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Apple Vs. Google: Vying for a Higher Fraction of the Population

Since the first article linked below was written in February of 2013, a major shift in the market statuses of Apple and Google has occurred. When the article was written, Google’s share price had just surpassed an all time high of $800, while Apple was continuing to “freefall.” Despite the state of affairs between the rival companies in February of 2013, things look a little different now.

The second article linked was written a little over a week ago on November 5th.  It ranks Apple as the number one most valuable brand in the world, worth an astounding $124.2 billion.  Google, coming in at number three of most valuable brands, is worth $56.6 billion.  What could have caused this shift from Google soaring and Apple falling, to Apple taking a clear lead?

Here it seems necessary to concede that Apple and Google differ significantly in how each makes its money.  Google makes a tremendous amount of its money through advertising, while Apple’s revenues lie largely in innovative tech devices – i.e. phones, tablets, computers, etc. – with which most of us are more than familiar. Comparing the two companies in their entirety would be somewhat like comparing apples and oranges and thus, for the purposes of this post, I will focus just on the competition between the two companies in the sale of tech devices.

Apple’s huge success can be attributed to its gaining a larger fraction of the population (of tech device-purchasing people) than Google has.  This suggests that Apple passed some unstable equilibrium point through its innovation, which then caused demand for its products to keep increasing, while consequently causing demand for Google devices to continue to fall.  If Google hopes to compete in the tech device arena and increase its fraction of the population of tech device-purchasers, it will either have to lower the cost of its products or introduce ones that compete with Apple’s constant innovation.  This might tip the balance back and create a new equilibrium point.


http://www.forbes.com/sites/thestreet/2013/02/19/google-vs-apple-a-tale-of-two-companies/

http://www.forbes.com/sites/kurtbadenhausen/2014/11/05/apple-microsoft-and-google-are-worlds-most-valuable-brands/

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