Not sure why it makes sense to keep Android inside a search engine company when they could be spun off into its own independent subsidiary and have nothing to do with search. After all, Google makes more ad revenue off PCs and iOS devices. Unless of course, an independent Android, Inc. wouldn't generate any licensing revenue, and always show a net loss.
On first thought it does seem like Android could have been spun off separately. Thinking about it a bit more tho most of Android's services depend on search and the neural network that makes it possible. It's deeply integrated. Android would logically be developed with the same resources that support Google Search and it's related services like Google Cloud, maps and voice recognition. Chrome OS will be under Google too for the same reasons.
I give them six months before they dump Android on the open source community and spin it as some magnanimous co tribute on to society. Stagefright is a portent of thing to come and Google knows it. https://torusoft.com/blog/persona-non-grata
They also know they have hit a wall for growth in Mobile revenue where Android earns $3b and iOS earns $9b for them. They're doing this now so Wall St is left unaware of the end of growth for Google.
If Android is spun off it would expose that it is a business that makes very little money.
Google will make about $70 billion in revenue this year. Goldman Sachs estimates that Android only makes about $3 billion in revenue.nue in ONE QUARTER than Android made in an ENTIRE YEAR.
Goldman Sachs believes the Apple Watch is failing sales expectations too. You really think their estimates are pretty accurate?
EDIT: I realized how jaded by big numbers some folks have become to use the word "only" when discussing $3B revenue. Who here would be unhappy having $3B?
So Android only makes about 4% of Google's total revenue. Pathetic. I'm sure Android costs BILLIONS to keep running. So they are basically not making any profit from Android. Google makes the majority of its advertising revenue from iOS devices and Windows/Mac search.
To give you a comparison Mac is about 12% of Apple's revenue. Compare to Android is only 4% of Google's revenue. In fact Mac made more revenue in ONE QUARTER than Android made in an ENTIRE YEAR.
So true and if only Apple could remove Google's earnings from iOS! ?Search where are you?
I would disagree. IMO it should make the individual companies much more focused. Now their leadership can concentrate solely on their own businesses, succeed or fail on their own merits. The chances of the various companies being successful enterprises in their own right just went up with the new accountability and opportunities for recognition (and compensation!). I think it will be seen as a brilliant move, thus the excitement from investors.
Another way of looking at it is that the Google brand is faltering. But that wouldn't look brilliant.
Frankly, I wish the best for Tony Fadell. Maybe this will be his opportunity.
Oh wait. Nest was bought by Google after he was a successful startup. Now he's a successful startup again?
Goldman Sachs believes the Apple Watch is failing sales expectations too. You really think their estimates are pretty accurate?
The two statements are not really comparable, one is a number based upon filings I would assume, the other is an opinion based on expectations, based upon what ... a few analysts predictions? Steve said 1% of the smart phone market would satisfy him, Wall Street always has other ideas.
So true and if only Apple could remove Google's earnings from iOS! ?Search where are you?
If you pay close close attention it's happening every year. Every Apple keynote I notice small improvements announced that bite off a little of Giggle's profits.
Force Touch in the Macbooks is one I noticed that flew over everyone's heads. I kinda chuckled when they showed it off.
It might actually be in Apple's best interest to follow a similiar model but take it a step further.
Why? Even though its makes ZERO sense many in Wall Street think Apple is just too big in market cap. If they split into several companies they can grow faster. But I'd like these seperate companies to all have different stock.
Apple - should be principally a hardware company. iPhone, iPad, Mac, Watch, routers.
Apple Services - AppleMusic, iOS, OSX, ApplePay. Apple services will charge Apple software fees for each unit.
Advertising/Search - brand new company to focus on an advertising/search platform. I don't want the Apple brand to be tarnished by an advertising company.
Peach Hardware - hardware company that makes cheaper versions of Apple products for India, Africa, ect. It will also run on iOS/OSX. But being a totally seperately company won't tarnish the Apple name.
Hedge Fund - will allow Apple to day trade their AAPL stock. Buybacks have to many strict rules that don't allow Apple to fully fight off other hedge fund manipulation.
Jobs Bank - full on bank with creditcard services.
Cupertino Motors - Car company
IMO having seperate companies will allow the total market cap of all companies to excede its current total.
