How Apple and Google can benefit from iPhone and Chrome

Monday, September 22, 2008
By Faisal Laljee

I realized that my previous post about Google and Apple failed to outline how it is I think that Apple and Google could monetize the App Store and Chrome respectively.

For Apple, the average iPhone user downloads about eight apps in the first month of owning the phone. Other smartphones users download less than one application a year according to Information Weekly. Apple reported more than 10 million downloads in the first week its App Store was open and Apple makes a cut from the sales of these applications, that are developed by third-parties and sell for less than $10 each.

As for the Chrome, it is to Google what IE is to Microsoft and Mozilla is to Firefox. Strategically, Chrome will give Google user browsing patterns that it did not have access to in the past unless users downloaded the Google Toolbar. This will help Google serve contextual advertisements via behavioral targeting.

Moreover, the future of browsing is not simply to access the internet. A browser will be the future version of what is currently a desktop. Applications will no longer reside on the local computer, rather, they will be accessed via a browser. Google’s Chrome browser is built to process code and in doing so, takes a giant leap towards the future of browsing. According to Gunther Sonnenfeld, SVP of digital and social media at DEI, “Its significantly increased speed will optimize content delivery, particularly among video platforms. Just think about how annotations, interstitials, as well as pre- and post-roll will fare in this new environment.”

I reiterate my buy on both Google and Apple amidst the market sell-off today.

– Faisal Laljee
Full Disclosure: I own AAPL but my position can change anytime without notice.

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2 Responses to “How Apple and Google can benefit from iPhone and Chrome”

  1. Brendan Lee

    Dont you think AAPL valuation is still too high?

  2. Brendan Lee

    RBC Capital downgrades Apple to sector perform from outperform. I guess I am right, valuation is too high.


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