Apple's Problem Isn't Cosmetics, It's Google

NEW YORK (TheStreet) -- I've been owning Apple (AAPL) stock because I think it's one of thebest-managed companies in the world, and Apple has had an epic runbased on the iPhone and iPad products. However, recent events andtrends are causing me concern.

The setup for Apple's big June 10 developer conference keynote soundslike this: Every analyst is enamored by the prospect that newlyappointed chief software designer Jony Ive will have eschewed theso-called skeuomorphism design language.

What is skeuomorphism? It's the charming icons in the iOS softwarethat we have seen since it was first launched in 2007. Basically, a"books" app icon looks like a wooden bookshelf, the "notes" app iconlooks like a yellow notepad and so forth. You get the point -- anicon looks like something analog in the real world.

The great hope for Apple now is allegedly that it will relinquish thisskeuomorphism in favor of a so-called "flat" design of its app icons.What this means is a design language that looks a bit more like --wait for it -- Microsoft's ( MSFT) Windows Phone 8.

No, I kid you not -- if the rumors are true, Apple's next invention isto make the iPhone and iPad look more like Windows 8, which is "flat." This is supposed to reignite Apple's earnings, which have stagnatedso far this year.

Aside from the perpetually bored tech press, have you heard any normalperson complain about Apple's skeuomorphistic design language on his or her iOS devices, begging for Apple to simply copy the Windows 8 look?Only then will they run to the Apple store and buy more Apple productsagain!

Me neither.

If Apple thinks its problem is the look of its software, I getseriously worried. If it thinks that it can have a bright futurebased on copying the look of Windows 8, there's a screw loosesomewhere.

Obviously, I'm exaggerating a bit here. It can't be that bad -- orcan it? We had better hope Apple is going to get a design revampright. I have every reason to believe it will be as beautiful asanything. Also, I don't mind some aspects of the Windows 8 look anyway.

In the bigger picture, though, for Apple to focus on changing the iconcolors is like rearranging the deck chairs on the Titanic -- almostliterally. Apple has hit an iceberg, and it's losing water -- fast.

The name of this iceberg? Google ( GOOG).

Google, together with a long list of hardware partners -- Samsung, Asus, Acer, HTC, Sony ( SNE), Lenovo ( LNVGY), ZTE, Huawei, Motorola and many more --are attacking Apple like hyenas bite into a gnu. They're doing itthrough lower prices, improved hardware, and better services.

Let's examine those in turn:

1. Lower prices:

First, hardware: Apple laptops start at $1,000; Google laptops startat $200. Apple tablets start at $330; Google tablets start at $200.Apple's iPhone 5 smartphone starts at $649; Google's equivalent Nexus4 starts at $349.

Components: Apple now makes (aka engineers) its own CPUs. Google andits partners work with Intel ( INTC), Nvidia ( NVDA), Qualcomm ( QCOM), Samsung and Broadcom ( BRCM) for CPUs. Yes, I know, Apple uses some of those, too, for selectedlower-value/importance parts.

Second, software: Google offers more cloud services, and they arefree. Google gives you 15 gigs of storage just for creating anaccount. Google gives you 100 gigs of storage for buying a $250laptop, and 1 terabyte for buying a $1,300 laptop. Apple could chargeyou $50 per month for something like that.

2. Improved hardware:

Whether smartphones, tablets or smartphones, it is absolutely truethat Apple had superior hardware on most fronts until a year or twoago. Android was laggy, had poor battery life,and Google's firstlaptops were slow.

So where are we now?

Smartphone: Almost everyone agrees that all the high-end Androidsmartphones are ahead of the iPhone in terms of the hardwareexperience. They have bigger screens, bigger batteries, andexpandable storage, among other things.

Tablet: Whatever advantage Apple had in the early days has largelybeen eradicated. I could argue that most tablets are now the same,but Android invents more in terms of form factors, optional stylus,and so forth. In either case, and equivalent Android tablets tends tosell for $100 less than the iPad.

Laptop: Obviously, Google started out by focusing on $200-$450laptops, but they are no longer too slow for their basic tasks. Asfor the high end, the $1,300 Google Pixel is starting to address thehigh-resolution (2560x1700) touchscreen laptops built with thetightest quality standards.

3. Better services:

Docs: With Google, you can simply open up a web page on almost anyplatform -- Chrome OS, Android, Apple's iOS, Microsoft's Windows --and create a word document, spreadsheet or presentation, for free.Open and edit on any device.

With Apple? Not so much.

Maps: Actually, let's not go there, shall we?

Just-In-Time Information: Google has NOW. Apple has NO-thing.

Voice: With Google, I get a free phone number and it works on most ofmy devices -- all PCs, all Apple iOS, all Android. With Apple? Nosuch thing.

Calendar: The Google calendar works on every device, from everymaker. Apple's calendar? It's great if you use only Apple hardware;otherwise... not so much.

What about tech support? Apple has great tech support, the best inthe business. The Apple stores are little museums, and everything isneat and clean. If you have a hardware issue with your iPhone, theApple store will be more helpful in making things right than any otherentity.

But you know what's better than the best tech support in the world?No need for any tech support in the first place, that's what.

At least on the software side -- and that's where the action is formost people -- with Google, all you do is to log in with your GoogleID, and then everything "just works." Apple has tried to copy thisbut, as we all know, it is just not that easy to get it to work. Ittakes a few trips to the Apple store to get it right.

But wait, there's more!

Google's attack on Apple isn't stopping there. In the coming year, asI have been writing in previous articles, Google will start to offerfree mobile telephone service to go along with its free SMS service.This will enable you to buy a sub-$300 Android smartphonecontract-free, and pair it with a $20 per month data plan, saving youup to $70 per month compared to an iPhone.

That's $70 per month -- $840 per year, or $1,680 over the iPhone'stwo-year contract.

The price pressure on Apple has barely started. It's going to get alot worse. The peasants -- Google and its umpteenth partners -- arestorming the castle; the hyenas are biting into the gnu's flesh.

And I haven't even mentioned the future Chromephones and Chromepads.

The advent of Chromepads and Chromephones starting over the next yearor so will further help Google lower its prices and improve thequality of its cloud services. More headaches for Apple.

So Apple, please tell me you have something more important to announcenext week than changing the look of the icons on the iPhone. If youdon't have anything else material to show, please tell me beforehand,so I can sell my stock.

At the time of publication the author was long GOOG,AAPL, INTC, NVDA, BRCM and QCOM.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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