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Call the Cops: Apple's About to Kill Android

Stocks in this article: AAPL

When iPhone 5s came out, I "couldn't" get one. I still had roughly one year remaining on my two-year wireless contract with Verizon (VZ). While I would have probably upgraded anyway if I was eligible (that's just how I am), I never feel shortchanged by the iPhone 5 when I compare it to the iPhone 5s. For all intents and purposes, they're the same phone. This assessment probably holds for most people.

Competing against the standard it has set for itself, Apple probably can't afford to have iPhone 5s owners, for instance, feel the same way with respect to iPhone 6. It's not that Apple has to out-wow Android consumers; it has to reignite the uncontrollable aspirational urge to upgrade among its devotees.

That's the focus. Not some overhyped concern over what Google's hardware partners do with Android-based devices.

The Apple consumer's love affair with the iPhone has become routine. The missionary position every night of the week. Oh. Nice. Another iPhone. For most companies, tepid excitement Apple style would be fantastic. But that's not the case when Apple measures itself against Apple. It needs to find that spark again. And there's no better way to do it than by recreating the iPhone experience just enough ... to the point where it shifts expectations vis-a-vis the smartphone experience.

This is Apple's position of strength -- a more than stable, world-beating iPhone (and iPad) business that gives it the ability to not have to chase the so-called competition. As long as it stays true to itself at the same time as it outdoes itself, it'll be OK. Tall order, yes. But it has become the Apple way.

How anybody could argue against the notion of "the only phone that matters this year" further eroding Android's declining marketshare is beyond me. It's not like when you predict iPhone will demolish Android, you're saying Google sucks. Quite the contrary.

Google's as strong a company as Apple. Just in a different way. It's not doing hardware the right way (and it knows it) because hardware isn't the endgame for Google. Search, software and services represents Google's grail. A scattered hardware strategy is merely one of many means to make it holy. Google's a bit like (AMZN) in that regard. 

It's in Google's DNA to be a marketshare company. Considering Google's roots in search, that's not a surprise. Most of the other important things Google does, outside of Glass and other relative larks, require marketshare. Again ... just like search. 

But there's a problem with this Google strategy. It likely won't hurt it's core, but it makes it vulnerable to losing further Android marketshare, particularly in the United States.

When you farm hardware production out to less-than others, you spread yourself thin. Ultimately, there's no there there. It's for this reason Apple can effectively compete with Samsung with one phone (and a couple older models). Google allows Android to power dozens and dozens of devices. None remarkable enough to differentiate themselves from the pack. This dynamic gives Apple the ability to do what I think it will do (and Saintvilus alluded to) with iPhone 6:

Come hard with a clear and distinct message.

Bigger screen option. Fastest smartphone on the market. Ability to multitask. Improved Maps. Improved Siri. Mobile payments capability. Whatever Apple has up its sleeve will get iPhone diehards talking again. The lines will be long. The rest of the world will watch. Apple will reclaim ownership of the halo effect.

When Apple outdoes itself -- as it has since Steve Jobs introduced iPod -- things pretty much goes down exactly that way. It doesn't gobble marketshare as much as it chips away at it. Swoops in. Owns a market. Others dilute that market. And then, because quality and loyalty trump the marketshare ploy, Apple trends up while the others trend down. Apple's always in charge of putting the writing on the wall. 

This article won't make sense to about half of the people who read it. But by the end of 2014 it will. "Demolish" will seem much less inflammatory in January 2015 than it did in April 2014. If it doesn't, we'll reserve a room for you at Bellevue -- they'll be waiting for you there with their oxygen masks -- next to the few remaining BlackBerry (BBRY) diehards. Sitting there. Mumbling to themselves.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a full-time columnist for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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