Google is Glad Apple is Releasing the iPhone 5
Jason is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
No matter how much they probably don't want to admit it - Google is glad Apple is releasing the iPhone 5.
The iPhone 5 release in combination with Google (NASDAQ: GOOG) and Apple's (NASDAQ: AAPL) strained relations, (and now dissolved agreement for iOS intergration for YouTube) has opened the door for Google to make some changes to how YouTube is presented to the moblie world.
Starting with the iPhone 5 YouTube will now have be downloaded from Apple's App Store for use on the iPhone.
Why Google's Smiling
Google will now be able to monetize its popular app on iOS and generate revenue from iPhone users, a previously untapped market. With Apple projected to sell 10 million units of its iPhone 5 (and users readily prepared to download the YouTube app) it presents a viable stream of income for Google. This stream of income off the "Apple" tree is almost sure to expand beyond this year's currently projected iPhone 5 sales, as scores of iPhone users become eligible for upgrades next year.
Who Else Will be Smiling
For sometime, web-based companies have been seeking a successful transition into the mobile ad market, and while some have dived in with both feet, most have made relatively small strides towards mobile monetization. YouTube much like its parent Google is an internet household name, and it can be readily inferred that its approach to mobile ads will spark imitation by other moblie app companies.
There’s little question that shortly after creating their passwords new iPhone users will head on over to the app store and download the new YouTube app. Apple knows that it needs to offer YouTube as it has no viable alternative to offer its users. The cold truth is that by playing nice in offering Google’s YouTube, Apple is keeping itself competitive. The iPhone 5 no matter how pretty would not be the same without YouTube access. The question remains however, will Apple let YouTube become lost in a sea of look-a-like apps or will it play nice and set it up as a “Featured” app or give it some other quick recognition due to customer demand.
Leverage in the War?
As I stated before, the iPhone's attractiveness would be greatly reduced if users were not able to access YouTube. Is it possible that Google could leverage this in its "Cold War" with Apple and others?
Think of the implications...
"The All-New Google Powered Andriod X, the only smartphone that You can Tube with." -Ouch!
It may not shake the Apple faithful, but for the average "app"-pertunistic mobile shopper that just might be enough to win their vote and lower Apple's number one profit base (iPhone Sales).
Could it be time for Cupertino to get started on a social video platform of its own?
Foolish Bottom Line:
While consumers are subject to the cold war between Apple and Google, investors can count on the warm & fuzzy revenue these two tech giants generate off each other's love/hate relationship and market leading products to keep their portfolios warm at night.
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