Analyst: Apple and Google should watch out for Microsoft
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.
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.
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
1. Droid_X_Doug (Posts: 5977; 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.
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.
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.
61. haseebzahid (Posts: 1842; 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
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.
72. haseebzahid (Posts: 1842; 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
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.
78. haseebzahid (Posts: 1842; 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.
59. haseebzahid (Posts: 1842; 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
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.
73. haseebzahid (Posts: 1842; Member since: 22 Feb 2012)
here is what i read
as i said untill reports come out we can spaculate news but it still something to check out
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
9. SuperEd (Posts: 118; 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.
22. joey_sfb (Posts: 3704; Member since: 29 Mar 2012)
Now i know why they are called 'Anal'-yst
26. Droid_X_Doug (Posts: 5977; 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.
45. Dr.Phil (Posts: 954; 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.
2. kozza3 (Posts: 581; Member since: 17 Oct 2012)
Apple = Boring OS
Google = Fragmentation
Microsoft = Not sure yet
3. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)
Apple = Fragmentation
Google = Fragmentation
Microsoft = Fragmentation
5. nak1017 (Posts: 328; Member since: 08 Jan 2010)
How is Apple fragmented?
It's more of an "intended obsolescence"...
12. Hammerfest (Posts: 370; Member since: 12 May 2012)
In that case so is Android...
way to make a moot point... moot!
14. joey_sfb (Posts: 3704; 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.
30. lyndon420 (Posts: 2087; 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.
50. MeoCao (unregistered)
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.
54. jroc74 (Posts: 5201; 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.
32. PhoneArenaUser (Posts: 5498; Member since: 05 Aug 2011)
Google for more if you want.
67. xfire99 (Posts: 580; 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?
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?
37. networkdood (Posts: 6329; 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.
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 ?
52. lyndon420 (Posts: 2087; 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.
51. Bernoulli (Posts: 2008; Member since: 01 Sep 2012)
Forgot to include symbian mate, and MeeGo, and I'm sure MeeGo is by no means boring nor fragmentation
8. CanYouSeeTheLight (Posts: 991; Member since: 05 Jul 2012)
Are there people still using Symbian?
10. chaoticrazor (Posts: 2347; Member since: 28 Aug 2012)
yep im one of them, i can do everything i need and more.
28. wendygarett (unregistered)
Wtf thumb you down because you are symbian user? Seriously this is too much!!
53. chaoticrazor (Posts: 2347; Member since: 28 Aug 2012)
What are you on about, it ain't my fault you got thumbed downed stop been a baby crying over it.
Your too much how about you go do something other then troll
7. TylerGrunter (Posts: 1156; Member since: 16 Feb 2012)
Apple=as their ecosystem is build up of just pretty much one device every year, it will take just one bad device, one serious issue to have a debacle. Also their capacity for growth is limited, as most of the upper market is already saturated (eveyone with money to buy and iphone has already a smartphone of some kind). They also have two differnt OS and trying to avoid them competing (lack of productivity in iPads/iphones) can take a toll in the long run.
Google=There is no real revenue at this point in time for Google from Android, or it is very limited. If selling videos, music and apps fron the playstore doesn´t compensate the high costs of constantly innovating and actualizing the OS their model is at risk.
They need aslo to put a foot in the bigger screens, computers and TVs.
Microsoft=They desperately need to enter in the mobile market. Right now the stragegy of 3 different OS (W8, RT and WP8) won´t be sustainable in the long term and will cause confussion and disatissfaction in the customers. Either they manage a sucess with WP8 and/or RT and merge them or with the convergence of mobile & productivity computers they could end up losing their business completely.
Personally I think Apple is the best postioned for the present, but Google and Microsoft are better positioned for the future, one in the mobile and media consumption, and the other in the productivity markets. But as both markets (compters and mobile) converge I doubt there will be place for the three. OS are natural monopolies, and that´s a rule difficult fo fight. So let´s take some popcorn, sit and watch how it develops!
13. mick25 (banned) (Posts: 110; Member since: 12 Nov 2012)
"They need aslo to put a foot in the bigger screens, computers and TVs."
They already are. Google TV, Chrome OS, etc.
