest point. Just have a look:

- How MS mobile stratgey shifted back and forth that left their allies stranded

- How long it takes MS to bring a product to market

- the WP8 and RT features or lack thereof

- The disappointment called Surface RT

...
And THIS company will "muscle out " Android?

I know MS is desperate, but resorting to such extreme measure to make some noise is beyond any stupidity.

posted on 30 Nov 2012, 02:43 1

61. haseebzahid (Posts: 1853; Member since: 22 Feb 2012)


so android was full of everything u see in it now since 2008 or some date back then or was it evolving over time yes wp8 lacks few features at moment but its fresh thing built from scratch in less then a year and yet it outperforms android in things that are important for OS it self smothness stability and android took 3-4 years to get to that while apps didnt add up for android either from 300k it was also 0 once took 5 years wht else u point out locked system huh look at Iphones still they get more sales then androids so who hates locked OS even if it is extremly overpriced still gets more sales. so where did ur arguments fall in friction or just hate for a company besides they all do buissness and in that matter its a COLD war they all pull each other every one is evil and good same time i dont support any of the three in that matter cuz its just what the buissness books says

posted on 30 Nov 2012, 07:13 2

69. Aeires (unregistered)


It's extremely difficult to answer when all you wrote was put into one sentence, but I'll try.

I never mentioned app count because Android didn't rise due to app counts. Android rose to market share dominance due to it being customizable, variety of handsets, and handset pricing.

MS' new W(insert model number here) has been out for what, two years now and still is in single digits. That's growth much slower than Android. Up until now they phone selection hasn't been all that stellar so that could be part of it but I suspect the main reason is people just don't like the tiles, IMO.

As for my personal opinion on W8, I too don't like the tiles but as for it succeeding, great. I don't care one way if it does or doesn't, but I mostly wish it would so more variety could be seen in the mobile world.

And just so you know, I've been using Windows since 3.11. My phone is Android because I can customize it exactly like I want.

posted on 30 Nov 2012, 15:05 2

72. haseebzahid (Posts: 1853; Member since: 22 Feb 2012)


you did make valid points though and i was not pointing about apps againt Android i was simply telling the fact that its natural to get apps over time not over night

for some details about winphone7 and 8
-winphone7.5 dont support core engines that most developers are use too, so game developers skip it back then and games are to main reson why others doing awsome

-wp8 now have those engine support that developers use so that was first major reson why games didnt came to it + the hardware limit + the fact wp8 was know to be new born from scratch which will eventually oslosilte wp7.5 well that was a bummer :|

- there u go wp8 is now in the first year not second year.

- last but not least you think customization is key to victory or i guess u think that but did u think apple whould have made on top because you are correct NO most people dont bother customization or do it for a while then its not that awsome to do it all the time.

- And their is a theory of mine perhaps even more guys will agree win8 was desgined like wp8 so people adopt this ecosystem where they hate it or not since eventually they will converg to win8 sooner or letter if not getting to linux or MACOS($$ Hard Choce $$) for pocket though. in few months or a year people might get more intersted in this and that might be wht MS did with windows overhaul.

Conslution ; Wp8 got good chance to stand in the competetion sure it needs tweeking, updates, but in time it will be good enough, we all know when some can put so much money in this OS they will make it worthwhile eventually

posted on 30 Nov 2012, 19:08 1

75. Aeires (unregistered)


W8 might be in the first year, but the whole Metro UI is in the second year due to 7.5 and 7.8. I didn't know that about the engine though, it makes perfect sense what you wrote about W8 and developers. One thing you didn't point out that I said on another article is MS should have an easier time with the upgrade process because of stricter requirements on standardized hardware. +1 for MS seeing that early on.

Customization was one of three things I mentioned. It's importance varies with each user, but having that choice is important.

I totally agree with you on the PC integration and believe that's exactly what MS had in mind when they shifted everything to Metro across all platforms. Whether it works or not remains to be seen, but it does have potential.

