It’s Time for Apple to Support Android

There is logic to the suggestion that Apple (NASDAQ: AAPL  ) needs to break down the walls to its closed garden. If Apple is a devices and services company, as it claims, the company's lack of dominance in the smartphone business is hindering its growth. However, you're not going to hear someone say that Apple needs to sell cheaper products. Instead, Apple needs to sell its products on other platforms. 

The Android and Windows Phone problem
You could easily make the argument that there are three huge companies fighting for the future of computing. Apple is an obvious entrant with the popularity of its iPhone, iPad, Mac, and iTunes lineup.

Google (NASDAQ: GOOGL  ) , with its Chromebooks and Chromeboxes, the Nexus lineup and Android, is a natural competitor. Though some thought the company was permanently left behind, Microsoft  (NASDAQ: MSFT  ) has emerged as the clear third system with Windows 8, Surface revenue jumping 123%, the hit Xbox lineup, and Windows Phone taking third place in global smartphone sales.

The problem facing Apple is, according to Strategy Analytics, that the global smartphone market grew by 41% in 2013, while Apple's shipments grew by just 13%. Android and Windows Phone, on the other hand, grew their shipments by 62% and 90%, respectively. With Android and Windows gaining market share, and Apple losing it, Apple may need to release its tight grip on the company's software and services.

Google almost has it
Google is almost perfectly positioned to allow users access to its offerings on all three major platforms. The company's apps are largely present on Android and Windows Phone, as well as iOS.

There are a few exceptions, like no official Google+ app for Windows Phone, and no official YouTube app for Windows desktop store, but there are workarounds. With Google Play generating part of the $1.6 billion in revenue from Google's other division, and a 99% growth rate in revenue, the company has the three big operating systems covered.

Microsoft is coming up fast
Though it would have been unthinkable a few years ago, Microsoft has realized that it can't just offer proprietary software on Windows systems. The company offers Office for Android and iOS, and there are rumors that Office for iPad is coming soon.

Though Windows Phone only carries about 3.6% of the global smartphone market, the system grew shipments faster than many others and took market share. Microsoft's decision to make its OneNote software free across all major operating systems is just the latest salvo in the company's push to become a devices and services company.

With almost half of Microsoft's revenue generated by corporate sales, and another roughly 25% generated from devices and consumer hardware, the company is less reliant on traditional Windows sales than before.

Apple...not so much
Unlike Google, which makes its services and software available everywhere, or Microsoft, which is moving that way, Apple has almost no official apps on either Google Play or the Windows Store.

With 56% of the company's revenue generated by the iPhone, and another 20% from the iPad, maybe Apple doesn't think it needs diversity to its revenue stream. However, its fastest growing unit is actually iTunes, which generated over $4 billion in revenue and grew by 19% last quarter.

If Apple's hardware is good enough to compete against other devices, it should be able to compete even if the company's services are available on other operating systems. To help drive iTunes revenue and diversify Apple's revenue stream, it's time for the company to offer iTunes on both Android and Windows platforms.

Conclusion
Millions of users love the iTunes store to purchase music, videos, and more, and not making an official iTunes app for Android or Windows Phone is shutting out a tremendous opportunity.

Though this probably sounds like heresy to many Apple fans, it really isn't. When more than 82% of the global smartphone market uses your competitor's OS, you either adapt or you don't. This would be a bold move and could lead investors to reexamine Apple's growth potential. For a stock that seems to be looking for a catalyst, this could be exactly what investors are hoping for, even if they don't know it yet.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 27, 2014, at 10:31 PM, marv08 wrote:

    Comparing things which have nothing in common does not necessarily produce any useful output...

    - Google makes almost all its money from ads, the "other" division making $1.6 bn is peanuts, Apple makes this much in a good week. Google's business is ads, they burn money on everything else. Still, nobody writes articles on how they should diversify, because this one profitable product collapsing would destroy the entire company. Pretty much everything they did after Search, Ads and buying YouTube was a complete disaster (G+ is getting nowhere, robots, Glass and cars are nice money destroying hobbies, Motorola was a complete failure, Google TV was a complete failure etc.) Still, the story, especially here on MF is: they do everything right.

    - MS's business is software and all their money comes from software. All their hardware adventures were complete failures, they lost billions of Dollars on Danger, Xbox, Zune, Surface etc. and Nokia will just be another flop on this list.

    - Everything Apple does is aimed at selling hardware. All the software and media stores, and all the software they make (and mostly give away for free) are selling points for Apple hardware.

    The only common thing here is that each of these players is a complete failure when it comes to doing what the others do. Google sucks at software and hardware, MS sucks at everything outside of productivity software and Apple sucks at enterprise and cross-platform software and Internet services outside of "stores".

    The major difference is that Google and MS keep burning money trying to change their DNA (diversify), while Apple sticks to what they can do best. The worst Apple products are/were iTunes and Safari for Windows. Gracing any other platform with such atrocities is not required.

  • Report this Comment On March 27, 2014, at 10:50 PM, Cintos wrote:

    Perhaps "82% of the global smartphone market uses your competitor's OS", but every study of user engagement suggests that the folks who use that competitors OS are no were near as actively engaged with their devices. If you are suggesting that it is because of the lack of Apple's "official" apps on those devices, so be it. I think not. No Android customer would pay Apple for a copy of iTunes, and unless they are interested in lining Apple's coffers (and my dividends), there is absolutely no reason to do it. Google and their licensees can loose all the money they want delivering their product at cost.

  • Report this Comment On March 28, 2014, at 1:14 AM, SimchaStein wrote:

    iTunes on Android is a good idea.

    MSFT Office on iPad is a good idea.

    Both add to Apple's best growth area - iTunes and SW.

  • Report this Comment On March 28, 2014, at 2:06 AM, BarryBye wrote:

    How can you know better than all those brilliant minds at Apple> What a joke!

  • Report this Comment On March 29, 2014, at 6:48 AM, Chiam wrote:

    Barry is right as usual. The guy can pick the time to buy and sell on stocktwits.

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