The Mobile Wave Rolls On

Google’s Android software versus Apple‘s iOS, says Google Chairman Eric Schmidt, "is the defining competition in the industry today.” The battle in smartphone and tablet technology — to build so-called platform ecosystems of partners, developers and users — is the underlying theme in not only Google’s seemingly disappointing quarterly performance, but also in a string of recent tech company and industry reports.

The once-dominant personal computer platform is in retreat. The quarterly results this week from Microsoft, Intel and Advanced Micro Devices all point in that direction. Yes, there is a product-transition issue as the mainstream PC world pauses while waiting for the upcoming release of Windows 8, Microsoft’s new operating system. But the report from IDC last week showed that even Apple’s shipments of Macintosh computers were off 7 percent in the third quarter. Still, people buying fewer personal computers and more smartphones and tablets is a trend that warms the hearts in Apple’s headquarters. That is a tradeoff the company will take gladly, given Apple’s lofty profit margins on iPhones and iPads. The other mobile technology heavyweight, Google, is making a tradeoff of its own. Yes, its profit margins are slipping a bit as more people increasingly use its search and other services on smartphones and tablets. The price paid by advertisers per click is less on mobile devices than on the bigger screens of PCs. But the mobile ad market is embryonic, although growing rapidly. The business models haven’t been figured out yet. Recall, though, that Google was founded and well underway before it figured out the search ad model that made the company an Internet cash register.