There is one thing that MS has a battle with though. When Android was released, in all reality only iOS was rising. BB was getting stagnant and Nokia was killing off Symbian. Android had a lot less competition to deal with. MS on the other hand has iOS and Android to deal with, and possibly even BB again (hopefully). While I will say MS can be successful with W8 on phones and tablets, I'm not ready to say they'll be the top mobile OS just yet. We'll have to give this some more time to stew.

posted on 01 Dec 2012, 01:18 1

78. haseebzahid (Posts: 1853; Member since: 22 Feb 2012)


i agree on u at last but for the last point they dont have to be on Top neither it is important for customers its just a badge they all wear for a while then other gets it but its better to have so different OS then any other it is balance between closed and Open ecosystem although some of its features should not be closed but all in all it is doing good as competetion is though rising up is harder these days Meanwhile Android was very lucky but well timed.

posted on 30 Nov 2012, 02:34 2

59. haseebzahid (Posts: 1853; Member since: 22 Feb 2012)


well can cant say anything untill the first two reports of win8 and wp8 comes out but win8 is doing preity huge as software is is being adopted faster then win7

posted on 30 Nov 2012, 07:16 1

70. Aeires (unregistered)


I'd have to see some report data before making that call. All I've read is W8 sales are less than expected from MS. Add to it, people were leery of W7 because they got stung by Vista so badly. Once people saw W7 was solid, it took off but for a while there was a lot of skepticism. An impressive stat would be if W8 is adapted faster than XP.

posted on 30 Nov 2012, 15:10

73. haseebzahid (Posts: 1853; Member since: 22 Feb 2012)


here is what i read

http://www.phonearena.com/news/Windows-8-sells-40-million-copies-to-date-faster-adoption-than-Windows-7_id37089

as i said untill reports come out we can spaculate news but it still something to check out

posted on 01 Dec 2012, 04:04

79. atsamman (Posts: 74; Member since: 26 Sep 2012)


if ms did launch with android I think yes it would've crushed both apple and android or at least be at the same level of sales of apple or android
I think its gonna take not less than 2 years for ms to be as competitive and it mainly depends on its sales cause if they didnt make a good sale they would eventually fail no matter how much effort they put into their products and no matter how much better they make them
I think ms gonna suffer so much convincing people to buy surface....people already are happy with either android or apple devices so why change
I think though if apple did change a bit of the iOS make a bit more open, expandable storage and more accessible to the files on the device it would make a huge plus over android
i would think many times before updating the iOS on my idevice its alotta time backing up and restoring not to mention if u have a jailbroken or illegally unlocked iPhone
on the other hand I don't have to do any of that on android I would just get the firmware and just flash it without loosing any thing

posted on 29 Nov 2012, 16:22 8

9. SuperEd (Posts: 132; Member since: 18 Oct 2011)


Are you really that pedestrian? Win 8 has bareley been released. how could it crush anything. Oh, unless your looking at market share of MS as a whole? right..then both APple and Google have been crushed for their entire existence.

posted on 29 Nov 2012, 17:33 5

22. joey_sfb (Posts: 6014; Member since: 29 Mar 2012)


Now i know why they are called 'Anal'-yst

posted on 29 Nov 2012, 17:59 3

26. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)


"then both APple and Google have been crushed for their entire existence."

Right, laughing all the way to the bank.

posted on 29 Nov 2012, 21:14 1

45. Dr.Phil (Posts: 1326; Member since: 14 Feb 2011)


While I disagree with the way Droid_X_Doug put it, I believe he was referring to the way Microsoft was hyping up WP8 to capture a lot of attention and become the new thing everyone would want. With the average success of WP7, Microsoft looked to WP8 as a way to create the breakthrough they needed. However, it remains to be seen if they have had that real breakthrough they needed or not. It's been about a month now and we still haven't seen any hardline numbers for WP8 devices besides company representatives saying that they are good.

posted on 29 Nov 2012, 15:57 14

2. kozza3 (Posts: 702; Member since: 17 Oct 2012)


