But that changed last summer. Samsung Electronics Co., Ltd. (KRX:005930)’s Galaxy S3 was the first phone on the market that was at least as good as Apple’s flagship. Part of that was Samsung’s hardware innovations (a larger screen) but most of it was due to Google Inc (NASDAQ:GOOG)’s advancements with Android.
For years, Google Inc (NASDAQ:GOOG)’s Android was a poor knock-off of Apple Inc. (NASDAQ:AAPL)’s iOS. While it was always infinitely more customizable, it suffered from both stability and speed issues — it was noticeably slower than the iPhone, and apps would frequently crash. But that changed completely with Android 4.1 (Jelly Bean).
An Android phone running Jelly Bean (like the Galaxy S4) is just as snappy and responsive as an iPhone, and nearly as stable. At the same time, it retains Android’s customization and offers features the iPhone can’t match.
One of those features was Google Inc (NASDAQ:GOOG) Now, which was ported to the iPhone earlier this week via an app in the app store. Apple users will find that Google Now is a far superior alternative to Siri — able to anticipate a user’s search needs ahead of time.
But that’s just last year’s Android. Google’s next version of Android (named Key Lime Pie) might be unveiled this month. With that release, it’s likely that the iPhone will only fall further behind.
Not a two-horse race
Some people may be inclined to read this as simple rehash of the Samsung versus Apple debate. But that isn’t the case at all. If Samsung Electronics Co., Ltd. (KRX:005930)’s Galaxy S4 isn’t available, that money could be put toward an HTC One or an LG Optimus G. Alternatively, it could be set aside the upcoming Sony Corporation (ADR) (NYSE:SNE)
Xperia Z or Motorola’s long-rumored “X phone.”
The larger point is that, at long last, Google’s Android has finally caught up. Once upon a time, criticisms like Roger McNamee’s claim that Android phones are only cheap knock-offs of the iPhone, were true — but they aren’t anymore.
No doubt it will take some time to play out, and many consumers will stick with Apple out of brand loyalty. But after losing its quality edge, Apple’s iPhone is likely to struggle in the coming years.
The iPhone has been outgunned
Apple shares rallied a staggering 700% from the beginning of 2009 to the end of August 2012. Most of that rally was predicted on the company’s incredible earnings — earnings that led to the company building a cash pile David Einhorn characterized as a “war vault.”
But nearly all of that money was acquired selling the iPhone — a device that, until recently, was in a league of its own.
But the iPhone is now outmatched and outgunned by its Android-powered rivals. It won’t happen overnight, but consumers will soon learn that Android phones offer a better mobile experience than the iPhone.
As that happens, iPhone sales will dwindle — along with Apple’s profits.
The article The Best $820 an Apple Investor Can Spend originally appeared on Fool.com is written by Salvatore “Sam” Mattera.
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