Wall Street doesn't see Google's I/O announcements posing a threat to Apple's ecosystem

Posted:
in General Discussion edited July 2015
Google this week announced a number of new products and services for phones, tablets, cars, TVs and more, all of which will compete with Apple. But after seeing Google's latest, Apple-watchers on Wall Street aren't concerned.




During its keynote presentation this week, Google revealed that it has paid $5 billion to Android application developers over the last 12 months. Analyst Timothy Acuri of Cowen and Company issued a note to investors on Thursday, a copy of which was provided to AppleInsider, saying the amount Google paid to developers in the last year shows that Apple's ecosystem continues to generate more money for developers.

Acuri noted that Apple paid out around $8 billion to developers in calendar year 2013, and that was about 100 percent year over year growth from 2012. With iPhone sales continuing to grow and the installed base of users larger than ever, he believes developer revenue growth has continued into the first half of 2014.

If App Store purchases have grown at the same rate thus far in 2014 as they did in 2013, that would imply that Apple is still generating twice the aggregate trailing 12 months revenue as the Google Play Store. This despite what Acuri estimates is an installed base about half the size of Android's current monthly active users.




With OS X Yosemite and iOS 8 set to launch this fall, a new programming language for developers called Swift, high hopes for this year's anticipated "iPhone 6," and rumors of a forthcoming "iWatch" launch, Acuri remains bullish on AAPL stock with a price target of $102.

"We expect Apple's ecosystem to remain the dominant platform for developers for the foreseeable future," he wrote.

Rod Hall of J.P. Morgan also provided his take on Google I/O on Thursday, and came away with a similar conclusion that the announcements aren't likely to affect Apple. He noted that Google focused heavily on consistent design and flexibility across multiple form factors --?something that Apple already does well between iPhone, iPad and Mac.

"All in all we felt the seamless integration was the main new feature, but we question just how useful this will be given very few people are using Google laptops and tablets," Hall wrote.




Google's announcements focused on placing Android everywhere, with the newly redesigned Android L operating system focused on smartphones and tablets, Android Auto targeting vehicle infotainment systems, and Android TV taking on the living room. All three platforms will respectively compete with Apple's iOS for iPhone and iPad, CarPlay support from iOS 7 and later, and the Apple TV set-top box.

Google also spotlighted Android Wear along with a trio of smart watches running the platform. Apple is expected to enter that space this fall with the debut of a rumored "iWatch."

"The key takeaway for us is that Google wants to disembody Android from the device and have it float around wherever you happen to be on any device seamlessly," Hall said. "This is, on our opinion, similar to Apple's vision but potentially tougher for Google to implement given their device ecosystem is largely limited to smartphones today."
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Comments

  • Reply 1 of 73
    Wow... Wall Street NOT pooping all over Apple.

    Welcome to Bizarro World.
  • Reply 2 of 73
    solipsismxsolipsismx Posts: 19,566member
    Wow... Wall Street NOT pooping all over Apple.

    Welcome to Bizarro World.

    Like everyone else they either feel asleep and/or couldn't figure out what focus they had at the event. I watched it and I have to struggle to think of a coherent theme or any breakout products that are pushing the envelope for the next year. Not mentioning Google Glass (or Google+) certainly didn't help after mentioning pretty much everything else in a haphazard manner.
  • Reply 3 of 73
    Wait - do we care about Wall St opinion or not? I get confused in the head. Sometimes we don't and rail against their pronouncements. But today we do! Stop playing with my emotions AI.
  • Reply 4 of 73
    rogifanrogifan Posts: 10,669member
    solipsismx wrote: »
    Like everyone else they either feel asleep and/or couldn't figure out what focus they had at the event. I watched it and I have to struggle to think of a coherent them or any breakout products are pushing the envelope for the next year. Not mentioning Google Glass (or Google+) certainly didn't help after mentioning pretty much everything else in a haphazard manner.
    Plus no real surprises like we saw at WWDC. Pretty much everything they announced was rumored beforehand.
  • Reply 5 of 73
    tallest skiltallest skil Posts: 42,716member
    Originally Posted by ddawson100 View Post

    Wait - do we care about Wall St opinion or not?

     

    It’s pretty simple to understand: We care about it when it’s wrong. How’s that confusing?

