If there’s one arena where Googleand Appleare really at each other’s throats, it’s phones.
Apple 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 .
Google’s Android OS has redefined the smartphone landscape again over the past two years, thanks to popular phones like the Droidand 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 nowherein 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 , Samsung, LGand HTC – Dell 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.
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