Apple visibly sweating over Galaxy IV

Apple marketing executive Phil Schiller announces the new iPad Mini at the California Theater on October 23, 2012, in San Jose. / Kevork Djansezian/Getty Images

(MoneyWatch) Apple (AAPL) has many tools in its competitive basket: great industrial design, a mastery of supply-chain issues, marketing savvy and a huge bank account. But perhaps the most important and subtle of the company's strengths is attitude. Success breeds success, and a winning attitude can be invaluable.

But that confidence is beginning to slip. Take Apple's potshots yesterday at Google's (GOOG) Android operating system and Samsung the day before the newest Galaxy phone is announced in the U.S. That smacks of a company living in fear, and perhaps aware of the serious weaknesses that it must grapple with.

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It was Apple senior vice president of worldwide marketing Phil Schiller who undertook the attack. Here are some points he made in an interview with the Wall Street Journal:

This is notable because Apple almost never comments on other companies' products. In the past, Steve Jobs or one of his subordinates might make the occasional dismissive or snide comment, but not seemingly as part of a concerted effort to undermine a competitor.

That began to change when Jobs once attacked Google, RIM, Nokia and small tablets during an earnings call. It was unusual for Jobs to be on earnings calls at all, let alone to use one as a platform to attack rivals. This was in 2010, by which time the threat from Android had become undeniable.

Schiller's comments build on a growing willingness by Apple to address competitors, particularly Samsung, whose Galaxy phones have proven extremely popular. The actual content of the remarks are another example of what people would have called the "reality distortion field," had Jobs been alive to deliver them himself.

For example, Apple can claim what it will about conversions, but extensive market research by virtually all the companies that follow these markets show that Android phones have far and away taken the majority of global market share, even if the iPhone enjoys an advantage in its U.S. backyard. Yes, there are phones that run older versions of Android, but in a way older iPhones that updated to the current iOS 6 software don't get all the features of the operating system, and so effectively create somewhat different versions. As for free, that's the upfront price to a consumer of a base model iPhone 4 these days.

And clearly the old criticism of small tablets fell away when Apple introduced the iPad mini.

Schiller's interview is an example of Apple sweating in public. Recent versions of the iPhone have not been especially innovative. Most of the world -- and this is a global industry -- focuses on Android. Apple's stock price is off by more than 39 percent from a 52-week high of $705.07. And there's no indication that Apple is currently at work on some revolutionary product that will create a new market with a high barrier to entry, as it has done in the past.

These are reasons for any company, including Apple, to sweat. And a new version of an Android smartphone that has proven wildly popular is only turning up the heat.

[123-cbsnews]

Apple has sold crap for more than thirty years, "get over it", without the MS federal monopoly lawsuit they would not even exist today. The reality thirty years ago they sued MS for stealing GUI interface, they lost, MAC OS is still crap. They just managed to make a smart phone when everyone else still made crap.
IBM did not notice there was a large market in smart phones, HP bought Palm OS so they just don't get it, companies like SAMSUNG and TOSHIBA make very nice products at a more competitive price.

[TheStolenGiraffe]

I've been short on AAPL since Sept 2012 and it's paid off handsomely.

My analysis...though a strong and financially sound company, AAPL will no longer be able to rely on it's "brand loyal" patrons because technology consumers are a fickle crowd. The Galaxy out performs the iPhone in nearly every spec...and has tons of features and add ons available that iPhone users have to jailbreak their phones to obtain. AAPL can no longer hide behind their patents, cool colors, and sleak designs; they need to get innovative.

A smaller version of the iPad/iPhone, is not what the public was waiting for. I own an iPhone 5 and the only thing stopping me from getting a Galaxy was the size of the Galaxy and the fact that I'm tech saavy enough to jailbreak and mod my phone the way I want. But if what I hear about the Galaxy 4 is true, I'll be switching over in 2013.

Truth be told, the next company to successfully develop and implement holographic images and apply them to cell phones will be king of the tech world. Rumor has it Samsung is already substantially close to doing this...for their TV's though.

[you_MAY_be_right]

In 2008, when the first iPhone came out, Apple screwed themselves by limiting their market. Oh it was fine to release only to AT&T with a big $$ contract and limit it then to just AT&T. They thought everyone would jump ship and switch to the more expensive carrier just to have their iPhone, and many did -First mistake.

