The Power Of Brands: Google + Verizon Take On Apple

Apple Inc’.s (NASDAQ: AAPL) products are so successful that when it comes to competing with them, every company that tries gets a swing at the pinata. Very few hit it, at least with any force.

The iPod was successful enough that several firms tried to get a piece of its market. The most visible failed attempt was Microsoft Corporation’s (NASDAQ: MSFT) Zune. Several handset companies including Nokia oy (NYSE: NOK), Research-in-Motion (NASDAQ: RIM), and China’s HTC have built smartphones to compete with the iPhone. Apple keeps gaining market share in the sector and now threatens RIM’s place at the top of the market.

Google Inc. (NASDAQ GOOG) and Verizon Wireless will join forces to create a tablet computer to compete with the iPad, which now runs exclusively  on the AT&T (NYSE: T) Wireless network in the US, according to WSJ.com.

Google and Verizon fail, as is often the case, to acknowledge the power of Apple’s brand and the extent to which it quickly builds  an infrastructure, a moat, of software and content around its products. Several PC companies have indicated that they are considering tablets of their own. So far the list includes Hewlett-Packard (NYSE: HPQ) and Dell (NASDAQ: DELL). One of the reasons that these products may not have come to market is Apple’s early dominance of the tablet market.

Apple has sold more than one million iPads so far and has not even begun offering the product overseas. The demand for the iPad has been so great that Apple has run out of the product in some of its retail stores.

Apple has used its brand, built on the tremendous success of the iPod, launched in 2001, to build products which are created to dominate their sectors by cornering the market in the content and software “accessories” to drive sales. The iTunes store quickly became the primary source of digital music. The iPhone has its Apps Store which has nearly 200,000 apps and has already had over 3 billion downloads. None of Apple’s competitors have anywhere near its dominant presence in the smartphone software download business. The large number of successful Apple apps tether iPhone users to the Apple network of wireless software products.

It would go too far to say that no one cares about a Google-driven tablet sold on the Verizon Wireless network, but the tablet buyer market is likely to look at it as trying to play catch-up in a market that Apple has already begun to control.

Douglas A. McIntyre

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