Assuming Android goes proprietary to Motorola, it falls behind Apple in market share by 2012 and Windows Phone (the Other category) gulps up nearly half the mobile phone market.
There’s a good reason why Apple’s products “just work”. But it’s been a bumpy road for the Cupertino, California company because right from the onset competitors were ridiculing its vertically integrated approach to business. Apple’s supposedly ‘closed’ ecosystem is a major weakness, critics cry. The past decade, however, saw the marketplace validate the strategy through booming sales of Apple gear. But what if GOOG actually tried the AAPL model with Motorola, which today makes about one in ten Android smartphones?
That’s the dilemma Piper Jaffray resident Apple analyst Gene Munster set out to explore in his Friday note to clients. In short, making Android proprietary and exclusive to Motorola would add about 35 percent to operating income for Google, the accidental hardware company. By 2015, the phone biz would add $10.5 billion in operating profit and $56 billion in revenue, resulting in a per-share earnings of $25.16 by 2015. There’s just one problem with this hypothetical strategy: Read more