An Analysis of Software Developers and Managers
Apple and Google are two of the biggest corporations around world. Google was established by two Larry Page and Sergey Brine, who studied at Stanford University. They established Google Company in 1998. The company has invested a lot of money to expand its services in an attempt to spread out its identity image worldwide. It started with its remarkable search engine, Google which transformed how search for information on the internet. The company relies heavily on its website to provide most of its revenue.
Google recently entered the mobile software industry through its Android system. The system gave the company a significant advantage over its competitors. Some of the companies that have adopted the Android operating system are Samsung, HTC, Motorola, Sony, LG and Huawei. Additionally, Google announced the launch of Google play market to enable Android users to purchase mobile applications. These applications can be applied in different industries such as banking, education and tourism. The Android system together with the Google market place has given Google a competitive advantage in the market. Unlike Google, Apple has developed a unique brand and policy for its products.
Apple Incorporated was started in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. Apple is currently the world’s third-largest mobile phone maker. The company has also diversified from producing high end mobile phones to making laptops and tablets. The company’s brand is recognized worldwide for quality materials and features. Apple achieved great success after introducing the IPhone to the public. Additionally, Apple launched iTunes in 2008. Apple customers had exclusive access to the marketplace where they could buy music and other applications. Apple’s marketplace has been lauded as one of the most secure in the United States market. The system protects users’ identities more efficiently than other comparable systems. Security and identity protection makes clients comfortable while using the site. This paper will illustrate how Google and Apple market are performing in the mobile applications industry and give recommendations based on a detailed analysis of the two.
App store:
The line chart above illustrates the frame work for App store. In 2004, activity was at zero and stayed at that level until April 2008. In the period commencing July 2008, App store rose to 14. Between 2009 and 2010 there was a significant increase in App store downloads to 36. In the beginning of 2011 there was impressive growth to levels slightly below 60. However in February of 2011, App store dropped to 39 and fluctuated for most of 2011to close at 64. In the beginning of 2012 between January and March there was a recession a factor that affected overall sales. The line graphs show growth although at a lower level than 2011. By December 2012 there was a significant increase in App store to pick a high point of 100. In the beginning on January 2013 the App store started to decrease from 100 to 86. And continued decrease until April 2013 to 78.
Google player:
The line chart of frame work for Google player illustrates that the interest for Google player was 6 after it was launched in 2004. The interest continued to increase until the end of 2004 to 8. In 2005 the frame work of Google player continued to increase until the end of 2005 to 17. By 2006 the frame work of Google player started at 25 and continued increase to achieve above 40. In the year 2007 the frame work of Google player suddenly started to decrease. The drop was from 47 in January to 32 in December. In 2008 the frame work of Google player continued to decrease from 34 in January to 29 in June; however; the frame work started to increase to 41 by September 2008. In 2009 the frame work of Google player started at 42 in January and continued to increase to achieve 56 Google players by December 2009.
The frame work of Google player in the beginning of 2010 has fluctuated between 54 in January to 58 in December. However; in 2011 Google player had 58 in January and started to increase to a peak of 90 by the end of 2011. Moreover; in 2012 there was a decrease from 90 in 2011 to 71inMay 2012. And after that there was a significant increase to achieve the high point 100 on December 2012. In addition, on the bagging of 2013 Google player started to decreased from 100 on January to 85 on April 2013.
The Porter five forces analysis will allow more insight into the industry. This analysis examines the threat of new entrants, the threat of substitutes, the customers’ bargaining power, the bargaining power of the suppliers and the competitive rivalry in the industry. The threat of new entrants in the application market is high because of the opportunities that the internet provides. To curb this possibility, the two main players, Apple and Google buy out small software development companies through acquisitions. Google has used this strategy over the years to gain ownership of valuable patents and trademarks such as Google Earth which it bought from Keyhole Incorporated in 2004. There are also many substitutes available to customers. This means that the two companies have to develop the best alternatives at the best price. The targeted customers for applications are highly discerning and will look for the best applications to meet their needs. Value is largely determined by the performance of the application bought. Suppliers have limited bargaining power because the market is flooded by software developers. Additionally, the two companies have their own software development departments which are constantly coming up with new applications.
