Apple Inc. is going toe-to-toe with Google, and the results should be spectacular. The two tech giants have a lot in common; both offer lifestyle services accessible through wireless technology, both have a significant share of the global mobile platform operating system market, and both have strong financial forecasts for the coming year. How do these companies stack up against one another in terms of offerings, innovations and financials?
Apple Inc. made its bones in the computer market, but really amplified its impact after then-CEO Steve Jobs refocused them on delivering consumer electronics. Despite a loyal following in the media production industries, Apple Inc. has a relatively small percentage of the Microsoft Windows-dominated desktop PC market.
This is not really dire news, as shipments of desktop units as a whole continue to be eroded by ever-more-powerful tablets and smartphones, of which Apple has a VERY healthy share. As of December 2013, tablets like the iPad running Apple Inc. IOS’ are estimated to comprise 48.2% of the market, with units running the Android OS are holding approximately 43.4% of the market.
IOS-based devices were responsible for over 55% of mobile browsing as of October 2013, with Android-based units holding a little over 30% of the market.
As far as share value and market capitalization, both companies have had interesting histories. Apple Inc. reached a new peak share price in 2013, which propelled its market capitalization over $500 billion, though this has not significantly boosted the company’s valuation. Despite this, Apple Inc. failed to live up to 2012 forecasts calling for $1000 share prices and a valuation approaching $1 trillion. Apple Inc. shares prices are currently around $566.
Google currently has a share price over $1000, and is third behind Apple and Exxon in market capitalization. Apple Inc. is the most valuable company on the planet by market capitalization (cap). Market cap is the total value of issued shares, calculated by multiplying price per share by number of shares outstanding.
Apple Inc. experienced a significant drop in stock value in October 2012, right after hitting a peak of $700 a month prior. This unexpected crash happened even as the product launches for the iPhone 5 and the iPad mini exceeded expectations and achieved record sales. The market is fickly and volatile.
The share price dipped below $400 in April that prompted a multi-billion dollar stock buyback program. As significant as the 2013 crash was, Apple Inc. experienced an even more severe dip back in 2008, falling under a $100 for a period of time.
Google, on the other hand, has not been buying back shares – in fact, they have been issuing new shares, 5.5 million new shares, creating nearly $6 billion dollars in wealth, while diluting the value held by existing shareholders. It must also be taken into account that Apple Inc. has paid out dividends of more than $10 per share over the past year, where Google has paid none.
Apple Inc. has also made some interesting acquisitions lately. The company has recently purchased Topsy, a social analytics firm for $200 million dollars. Topsy’s specialty is parsing Twitter feeds to analyze trends. Analysts predict that Apple Inc. will use this newfound resource to aid in pushing content through iTunes and App store.
Apple Inc. has also confirmed purchase of PrimeSense, an Israeli-based company that produces 3D motion-sensing technology. This could be used to help Apple Inc. devices “see” three-dimensional space, opening a new world of app possibilities.
Overall, both Apple Inc. and Google are on firm financial and technical grounds, and both companies have strong visions for their future business models. Time alone will demonstrate which one of these innovative and highly valued tech companies will come to dominate.
By Mark Clarke