Apple = Boring OS

Google = Fragmentation

Microsoft = Not sure yet

posted on 29 Nov 2012, 16:01 19

3. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)


Apple = Fragmentation

Google = Fragmentation

Microsoft = Fragmentation

posted on 29 Nov 2012, 16:07 3

5. nak1017 (Posts: 328; Member since: 08 Jan 2010)


How is Apple fragmented?
It's more of an "intended obsolescence"...

posted on 29 Nov 2012, 16:39 7

12. Hammerfest (Posts: 383; Member since: 12 May 2012)


In that case so is Android...

way to make a moot point... moot!

posted on 29 Nov 2012, 16:46

14. joey_sfb (Posts: 6014; Member since: 29 Mar 2012)


Intended obsolescence is what some android manufacturer hidden intend as well. Just that they are not up front about it especially the phones are still selling on the shelve.

Samsung, Sony and HTC are getting better at keeping up with updates as they start to acknowledge that what make a return customer.

A lot of young people update their hand set every 12 months.

posted on 29 Nov 2012, 18:53 7

30. lyndon420 (Posts: 4559; Member since: 11 Jul 2012)


The iphone used to only come in a 3.5" screen size because Steve said any bigger was ridiculous for a phone...now they have a 4" screen. The ipad was at one size also because of Steve's vision, now they have 2 or is it 3? IOS developers have to alter their apps to work properly on every different screen size, whereas Android tries to use a 'write once' approach that in most cases adjusts automatically to the screen size being used. But...it isn't perfect and some apps/games do need to be tweaked depending on their complexity etc. Fragmentation in my opinion is when a developer can't code something once and have it work across all screen sizes and devices...even platforms for that matter, unless it's web based of course.

posted on 29 Nov 2012, 22:21 4

50. MeoCao (unregistered)


Great comment!

I think what Google is trying to do with their auto-scaling approach is right as it makes apps development much easier.

But I think they need to support 3 base screen sizes: Phone, 7" and 10" tablets. All devices will be scaled to fit from 1 of those base sizes.

Currently Google uses only 1 base size and that's not enough.

posted on 30 Nov 2012, 01:23 1

54. jroc74 (Posts: 6015; Member since: 30 Dec 2010)


"whereas Android tries to use a 'write once' approach that in most cases adjusts automatically to the screen size being used."

Guess what Google calls this feature... Fragments. I think that was Google's way of being Google...lol.

Ppl that keep bringing up fragmentation and Android need to read up on Fragments. As for other reasons ppl bring up the F word....look at the PC market. It hasnt hurt PC's. Android will be fine. And like PhoneArenaUser mentioned....fragmentations exists with Android, WP and iOS to some degree.

posted on 29 Nov 2012, 19:32 2

32. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)


http://www.phonearena.com/news/iOS-6-fragmentation-detailed-which-device-gets-what_id31217

Google for more if you want.

posted on 30 Nov 2012, 06:24 2

67. xfire99 (Posts: 872; Member since: 14 Mar 2012)


Iphone 3GS/4/4S/5, Ipad 1/2/3/4, Ipod and if this isnt fragmentation and what do u call it?

posted on 29 Nov 2012, 20:02

35. meowcenary (Posts: 187; Member since: 13 Apr 2012)


I think you are jaded, apple and ms are not the fragmented one. androidOS is the fragmented OS/hardware on many levels. Despite the fragmentation it sells really at an excellent rate. What does this tell you about the users of androidOS?

posted on 29 Nov 2012, 20:07 3

37. networkdood (Posts: 6330; Member since: 31 Mar 2010)


That tells you that many do not care about so-called fragmentation and simply go to XDA for the updates.

posted on 29 Nov 2012, 22:09 1

49. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)


In this case it is more than my opinion it is fact!

Also have you read my comment #32 ?

posted on 29 Nov 2012, 23:34 3

52. lyndon420 (Posts: 4559; Member since: 11 Jul 2012)


What I'm being told is there are many people out there that love the freedom and choices that the Android OS offers.

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