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Apple Beat Google and Amazon on Black Friday

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Owners of Apple's (NASDAQ: AAPL  ) mobile devices spent more money shopping online on Black Friday than did owners of devices powered by Google's (NASDAQ: GOOGL  ) Android, according to analytics data from IBM and Adobe (via Business Insider). Apple's mobile devices accounted for more Internet traffic than those running Google's mobile operating system, while the average Apple user spent more money.

The favored device among shoppers was Apple's iPad -- according to Adobe, iPads alone generated $417 million in sales, while Android-based tablets accounted for just $42 million in sales. Though this might be seen as further evidence of Apple's dominance of the mobile market in the U.S., it seems most troubling for (NASDAQ: AMZN  ) , whose entire tablet strategy is centered around using its devices to drive sales.

Apple remains in control of the U.S. market
Although Apple's share of the global smartphone market has dwindled in recent quarters, now down under 13%, the iPhone-maker has remained in control of the United States. Android-powered devices account for a larger proportion of the U.S. handset market than Apple's iPhone, but the gap is much smaller -- about 52% to 40%. Probably because of Android's fragmentation, developers continue to favor Apple's mobile operating system, releasing their apps for Apple's platform before eventually porting them to Android. 

Moreover, IBM and Adobe's data suggests that Apple has the more affluent, tech savvy users -- the sort of users app developers desire the most. While it's still possible that owners of Android-powered handsets are wealthier or more willing to purchase things online, they certainly didn't show it on Black Friday: According to IBM's data, owners of Apple devices spent about 21% more on average, while Apple's devices generated more than twice as much Internet traffic.

Amazon sells its hardware near cost to drive sales
While this data may seem disheartening for Google's Android, it's potentially worse for Amazon. A large chunk of the millions spent online during Black Friday was probably spent on Amazon's website, but the retailer would probably prefer that customers bought from its website using one of its mobile devices, such as the new Kindle Fire HDX.

Since it introduced the first Kindle Fire in 2011, Amazon has sold the tablets at around breakeven; Amazon admits it isn't out to make money on the devices (unlike Apple) but rather to generate sales -- Amazon's store is heavily tied to the Kindle Fire's interface. The 7-inch Kindle Fire HDX costs just $229, far cheaper than Apple's $400 competing iPad Mini with Retina display. In fact, Amazon has started handing out its newest Kindles for free, letting customers try them for 30 days, and only charging them if they don't return the devices. Although they run a heavily modified version of Android, Amazon's Kindle Fire tablets are some of the most popular Android-based tablets in the United States and accounted for more than half the Android tablet usage in the United States last year.

Ultimately, getting the sale is more important to Amazon than what device it comes from, but the iPad's dominance of online shopping suggests that Amazon's tablet strategy may not be working as well as planned.

Google has its work cut out for it
Google, too, obviously has a way to go before Android becomes the dominant mobile operating system in the United States. Last week, Google's chairman, Eric Schmidt, observed that many of his friends were making the switch to Android. That may have been true among Schmidt's social circle, but in the aggregate, Americans still seem loyal to Apple. Statistics like IBM's and Adobe's only further cement that notion -- Android has the raw numbers on its side, but Apple's platform remains the preferred mobile experience. 

At least for now, Apple remains on top in the United States.

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Read/Post Comments (6) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On December 01, 2013, at 9:42 PM, JokerJoey wrote:

    And so it shall stay, especially with upcoming announcements. As for the decline in worldwide market share, I fear;ess;y predict that as soon as China Mobile comes on line, you will see about half.....yes, I said HALF....of their installed base switch to iPhones.

    Let's do some math. That would be about 350,000,000 new iPhone sales, and let's assume that they prefer the 5s instead of the 5c. Let's further assume that Apple gets $600 out of each phone that's moved into a contract. That's a tidy $210 Billion dollars in potential revenue from that stream alone, not even including App downloads and other potential economic spinoffs. That would represent MORE than $210 per hare in revenue, and assuming only 35% margin would yield Apple about $75 per share in profit. Add that to the current profit per share and couple that with their buyback program, and you can see that if Apple maintains it's approximate 12 times trailing earnings, give or take, that puts the shares somewhere north of $1200, or more than double their current valuation, and making Google look like it's a tortoise in the valuation race.

    Do we get the hint here folks? T minus 16 days and counting.... buy now, or you will greatly regret it later!

  • Report this Comment On December 01, 2013, at 9:44 PM, JokerJoey wrote:

    Meant "fearlessly" but my ham hands wouldn't hit the right keys....

  • Report this Comment On December 02, 2013, at 12:34 AM, dwilh51183 wrote:



  • Report this Comment On December 02, 2013, at 2:08 AM, johnestromjr wrote:

    Just like with their e-Books, ScamAzon loses money to keep the competition from entering their business. When that doesn't work they cry "foul" and run to the DoJ which does an "investigation" and finds that Apple would introduce competition into the e-Books market and sues. With a deftly appointed leftist judge appointed by.....Bill Clinton, ScamAzon wins the battle.

    Now we find out ScamAzon is also losing money on their Kindle Fire - but don't care. What they and Google are trying to do is destroy Apple by under-selling the market. Google ALSO loses money on their Moto X smartphones - also to try to undermine Apple.

    One [ScamAzon with a P/E ratio of over 1400] would get worldwide sales and the other would get clicks for advertising and no one would make money on smart phones or tablets. Too bad Apple's not cooperating and millions in the USA and the world want Apple devices since they work and give their owners a far better experience in whatever they are used for.

  • Report this Comment On December 02, 2013, at 5:44 AM, RuggedGuy wrote:

    Still can't fathom what it is about Amazon's business model that causes rational people to extoll the immense "value" of the company and support buying its stock at nearly $400 per share. The company has never demonstrated that kits model will deliver earnings at any sustainable level. They continue to invest in building an infrastructure to sell virtually anything that can be sold. What is it that causes people to believe (even the authors of Stock Advisor) that someday Amazon will magically transform this grow-grow-grow model into a profit making machine? They have had over a decade to demonstrate some earnings generating power and yet still have none. Imagine if WalMart began merger negotiations with Amazon. It would be Time-Warner - AOL all over again. A grossly overvalued internet stock gobbling up all the cash and capacity of a truly well-run industry giant. Nonetheless, like the fabled tulip bulbs, AMZN continues to soar to new highs on an almost daily basis.

  • Report this Comment On December 02, 2013, at 12:04 PM, ralphrides wrote:

    and hopefully Apple does not start drone deliveries too :)

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