But given the software advantages iOS still enjoys compared to Android, Apple is likely to have a large, dedicated user base in the developed world for the foreseeable future.
Until Android becomes the first choice of app developers, Apple shareholders need not concern themselves with global market share. Even with a minority position, iOS can still be highly profitable for Apple Inc. (NASDAQ:AAPL) — as its Mac division has been, despite the fact that Windows PCs utterly overwhelm them in the marketplace.
Is Google benefitting from Android’s growth?
Then there’s Google Inc (NASDAQ:GOOG). Shares are up more than 70% in the last two years, but how much of that is from Android’s growth?
The amount of money Google makes from Android is debatable — Google maintains Android as an open source operating system, giving it away for free. Venture capitalist Roger McNamee has slammed Google’s strategy, calling it “profitless prosperity.” In fact, based on the company’s court case with Oracle, The Guardian estimated that Google made just over $550 million on Android from 2008-2012.
But Google Inc (NASDAQ:GOOG) does benefit from Android’s popularity — Android users are more likely to utilize Google’s web services. Android devices are tied directly to many of these including gmail, Google Docs, and Google+.
Unfortunately, Google doesn’t break out the exact profitability of each service; still, they’re the key to the company’s long-term success. The search giant warned last fall that the ongoing transition from desktop to mobile has weighed on the company’s advertising revenue, getting consumers to embrace its web services (via Android) should allow the company to profit in a post-PC world.
Should BlackBerry shareholders remain patient?
As for Research In Motion Ltd (NASDAQ:BBRY), CEO Thorsten Heins urged investors to remain patient on Tuesday. He continued to stress that the company was in the midst of a transformation, and that BlackBerry would return to profitability in the future.
While BlackBerry might find a future as a mobile services company — it has brought its Secure Work Space to iOS and Android, and plans to do the same with BlackBerry Messenger — it will be a bumpy road. As the very title of this piece suggests, the company’s fall from grace has been nothing short of spectacular, and the reception to its new BB10 operating system has thus far been lukewarm.
A host of analysts downgraded the stock last week, including analysts at Deutsche Bank, who warned that the company was having difficulty competing in the smartphone market. Deutsche Bank has a $6 price target on the company, implying over a 40% downside from these levels.
Android won’t crowd out iOS completely
Apple Inc. (NASDAQ:AAPL)’s mobile market share should continue to decline. And given Android’s ability to offer sub $100 phones in emerging markets, Android’s market share will likely increase further.
But that doesn’t mean that the mobile world will become a single-horse race. iOS continues to be the favored platform for mobile developers despite Android’s significantly larger market. As long as that remains true, Apple will have a large minority position in developed economies.
The article Is Apple About to Become BlackBerry? originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.
Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
