Winners and Losers from Apple´s WWDC
Andrés is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Apple (NASDAQ: AAPL) had its much-anticipated Worldwide Developers Conference on Monday, and considering it's the biggest company in the world and an undisputed bellwether in the tech industry, whatever Apple does has big implications, not only for the company but for many other corporations too. So, come join me for some quick thoughts on the investment implications the conference had for different companies.
Starting from the beginning, there were no really big surprises from Apple´s perspective, the MacBook Pro with retina display was much anticipated, but it did look really great. It´s one thing to know or expect a product, but the actual visual experience is a whole different thing. It was the first WWDC without Steve Jobs, and Tim Cook handled the situation quite well. It’s not the same without Steve, but it wouldn´t be fair to expect the same charisma from Cook. No big breakthroughs for Apple, but things still seem to be going well in Cupertino.
One winner from the conference Facebook (NASDAQ: FB) which will be integrated into IOS 6 in a similar way to which Twitter was last year. This will not only help Facebook in terms of accessibility, it may also have concrete financial implications for the social network. The fact that it’s going to be much easier to “like” a song on iTunes or an app on the App Store can produce additional revenues streams for Facebook, which is no small detail considering that the company is still working on building a sustainable business model.
Facebook has been developing sponsored stories, which are a new advertising product consisting on showing people the “likes” of their friends. The company needs to be particularly careful with the privacy implications of this new product, but it does open the door for more relevant ads. Record companies, apps developers or eBook publishers may easily be willing to pay for this kind of advertising. Facebook friends are influencers to greater or lesser extent, and the new sponsored stories are much in line with the integration between Apple and Facebook.
The biggest loser from Apple´s WWDC was clearly Google (NASDAQ: GOOG), the fact that Apple is being more “friendly” with Facebook is no good news for Google, which competes in the online advertising business against the social network. Even worse, Apple decided to abandon Google maps for its own mapping functionality powered by Tom Tom, this was probably the most noteworthy move from Apple against Google, but there were other more subtle changes which should also be noticed by investors in the big tech space.
Apple has improved the searching power of Siri, and the digital assistant is expected to be able to provide its own answers on questions which were redirected to Google under the older version. It´s hard to tell if these kinds of moves are simply trying to improve the quality of Siri or part of a more ambitious long term plan from Apple in the search space, but it still doesn´t look good from Google`s perspective.
Another winner from the conference was OpenTable (NASDAQ: OPEN), the online reservation company will be integrated into Siri, which will allow users to make or change reservations using the OpenTable system. Gaining accessibility and popularity is surely a plus for OpenTable, since the company operates in an industry in which the network effect is the main competitive advantage.
As more clients join the OpenTable network, the bigger the incentive for restaurants to implement the service. Customers, at the same time, receive a service of higher value it the system includes more restaurants. The recent integration with Siri is probably not a definitive game changer for OpenTable, but joining forces with Apple can be a powerful strategy for the company in the long term in terms of gaining exposure to more users.
When Apple makes a move, even if it’s not a big one, it has deep implications, not only for investors in the company but also all over the tech sector. Looking for ways to capitalize the influence of the Apple phenomenon in other companies may be a smart alternative for investors looking for more innovative ways to invest in technology stocks with strong prospects.
acardenal owns shares of Apple and Google. The Motley Fool owns shares of Apple, Facebook, and Google and has the following options: short OCT 2012 $40.00 calls on OpenTable and long OCT 2012 $40.00 puts on OpenTable. Motley Fool newsletter services recommend Apple, Google, and OpenTable. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