  • Reply 6 of 73
    sockrolidsockrolid Posts: 2,785member
    Remember Ballmer's "Windows Everywhere" initiative?
    Same thing is happening with Android.
    Meaningless dilution of the brand name.
  • Reply 7 of 73
    solipsismxsolipsismx Posts: 19,566member
    rogifan wrote: »
    Plus no real surprises like we saw at WWDC. Pretty much everything they announced was rumored beforehand.

    I put the 2014 WWDC keynote p there with the original iPhone event The iPhone was just amazing but this even had so many great things, spaced out well, and clearly detailed.

    I'd say one of the worst in term of planning and focus, although I'm probably in the minority, was the iPad event. Steve Jobs repeated himself several times during the demo and using the NYT site with a flash logo on the page was bad form.
  • Reply 8 of 73
    mvigodmvigod Posts: 172member
    Wall Street. The experts in knowing the technology sector. The ones that sold apple from 705 down to under 400 and wrote Apple's obituary. I'm almost ready to take Wall Street's call about Google's I/O announcements and see it as a massive bull signal.
  • Reply 9 of 73
    darklitedarklite Posts: 229member

    Well, there's not a lot to be worried about.


    • A push into the low end markets (Android One) won't affect Apple. Someone who can only afford to buy a $100 phone isn't a potential Apple customer.

    • OSes don't usually drive a mass exodus from one platform to another unless they get an extremely negative reaction (such as Windows 8 and its reception by the media). Also, neither OS has been released yet, so it's hard to tell how it will work out in practice because any issues now could well be resolved by launch.

    • Someone with an Android phone won't buy an iWatch, and someone with an iPhone won't buy a Wear device. There'll be competition within the Android Wear ecosystem, but iWatch and Wear appeal to two different markets.

     

    The only real areas of potential competition are CarPlay / Auto and TV, and frankly neither of these matter to Apple or Google's bottom line. Both companies could drop these projects today and it wouldn't make much of a difference. Wall Street aren't worried because there's no reason to be worried.

  • Reply 10 of 73
    antkm1antkm1 Posts: 1,441member
    There are too many "wait and see's" at this point. From what I saw of the keynote, one thing might be something to be mindful of, and that's AndroidOne.

    IF this is a smash hit strategy, IF...then Apple has most certainly lost any momentum they might have in developing nations. Something they desperately need to take command over in the coming years. IF this *open-source* hardware spec is fast and powerful and IF the android OS is optimized to these specs, IMO Apple has a lot to compete with. This idea of open source hardware in the sub-$100 range is exactly what developing nations run too. People in these markets are not loyal to, nor are concerned with ecosystems. They care about the all-in-one and price.

    But...it's a wait and see right now.

    "L" is basically a reaction to iOS 7.
  • Reply 11 of 73
    adrayvenadrayven Posts: 460member
    yawn.. ahh.. sorry, still waking up from yesterdays google keynote.
  • Reply 12 of 73
    sockrolidsockrolid Posts: 2,785member

    Originally Posted by Rogifan View Post



    Plus no real surprises like we saw at WWDC. Pretty much everything they announced was rumored beforehand.

     

    Google's scheduling of their I/O conference near WWDC  is an extremely bad idea.  Doesn't matter whether it's just before or just after WWDC.  Google I/O gets buried by WWDC news in the tech press.

     

    Better to schedule I/O a month or two after WWDC.  So Google will have time to script their keynote to emphasize features and products that (they think) are better than those that Apple announced at WWDC.  And to give them time to start working on clones of Apple technologies that caught Google totally by surprise (e.g. last year's CarPlay, fully 64-bit iOS and hardware, this year's Metal and SceneKit, the excellent new Swift programming language plus Xcode 6 playgrounds and other improvements, etc.)  The closer Google I/O is to WWDC, the worse Google looks.  And this year's I/O was pretty darn close to WWDC.  On the calendar anyway.

     

    People think "doubling down on secrecy" means cracking the whip on Chinese component suppliers so they won't leak fuzzy next-gen iPhone backshell photos.  (Which actually help to build hype for each year's new iPhone anyway.)  No, real secrecy means preventing platform and infrastructure competitors from knowing what you're working on until it's too late for them to counter-attack in any meaningful way.  By developing new features that are so far ahead of the competition that they'll never catch up.  Even without catastrophic fragmentation.

