IBM's Watson App: Google And Apple Should Be Nervous

| About: International Business (IBM)

IBM's (NYSE:IBM) supercomputer "Watson" wowed the world a few years ago when it easily beat trivia king Ken Jennings on Jeopardy!. For years now, people have predicted that such technology, or technology similar, will change the face of computing forever. And they'd be right.

IBM has announced that it will be creating an app for smartphones that uses Watson to answer important questions instantly, saving them time from having to spend hours or even days searching for the answers.

IBM's vice president of innovation said the following:

"A farmer could stand in a field and ask his phone, 'When should I plant my corn?' He would get a reply in seconds, based on location data, historical trends and scientific studies."

This isn't just a cute move for IBM. This is a sign of things to come,and an attack on Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) in the long run.

Goodbye Siri, It Was Cute

Siri is cute compared to Watson. Siri can answer basic questions and barely change your calendar if you say things in the right way. Overall, Siri didn't change the way the world operated.

Watson, however, will. Every app won't have a "baby Watson", but will be hooked up to a full Watson install somewhere, meaning users will be talking directly with a 10-rack supercomputer with 2880 processor threads with 16tb of RAM that can process 500 gigabytes of data per second. That's intense.

If IBM turns this into a consumer app, the long-term implications will certainly be a ding to Apple, though it probably won't be some kind of Apple-killer.

Long-Term Attack on Google?

I've written in the past that I'm not a fan of Google anymore. I used to love the company, but it changed, so I don't anymore. I've explained how the company has watered down its results in a way that makes me use Bing by Microsoft (NASDAQ:MSFT).

Watson's technology is a good example of why I don't own Google shares. It's a rapidly changing technology that could eventually consume a huge portion of Google's business model. Mix an eventual Watson app that is affordable with a growing Bing, and you have a Google gasping to be put out of its misery. Or, at least, severely hurt.

The Limitations On Watson's Impact

The limitations are money. Details on how Watson will be paid for are still a little fuzzy. It costs $3,000,000 to install Watson. Perhaps it'll be an expensive consumer app, or perhaps it'll begin only with a business app. There's no telling.

Eventually, perhaps it'll set up a subscription website for people who want to ask Watson a question. It can pay per question or have a subscription model. The ideas and possibilities are breathtaking.

In the end, IBM still has every ounce of innovation that made it IBM in the first place. The company is changing the world through that innovation, and people looking for long-term income or returns should own some.

Disclosure: I am long IBM, MSFT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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