55. TylerGrunter (Posts: 1156; Member since: 16 Feb 2012)
With "put a foot" I mean to have the critical market share that is needed to make profit out of a product. In both cases the market share Google has is negligible.
20. QWIKSTRIKE (Posts: 923; Member since: 09 Mar 2010)
you are completely wrong about Google, they make money from advertising and as long as you have a hand held device or pc they will make money unless advertising changes.
Google would give away devices at cost because advertising is very lucrative. They have a great model based on this. Why do you think maps is free, and most things are free with Google. The more you get in contact with Googles advertisers they get paid if even only a click of an ad.
However this analyst is just blowing smoke up your ass to get is postition traction in the stock market
23. Aeires (unregistered)
And to get the Google app package, you have to pay Google for each handset made that have them. If the daily activations are a million, even if 75% of them have the app packages, that's a boat load of money made from having the official Google apps. And there's the market as well, it is always being advanced and offering more money for Google to collect.
Android is a big money maker, make no mistake about it.
57. TylerGrunter (Posts: 1156; Member since: 16 Feb 2012)
OEMs don't pay to get the app pacakage. The only condition is that they have to include the whole pack. Google does this to ensure they include the "Play Store" instead of their own stores. That's why the Kindle doesn't have any of the applications, becasue they want you to use the Amazon Store, not the Google one.
The revenues for Google comes from:
a) Advertising: pretty much in each one of the apps
b) Sells in Play Store
c) Selling services like Google Drive or Google docs
d) Selling positioning for business (EG: if you want your shopt to show in Google Maps over other shops in a search)
76. Aeires (unregistered)
I wish I would have bookmarked it but I could swear I read an article that said to get the official Google apps, manufacturers had to pay Google a fee for them. It was the main reason a lot of phones coming out of China don't have the Play store, they didn't pay the fee. And of course, Amazon wasn't going to do that either because they created their own market. Same reason why a lot of cheap tablets don't have the Play store.
58. TylerGrunter (Posts: 1156; Member since: 16 Feb 2012)
I didn't say they don't make money, I said it's very limited in mobile for the time being.
For how much they make out of advertisements:
And for revenues of the Play Store:
They are making money, but so little that they are still creating Android more for the promise of future profits in the Play Store (selling videos and music may increse that in the medium-short term) than for any real gains right now.
Don't get me wrong, I'm cheering for Google, but I'm not blind of how much they struggle to offer services at the minimum price possible.
33. webOSlove (unregistered)
They haven't really innovated. Matias Duarte is just takinng 3 year old webOS ideas and putting them into Android. WebOS is one of the main reasons Android has changed at all.
38. meowcenary (Posts: 187; Member since: 13 Apr 2012)
Besides WP, webOS has always been a favorite. It's a shame that HP did not do Foxtrot Sierra to this fine OS.
As for androidOS change is not that spectacular OS wise. Hardware wise they still can't do multicore processors efficiently. In order for androidOS to mature, google needs to stop this arms race against iOS. They focus on fine tuning and making their OS more robust versus a leaking sieve.
60. MeoCao (unregistered)
I think what you say about Android is fair, but some weaknesses are due to Android open nature. eg Android apps need scaling while iOS apps don't therefore iOS is very inflexible and it's very difficult for iOS to expand to different screen sizes.
And Android powerful Notification Center, widgets, Google Now .. all require system resources.
maybe Goggle can make Android more efficient but overall I think the price that Android has to pay is money well spent.
62. MeoCao (unregistered)
I disagree, I think the best that Android inherits from WebOS is Duarte himself. This guy is genius. He did bring some ideas from WebOS like dispaying information in cards but that's not a big thing.
But no doubt Duarte has done a very good job fro Android.
11. mick25 (banned) (Posts: 110; Member since: 12 Nov 2012)
This analysis is far-fetched; it just seems like Sizemore is trying to justify his investment into Microsoft.
"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."
