Does Google Pose A Legitimate Threat To Apple?
by ArvindVig
Samsung recently announced the end of the production of the Galaxy Note 7, Apple’s main competitor to their own line of “plus sized” phones, due to an outbreak of battery explosions within the Note 7. Although many Apple shareholders were quite excited about the company’s opportunity to increase their market share, a new competitor has surfaced: enter the Google Pixel and Pixel XL.
On Catherine’s post, she discusses the differences between the iPhone and Pixel, but ultimately believes that the iPhone can withstand the Pixel. I agree with her viewpoint, as Apple already has an established, loyal customer base. It would take a spectacular product to convince longtime Apple users let go of their beloved iPhones. The switching costs for Apple users to switch to the Pixel are much higher than a Samsung user, as iPhones use a different operating software. Samsung phones are classified as “Androids”, which the Pixel and Pixel XL are also classified as.
Now that we’ve established that it will be very difficult for Google to convert Apple’s customers to their own, lets think about which portion of the market they can take control of. There is a large number of Android users, accustomed to a larger sized phone, that are currently without a phone due to the Note 7 recall by Samsung. So these consumers have to make a decision of whether to start using a smaller phone, switch to the iPhone Plus, which uses a different operating software, or use the Pixel XL. Using the Pixel XL seems like the most convenient option, which poses a threat to Apple, but not a significant one.
The Pixel XL is going to attract customers who lost their phone to the recall, so Apple loses nothing if Google is able to secure all of the former Note 7 customers. One could argue that they are losing out on potential customers, which is true, but from a revenue standpoint they are not losing anything. As Google continues to develop new models and new technology there is a possibility of Apple customers willing to switch phones, but at this time the switching costs are simply too high.
Word Count: 351
Sources:
http://creoleindc.typepad.com/rantings_of_a_creole_prin/2012/08/google-vs-apple.html
http://www.mirror.co.uk/tech/google-pixel-v-iphone-7-8970232