  • Reply 13 of 73
    rogifanrogifan Posts: 10,669member
    solipsismx wrote: »
    I put the 2014 WWDC keynote p there with the original iPhone event The iPhone was just amazing but this even had so many great things, spaced out well, and clearly detailed.

    I'd say one of the worst in term of planning and focus, although I'm probably in the minority, was the iPad event. Steve Jobs repeated himself several times during the demo and using the NYT site with a flash logo on the page was bad form.
    I wasn't crazy about the iPad event last year. Too much stuff squeezed into a short amount of time. And the Eddy Cue iCloud collaboration demo I thought was lame. WWDC was tight with no unnecessary demos. I hope Apple keeps that format for future events. And only puts the best people on stage (which I don't think includes Eddy Cue).
  • Reply 14 of 73
    auxioauxio Posts: 1,758member
    Quote:

    Originally Posted by Michael Scrip View Post



    Wow... Wall Street NOT pooping all over Apple.



    Welcome to Bizarro World.

     

    Apple is definitely doomed then

  • Reply 15 of 73
    sockrolidsockrolid Posts: 2,785member

    Originally Posted by AppleInsider View Post

     


     

    And what are all those Google I/O attendees looking at (while being distracted by their Google Glass-es)?

     

     

     

    Where's a lady with a sledgehammer when you need one?

  • Reply 16 of 73
    solipsismxsolipsismx Posts: 19,566member
    rogifan wrote: »
    I wasn't crazy about the iPad event last year. Too much stuff squeezed into a short amount of time. And the Eddy Cue iCloud collaboration demo I thought was lame. WWDC was tight with no unnecessary demos. I hope Apple keeps that format for future events. And only puts the best people on stage (which I don't think includes Eddy Cue).

    Perhaps the results of this year's WWDC is proof of Tim Cook's leadership ability. In a sense this is just a smaller, more confined version of what he did for Apple all those years. He also seems to be aware that he's not the best to be demoing the products and doesn't seem to have a problem letting others have the spotlight.
  • Reply 17 of 73
    gatorguygatorguy Posts: 17,869member
    antkm1 wrote: »
    But...it's a wait and see right now.

    "L" is basically a reaction to iOS 7.

    I doubt "L" development started after Apple's reveal of iOS8. Google may have some darn good engineers but they're not magicians. FWIW I personally think Android L is even less similar to iOS than their previous version was. Feature-wise the two are mimicking each other more and more as would be expected. Implementations are not.
  • Reply 18 of 73
    richlrichl Posts: 2,213member

    I think the best thing to come out of Google I/O was the Moto 360 and I don't see that having a big impact on Apple's bottom line. 

     

    Even in the mobile market, there's still a lot of people using basic feature phones. Android has plenty of room to grow without having to go aggressively after Apple's customers.

  • Reply 19 of 73
    auxioauxio Posts: 1,758member
    Quote:

    Originally Posted by Gatorguy View Post



    FWIW I personally think Android L is even less similar to iOS than their previous version was.

     

    I dunno.  When I read the summary of Android L, these things stuck out to me as being very much like iOS:

     

     Android L also gives developers the ability to create seamless animations when transitioning between screens.


     

    Perhaps they've taken animations further, but the sliding animation effect when navigating screens in an app has been a staple of iOS since the beginning.  And iOS 7 also added an extra fade effect to transitions as well.

     

    And a new feature called "palette" automatically reads the colors in images to make the user interface around them match.


     

    A variant of what iOS 7 did with the translucent blur effect so that the user interface takes on the colour of whatever background image you have set or content you are looking at (now coming to OS X).

  • Reply 20 of 73
    rogifanrogifan Posts: 10,669member
    solipsismx wrote: »
    Perhaps the results of this year's WWDC is proof of Tim Cook's leadership ability. In a sense this is just a smaller, more confined version of what he did for Apple all those years. He also seems to be aware that he's not the best to be demoing the products and doesn't seem to have a problem letting others have the spotlight.
    Yep. And I think Craig Federighi will get lots of stage time because he's good at it. What I love most about Tim is he knows his weakness and doesn't try to be something he's not.
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