Apple didn't plan on someone else, other than Microsoft and RIM, would develop another OS that would become popular. Second mistake.

Next the released iPhone on Verizon, another expensive carrier. Why haven't they tried to increase market share and release to other carriers? Third mistake.

Want new OS, you mostly have to get a new iPhone (more $$ here), but they offer this every 6 months or so so don't worry, it will come around fourth mistake. While the update releases of Android are slow to appear, I have upgraded my software twice in the past year AND it operates faster and smoother with NEW features, thses are free upgrades.

Now you can get thh iPhone on most carriers, BUT now Google/Android/Samsung have imbedded themselves into the market and left Apple whinning in the corner.

Apple is innovative, but they can't seem to realize they are losing the race here so they will, in despiration, try to drag down their opponent -sort of like trying to intentionally tripping the racer next to you so you can win the race, it is ok as long as you don't get caught, and you can live with yourself after the fact.

[bobnjersey]

[Most of the world -- and this is a global industry -- focuses on Android]
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currently ... most who develop apps for mobile devices that expect to be compensated for their efforts ... focus on iphone ... developing their app their first ... and only following up w/ android versions when revenue viability is shown from the apple community. this may change as the android phones build a larger market share ... but if the android community doesn't want to pay for the extensive efforts of others ... they may not see the same app offerings from independent software developers.

[eriksherman]

The average iPhone app doesn't make much, either. If you consider the cost of developer time to write them (developers working for themselves might ignore this factor), the average app loses money. Yes, the billions paid out seem big, but the money is concentrated in a relatively few hands.

[hypnotoad72]

I'll be buying a S4.

Apple can't hide behind enough patents. And if Xerox had patented its GUI, it would not have lost its lawsuit against Apple 25+ years ago... You seem to forget, all of these major companies "innovate" from one another... so those whining and mewling about Android and Samsung should look up history -- Apple's another "do as I say, not as I do" hypocrite.


Also, some people believe American is an "American" company. How so?


1. So offshoring manufacturing to an Asian company doesn't nix Apple's status as an "American" company?

2. So offshoring engineering and design jobs to an Asian company doesn't nix Apple's status as an "American" company?

3. How is Apple "American" when it's offshoring everything, including profits? Apart from using large amounts of lawyers to get taxpayer-funded subsidy (corporate welfare) and other entitlements? (Given how much information is available, even on mainstream news sources, about corporate welfare, it won't take you long to realize...

[BludApfel]

Good riddance, Apple.

[andacar]

Nothing lasts forever. Apple's incredible dominance in electronics buoyed by a fanatical cult following is losing out to something newer and stronger. They are going to need to learn the lesson IBM failed to learn, when they woke up and discovered the world didn't revolve around Big Blue anymore. HP is floundering. Microsoft is still slugging and trying to do new things, but they are no longer at the top of the heap. Google and Samsung are rising up. And then somebody else will convince the lemmings to run off their cliff.

[hypnotoad72]

IBM had its off-the-shelf built system cloned by Compaq, sued Compaq, and lost. Apple is little different - it too built OS X from (in part, big part) open source and uses off-the-shelf hardware in a pretty (and heat insulating case*).

* don't believe me? Web search any number of articles that discuss overheating (or high temperatures) in iMacs and Macbook pros and wince...

[CGanus]

In today's market tech firms come and go. Apple is not the exception. Samsung came to play, and the Galaxy line is going to destroy Apple. Apple has not done anything that resembles excellence since the launch of the initial iPhone in 2007. "Lets launch a phone that has the headphone jack at the bottom, and increase screen size slightly", that sounds like an innovative company to me! Oh wait do not forget the fantastic product titled, 'iPad mini' or the new iWatch that we have all been waiting for!

[hypnotoad72]

In the market, it's inevitable - period.

I'll give Apple some kudos for standardizing - but, in technology, such standardizations are a state of decay and holding back progress. Microsoft help chain the world to 16- and 32-bit technology far longer than the industry should have...

But we all know it's about the patents.

[Tarzan98]

AAPL managment and Board of Enablers needs to get their act together. Pay attention to market demand for products (copy Samsung's game plan it seems to work). They also need to embrace their investors, split the stock, increase dividend, and buy back shares with the $150 billion pile of cash they are currently squandering. More investors owning the company will buy their products...I don't think Cook and his cronies get that concept.