disposableidentity

Google: Setting Itself Up for Failure?

Google has unlimited resources and talent, they have a brand that stands for search/online advertising, they have a huge client-base of advertisers who are already spending massive amounts of money with them.

Why on earth does Google need to buy into this market (paying a premium over building it themselves)?

If Google has to buy their way into what amounts to a sub-market within their main area of business, what does that say about management's confidence in their own team?

Google Should Make Apple Beg for Maps Navigation

Both the iPhone 3G and the 3Gs have a GPS.
Tom-Tom's app actually installs map data on the iPhone. Google's approach relies on an active network connection (either 3G or WiFi).

Anyway, with 100,000 iPhone apps there are lots of different approaches to many, many functions. Google can disrupt all they want, they have nothing to lose. Unfortunately with Google's lousy track-record generating cash from their ideas/technologies, they probably have nothing to gain either.

(And right now there's no sign they want to do Apple any harm anyway.)

Google Should Make Apple Beg for Maps Navigation

@ jack dee, if someone wants to throw cold water on Apple, go right ahead. This is about business. If you've got a good reason to be bear-ish on the company as a whole (or even a reason why one aspect of their business isn't going the way it should be), I want to hear about it.

That's not what this is.

This article says Apple is very dependent on Google's apps. It implies they could be withdrawn at any time, leaving Apple in a precarious position.

On the contrary. The iPhone is the only mobile platform generating any significant traffic for Google. Google Maps on the iPhone is actually an Apple app, using Google's open APIs. Google's new Turn-by-turn will be available on the iPhone as soon as Apple approves it.

So what's the story?

Google Should Make Apple Beg for Maps Navigation

The iPhone has won a place in my pocket. Google can't change that.

On the other hand, Apple could develop their own mapping function (and with their recent purchase it sounds like they're doing just that).

Apple could also build their own search engine. They have the skills and the resources -- and would have a built-in audience of close to 100 million active users (counting the iPhones, Macs and iPod Touches) on day-one.

As an advertiser would I add Apple's search engine to my ad budget, knowing that it's reaching the most affluent and/or technically advanced 10 or 20% of the worlds consumers?

Apple is holding all the cards.

Apple's business has a good solid "moat" around it. iPhone and Mac users have invested hundreds or thousands of dollars in hardware, apps and accessories. We're not going anywhere any time soon. Google's users have only a URL to change.

Apple, Microsoft, Google: Cash vs. Cash

@jack dee, isn't that funny? Microsoft is basically saying to investors that you are better able to invest the money yourself.

In other words: Despite all of their smart employees, technology patents, infrastructure, monopoly positions in multiple markets, and extensive R&D efforts, Microsoft thinks that you can make a better return on all of that money than they can.

Microsoft to Employ Dual Mobile OS Strategy to Compete with Android and iPhone

Since we're on an investment site, at least in the mobile market, no one would want to trade places with Microsoft. Don't forget, they're only selling the OS.

Look at it this way:

Apple sells 5.4 million PHONES last quarter, they make something like $400-$450 PROFIT per phone including carrier subsidies.

RIM sells 7.8 million BlackBerrys, at maybe half that profit per phone including carrier subsidies.

Microsoft sells 3.8 million Windows Mobile LICENSES last quarter, and they make something like $5-$15 REVENUE per phone.

Even if Microsoft sold 10 times as many as Apple, they wouldn't make anything close to their profit. Microsoft chose it's business model and now has to live with it.

Microsoft to Employ Dual Mobile OS Strategy to Compete with Android and iPhone

@ Josh B, it's about the trend. Microsoft's product have a large amount of momentum, but look where they're going.

Nokia has a huge share of the smartphone market today too, but a few more years of double digit market share losses and that won't be the case anymore.

Microsoft to Employ Dual Mobile OS Strategy to Compete with Android and iPhone

Splitting developers' attention is such a bad move. They already have a hard time justifying development on a mobile platform other than the iPhone / iPod Touch (50 million installed base + more apps purchased per unit than any other mobile platform).

Plus think of the confusion for customers. Which should you buy into? If Apple can be effectively challenged it will be because of one or two strong platforms (RIM is doing well, Android looks like a possibility, but no critical mass yet). A dozen competitive platforms will only help Apple stand out more.

