“Google Inc.’s prospects haven’t looked so promising to investors relative to Apple Inc. since before the iPhone was introduced,” Brian Womack reports for Bloomberg. “Google’s shares, which climbed to a record yesterday, are now trading at 25 times profit, compared with a price-to- earnings ratio of less than 10 for Apple, according to data compiled by Bloomberg. That gap is at its widest since June 2005, two years before competition between the two companies in mobile devices began to intensify.”

“There’s no guarantee Google will remain investors’ favored stock,” Womack reports. “Apple Chief Executive Officer Tim Cook has said the company is exploring new TV-related products, and he has a team of engineers developing a wristwatch device, according to people with knowledge of the plans. A more robust Apple TV could add to revenue while spurring demand for other products, from apps to movies to high-end electronics. An iPhone-like watch could command margins in the neighborhood of 60 percent, according to a Bloomberg Industries analysis.”

Womack reports, “Google, for its part, is vulnerable in key areas. The company has yet to produce a hit product that would help it make good on the $12.4 billion acquisition last year of Motorola Mobility Holdings. The shift to mobile also has disadvantages because ads shown to handheld device users command lower prices than those appearing on personal computers.”

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