Comparing Apple (NASDAQ: AAPL ) and Google s (NASDAQ: GOOG ) smartphone
businesses is like pun intended comparing apples and oranges. Thats why
headlines about Google Android phones recently outselling iPhones by 2 to 1,
according to a Tuesday study from research group Nielsen , are besides the
point. Apple makes phones. Google touts an operating system. That 56% of
smartphone consumers in the U.S. bought an Android-based phone in the past three
months, while only 28% bought an iPhone using Apples iOS operating system in the
same time period, isnt reflective of the shape of the smartphone market or of
how much money those companies are making in that market. Thats all going to
change, of course, once Google completes its planned acquisition of Motorola
Mobility (NYSE: MMI ) and joins the fray as a manufacturer of phones rather than
just a software sales company. Even then, while Androids footprint might grow
even bigger when Google itself is making and selling smartphones, it likely wont
match Apple for revenue. Heres why. Apple is the biggest smartphone company in
the world in terms of revenue, surpassing even longtime mobile market tyrant
Nokia (NYSE: NOK ) in recent quarters. During the second quarter of 2011, Apple
sold more than 20 million iPhones premium-priced machines that brought in a
total of $13.3 billion in revenue. Nokia sold just less than 17 million
smartphones, only bringing in approximately $3.4 billion in revenue. Google,
meanwhile, reported a total of more than $8.5 billion in revenue for the second
quarter across the entire company, even while it touted 500,000 daily Android
phone activations around the world. Finally, Motorola sold just more than 4
million smartphones during the same period, with the Mobile Devices segment
turning in $2.4 billion in revenue. Unless the shape of the market changes
dramatically between now and the time Google takes ownership of Motorola, Google
simply wont be able to match Apples take. Android doesnt earn enough as a
licensed platform split among the many smartphone manufacturers of the world,
like Samsung (PINK: SSNLF ) and HTC, and the added revenue of Motorolas
smartphones wont tip the scale. There is at least one scenario that could change
Googles fate in the market and transform Androids commanding lead in worldwide
operating system marketshare into a lead in revenue from actual smartphone sales
and its actually Finlands prodigal son that provides the road map.
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