Google or Apple: Who Will be Getting a Larger Share?
Ahsan Aslam is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Google’s (NASDAQ: GOOG) shares hit $800 for first time in history while Apple's (NASDAQ: AAPL) free fall still continues. If we see comparative gains and loss of both companies Google has gained 20% increase in share price in last three months, on the other hand Apple’s shares are down 19%.
Google earned 11.3 billion in revenue which is $10.64 a share during the fourth quarter, Traffic acquisition costs is not included in above figure, with traffic acquisition cost Google earned 14.42 billion which is 36% more than previous year fourth quarter earnings . According to Fourth quarter reports of Google CPC (cost-per-click), a key metric for ads, fell 6% a year, but actually rose 2% sequentially, alleviating Wall Street concerns.
On the other hand Apple reported 17.6% annual revenue growth and was punished as its revenue fell short of forecast. Apple earned revenue of 54.5 billion which is more than 46.33 billion from the prior year’s quarter, but it missed the expectations of analyst which was $54.73 billion.
As Google is branching outside of its key advertising model which is the main stream of income of Google into other areas, it seems it is becoming more like Apple and is being rewarded for becoming more like it.
Google is building Google branded retails stores in those areas where Apple's store has gained great sales and success, with retail stores Google is making its own hardware which is another edge of Goog;e over Apple.
Google has sold its products like Nexus 4 Smartphone, Nexus 7 and Nexus 10 tablets which are doing good but of course they have no match with apples’ iphone, As Apple is selling iPod, iphone and iPad for many years. Google require a lot of time to compete with Apple in this domain.
Apple (NASDAQ: AAPL) CEO TIM cook in a recent tech conference said ;
“Because we’re not a hardware Company, we have other ways to make money and reward shareholders,”
This doesn’t get noticed very much for some reason. It seems he was trying to change the people’s perceptions of the tech giant. Tim Cook also indicated that in its most recent quarter Apple has earned 3.7 billion dollars just from services and software.
Google's New Products:
Google unveiled its premium touch screen Laptop called Chromebook Pixel. It’s aimed squarely at the Macbook Air. Google designed it to be a premium product as a status symbol akin to an Apple products. Its 12.85-inch display has about the same pixel density as Apple’s 13-inch MacBook Pro with Retina Display. It’s much sharper than the MacBook Air’s 1,440 x 900 screen.
There is probably some extremely-limited, niche audience for the Chromebook Pixel. It’s terrific display alone will attract a number of customers. It’s still exciting. This isn’t always a purely logical market. This feels like it could be anything-but-cautious beginning of serious Google computers. Between the sci-fi future of Project Glass and this intriguing new Pixel, I find myself getting more and more excited about Google hardware
With all the things which is going on, perception of market about Apple has changed in last couple of months. Hedge funds like Third point, Discovery Capital Management, Omega Advisors liquidating their positions.
We know that market is capricious, and Apple is well aware of market’s behavior, it is something that Google has also experienced. One should not be surprised if market perceptions changes again in near future.
ahsanaslam has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!