What Happens When Apple, Inc. Doesn't Have a Head Start?

Google (NASDAQ: GOOGL  ) just officially announced Android Wear, a version of Google's mobile operating system tailored to wearables, starting with smartwatches. Meanwhile, Apple's (NASDAQ: AAPL  ) rumored iWatch launch time frame is still uncertain. Will Google's early start in the category give the company an advantage over Apple?

Rewind seven years
The entire tech world was watching when Steve Jobs took the stage that day. It was Jan. 9, 2007, the date of one of most important product launches ever. Jobs took the wraps off the smartphone that would change the mobile phone industry -- and the world -- forever. "Apple Reinvents the Phone with iPhone," read the title of Apple's press release that day.

The Atlantic's Fred Vogelstein shared the reaction of one of the Google (NASDAQ: GOOGL  ) Android engineers that day.

Chris DeSalvo's reaction to the iPhone was immediate and visceral. "As a consumer I was blown away. I wanted one immediately. But as a Google engineer, I thought 'We're going to have to start over.'"

From that day forward, Apple benefited immensely from a first-mover advantage. Sure, Google's Android came to market in 2008. But it wasn't until 2010 that the platform really started to gain traction. And, by then, Apple had already built a massive moat around its castle at the high end of the smartphone market, where it collects the lion's share of the mobile phone industry's profits today.

Apple's first-mover advantage undoubtedly played an enormous role in its dominance in smartphones. But what happens when Apple doesn't move first in a new category?

A disadvantage for Apple?
In smartwatches, Google will be the tech giant that enjoys the first-mover advantage. The launch of Android Wear this early in the game sets the stage for a far different head-to-head battle than the one investors saw between Apple and Google in smartphones.

Among a number of potential advantages that Google will benefit from, one is particularly notable: Providing a standardized platform for Android Wear so early and releasing an accompanying software development kit means developers can get to work on innovative new apps for Android Wear before the iWatch even hits the market. This will not only give Android's app marketplace for wearables a head start, but it will significantly enhance the customer experience on Android Wear devices.

Google's first-mover advantage really puts even more pressure on Apple to release its iWatch this year, because waiting until 2015 now seems a little too distant.

But Apple investors shouldn't put the idea of iWearable domination on the shelf. Apple has an incredible history of reinventing entire product categories. Further, Apple's enviable customer loyalty could keep the bulk of its user base waiting for Apple's alleged iWatch.

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Read/Post Comments (15) | Recommend This Article (3)

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  • Report this Comment On March 22, 2014, at 2:15 PM, deasystems wrote:

    Google has *no* first mover advantage.

    If iWatch is real, Apple has been working on it for a long time. The difference is that Apple will release a finished product, a system; Google has released an announcement.

  • Report this Comment On March 22, 2014, at 2:27 PM, djtetsu wrote:

    Apple has new health functions while google is aiming for a universal watch OS, which still begs the question, why?

    It'll be another device that we'll need to keep changing when all it'll do are same things your phone already does.

  • Report this Comment On March 22, 2014, at 2:31 PM, twolf2919 wrote:

    The video speaks of the exciting new "experiences" android wear developers will come up with. Maybe my imagination is limited, but I can't think of anything I'd like to *do* on a 1.6" or smaller watch face. It occurs to me that the main benefits of a smart watch are its ability to deliver notifications and it's ability to collect data (e.g. Voice commands and sensor data). These features don't require application-specific UI experiences.

    So Apple may not go the route Google has chosen at all! They may just opt to provide an API that lets apps access the additional sensory data and simply extend the existing notification API.

  • Report this Comment On March 22, 2014, at 2:47 PM, HiramWalker wrote:

    If Google ever actually produces something new and original, Apple should feel free to copy it and catch up immediately. The courts support this and it is much more profitable than spending time and money developing your own tech.

  • Report this Comment On March 22, 2014, at 4:19 PM, SimchaStein wrote:

    OMG: Not only that but Apple was late the MP3 player market. OMG they still don't have NFC. OMG LTE was on Android before it was on iOS. OMG Maps, Siri, AntennaGate.

    OK - you get the point. Now:

    1) Apple leads in 64 bit computing.

    2) Think what Apple may bring to a wrist device by investing heavily ($B's) in materials and advanced manufacturing to raise the bar in terms of ruggedness and battery life.

    3) Everyone 'gets it' when break-away products like the iPhone and iPad come along, but Apple does so much more, which is why they led in loyalty, web usage, on-line purchases, and photo sharing despite smaller market share.

