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Clash of the Titans: Apple Vs Google

Published: Thursday, 9 Sep 2010 | 12:50 PM ET
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By: Jon Fortt
Tech Correspondent

If there’s one arena where Google and Apple are really at each other’s throats, it’s phones.

Apple [AAPL  Loading...      ()   ] redefined the wireless space three years ago when it introduced the iPhone – a then unheard-of gadget with a touchscreen and just one button. Apple’s gone on to sell well over 60 million of the devices worldwide at an impressive average selling price of over $600 and nosebleed profit margins.

The one company raining on Apple’s parade? Google [GOOG  Loading...      ()   ].

Google’s Android OS has redefined the smartphone landscape again over the past two years, thanks to popular phones like the Droid and the Evo 4G. What’s not to like? Well, maybe the business model if you’re an investor. Google gives away Android software for free, so while Google’s market share has soared, it’s no surprise that its stock has gone nowhere in the three years since the iPhone’s debut, while Apple’s has doubled.

So who will win here?

Depends how you keep score.

If you’re measuring market share, then Google will almost certainly win. Practically every major handset maker in the world is working with Android, including Motorola [MOT  Loading...      ()   ], Samsung, LG and HTC – Dell [DELL  Loading...      ()   ] and other PC makers are dabbling, too.

But market share gets you only so far.

For an investor, a more important number is profit per phone, and by that measure Apple will still rule for the foreseeable future. Because Apple designs its own chips and hardware, makes its own OS and operates its own retail stores, it can achieve incredible margins when things go right.

So who has the advantage? It’s got to be Apple – until Google proves it can translate Android market share into mobile advertising dollars.

Questions?  Comments? 

And you can follow Jon Fortt on Twitter @jonfortt
© 2012 CNBC, Inc. All Rights Reserved


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