The lack of a competitive Android solution across pricing tiers could force more Android manufacturers to focus their efforts on the lower-end of the smartphone market – which could reduce the value of Google Inc (NASDAQ:GOOG)’s Android search users – Low-priced smartphones appear to attract “light” computing users who are simply looking for a “better feature phone,” making them less likely to search and purchase products on their mobile device. The potential risk to Google would be additional erosion in Google’s “cost-per-click” rate for its ads, which has been trending down since the fourth-quarter of 2011.
In addition, iOS 7 could kill Research In Motion Ltd (NASDAQ:BBRY). Steep price reductions for Blackberry’s flagship smartphone four months after its launch, the platform’s continued loss of market share, and significant delays in previous operating system upgrades all point to Research In Motion Ltd (NASDAQ:BBRY)’s tenuous position in the smartphone market. If the majority of high-end smartphone users demand dynamic UIs, it’s not unreasonable to question the Research In Motion Ltd (NASDAQ:BBRY)’s ability to survive, given the time and resources the company would need to push through another major OS update.
Apple Inc. (NASDAQ:AAPL) can also further differentiate its iPhone and iPad models. Mobile products using the older A4 chip (including iPhone 4 and the anticipated lower-priced iPhone) will require some of iOS 7’s graphics functionality to be constrained. The result will be another point of differentiation between Apple’s older, lower-priced models and its newer, higher priced smartphones.
Finally, app developers will need to focus more time on iOS 7 apps, and less on the competition. At the risk of appearing dated, existing iPhone apps will need to be quickly modified to incorporate the look and new features of iOS 7. Also, the dynamic interface of iOS 7 can’t be replicated on web browsers — putting pressure on web-based developers to create native apps for the iOS 7 ecosystem. What’s more, iOS 7’s new features, including natural movement and 3D effects, will likely attract additional attention as developers race to exploit iOS 7’s new capabilities. The result? More developers spending more time on iOS 7 apps, at the expense of the Android, Windows 8, and Blackberry 10 mobile operating systems.
Foolish Bottom Line
Apple Inc. (NASDAQ:AAPL) has two goals for their new mobile operating system. First, reignite the wonder and excitement users felt following the introduction of the first iPhone. Second, create a technology moat between Apple and the rest of the mobile competition. Foolish investors should closely track user reaction for iOS 7, since wide appeal for iOS 7 could support company margins and increases in Apple Inc. (NASDAQ:AAPL) iPhone and iPad market share.
The article iOS 7: A Nightmare for the Competition? originally appeared on Fool.com and is written by Bill Shambllin.
Bill Shambllin owns shares of Apple and Google Inc (NASDAQ:GOOG). The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG). Bill is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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