Apple's real target

Charis Palmer

Lawsuits by Apple against tablet makers offering devices running the Google Android platform are inspired by Google’s success, said Eric Schmidt last month.

The Google executive chairman was speaking at a Google conference where he also accused Google’s competitors of responding with lawsuits rather than innovation.

Few people in the tech sector would be willing to accuse Apple of a failure to innovate, but there’s little doubt Android is threatening Apple, with new data released by Canalys yesterday showing of the 56 countries the research firm tracks around the world, Android led in 35 of them, achieving a global market share of 48 per cent.

Samsung is the largest Android device vendor and the number two vendor overall in the market, Canalys says, but also of note is that the Asia Pacific region is leading the growth for Android.

Apple obviously doesn’t want to find its Australian business in the same situation as South Korea where Android holds an 85 per cent platform share, or Taiwan, where it has 71 per cent. Android’s share of the smartphone market in Australia is closer to 30 per cent, compared with Apple’s 40 per cent, according to IDC.

But in a market where smartphone and tablet sales continue to skyrocket, small shifts in market share can have a big impact on the bottom line.

Bernstein's Toni Sacconaghi says Apple will push its legal claims hard and unrelentingly, with the key goal being to upend Android's momentum by forcing a work around on key essential features which, if successful, could have huge, positive financial implications for Apple.

Bernstein predicts a 10 percentage point shift in smartphone market share from Android to Apple in 2013 is worth an estimated $US30 billion in annual revenue to Apple.

Yesterday’s news that Apple had succeeded in blocking Samsung’s upcoming Galaxy Tab 10.1 tablet from being sold in Australia until patent concerns are resolved means Android will face a fight in gaining any real market share in tablets in Australia. comScore data shows Apple commands a 98 per cent share of web traffic generated by tablet devices, so it’s clear the tablet market is much less of an issue for Apple in Australia.

With the launch of the iPad 2 in March this year, analyst firm Telsyte argues Apple has cemented itself as the market leader in tablets. Telsyte estimates Apple’s iOS platform will retain 71 per cent market share in 2011, with Android sharing the remaining cut with QNX (Blackberry) and WebOS (HP).

Telsyte has identified the need for Android manufacturers to reduce prices to more effectively compete against Apple, so it would be interesting to know what price telcos had planned to sell the new Galaxy Tab for.

But if you’re the impatient type and don’t mind circumventing Samsung, just have a look online – they’re currently selling on eBay for between $600 and $750.

Google Australia declined to comment.

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NOELENE KHOO

I come from an apple loving family. I have a husband and son with an iphone and when I went to buy my latest phone they both said get the galaxy it s better and now I have the phone I agree, so much that if I wanted an ipad type machine I would buy the galaxy tab from overseas. However I like my macbook. The problem with apple is that it releases things with minor faults that become major irritations. If they made sure their product is better they have no fear of their competitors.

Geoffrey Luck

Schmidt is right. Google is the enemy, not Samsung. Does anyone else see an historic parallel between Apple's proprietary iOS v Google's Android and Apple's proprietary computer OS v IBM with Microsoft's MS-DOS? The PC clones with PC-DOS won that fight easily; despite its later generations of brilliant easy-to-use machines, Apple never gained the market share of the WIN-PC. Android has conquered the phone market and will best Apple in the tablet market too.

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