For example Apple Services is basically a Mobile version of Microsoft. I think it would it get a simuliar valuation as MSFT that is now $380 billion. Lets say $300 billion.
Peach Hardware would be worth about $50 billion.
Hedge Fund would probably be a privately held company to avoid too much regulation.
Jobs Bank - worth about $50 billion.
Cupertino Motors - worth about the same as Tesla $30 billion.
Search company would probably be worth $150 billion.
That gives us a total of $580 billion even before accounting for Apple hardware. Which should be worth north of $450 billion.
Gives us a total of just over $1 trillion.
I think you are under estimating search. If they close off iOS to Google (legally of course) just think of the $s!
Dont matter what Goldman Sachs believes about Watch. They have no idea what Apple's timetable is.
But Android which Wall Street loves to praise as the second coming is an utter failure. Google makes less money on Android than Apple makes on Macs. And I mean MUCH less. Mac revenue is about $20 billion a year. Android is $3 billion.
Not to mention Mac sales are GROWING ...!!! :smokey:
I have to laugh though that Page talks about focus when this seems like anything but that. I do think this could put more pressure on Apple to use its cash pile for moonshot type stuff. Some Wall Street types will be calling for Apple's version of Google X.
Depends on whose focus is being discussed, I guess. Page and Brin become the "overlords" of all of these diverse companies, but how many of them are making a profit? Most of them aren't. Where are they getting their funding? From the currently profitable Google.
Comments
They also know they have hit a wall for growth in Mobile revenue where Android earns $3b and iOS earns $9b for them. They're doing this now so Wall St is left unaware of the end of growth for Google.
My first reaction was, "What is Google attempting to dodge this time?".
My second reaction was, "Where is Eric Schmidt in all of this?".
My third reaction was, "I hope Apple stays focused!".
What a tiny car - not even room for a search engine.
It's in there somewhere.
You just have to search really, really hard.
http://www.sec.gov/Archives/edgar/data/1288776/000128877615000039/a20150810form8-k.htm
EDIT: I realized how jaded by big numbers some folks have become to use the word "only" when discussing $3B revenue. Who here would be unhappy having $3B?
So true and if only Apple could remove Google's earnings from iOS! ?Search where are you?
Sounds like they're hiding something or fear the future. But what do I know? This isn't my expertise...
I would disagree. IMO it should make the individual companies much more focused. Now their leadership can concentrate solely on their own businesses, succeed or fail on their own merits. The chances of the various companies being successful enterprises in their own right just went up with the new accountability and opportunities for recognition (and compensation!). I think it will be seen as a brilliant move, thus the excitement from investors.
Another way of looking at it is that the Google brand is faltering. But that wouldn't look brilliant.Frankly, I wish the best for Tony Fadell. Maybe this will be his opportunity.
Oh wait. Nest was bought by Google after he was a successful startup. Now he's a successful startup again?
The two statements are not really comparable, one is a number based upon filings I would assume, the other is an opinion based on expectations, based upon what ... a few analysts predictions? Steve said 1% of the smart phone market would satisfy him, Wall Street always has other ideas.
So true and if only Apple could remove Google's earnings from iOS! ?Search where are you?
If you pay close close attention it's happening every year. Every Apple keynote I notice small improvements announced that bite off a little of Giggle's profits.
Force Touch in the Macbooks is one I noticed that flew over everyone's heads. I kinda chuckled when they showed it off.
I think you are under estimating search. If they close off iOS to Google (legally of course) just think of the $s!
I'm not religious but that and seeing Microsoft crash and burn is a prayer worthy indeed ...
Not to mention Mac sales are GROWING ...!!! :smokey:
Welp, I was feeling pretty good about AAPL recovering 4 points today until I saw that GOOG was up over 40 points in after hours, on the news of this.
$40, not 40 points. A point is not a dollar, especially when you are referring to things like "basis points".
Let's see where it ends up tomorrow.
I have to laugh though that Page talks about focus when this seems like anything but that. I do think this could put more pressure on Apple to use its cash pile for moonshot type stuff. Some Wall Street types will be calling for Apple's version of Google X.
Depends on whose focus is being discussed, I guess. Page and Brin become the "overlords" of all of these diverse companies, but how many of them are making a profit? Most of them aren't. Where are they getting their funding? From the currently profitable Google.