Now that Google has itself a handset maker and a passel of patents, the Android creator is likely to come gunnin’ for Apple, right? Wrong, say a number of Wall Street analysts, who expect little negative fall-out for the iPhone maker. If anything, the acquisition threatens the chances of any mobile success story outside of the Apple-Android duopoly.
Long-time Apple watcher Piper Jaffray analyst Gene Munster says the deal cements the changing landscape shifting from PCs to smartphones. “This confirms our belief that unlike desktops, there will be two or three winners in mobile (iOS, Android and possibly Microsoft.”
Rather, Monday’s announcement is just more bad news for the already-beleagured manufacturers, minimizing the razor-thin market share of BlackBerry-maker RIM, orphaned Symbian and Palm’s webOS. The deal will also increase the urgency of Apple to introduce a lower-priced iPhone targeting emerging markets, where Android has a headstart, Munster opines.
Although much of the talk on how acquiring Motorola benefits Google has centered around cell phones, the Schaumburg, Il. company also makes TV set-top boxes, prompting Munster to believe the buyout could boost the fate of Google TV. Talk of Apple getting into the TV set business arose once more after a study found the price of premium TVs falling, opening the possibility of a $999 Apple-made TV set powered by iCloud.
Morgan Stanley’s Katy Huberty, a rather recent member of the Apple cheering section, takes an even-handed view of the impact to Apple. The Google-Motorola deal “highlights the risk that Apple’s IP portfolio presents to the Android ecosystem” and confirms the wisdom of the Cupertino, Calif. company’s integrated approach, yet also increases the legal risks for Apple.
Like Huberty, Deutsche Bank’s Chris Whitmore views the deal in a positive light for Apple. He views the deal spawning an even more fragmented Android marketplace. Whitmore sees the Motorola purchase as more a defensive move by Google, noting the Mountain View, Calif. Internet giant paid a 60 percent premium for the handset manufacturer.
The deal’s beginnings “may lie in Android’s forking, inconsistent user experience and poor momentum in tablets,” the analyst tells investors.
RBC Capital Market’s Mike Abramsky foresees a “Nexus on steroids” now that Google has more direct control over the Android software and hardware experience. However, the threat from Motorola patents is overblown, he suggests. Unlike Apple’s cache, the majority of the patents Google acquired when picking up Motorola focus on basic wireless technology.
In the end, most of Wall Street view the $12.5 billion deal as a minor threat to Apple’s continued juggernaut.
