The moment you have all been waiting for has arrived. The infamous tech rivalry between Apple (AAPL) and Google (GOOG) is here. These two giants in the tech world are at the peak of their clash regarding mobile devices and software.
Apple was the first to arrive on the scene, in 1976 (incorporated in '77), when Jobs, Wozniak, and Wayne set to create the Apple 1, the first personal computer. Selling at $666.66, this was the beginning of Apple Computer, Inc. Since then, Apple has only seen growth with the introductions of Apple 2, the Mac, the iPod at the turn of the century, the iPhone in 2007 (also when the name was changed to Apple, Inc.), and the iPad in 2010. Apple revolutionized music and the music experience through iTunes and set forward a new era of mobile technology. Granted, many predecessors such as Microsoft attempted to release similar products, but all failed to satisfy the human experience Apple provided. After Steve Jobs' unfortunate death in 2011 to cancer, Tim Cook took over as present CEO. Upon looking at the stocks since the 1997 incorporation date, we noticed a pattern of pure growth within Apple's trading. What about the surge in 1999? Surprisingly, considering this company held a significant role in the Information Era, Apple saw no significant growth or downfall. Stocks continued to rise slowly, until 2007 - the release of the iPhone. By then, it was clear that Apple was the front runner in the mobile world. The 2008 Recession caused a 25% drop in Apple's stocks but since then the company has more than quadrupled those numbers and, in just four years, grew from a mere $150 to almost $750. Beginning in September of this year, stocks began heading downwards, and were down about $60. When we discussed Apple at our meeting, stocks cost $604 a piece, on Friday (11/16) they closed at $527.68. When Apple released the iPad Mini, relatively (in comparison to other Apple products) few people knew about the new device. Suddenly, when one searched on Apple.com, they found this new, smaller, and significantly unsatisfying iPad. Meant to wipe out some of the competition, this tablet did much the opposite - stocks tumbled down and prediction after prediction prognosticated significant profit issues towards losses. However, now that the stocks are starting to settle down and hit their relative minimum, they can only go up. Improvements in the 4G LTE in the iPhone will certainly boost more sales, and the spread of Apple stores in China will provide a healthy and well-needed push upwards. By the end of the holiday season, we expect Apple to push $650-700 again.
What would we do without Google? A company that made its money solely on advertising is now one of the biggest players in the mobile industry. Google was established in 1998 by Page and Brin, Stanford students seeking to bring the world's wealth of information into one place. Since then, Google has grown from a search engine to a mail server, a cloud service, a social network, and most recently a mobile operating system - Android. This was the new kid on the block, and it was a tough one. Android has now taken iOS over as the leading mobile OS (operating system); considering Android operates on plenty of different phones, manufacturers, and carriers, this is no surprise. Now, the mobile user's internal struggle fights between the Apple cult or cool new features accompanying Android phones (the Galaxy SIII on Android 4.0, to name just one). Unfortunately, what Google has in mobile growth, it lacks in stability on the Stock Market. As far as our records tell us, Google has always been very expensive and very unstable. With each major event and world crisis, Google is almost always involved and even business growth easily impacts the company's stocks. Overall, stocks fluctuate between 100 and 400 points a year. More recent action has prompted a cap around $770 which shares cannot seem to pass. Remember that when less shares are available, the price will increase proportionally; nobody will buy $800 stocks. When we delve into more recent Google action, we see lawsuit after lawsuit in the tech world. Apple and Samsung, Microsoft against Motorola which dragged in Google, and most important for the search engine giant, Vringo (VRNG) and Google. Vringo, a tiny search engine company with stocks barely pushing $4, happens to own hundreds of patents that Google needs if they want to continue expanding their software. Most recommended Google to buy the company instead of settling a $700 million lawsuit; in the end, Vringo partially won, but only about $16 million. This seems minor in the end, but the original accusations led to an $80 collapse per share on October 18th. By the end of October, Google released strong earnings which prompted us to expect a rise in share price. This increase arrived, met the $700 cap, and continued to fall back down as more lawsuits were filed. Now, shares average near $650 for GOOG. Even though these cases will cause problems with investing, investors will soon learn that lawsuits are the next big thing in technology - greedy companies create, patent, and want to make money from each of their designs. We strongly believe Google is currently in the same situation as Apple: once things clear up, both can only improve and they will both more than thrive during the holiday season. We will try to post again early next year to show everyone how they did, but until then, which do you think is better?
Apple is becoming an income stock.(One that gives dividends) This attracts buyers who are going long. Google has not payed dividends. Also, Apple has had 178% growth in the past three years. Compare that to Google's wimpy 17% growth for these same three years.
ReplyDeleteIf I were to choose, I'd go Apple. It's a hell of a lot less boring.
If I would short, I'd Google stock.