Buy Apple and sell Google if you can own only one

“It’s been a tale of two tech stocks this earnings season, with Apple Inc. proving why it’s still dominant, and Google Inc. showing signs of distress,” Jeff Reeves writes for MarketWatch. “Here’s why, if I had to pick, I’d buy Apple and sell Google today.”

“Apple posted earnings Monday, propelled by its flagship iPhone. Apple looked solid across the board, with numbers ahead of expectations on both earnings and revenue,” Reeves writes. “Also encouraging was forward guidance for its fiscal first quarter. Apple revenue is now forecast to come in between $63.5 billion and $66.5 billion. That’s up from $57.6 billion a year earlier, for an 11% jump. ”

“Perhaps most impressive of all is that the iPhone 6 and super-sized iPhone 6 Plus were only released on Sept. 9 and the fiscal year for Apple ran through Sept. 27. That means the long tail of this successful product launch has yet to be seen in the top and bottom lines,” Reeves writes. “If Apple’s earnings were a validation of its flagship smartphone, Google earnings were a validation of recent fears that the ad giant is facing serious challenges in the age of smaller mobile screens and declining online advertising rates… Not only is Google’s stock not performing up to Wall Street expectations on basic financials, but the details tell a story of deceleration in its ad business. This continues a narrative we’ve seen emerging at Google for some time, beginning about a year ago.”

Read more in the full article here.

MacDailyNews Take: As we wrote two years ago:

Android is pushed to users who are, in general:

a) confused about why they should be choosing an iPhone over an inferior knockoff and therefore might be less prone to understand/explore their devices’ capabilities or trust their devices with credit card info for shopping; and/or
b) enticed with “Buy One Get One Free,” “Buy One, Get Two or More Free,” or similar offers.

Neither type of customer is the cream of the crop when it comes to successful engagement or coveted demographics; closer to the bottom of the barrel than the top, in fact. Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle-building powders or grease monkey overalls.

Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong.

Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.

iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the “Hee Haw” demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth.MacDailyNews, November 26, 2012


  1. Google doesn’t benefit from Android in China.
    Soon, iOS will be over 50% in the US and I’m sure this will be the tipping point.
    So Google loses a lot of mobile benefits from two of the worlds top economies.
    They shot themselves in the feet. Brin and Page have that sinking feeling. Schmidt is a snake so who knows.

    1. AAPL is the only company benefiting from China – for GOOG and AMZN, China is their worst nightmare. AMZN’s current P/E is an insane 730, proving their investors really are immune to any kind of reality…

  2. Clearly Google is on the way out. There is a distinct difference between Android and iOS owners. In Silicon Valley you can see if in that 49er and Giants fans are iOS owners while Raider and A’s fan tend to be all about Droids. And that is even though Google is located in Mtn View near Levi Stadium. It is just another example of the superiority of us Fanboys.

  3. But… but… but Android has 90% smartphone market share and there must be at least 5 million new devices activated daily. Besides, there are analysts claiming that if Apple Pay catches on for general consumer use, Google will benefit most from Google Wallet and all those hundreds of millions of NFC-equipped Android smartphones. And don’t forget Google Glass which everyone will be wearing in the future. Apple is doomed more now than ever.


    Even Microsoft’s market cap has again gone ahead of Google’s market cap so it somewhat proves that Google is not as invincible as Wall Street claimed it was. A P/E of 30 for Google is simply Wall Street charity.

  4. Bill Gates talked about innovation. Steve Balmer tlked about innovation. Satya Nadella talksabout innovation. Mike Dell talked about innovation. Eric Schmidt talksabout innovation.

    Why do so many phones look like an iPhone. Why did Android change it’s look to one more like iOS. Why do laptops tend to look like MacBooks? Why do desktops change their look when the Mac changes?

    Steve Jobs innovated. Tim Cook innovates. Jony Ive innovates.

    1. The idea for the Metro GUI came to Steve Ballmer while he was brown pebbledashing the executive bathroom after his usual taco bell breakfast. The design was inspired by hallucinogenic chillies combined with explosive flatulence. it might have been accidental but still qualifies as innovative.

    2. I used to go nuts every time I’d here Gates or Ballmer spew the word innovate Two guys who couldn’t innovate their way out of a wet paper bag. They were lucky, but never innovative.

      Microsoft is on a long slow decline. They’re not going to be able to ride the coat tails of MS Office and their desktop OS forever.

      With the advent of tablets and alternatives to Office, they don’t have any sort of innovative edge to lead them successfully into the future. They’re either waning or failing on every front. It’s a shame really.

  5. 1. I am very surprised to see this story on MarketWatch. Their Apple related articles have been at least 75 percent negative over the last few years. Overall, this could mean that some hold out financial institutions are finally waking up to the fact that Apple is winning. This is good for AAPL.

    2. Google was unsuccessful at adopting the Apple design-build software and hardware business model. The Motorola attempt was a failure, so they essentially partnered with the unscrupulous company known as Samsung and continued to hack their customers’ data for profits. This business model is not sustainable. The only chance they have is to invent a new paradigm and sell the resulting products without spying on their users.

  6. Guys, one step at a time. Let’s take down Samsung first. Their profits were down 60% last quarter with only like two weeks of iPhone 6 sales in the quarter. This quarter with the China launch and a full quarter of iphone 6 sales maybe Samsung’s profits drop another 10 or 15%. Samsung’s panicking right now too. Panick can lead to mistakes that can lead to an even more steep profit decline.

  7. The key difference between the 2 companies is well known, but still bears repetition.

    Apple’s business is making superior hardware, software and services and selling them at a profit. Its customer is you.

    Google’s business is you: what you buy, who you buy from, who you correspond with, what you search for. It’s products serve this end. They don’t care about privacy because they can’t afford to. Their entire business depends on an intimate knowledge of what you are doing so it can sell this information to its actual customers, the advertisers, not you.

    I try to keep as far away from Google as I can.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.