Please define "kicking the crap out of Apple."
Are we talking about market share?
Market revenue share?
Mindshare?
I'm not being a fanboy pointing this out. According to "traditional" business methods, Google should be walking all over Apple. Yet, when it comes to the basic principle of business, $$$, Apple is walking all over EVERYONE. That is pure fact. I do agree, in all other things, android is winning, but the force is still strong with Steve, and Apple is defying all "traditional" business practices.
You're short sighted. Google's core moneymaking business is advertising, but they have always been a software company. Instead of following the "traditional" business model of selling software to customers they have decided to:
1. Charge businesses only (for the most part)
2. Give a lot of the software away for free to consumers and make more money in the long run by pushing ads to them. They also collect demographic/usage/behavioral information which makes the ad space they sell more valuable.
Apple made computers, but they have halfway-morphed into an electronics company. The only reason that Apple still writes software is because that is what is necessary to add value to their products and try to lock in their customer base. Don't forget that Macs now use PC hardware. There is very little difference between the components on a MacAir or a high end Lenovo X-series notebook.
What you have are two large companies that are starting to compete in the same market having come at it from opposite ends.
Apple was in the hardware business first, and got into software in order to sell their devices.
Google was in the software business first, and is getting into hardware in order to keep distributing their software.
In terms of market dominance, Apple has nowhere the hegemony that Google has put together. Electronic devices are great, and the iPhone is a clever device.... but 2 years from now, no retailer will be able to sell an iphone 4 to a consumer because technology will have progressed. Just compare how many people still use their iPhone 2G from 2007 to how many people are still using Google search, Gmail, and Google maps that they have had for 5+ years.
Basically, you shouldn't expect Google to act like Apple. Different companies, different culture, different goals. Google is aiming at being the default/defacto service portal to the interwebs, no matter what type of device you use. Apple is trying to sell you as many gadgets as you can and get you to purchase service subscriptions.
Apple has made headway compared to their low point in the late 90's, but it is a business model that has limits. They have to sell you a physical good before they can take your money, and despite all the window dressing... hardware tends to be expensive and their software tends to be restrictive. Every device that Apple makes is made by someone else who does it better (except maybe for the iPad, at the moment).
On the other hand, Google doesn't have to sell you anything. You sign up for their free services and they automatically make money off of you. Google 'succeeds' by having a presence in every market they can. This is why they come out with competitors for Twitter (google Buzz), facebook (google plus), iOS (android), hotmail (gmail), etc etc etc.
Apple has started to realize this. This is why mobileme is becoming icloud and why Apple is rolling out free iOS messaging and trying to develop their own map program/service.
Its kind of funny.... instead of offering equivalent functionality, Apple offers a 'sense of identity' and charges you money for the privilege. It is EXACTLY like being in a cult and many Apple fanatics are completely incapable of seeing the forest for the trees.
I use Android and Google services and I have NEVER given Google, Inc. a penny of my money. Kind of puts things in perspective, eh?
So yes, cheer for Apple having a huge stock price and a massive profit margin. After all, that is *your* money making that happen. LOL