Google’s (GOOG) Android platform clearly dominates the mobile landscape in terms of market share, and though Samsung (005930) continues to close in, Apple (AAPL) leads the pack in profitability by a wide margin. According to one industry watcher, however, they should all be watching out for Microsoft (MSFT).
Sizemore Capital’s Charles Sizemore writes in a contribution to NASDAQ that “Microsoft will ultimately muscle-out Apple as the leader in smartphones and tablets.” He says the war will be long and grueling, but Microsoft will ultimately pull ahead because Apple has no “durable long-term advantages” to keep customers loyal. He also contends that “Apple’s insistence on controlling every aspect of both its software and hardware puts it at a disadvantage to a more flexible Microsoft.”
Where Android is concerned, Sizemore says he doesn’t take Google seriously as a long-term competitor because the company’s solutions are “shoddy” attempts at matching superior offerings from Apple and Microsoft. He points to Google Play Music as an example, though the extent of his complaint seems to be that the app can’t cache music on an SD card as opposed to a device’s internal storage without the user “hacking” his or her phone. The analyst offers no further examples to substantiate his claims.
“You simply don’t have these sorts of problems with Apple or Microsoft,” Sizemore contends. “Why? Because they are real companies with real business models. With a few exceptions, they actually charge for their products and offer some degree of support.”
He continues, “Given that Google gives most of its products away for free, you have to question how seriously they take them. And given my experience with Play Music, the answer is ‘not very.'”
The analyst concludes that while he is not forecasting an “immediate collapse in Google’s share price,” he finds no evidence to show that Google’s advertising model is sustainable and therefore will not invest in Google. Sizemore discloses that his firm holds a long position in Microsoft.
