Market Overview

Jefferies: Google Is Apple's Top Competitor And Apple Is Losing

Jefferies: Google Is Apple's Top Competitor And Apple Is Losing
Related AAPL
Maxim Expert Breaks Down Movement In 4 Tech Stocks
The Market In 5 Minutes
Stocks Rattled By North Korea Talk; Sprint/T-Mobile Deal Near? (Investor's Business Daily)

Sundeep Bajikar of Jefferies presented an interesting thesis on Wednesday: Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) is Apple Inc.'s (NASDAQ: AAPL) top competitor.

"Our analysis suggest that Google provides the majority of most popular Consumer Cloud Services, which are expending penetration through Android, Chrome, iOS, Windows, and other devices, unlike Apple's iCloud which remains focused on iOS devices," Bajikar wrote in a note to clients. "As hardware differentiation slows due to Moore Stress, we think device-agnostic Cloud Services could accelerate hardware commodization longer term."

According to Bajikar, Google is the clear leader in Search, Maps and its Chrome and YouTube services are unmatched. The analyst credits Google's dominance due to its "core expertise" in delivering and organizing relevant content through its “industry-leading” Cloud Data Centers.

Related Link: Will YouTube's Subscription Service Be Profitable?

Apple has demonstrated success in selling superior hardware devices that operate on its iOS system while Google's success lies in its abilities to scale up monetization activity among its Android base, which is three times larger than the iOS base.

Bajikar estimates that the iPhone sells at a price premium of $300 due to consumer perception of a superior hardware and aesthetic design. However, Samsung's research in flexible display and rapidly improving handsets from China pose a threat to Apple's bottom line. The analyst adds that for every 1 percent decline in the iPhone average selling price would result in an approximate 1 percent decline in Apple's earnings per share.

Shares of Apple were reiterated with a Hold rating with a price target raised to $120 from a previous $112.

Latest Ratings for AAPL

Sep 2017Morgan StanleyMaintainsOverweight
Sep 2017NomuraMaintainsBuy
Aug 2017NomuraMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Android Chrome cloud iOS JefferiesAnalyst Color Price Target Analyst Ratings Best of Benzinga


Related Articles (AAPL + GOOG)

View Comments and Join the Discussion!