Google, with its Chrome browser has taken a critical step toward the application software market. They are looking for the desktop interface to be completely replaced by a browser. To that effect, Chrome has an exceptionally robust, yet simple interface. The limited testing that I have done myself shows Chrome to be faster and much more stable than Microsoft's (MSFT) IE 7, which now holds over 70% of the browser market, with Firefox a distant second with over 20% and Apple's Safari with 6%.
While Chrome has a very long way to go, its purpose is to allow businesses to run remote applications via the browser and run them fast. Conceptually, this design is a stride in the right direction as more and more enterprise software has moved from desktops to web-client architecture.
So is Chrome my only reason for recommending Google? Heck no! The stock has almost halved over the last 12 months and all because advertising has been affected by a weak economy. Google's earnings growth is slowing down as evident from their miss last quarter. I think the 50% decline in Google's stock price is unjustified considering it is still number one in search and despite the slowdown, their earnings are still growing and at a good pace. The current economic climate will change in a year or so, but this stock at $400 is a once-in-a-life opportunity. Chrome just gives you another reason to buy it.
Apple - all I can say is that I have always been a PC user. I used to also work in an academic computing lab some 10 years ago fixing people's computers and always thought the Mac sucked. However, lately, I have had the opportunity to test a Mac first hand and I can tell you - this is the real deal. That Macs will continue to peel away market share from PCs is a given. Apple's stock meanwhile, is down from its all-time high of around $200 a few months back. In fact, it is down some 25%.
I also tested the new 3g iPhone and it is a thing of beauty. I had been a Palm (PALM) Treo user for many years before switching to a Motorola (MOT) Q this year (a decision I very much regret). I have also been and still am a big fan of Blackberry (RIMM) but having finally got my hand on a 3g iPhone. I do believe that once companies figure out how to make it work correctly with Microsoft Exchange server, it will be the phone of choice for corporations.
My estimate is that Apple has already sold over 4 million of these new iPhones in the first two months and here is why Apple will make more from these iPhones than the previous version:
- The new phones have a higher level of security built in which will prevent buyers from unlocking the phones for use with non-authorized carriers. This means more of these phones will be activated by AT&T (T), which shares its monthly revenue earned from iPhone contracts with Apple.
- Open source means a plethora of applications will (and have) hit the market. Best of all, these applications can only be downloaded via iTunes and developers will have to pay Apple for every sale of their product.
Ultimately, the iPhone, the Mac and iTunes are what will drive Apple's earnings going forward. Steve Jobs' health is an overblown issue and I think Apple shareholders will be rewarded for their patience soon.
Disclosure: I own AAPL and RIMM but my position can change
anytime without notice.