Tablet wars ahead in 2012–but it will be Google versus Amazon with Apple on the sidelines counting its profits
Some analysts and investors who read Apple’s (AAPL) December quarter earnings report yesterday are now anticipating the big fight in the tablet market between Apple’s iPad and Amazon.com’s (AMZN) Kindle Fire.
But there’s an increasing wave of opinion that argues these investors are looking at the wrong war. (For my take on Apple’s earnings see my post http://jubakpicks.com/2012/01/25/apple-is-still-a-cheap-stock/ )
Oh, there’s going to be a battle, no doubt about it, but the first combat, this view says, will be between Amazon and Google (GOOG). I know that Amazon’s Kindle runs Google’s Android operating system and that it’s therefore logical to think of the two companies as allies.
It was certainly intended to work out that way, but Google isn’t getting nearly the share of the tablet market for its apps that it thought it would from Amazon. And with other tablet hardware companies set to follow on Amazon’s model, it looks like Google will have to launch its own Android-based tablet or get less of this fast-growing market than it wants.
Here’s the problem from Google’s point of view. Read more
Update Google (G OOG)
Just in case you were in danger of forgetting, Google’s (GOOG) second quarter earnings report on Thursday, July 14, should remind you: It’s good to be out in front of the market, but as an investor you don’t want to be too far out in front.
I can pick a ton of holes in Google’s competitive position and the challenges it faces over the next couple of years. But the market right now doesn’t want to hear about anything so far off. The news that counts is that Google is producing great numbers from its current dominance of the Internet search space.
For the second quarter Google reported earnings of $8.74 a share (excluding one-time items). That was 91 cents a share above the Wall Street consensus estimate of $7.83. Net revenue (for Google you have to subtract the cost of acquiring traffic from the revenue the traffic brings in) climbed 26% from the second quarter of 2010 to $9.03 billion. (Wall Street was looking for $8.63 billion.)
Operating income grew to $3.32 billion for the quarter from $2.67 billion in the second quarter of 2010.
Analysts who dinged the company last quarter on rising costs were relatively quiet on that front this quarter even though operating expenses climbed 49% from last year. Read more
Google misses as costs climb on bet that economic recovery will continue
Good news for the economy. Just okay news for Google (GOOG)
After the market close on July 15 Google reported second quarter earnings of $6.45 a share. That was worse than the $6.52 Wall Street analysts had projected. The stock dropped 4.2% or $20.62 in after hours trading to $473.40.
The problem wasn’t revenue—which is good news for the U.S. (and global economy) since most of Google’s revenue comes from advertising and higher revenue means more advertisers are buying ads. Read more
Google’s China troubles not so great for Baidu?
Troubles at Baidu (BIDU)?
Traders jumped into shares of Baidu last week on the theory that Google’s (GOOG) troubles in China—and the likely shutdown of the company’s Chinese search engine—would be good news for the biggest domestic search company.
Today they seem to be having second thoughts. Baidu shares were down almost 8%–$36.68 a share—at 11:15 in New York. Read more
The other war between Apple and Google
There are two fronts in the increasingly bitter war being fought between Apple (AAPL) and Google (GOOG). And while the contest between the iPhone and Google’s Nexus One (and other Android phones) is getting most of the ink, it’s the apps battle that comes with the biggest stakes. Read more
