Something like 90%+ of the profit from smartphones goes to Apple — if that’s not the upper hand then I don’t know what is. Apple makes profit. Google has a legion of devices with incentives to keep insecure so they can monitor and harvest the data to both serve and sell ads.

That's not the upper hand. The upper hand is having the installed base needed to be able to push through product changes that undermine your competitors' strategic position. Things like being able to continuously track the location of each of your ~2B customers so that you know who is hanging out with whom and can build the social graph that another one of your primary competitors spent a decade curating - or, for that matter, that the KGB causes major diplomatic incidents trying to build.

I think that in this particular case, Google overreached, it's an inconvenience to them, and they'll roll it back. In the general case, though, Google's got way more power than Apple (and more than most nation-states) and they just haven't been called on it yet.

It's the upper hand in certain regions. Last I checked Apple has majority market share in Japan, think it was 60% or more. Google definitely stand to lose something and clearly its worthwhile if they are paying billions per year.

If google was so confident it had the “upper hand” with android and its 2B users why would it pay an estimated 9 billion to Apple [1] to remain the default search engine on iOS? That screams desperation to me. [1]https://www.google.com/amp/s/9to5mac.com/2018/09/28/google-p...

> Something like 90%+ of the profit from smartphones goes to Apple

Does that count ad revenue from ads running on smartphones?

That’s misleading. Android phones are huge in China, and they use zero Google services.

Apple’s market aligns with the most profitable markets for Google.

> Android has 85% of the worldwide smartphone market

I think a mistake to make here is thinking that Apple gives a toss.

Publicly, Apple will say that it doesn't care about Android market share for all the usual reasons John Gruber repeats. But privately, if there was one thing that would keep me up at night as an Apple executive, that number would be it.

I don't know, I think China is more on their mind at the moment. It was Steve's crusade to destroy Google; I don't think that really exists in the same capacity anymore. Right now, Apple still make the most money, they're quite happy.

In fact, one could reasonably say Apple actively tries not to obtain too large of a market percentage to avoid laws affecting monopolies.

More likely it’s about margins and business model.

Apple’s business model is selling high margin products. More share requires lower costs, which increases operational risk and reduces profitability. That’s why Apple stock is cheap compared to other big tech companies... a problem with execution today has a bigger impact than a company like Google that has a stream of revenue from ads on every platform.

You’re going to see changes in the model as they are hitting a growth ceiling, but they’ll probably take a different services path than Google.

> In fact, one could reasonably say Apple actively tries not to obtain too large of a market percentage to avoid laws affecting monopolies.

I would say rather to avoid laws it's to avoid appearing as a commodity and losing its "fashion" or "hip" status. If everyone has an iPhone suddenly it is less desirable to own an iPhone.

Yeah, I feel that way about my microwave too. Your analogy may have applied at one point in time but not now.

You think so? I think they don’t chase market share, but not to avoid anti-trust issues.

Their entire locked-in software model around OS, dev tooling, browser engine, app store, etc would be subject to legal challenges. True it may not be the primary reason they keep a low market share, but it's definitely a benefit and discourages shooting too high.

Maybe they should exist China and don’t give up keys to iCloud to Chinese govt.

Who are the more valuable users for ad providers? Owners of Apple devices or owners of Androids?

Worldwide, sure, but look at developed countries where most of the profit comes from. In the US in 2018 63% were iPhones and 36% were Android[1]. Android usage is even going down in some places, such as Canada where it went from 46% to 39% between 2017 and 2018.

[1] https://deviceatlas.com/blog/android-v-ios-market-share#us

And Apple has market share for the only mobile consumers that matter: rich people and whales.

strikethrough rich people and whales, and replace with people who are willing to spend their disposable income on apps and micro-transactions, of which in that segment contain rich people and whales, but also sometimes people in debt up to their eyeballs and low-income individuals as well.