This is the most naive thought I've ever read. Nokia is the only manufacturer that's going all in with Windows Phone. Ever wonder why Samsung makes a whole variety of handsets for Android yet a very few for Windows Phone? Because they know all the money is in Android, as with just about every manufacturers. Android fragmentation is a good thing to these manufacturers; HTC wouldn't have their Sense skin, or Samsung wouldn't have their Touchwiz and possibly the Galaxy Note would not exist either if it weren't for fragmentation. Manufacturers love Android, because they can differentiate their products from others even if they're using the same OS platform. HTC and Samsung are merely testing the Windows Phone market. Windows Phones have nearly zero differentiation; if there is no differentiation, there is little profit to be made. If Samsung and every other Android manufacturers went all in with Windows Phone as Nokia did, I can guarantee you Nokia would be long gone or at the very least, insignificant as they were before they looked into Windows Phone. This is also how Apple is also able to maintain a higher price than its competitors, by differentiation with their iOS.
"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."
Odd how he doesn't mention Google Play is the only one that even comes close to iTunes.
"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."
Completely wrong, Google is actually changing the advertising landscape.
15. Nathan_ingx (Posts: 3062; Member since: 07 Mar 2012)
Both Apple and Google started from scratch and none of us didn't even know or heard of what iOS or Android is until the iPhone and Motorola Droid was released respectively. If i had to look at how things started, Microsoft will ruin both Apple and Google because Windows has been pretty much there before none of us heard of iOS or Android. But no, i don't think this will be the case.
WP will be successful...but it won't overshadow any other OS, they will co-exist together, like they are doing now.
19. Nathan_ingx (Posts: 3062; Member since: 07 Mar 2012)
...and taking note that more operating systems like BB10 and Jolla, irrespective of how successful they will be, each will have their share depending on how well the representative owner updates their OS according with time and needs.
I won't be surprised to see more smaller OS emerge.
24. wendygarett (unregistered)
Total agree... I'm going to get wp soon and thats a promise, but don't worry, I won't throw away any of my iDevice and android device because of that :)
41. meowcenary (Posts: 187; Member since: 13 Apr 2012)
I would not call WP coexisting with androidOS and iOS. WP and RIM are basically lost at sea. With RIM they are drowing and land is not even in sight. One wonders about RIMS build 10, would that be their land ho? With WP it's treading water and land is near and yet it's so far away. Time would tell if MS would make it to shore or drown. There is one write up in a recent Forbes article regarding the impending demise of MS.
One hopes that either company makes it because competition i good for innovation.
16. MattAdorno (Posts: 19; Member since: 24 Jul 2012)
I really think Microsoft will be a much bigger player in the mobile market in the next couple years. Bringing the live tiles to the desktop operating system will familiarize everyone with entire concept. Windows being the dominate OS on PC everyone is going to be using it and growing more comfortable with its operation.
I know alot of people aren't happy with Windows 8, but even when Mircosoft has put out a crappy Desktop OS (Windows ME, Vista) there has never been a shift away from they're products.
And Microsoft has the money, so none of this needs to be imeaditely profitable.
18. mick25 (banned) (Posts: 110; Member since: 12 Nov 2012)
"but even when Mircosoft has put out a crappy Desktop OS (Windows ME, Vista) there has never been a shift away from they're products."
You must be joking. They flocked over to Apple.
"And Microsoft has the money, so none of this needs to be imeaditely profitable."
And so does Apple, Google, etc. they all have money. Only way to keep that money is to make a profit.
27. tedkord (Posts: 5908; Member since: 17 Jun 2009)
Who flocked to Apple? Microsoft's market share still hovers around 90%.
47. meowcenary (Posts: 187; Member since: 13 Apr 2012)
Then you have not read the article by Forbes and various media outlets regarding the state of MS. MS is like IBM and if they not change course the would cease. MS has always been the last one to the party. The old MS bought their way to the top. In this economy and with google's method of delivering application. MS cease being relevant, if Ballmer and his senior command staff do not wake up, MS is burnt toast.
17. mick25 (banned) (Posts: 110; Member since: 12 Nov 2012)
"If i had to look at how things started, Microsoft will ruin both Apple and Google because Windows has been pretty much there before none of us heard of iOS or Android."
This isn't even an argument.
There was a time were Sony was also at the top. They've also been around for a long time. Look what happened to them now.
21. Nathan_ingx (Posts: 3062; Member since: 07 Mar 2012)
And did you read the next following sentence? I didn't think so...