Deeper Apple (AAPL), Yahoo! (YHOO) Deal Makes Sense in Battle vs. Google (GOOG) - Sterne Agee
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Price: $169.02 +1.27%
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Yesterday, press reports discussed the possibility of a deeper and broader Apple (NASDAQ: AAPL) and Yahoo! (NASDAQ: YHOO) relationship. Sterne Agee analyst Shaw Wu weighed in on this possibility Thursday, saying it makes sense as both companies battle common competitor Google (NASDAQ: GOOG).
"While this is a positive for YHOO as it looks to strengthen its presence in mobile, this also signals AAPL's efforts in lessening its dependence on GOOG, who has arguably emerged as its biggest competitor," Wu said. "YHOO has somewhat become the Switzerland of internet companies and an ideal partner for AAPL as it isn't in the mobile devices business and doesn't own a mobile device OS, popular web browser, or social network."
A deal may impact Google's iOS mobile monetization, the analyst said. Wu notes that despite Android's much larger smartphone market share versus iOS (70% vs. 22%), iOS is the best platform for monetization. iOS accounts for 42% of mobile traffic (vs. 31%
for Android) and 51% share in revenue (vs. 30% for Android).
It won't be an easy task to replace Google on the iPhone, however. "While Google Maps and YouTube are no longer pre-loaded on iOS, the reality is that users love these services and industry data shows that both are among the top downloaded apps on iOS," Wu notes. A question to ask, according to the analyst, is whether Yahoo, Apple itself, or someone else can provide superior content and services.
Wu said he believe progress in Siri is worth monitoring as it bypasses Google and traditional search by giving users information directly.
The firm maintained a Buy rating and price target of $630 on Apple.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $435.69 yesterday.
"While this is a positive for YHOO as it looks to strengthen its presence in mobile, this also signals AAPL's efforts in lessening its dependence on GOOG, who has arguably emerged as its biggest competitor," Wu said. "YHOO has somewhat become the Switzerland of internet companies and an ideal partner for AAPL as it isn't in the mobile devices business and doesn't own a mobile device OS, popular web browser, or social network."
A deal may impact Google's iOS mobile monetization, the analyst said. Wu notes that despite Android's much larger smartphone market share versus iOS (70% vs. 22%), iOS is the best platform for monetization. iOS accounts for 42% of mobile traffic (vs. 31%
for Android) and 51% share in revenue (vs. 30% for Android).
It won't be an easy task to replace Google on the iPhone, however. "While Google Maps and YouTube are no longer pre-loaded on iOS, the reality is that users love these services and industry data shows that both are among the top downloaded apps on iOS," Wu notes. A question to ask, according to the analyst, is whether Yahoo, Apple itself, or someone else can provide superior content and services.
Wu said he believe progress in Siri is worth monitoring as it bypasses Google and traditional search by giving users information directly.
The firm maintained a Buy rating and price target of $630 on Apple.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $435.69 yesterday.
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