apple-vs-android

iOS vs. Android

Business / By / February 12, 2023
YeariOSAndroid
202226.98%72.37%
Data gs.statcounter.com

The release of the iPhone in 2007, and thereafter, the release of the App Store by 2008, set Apple as the dominant player in the smartphone industry.

Indeed, the combination of hardware (iPhone), operating system (iOS), and marketplace (App Store) was the propeller of Apple’s business model.

iphone-sales-2007-09

Concerned about the dominance of the App Store, and therefore of the iPhone, as the primary device for navigating the mobile web, Google, fearing this would soon make its search business commoditized, it used Android as a counterforce against Apple’s potential supremacy in the space.

In fact, back in 2005, a couple of years before the release of the iPhone, Google had bought Android, a “software for mobile phones.”

Yet, the real countermove from Google came a few months after the launch of the iPhone (launched in June 2007), when Google announced the Open Handset Alliance.

It was November 2007, and as announced back then:

ย A broad alliance of leading technology and wireless companies today joined forces to announce the development of Android, the first truly open and comprehensive platform for mobile devices. Google Inc., T-Mobile, HTC, Qualcomm, Motorola and others have collaborated on the development of Android through the Open Handset Alliance, a multinational alliance of technology and mobile industry leaders.

While there was no mention of Apple, as you can imagine, that alliance was created to counteract the potential rise of Apple as the dominant player in the smartphone industry.

Android turned out to be the largest mobile platform, comprising many manufacturers across the world.

The attempt of Google to block Apple from monopolizing the mobile market, thus, making Google’s search a commodity in the future, it turned out as the other most important mobile platform.

Today, Android and iOS combined power up the trillion-dollar mobile ecosystem. And the vertical integration Google reached via Android enabled the company to maintain its relevance in the search business.

Related Case Studies

Google Business Model

hidden-revenue-model-google
A hidden revenue business model is a pattern for revenue generation that keeps users out of the equation, so they don’t pay for the service or product offered. For instance, Google’s users don’t pay for the search engine. Instead, the revenue streams come from advertising money spent by businesses bidding on keywords.

How Does Google Make Money

google-revenue-breakdown
Alphabet generated over $282B from Google search and others, $32.78 billion from the Network members (Adsense and AdMob), $29.2 billion from YouTube Ads, $26.28B from the Cloud, and $29 billion from other sources (Google Play, Hardware devices, and other services).

Apple Business Model Evolution

apple-business-model-evolution

Apple Business Model

apple-business-model
Apple has a business model that is divided into products and services. Apple generated over $394 billion in revenues in 2022, of which $205.5 came from iPhone sales, $40 billion came from Mac sales, over $41 billion came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $29.3 billion came from iPad sales, and $78.13 billion came from services.

Apple Value Propositon

apple-value-proposition
Apple is a tech giant, and as such, it encompasses a set of value propositions that make Apple’s brand recognized among consumers. Apple’s brand’s three fundamental value propositions leverage the “Think Different” motto; reliable tech devices for mass markets. Starting in 2019, Apple also emphasized more privacy to differentiate itself from other tech giants.

Economics of the iPhone

how-much-profit-does-apple-make-per-iphone
It costs Apple $501 to make an iPhone 14 Pro Max, and the company sells it at a base price of $1099. This makes Apple’s base markup on the latest iPhone model at 119% Apple is the only tech company able to sell its tech products at a such a premium, thanks to a combination of hardware, software and marketplace.

Apple Business Growth

apple-business-growth
It costs Apple $501 to make an iPhone 14 Pro Max, and the company sells it at a base price of $1099. This makes Apple’s base markup on the latest iPhone model at 119% Apple is the only tech company able to sell its tech products at such a premium, thanks to a combination of hardware, software, and marketplace.

Apple Distribution Strategy

apple-distribution-strategy
In 2022, most of Apple’s sales (62%) came from indirect channels (comprising third-party cellular networks, wholesalers/retailers, and resellers). These channels are critical for sales amplification, scale, and subsidies (to enable the iPhone to be purchased by many people). In comparison, the direct channel represented 38% of the total revenues. Stores are critical for customer experience, enabling the service business, and branding at scale.

Apple PESTEL Analysis

apple-pestel-analysis

Apple Organizational Structure

apple-organizational-structure
Apple has a traditional hierarchical structure with product-based grouping and some collaboration between divisions.

Apple SWOT Analysis

apple-swot-analysis
Apple can leverage a strong consumer brand and set of successful products as a strength. Yet the company is still too reliant on the iPhone as a primary revenue stream. Though Apple is working to open up new markets as an opportunity, it has to make sure to sustain its stores’ sales.

Market Expansion Theory

apple-market-expansion

How do Apps Make Money

how-do-apps-make-money
Apps in the Apple Store follow five primary business model patterns: the free model, where the app might make money via paid ads. Freemium model where the app charges for premium features; subscription-based model, paid model, and paymium model is a mix of paid and freemium.

Apple Business Strategy

apple-business-strategy
When looking at the Apple Business Model, it is easy to assume that it is solely a product company which sells devices that are beautifully crafted. However, there would have been no success for the Mac without its OS operating system. There would not have been iPod success without iTunes. And no success for iPhones without the Apple Store. What’s next for Apple’s success?

More Resources

About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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