  • Report this Comment On March 22, 2014, at 5:24 PM, BBKlaiber wrote:

    Nothing whatsoever. Why do people try to re-write history? Apple wasn't first in mp3 players, digital music sales, smartphones or tablets. They still killed it in all those categories with second-mover-advantage.

    Second-mover-advantage is Apple's secret sauce. Getting it right matters more than getting it first.

  • Report this Comment On March 22, 2014, at 6:46 PM, imvho wrote:

    @BBKlaiber

    Exactly!

  • Report this Comment On March 22, 2014, at 9:05 PM, attaral wrote:

    "What Happens When Apple, Inc. Doesn't Have a Head Start?"

    Galaxy Gear is what happens....all those mp3 players that preceded the iPod are what happens. What happens is we see the crap products delivered by "innovators" like Samesung, when they don't have Apple products to copy from.

  • Report this Comment On March 22, 2014, at 11:15 PM, jdmeck wrote:

    What happens? They learn what not to do.

  • Report this Comment On March 23, 2014, at 12:24 AM, peanutgalerygeek wrote:

    Kind of reminds me of all of those baseball player evaluations from some fans which go like 'that pitcher would be really bad if he wasn't striking out so many hitters' or 'man, that dude stinks except for the fact that he keeps getting on base all of the time'.

  • Report this Comment On March 23, 2014, at 1:23 AM, Renee wrote:

    First mover advantage doesn't matter with Apple.

    They are great at capitalizing on their loyal customer base to sell them more of their devices, and they are great at marketing.

    Case in point: all the amazing MP3s that came before the iPod, but none of those were nearly as successful as the iPod.

    Smartphones were good before the iPhone. Although the user interface was easier on the iPhone, it was the latter that was the really successful one in comparison.

    Lately, Apple has been lagging too much behind the competition in speed, technology, features and innovation...perhaps because Steve Jobs isn't behind things, but it remains to be seen whether Apple copying an existing idea, putting its marketing gears into spin and getting their loyal customers riled up actually works to sell high numbers of its products still.

  • Report this Comment On March 23, 2014, at 3:03 PM, deasystems wrote:

    @Renée: You know what else Apple is good at, Renée? It's good at designing and engineering great products and software. That's why, for example, the iPhone 5s is the world's fastest smartphone, the world's first 64-bit smartphone and mobile OS, and provides the world's first mobile, swipe-free fingerprint ID system.

    I bet you knew all that though. The question is why do you choose to ignore it?

  • Report this Comment On March 23, 2014, at 3:35 PM, Cintos wrote:

    Another Lie. Seems like the press can't write a store about Apple without filling it with lies. Quite often, as in this article, even the premise is a lie. As noted by many above, Apple has never enjoyed first mover advantage. Apple's success is based on its ability to see what people are using and make it a fabulously satisfying experience. If folks are not already using a personal computer, a portable computer, an mp3 player, a phone or a tablet, likely there is no market to chase.

  • Report this Comment On March 23, 2014, at 4:37 PM, Renee wrote:

    @deasystems:

    I know it's the first 64-bit mobile chip. But I also know, from all the engineers that pitched in and the real world tests (of which there are plenty on youtube) that there is no advantage to having 64 bit chips in mobile devices yet (infact, some tests run slower on it than the iPhone 5 with its 32 bit chip).

    The above, by the way, already makes it not "the fastest smartphone", but if you look on Youtube at side-by-side tests of the iPhone 5S, you see that 1 or 2 year old phones like the Galaxy S3 and Sony Xperia Z dance circles around it in almost all day-to-day usage tests thrown at it. The iPhone 5S only beat them on some narrow performance tests that mean something only on paper, but lost out on most of those as well.

    I am indeed aware of the swipe-free fingerprint thing on the phone, and am equally aware of the epic failure that it turned out to be with Apple's support forums overflowing with people complaining about how annoying and unreliable it is, to the point that most people stop using it.

    But, as you say: "I bet you knew all that though. The question is why do you choose to ignore it?"

  • Report this Comment On March 24, 2014, at 2:50 AM, deasystems wrote:

    @deasystems: You're relying on youtube videos for your information, Renée? That explains a lot…

    I suggest you look at tests by qualified independent reviewers like those at anandtech or arstechnica. When you do, you see that the iPhone 5s is indeed the world's fastest smartphone overall.

    Your assertions regarding the iPhone 5s's TouchID system (e.g. "most people stopped using it"), are equally ridiculous and false.

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