Sterne Agee on Google (GOOG): Getting It Right Where Others Failed - Aggressive Price Point

Sterne Agee analyst, Shaw Wu, attended yesterday Google I/O developer conference. The firm doesn't have coverage on Google (Nasdaq: GOOG), but was compelled to write up discoveries made at the conference since he covers other stocks in the sector.

Wu said, "...Google unveiled Nexus 7, a co-developed and co-branded tablet with Asustek of Taiwan. We find its $199 price point aggressive, on par with Kindle Fire, and will likely compete most against Amazon (Nasdaq: AMZN)(NotRated), Microsoft (Nasdaq: MSFT)(NR), Research In Motion (Nasdaq: RIMM)(Neutral), H-P (NYSE: HPQ)(Buy), and unfortunately its Android partners including Samsung, Dell (Nasdaq: DELL)(Neutral), HTC, Lenovo, Acer, etc. Apple (Nasdaq: AAPL)(Buy) could see competitive pressure as well but we believe likely least impacted given its unique structural and strategic advantages. This is the latest sign of GOOG's growing ambitions in hardware and worth monitoring."

"The tablet market, which is expected to double to ~$80 billion this year, is undoubtedly getting more competitive with GOOG and MSFT entering the space. We believe GOOG will post more of a threat to AMZN and MSFT due to its much better established market leadership of Android OS and richer app experience. GOOG has about 600,000 apps, far more than MSFT's 80,000 and AMZN's 31,000."

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