“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