Google Android has come out of nowhere to become a major threat to Apple’s iPhone business, which now represents half of Apple’s revenue.The story, as Henry Blodget has said repeatedly, is that Android could potentially destroy the iPhone the way Windows did to the Mac.
So RBC analyst Mike Abramsky asked Apple COO Tim Cook about that on today’s earnings call.
Why isn’t Android a Windows repeat? Why won’t it crush your growth, especially in the U.S.?
Tim Cook responded with a big, fat non-answer. Basically, he just said a bunch of things that could be summarized by: Apple is awesome! And Android is crap!
Here’s a transcript of Cook’s remarks:
“You know Mike, I just saw yesterday, it’s interesting you should point out the U.S., the comScore data released yesterday reported that the iOS platform outreaches Android by 59% in the U.S., and so this is an enormous percentage.
On a worldwide basis, we just did 18.6 million iPhones, which is up 113%, which is materially faster than the market rate of growth. And we launched the iPad 2 and sold every one of them that we could make.
As we’ve said before, we’re gaining traction in enterprise on both iPhone and iPad with astonishing 88% and 75%, respectively, of the Fortune 500 companies deploying or testing these.
We’ve got the largest App Store with over 350,000 apps for iPhone and over 65,000 iPad-specific apps on iOS, versus what appears to be fewer than 100 on Android.
And so we feel very, very good about where we are and we feel great about our future product plan.
We’ve also paid over $2 billion to developers and we’ve had well over 10 billion applications downloaded, and so our business proposition is very, very strong.
And as we’ve said before, we continue to believe — and even more and more every day — that iPhone’s integrated approach is materially better than Android’s fragmented approach, where you have multiple OSes on multiple devices with different screen resolutions, and multiple App Stores with different rules, payment methods, and update strategies.
I think the user appreciates that Apple can take full responsibility for their experience, whereas the fragmented approach turns the customer into a systems integrator, and few customers that I know want to be a systems integrator.”
Everything Cook says is true.
But it still doesn’t really answer the question.
Why isn’t Android going to continue to grow and improve itself and become more and more dominant? Why is Apple not at risk of severe disruption here? Why won’t the industry standardize around Android and make iOS the secondary platform?
What’s different about the mobile industry than the PC industry? Contract length? App lock-in? Software development time?
There are many better answers Tim Cook could have given, but he didn’t.
Maybe he doesn’t know. Maybe he’s just keeping quiet, in Apple’s typical style.
Or maybe Apple really is content to let Android take everything but the high end of the market. But that could be a dangerous proposition.
Related: SAI’s Apple Earnings Analysis