Google’s blockbuster deal to amass Motorola Mobility for $12.5 billion has set analysts, critics and business observers on a tear predicting what may happen across the business. however it had been Apple’s stock value following the announcement that maybe stirred the foremost speculation regarding what the long run may seem like for firms within the mobile house.
Following the announcement of Google acquiring Motorola Mobility, Apple’s shares gained on their Monday gap value. On Aug. 16, the shares were initially down, sparking some to surprise if investors have become gun back by Google’s news. However, it looks that the dominant thought on each Wall Street and Main Street is that Apple are going to be totally unaffected by the deal. When it’s all said and done, the iPhone maker can still sit atop the mobile house with no real threat from Google or Motorola Mobility.
But that may not be the case. As powerful as Apple is, and as vital as its iPhone and iPad are to the mobile house, the corporate are going to be plagued by the acquisition.
Read on to seek out out why:
1. Motorola was on its heels
Motorola Mobility was doing a fine job of competing against Apple and every one alternative competitors within the mobile house before the acquisition. The company’s line of Android phones were well-built, priced affordably and customarily a number of the higher choices for people who didn’t wish an iPhone. currently that Motorola Mobility can have Google behind it what makes anyone assume that its level of quality won’t solely improve?
2. Google has the money
One of the largest problems with Motorola Mobility has been its inability to speculate the sort of money in its platforms that Apple has within the iPhone to stay competitors at bay. however currently that Google are going to be putting its money up to assist Motorola Mobility, all bets are off. It shouldn’t surprise anyone if Motorola offers up some vastly improved devices that includes forward-thinking technologies that might place Apple on notice. It looks currently that a spending war is bound to happen.
3. think about the Android issue
Over the previous couple of years, customers have grown increasingly keen on Android to the detriment of iOS, BlackBerry OS and alternative mobile platforms. currently that Motorola Mobility is on Google’s facet, expect that issue to become even bigger for Apple as shoppers heat to the thought of getting merchandise designed and sold by Google. create no mistake, Google’s complete suggests that one thing in today’s marketplace and it may facilitate improve Motorola sales and therefore hurt sales of alternative merchandise, together with the iPhone.
4. currently 2 Android vendors are threats
It’s vital to notice that for the foremost half, Samsung was Apple’s solely major threat within the mobile house. That company was nearing quarterly smartphone sales that matched Apple’s. however currently that Motorola is functioning with Google there's a decent likelihood shoppers can get additional Motorola devices. Apple should currently worry regarding the scale and growth of 2 competitors. Simply put, Apple’s issues within the mobile house simply doubled.
5. additional consolidation can occur
One of the foremost possible effects of Google’s acquisition is more consolidation within the mobile house. Handset vendors may attempt to merge to require on Google and Apple, whereas major companies, like Microsoft, may gobble up alternative brands. Consolidation may prove troublesome for Apple. Right now, it’s faced with a bunch of little firms with restricted money to speculate in new technologies. If several companies be a part of forces to alter the direction of the mobile house, Apple may have additional hassle obtaining its message to its desired market.
6. Apple can got to strive tougher
Right now, Apple is in a position to coast. The company’s iPhone four, that has been out quite a year, continues to be one among the foremost advanced merchandise on the market, which suggests it'd not even got to deliver a brand new iPhone anytime soon. however once Motorola Mobility is taking advantage of Google’s money and scale, Apple can got to strive tougher to remain a step ahead. As Motorola develops additional advanced merchandise within the future the onus are going to be on Apple to stay up. that may solely mean additional capital expenditure and investment in analysis and development—two things that Apple possible doesn’t wish to envision go up within the returning years.
7. can margins be affected?
Aside from options, it’s vital to stay in mind that Google’s Motorola Mobility acquisition may have a negative impact on Apple’s margins. After all, if Google decides to beat the iPhone on value with merchandise that have similar options, Apple can got to respond with higher pricing, as well. within the method, the corporate may lose a number of the profitability it currently enjoys.
8. Steve Jobs’ wrath
When Apple CEO Steve Jobs seen that Google was breaking into the mobile house, he was very displeased. Over time, the companies’ once friendly relationship has gone awry as Jobs continues to require issue with Google’s strategy. currently that the search big has bought Motorola Mobility, how may he react? chances are high that it won’t be too kindly. Expect Steve Jobs to privately and whenever doable publicly specific his displeasure with Google’s move.
9. It suggests that an iPad competitor is returning
The Motorola Xoom is by no suggests that a competitor to the iPad a pair of. The device, that launched earlier this year, had a poor operating system in Android three.0 and a value purpose that hindered it from gaining traction within the marketplace. Google is additionally having hassle obtaining its Android platform to catch on with pill customers. however with the partnership between the businesses currently solely months faraway from being completed, all that might amendment. Google may invest heavily in a very Motorola pill, and with the assistance of Android, finally deliver one thing worthwhile. Apple, whereas enjoying iPad a pair of sales over that amount, higher be prepared.
10. Patents
One of Google’s biggest issues has been its patent portfolio. the corporate itself has been sued by Oracle over alleged patent-infringement within the Android operating system, whereas its vendor partners have conjointly been targeted. one among the businesses targeting Android is Apple. however currently that Google can have Motorola Mobility’s patent portfolio on its facet, all this may amendment. It’s doable the “bogus” patent suits, as Google’s chief legal counsel, David Drummond, calls them, may return to an finish.
Source: Google, Motorola Deal Will Impact Apple`s Business: 10 Reasons Why
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