Why Competition in the App Industry is Great for Consumers

 Coke and Pepsi, Ford and GM, AT&T and MCI, even Seahawks and Niners – great rivalries make great stories, stir controversy, spur creative thinking and change the world. From phones to football, great rivalries also drive competition, give us more choices and, let’s be honest, engage and entertain us as the consuming public. 

I would say that this brutal competition between Apple and Google over Android and iOS has enormous benefits for consumers worldwide,
— Eric Schmidt, Chairman, Google Inc.

Entering the ring – Google and Apple. It should come as no surprise we were nodding our heads a bit when Google Inc. Chairman Eric Schmidt took the Google vs. Apple rivalry head on in a Bloomberg TV interview this week  - “I would say that this brutal competition between Apple and Google over Android and iOS has enormous benefits for consumers worldwide,” said Google Inc. Chairman Eric Schmidt. “If you look at the innovation on the Apple side and on the Google side, that competition which I think is the defining fight of the computer industry, it benefits global at the billions of people level.”(Bloomberg TV)  

Those global benefits may be no more obvious than in the recent launches of Android One in India and the record breaking release of iPhone 6 and 6+. (Android One smartphone sales to hit 2 million in 2014: MediaTek)

Can you hear the fight song playing yet? Yes! Prices for devices are way down, sales are way up, and apps are cheap or free. Cloud based systems are changing the way services are delivered and more and more people are “connecting” in new ways from watches to cars and home systems. Consumers are in control of the market, and it is the job of developers, manufacturers and platforms to meet consumer’s expectations. Developers are bringing their A-game and the appetite for their innovation is evident in new products and services.

Let the games begin (or continue) as companies have to compete to get or keep your business. In the same interview with Bloomberg TV, Schmidt elaborated on the level of competition saying,  “It’s always good to have more competitors, but trust me -- between Apple and Google you’re seeing enormous, enormous racing.”

“Enormous racing” is right.  There are more than 2 million apps available in app stores and no limits on how many a consumer can load on their devices. There are apps for everything from getting around town to finding a date to helping keep you healthy and fit.  With an additional billion smart phones expected to come online globally each of the next three years, it appears we are still very much in the early stages of app industry growth. Today, according to a VisionMobile study released in July, there are 2.9 million mobile developers in the world, building, publishing and maintaining more than 2 million apps.  Their app store revenue forecasts, as reported by statistica.com project, predicts nearly $35 billion this year alone. The market is thriving and shows no signs of slowing down.

The point is - both choice and competition are important to the continued success of the app ecosystem and innovation economy. When companies compete, innovation is pushed front and center and consumers can demand the best products.

Its no secret Apple and Google approach apps from opposite positions. Apple uses a consistent design and function, controlling each piece of the user experience. This gives Apple a user friendly appeal that many developers and consumers like.

Android opts for the alternative, open, less structured delivery of apps across a multitude of devices. The proliferation of devices, including at highly diversified prices, enables developers to reach new consumers, and consumers to make broader choices about their hardware and app uses. There are benefits to both approaches - obvious by their respective success - as well challenges. Some say Apple picks winners and losers through their vertical integration, and limit consumer choice and developer innovation. Microsoft, Nokia and other competitors of Google have argued that Android is too successful, to the point of harming competition.

Whatever your platform of choice, the value of competition is clear, we all win.

Posted by:

Jake Ward, Executive Director