smart phones

Why Apple investors shouldn't sweat Android

April 11, 2011: 12:19 PM ET

There's been a lot of noise recently about how Android is outselling the iPhone, but it's nothing more than a meaningless distraction from reality.

By Andy M. Zaky, contributor

FORTUNE -- It seems that almost every day I'm confronted with yet another insignificant article explaining how Google has surpassed Apple in "platform market share" and that, due to this cataclysmic state of affairs, investors should jump ship as this surely amounts to nothing short of the financial end of Apple.

iphone android wars

Who's winning?

Just recently, Business Insider's Henry Blodget published a piece on this highly immaterial subject which generated tremendous criticism from investors, readers and even other members of the press. In his article, breathlessly entitled "Android is Destroying Everyone, Especially RIM – iPhone Dead in Water", Blodget writes that Apple investors should be "scared to death" by Android's recent 7-point gain in U.S. market share over the past three months. According to comScore, Android OS holds 33% of the U.S. market while RIM OS holds 29% and Apple iOS only 25%.

Blodget argues that Android market share gains are very important "because technology platform markets tend to standardize around a single dominant platform. And the more dominant the platform becomes, the more valuable it becomes and the harder it becomes to dislodge. The network effect kicks in, and developers building products designed to work with the platform devote more and more of their energy to the platform. The reward of building and working with other platforms, meanwhile, drops, and gradually developers stop developing for them." While Blodget does lay out the main concern in any platform war, his evidence for why Google (GOOG) is starting to dominate is not only insubstantial, it's actually irrelevant. More

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