Goldman Sachs: Google, MS ‘challenged’ by Apple threat
Thursday, December 13, 2012 @ 5:13am
| A recent study by Goldman Sachs says that both Google and Microsoft can expect to face an even more dominant Apple in the years ahead. Contrary to Google chairman Eric Schmidt’s assertion that that Google is ‘winning the war’ against Apple’s iOS with its Android OS, the Goldman Sachs report suggests that Apple’s customer loyalty will place Google and Microsoft at a significant competitive disadvantage. Apple currently leads customer spending on ‘complements,’ products and services that sit on top of the platform, which is only likely to continue to rise leading to additional iOS device product purchases.
"We believe loyalty to the company's ecosystem is only increasing and this should translate into continued growth going forward...,” states the report. “In particular, we see the potential for Apple to capture additional growth as existing iOS users move to multiple device ownership."
In the coming years, Goldman Sachs sees Apple, Facebook and Samsung as being well positioned. By comparison, Amazon is “straddling the line” while Google and Microsoft are “challenged” in ongoing platform adoption. Although Google has made some inroads with its own co-branded tablet devices, Android market share will drop to 21 percent next year, down from 33 percent this year. “Tablet share loss leads to smartphone share defection. We ultimately see Google as trying to find a way to stay just as relevant in the new compute paradign as it was during Web 1.0 and 2.0,” the report concludes.
Similarly, Microsoft’s continued troubles in gaining traction in the mobile computing space has seen its market share of “total consumer compute” drop in real terms from 93 percent in 2000 to around 20 percent in 2012 due to the surge in smartphone and tablet sales. According to Goldman Sachs, for Microsoft to turn this problem around in the short term, it “"would have to sell roughly 5 Windows Phones or roughly two Windows 8 RT tablets to offset the loss of one traditional Windows PC sale."
The report concludes that with the arrival of the iPad mini and cheaper iPhones, Apple "has room to rise much further, and that its dominant tablet market share appears to be more resilient than most expect." [via CNET]