Google Inc (GOOG), Microsoft Corporation (MSFT): Apple Inc. (AAPL) Can’t Survive as a Premium Brand

Research firm Flurry noted that Chinese mobile developers are beginning to export, building apps for the Korean and Japanese market. In time, they could turn their focus toward the West, putting their apps up on Google Play, and giving Android the app advantage over Apple Inc. (NASDAQ:AAPL)’s mobile operating system.

The dynamics of platform businesses
For premium companies in other industries, market share does not matter. A Louis Vuitton handbag purchased by one consumer doesn’t necessarily make the same bag owned by a different consumer more valuable (indeed, if the brand became too popular, it could actually become less valuable).

But with the iPhone, Apple is selling a platform. The more iPhone owners are out there, the more valuable each iPhone becomes — more developers code for iOS, making better apps for the phone, in turn making the existing phones more valuable to their owners.

In order to survive, Apple Inc. (NASDAQ:AAPL) needs to maintain a sizable market share. As Android has grown, iOS has dwindled, and now stands at just 14% of the worldwide market. A cheaper iPhone could’ve done much to change that, but unfortunately, Apple appears to be unwilling to release such a device.

The article Apple Can’t Survive as a Premium Brand originally appeared on Fool.com.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. 

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