When Apple outdoes itself with a new product, it almost always kills off the old one, instead of leaving a lesser product on the market for others to compete with.

When they brought out their flash-based iPod Nano, Apple killed off it's top selling hard drive-based iPod Mini. At the time analysts said they should have kept the Mini around to fill a gap in the lineup. Turns out Apple was right in the long run. Killing off the Mini left the other manufacturers with nothing comparable to Apple's stuff.

I guess that strategy only works for the leader. The "phone" market is changing rapidly into a "mobile computing platform" market. Apple is fast and ruthless. RIM is smart and focused. Microsoft will have a very hard time competing. Even if it's just for second or third place (or even fourth, if Nokia gets their act together one day).

Microsoft: Whistling in the Dark

"There's nothing to replace Windows and those consumers (the average cheap ones) and businesses (practical ones) won't be buying Macs in any large quantities."

But what if people could buy an Apple to replace your PC laptop for $600 - $800? Would that change things? Apple is now seen as a premium option by most consumers. It's just that the vast majority of mainstream consumers won't pay more than $1000 for any computer, no matter who it comes from. If this rumored Apple tablet provides what most people want in a mobile computer, and is available in that price range, Apple could capture a large slice of the mainstream PC laptop market, without cannibalizing their MacBook Pro line.

Notice how Apple has only had an older "placeholder" product in the MacBook (versus MacBook Pro) product line? They've been planning something big for a long time.

That's a well-run business. Growing out from a strong core, instead of flitting around.

Microsoft: Whistling in the Dark

And when I say "Maybe $850?" that's being very generous. Very.

Microsoft: Whistling in the Dark

Corporate laptops? Sure, they're not cheap. But most cubicle drones have an average mid-range tower under their desks. The software, infrastructure & support are thousands, but I highly doubt that many enterprise desktop boxes break the $1000 mark.

Look at the retail price of your average "enterprise" tower at dell.com, or hp.com. Maybe $850? And that's retail. No doubt you're paying less than that if you buy them by the ten-thousand.

Microsoft: Whistling in the Dark

"My frustrations with MSFT: how about ... concentrating on core competencies instead of trying to expand into competitive markets?"

@ Wisdom vs. Information, exactly.

If Microsoft had innovated and focused their development in the right areas (a usable and stable OS, a competitive mobile OS, truly advancing the Office suite), instead of chasing money-losing ventures with me-too products (search, Xbox, Zune, Silverlight, UMPC, Home Server, Surface / table computing, Bing Maps, MSN, etc, etc, etc.) they wouldn't be in this mess.

Microsoft: Whistling in the Dark

@jack dee, Apple's 90% of all computers sold over $1000 may sound silly, but it's probably about right. It's what the stats say.

Apple's presence in bricks & mortar retail isn't any greater than the other manufacturers, and it's online sales are probably stronger than everyone but Dell. If anything Apple's numbers might look even better if you include online retail. (If you include computers sold to enterprise, no doubt Apple's numbers will look worse -- but how many corporations are paying more than $1000/box these days?).

10 Reasons Not to Buy Apple

@john12345

Good points. The only thing I would dispute is the fanboys flaming -- at least on a financial/investing forum.

I think most of us here would like to hear a good, well-reasoned argument against Apple. As you point out, this article was not that. The vast majority of the criticism here was directed at the author's logic and his understanding of the issues.

There are probably lots of dangers to look out for with Apple, and even lots of external factors that can influence the stock. But this author didn't seem to understand some fundamental things about Apple's business or the markets is operates in: Apple gets a huge subsidy for their iPhone from AT&T (making it a very high-margin product); the introduction of the iPod Touch has moved sales from cheaper iPod Nanos to higher-end Touches; Apple's retail stores have the highest sales per sq/ft of any retailer; Apps are growing iPod sales by moving the product into gaming; the smartphone market is growing at a huge rate.

The author is simply not qualified to speak on the issue.

Apple and Google: Changing My Mind

When you say revenue of $10bn, and income of $1.6bn, of course that's just the GAAP numbers. If you account for the full value of iPhone sales (which are accounted for over 8 quarters, but banked in real time), Apple's numbers are even better than they look. Last I heard, at the end of last quarter they had over $28bn in the bank.