Google play as earlier said is one of the key market players in the technology industry. The value of revenue from Apple’s Ios App store is slightly more than twice that of Google play. App Annie's report on the market performance (Market Report Q1 2013) critically observed the state of the two chief app repositories, discovering that App Store produced over double the app revenue generated by Google Play over the precedent quarter. App Store revenues, which were already way above those of Google play, grew by approximately one-quarter over the precedent three months. Though significantly beaten/outstripped by the App Store in terms of revenue, Google Play revenues shot massively over the last quarter. From the fourth quarter in 2012 to the first quarter in 2013 (Q4 2012 to Q1 2013), Play Store income grew by slightly above 90 percent. However, even after considering this exponential growth, Apple realized more growth if we talk of absolute revenue. The Play Store is rapidly closing the gap with the iOS App Store speaking in terms of total app that are downloaded. In the precedent quarter, Play app downloads went up to about 90 percent of the App Store's entire downloads.
The graphs below show Apple’s total downloads and revenue as obtained from their website.
A software developer has to consider the market that their product could be exposed to. Apple has strong bases in various countries, but its largest countries by revenue are the United States and Japan. However, China has also become increasingly significant in terms of app revenue apart from the US and Japan. The United States, Japan, China and the United Kingdom collectively account for approximately half of the total iOS downloads. This compared to Google whose apps in South Korea, the U.S., Russia, and India make up about 40 percent of the total downloads. Apple offers a software developer the best chance of exposure but only if the product stands out against Apple software. Google compares favorably in the leading countries and also gives independent software developers a chance to grow.
As it has been already been observed, the two heavy weights on the app market are the App Store and the Google Play Store. The Play Store realized the record number of downloads representing roughly 51% of the total which was at 13.4 billion. Apple however is very close behind. Although as it can be seen Apple still beats the Play Store since it has the largest fraction of total revenue generated. This is to say Apple took pretty much of the money, with the value reeling to about 74% of the revenue. Software developers can opt to rely on Apple stores guaranteed volumes or take risks on Google’s potential for growth. It may be safer to launch software in Apple stores and expand into Google stores.
Most developers look towards download volumes when settling on where to start publishing. While many developers have been aiming both systems, majority of them start out on iOS and then progressively bring their apps and games to Android. Google Play revenue in terms of sales expanded a robust 311% (percent) from January to October of 2012 (App Annie). Google Play's lofty growth figures are boosted by Android apps which began the year with a trivial revenue rate, therefore its high expansion percentages can be deceptive especially when compared with a varying nanoscale base. Still, iOS growth seems to have slowed down while Google Play’s continues to grow tremendously. During the month of October, revenues from Google Play jumped up by 17.9% ( percent) while iOS went down by 0.7%(percent).If we stop for a moment and not talk in terms of revenue, Google Play’s growth is quickly gaining and rivalling that of iOS; if we compare the total number of free-downloads not revenues. Google Play has expanded by 48% (percent), while iOS expanded only by 4.4%(percent).
The following graphs were extracted from their website. The images show the variations of revenue and free download for Google play.
In conclusion, technology is one of the most dynamic industries in the world. Google and Apple are the foremost contenders in mobile devices, softwares and internet related products and services. The new frontier for competition among the two companies is the online application market place. Apple has iTunes while Google has the play store. Apple has still maintained leadership in terms of overall revenues but Google has been catching up as evidenced by its exponential growth. The framework for Apple dropped from 86 in January to 78 in April while Google was at 84 in April. Managers use this information to access the opportunities available in the two companies. Apple may have impressive revenues but its growth has been slow in the recent past. On the other hand, Google is growing and may be catching up to Apple in terms of revenue. Managers and other investors should look for opportunities in Google because the company has immense growth potential.
References
Andrew (16 July 2009). Android Market Hits 1 Billion Downloads & 100,000 Apps FoneHome. Retrieved 4 January 2012.
Bray, Tim (30 September 2010). More Countries More Sellers More Buyers
Burns, Chris (29 September 2011). Android Market Update Released for Honeycomb.
Chu, Eric (2009). Android Market Update Support.
Nickinson, Phil (15 April 2010). Android Market Now Has 38,000 Apps.Android Central. Retrieved 4 January 2012.
Gibb, Kyle (26 October 2010). Android Market Passes 100,000 Apps. Android Central.
Hildenbrand, Jerry (2010). Android Market Has More than 80,000 Apps, Android's Rubin Says. Android Central.Retrieved 4 January 2012.
Paul, Ian (2012).Google Play Store: 800,000 apps and overtake Apple App Store. Retrieved 20 February2013
Rodriguez, Armando (16 November 2011). Get Started With Google's New Music Store.
Zachary Lutz (2012).Google Play celebrates 25 billion downloads with 25 cent apps, discounted books, music, and movies. Engadget.com. Retrieved 5 November 2012.
http://www.google.ca/trends/explore#q=app%20store
http://www.google.ca/trends/explore#q=google%20player
