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.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
9 responses to “Apple Has Nothing To Fear From Google-Motorola Deal [Analyst]”
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It seems like just yesterday that Blackberry was the force to be reckoned with. Remember those days? Now Apple has it in their dust! I just read somewhere that Apple is the longest running cellphone leader in existence, with no signs of slowing down.
If there are profits to be made in emerging markets Apple will be there. If there aren’t, Apple won’t. I don’t understand this urgency for Apple to make a low-cost model for emerging markets. They will not enter it if the dogfight is for razor-thin margins. And even if there are more than razor-thin margins, the hit on their brand equity might not make it worth their while. They will lose their high-margin business the moment they make a low-margin phone (that is substantially similar to the high-margin phone) available. That’s just the nature of high-end merchandise.
Competition in the smart phone and tablet business in emerging markets is primarily one of pure price competition. Personal incomes are just too low to keep Apple’s ship afloat there. Apple will still have a presence but they’ll sell mainly to the affluent sector. Then as incomes rise, people will switch to the aspirational brand –Apple.
Google acquiring Motorola will make no difference to Apple. Yes Google will get 24K patents but Apple has already taken those into account.
I think that in the coming months Microsoft will buy Nokia, Samsung will switch to its own proprietary mobile OS, HP already uses WebOS. The odd men out are Sony-Erricson and HTC.
Sony-Erricson may be brought out by someone go out of business. HTC may go one way (Android or Windows) or swing both ways.
In the end Apple will be left standing with the largest share of the mobile market. Who knew? Wish I had more of Apple. It should hit $600 by end of 2012.
I got an iPad 2 32-GB for $21.68 and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $ 38.76 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $ 657 which only cost me $ 62.81 . Here is the site we use to get it al from, http://to.ly/aXce
So, Nokia ruling the market for well over a decade was just a passing fad? They lead the smartphone market from its beginning (as they created it) in 1996 until the second quarter of 2011 and Apple is all of a sudden “#1 of all times”?
Also, they still lead the dumbphone market… of course, that’s irrelevant.
Chill ace.