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July 7th 2012 4:12 pm

Why Google aren't afraid of Amazon, and why Samsung isn't afraid of Apple

There's a rash of Google vs Amazon and Apple vs Samsung stories on the net lately, and while fun spirited reads creatively done, they all ignore some basic facts:

1) Google isn't a hardware company. They make their money off of search and ads and their ecosystem. Sure, they can play around and make a few handsets or tablets through awesome partners (like Asus. Same company that makes Apple's motherboards).

2) Amazon is restricting access to the Play Store on their reskinned Gingerbread devices, but one of the first things anyone does is install google apps (easy. almost everyone has gmail) and if they are more advanced they install the Play Store also. So all those tablets sold are a win for Google. One way or another, Google is making money off every Amazon device sold, even if they are just using Google to search (who doesn't?).

So a very public (and somewhat fake) "fight" between Amazon and Google over the 7" tablet space just means more sales for both of them. It means Amazon getting their store more sales. It means Google getting more people into their ecosystem. It means more market share for Android tablets. This is now the year the 7" tablet exploded. When you think of it that way, you'll understand why the Nexus 7 is already a success even if it "fails". You can compare it to the whole Apple/Samsung battle. Everyone quotes the huge apple profits compared to Samsung Mobile without considering Samsung Semiconductor. Samsung makes 100 bucks off every iPad sale because the device is about half Samsung parts. Samsung is a damn huge company.

So we know who the winners are:

Google: The search engine. The free webmail. The web browser. The microsoft office replacement. Four number ones, and a bunch of rising stars like G+, Drive, etc. If you own a computer or phone made by anyone, you are giving them money somehow. They are brilliantly diversified. Plus they aren't suing anybody. They were smart and gave away their mobile OS for free. They are selling an ecosystem, and as was proven in the huge victory over Apple in California, they stand firmly behind their partners. Compare that to Apple who sues their partners.

Samsung: The top phone maker in the world also has their parts in just about every phone made. Their mobile division is making money hand over fist, and is only a small part of the overall Samsung juggernaut.

This is where diversification and being the smartest guys in the room pays off. Nobody is going to be a threat to Google anytime soon. Samsung is in an even better position.

Compare that to being a design shop focused on marketing and style over substance. Apple has backed themselves into a corner where they better start spending that 100 billion dollar warchest on actual innovation rather than being patent trolls. It's incredibly bad PR. The hatred for Apple on the net right now is astounding. They are a one-trick pony. Sure, they can afford to hand Samsung 100 million dollars with a failed lawsuit based on an illegal patent, but is that sustainable in the long run? They should be spending that money on a full refresh of their tired designs. They aren't Porsche. They can't get away with making the Nine-Eleven for 20 years. Consumers want new things eventually, despite brand loyalty. The outcry over how mediocre the iOS6 patch to iOS5 is should be proof enough, with its new Android features.

The only real question is what is Microsoft going to do? Sure, they still command basically the entire corporate and personal desktop market. Despite the massive marketing efforts, and the glut of review sites suffering from the Dunning-Kruger Effect. No, people aren't moving entirely to mobile. They can't. You still need a desktop. Most people still have them, and will still have them for a while. Only 25 percent of us even have smartphones. Only 15 percent off us have tablets. Most of us have a windows machine. Hardly anybody owns a Mac. The "mobile revolution!" is off to a slow start. Microsoft is aware of this. The Surface looks like it could be a great product eventually (if it stops locking up during live demos anyway) but it's not priced right. Google kicked off the low price revolution with the incredibly high quality Nexus 7. It ain't no Kindle Fire. Microsoft isn't addressing this most important mobile computing segment. So for all intents and purposes, right now they look like losers waiting to happen.


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