Can Google Swallow Apple?

 |  Includes: AAPL, GOOG, VZ
by: John Lounsbury

Verizon (NYSE:VZ) has revealed to The Wall Street Journal that it is working with Google (NASDAQ:GOOG) to develop an Apple (NASDAQ:AAPL) iPad competitor on Google's Android platform. The source of the information is probably reliable: Verizon CEO Lowell McAdam. All this comes from Clint Boulton writing at The revelation by McAdam comes as confirmation of a New York Times report last month that Google was working on a tablet device. According to eWEEK, Google has yet to comment on the story.

The news about Google going after the iPad market follows Google's Droid phones surging ahead of iPhones in the smart phone market. Gannett News Service (Chicago Sun-Times) reported yesterday (May 11) that Droids had 28% of the market in the first quarter, ahead of iPhone's 21%. Both trailed Blackberry (RIMM) which continued to lead the category with 36% of sales. Gannett indicates the data quoted comes from market research by NPD Group.

This is not the first time that Apple has been challenged by a new arrival. Last fall the Palm Pre was touted as an iPhone killer but it has dropped out of the top four smart phone suppliers, as HTC has moved into fourth position. HTC is traded on the Taiwan Stock Exchange. Fading Palm has agreed to be acquired by Hewlett-Packard (NYSE:HPQ).

So it's way too early to think that Google can have Apple for lunch. To consider it even reasonable to consider, Google needs to grow some more. The market capitalization of Apple ($233 billion) is 44% larger than Google.

Disclosure: Author holds a long position in Verizon