Google Inc (GOOG): Winning Customers for Keeps

Ecosystem lockup
Apple takes a very different approach to customer retention. During the fourth quarter, research firm IDC places global tablet sales up 75.3% to 52.5 million on a year-over-year basis. For the quarter, Apple maintained a 43.6% market share, helping the company sell a total of 22.9 million units. As the tablet market keeps growing, it represents an important opportunity for Apple — the chance to get customers locked in on two devices.

The long-term implication is that by growing its overall market presence, Apple well positions itself for extended success. “Once a meaningful amount of content and apps are loaded for most consumers, it becomes extremely difficult to unseat a device user from a particular operating system,” says Fool tech analyst Andrew Tonner. Most users do not want to spend the time or money required to transfer and convert significant amounts of content between systems.

None of this is to suggest that there is not significant cross-germination of ideas between the two companies, although none is likely explicit. Google continues to develop the functionality of its ecosystem and the increase in sales revenue from this division is proof. On the other side, rumors of a cheap iPhone continue to percolate cross the blogosphere. Ever since Apple failed to meet sales expectations, the market has been clamoring for Apple to take on Google with cheap options. Whether the challenge is accepted or not, Google continues to grow its base and remains a buy at current levels.

The article Google: Winning Customers for Keeps originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

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