Justin Sullivan, Chris Jackson, Getty Images
Industryweek 11098 052717applegooglejustinsullivanchrisjackson

Apple, Google Locked in Battle for Tech Supremacy

May 27, 2016
Two big names, lots of big ideas (and egos) ... and more than $1 trillion in combined value. Watching Apple and Google go after each other is like watching the best kind of race.

SAN FRANCISCO — At the top of the corporate world, Apple and Google are in a back-and-forth battle for the top spot, and it’s not clear which of the Silicon Valley giants will emerge on top in a contest that highlights the contrast of very different business models.

For a brief time early this year, Google parent Alphabet overtook Apple as the world’s largest company by market value. Apple then regained, lost and recovered the lead in May in a battle that appears set to continue for some time.

Right now, Apple is worth some $522 billion, to $496 billion for Alphabet, give or take.

The two companies have both been hugely profitable in recent years, for different reasons.

Apple has delivered a line of must-have iPhones and other gadgets that have set trends around the world but now “appears to be a little bit immobile,” says Roger Kay, analyst at Endpoint Technologies Associates.

Apple shares have slumped some 30% over the past 12 months over concerns that its stunning growth pace is slowing and that the iPhone won’t be able to rake in profits as it has up to now.

Kay said Apple could be losing the position of the innovation leader it achieved after the iPhone, with no new major hit products coming.

“They haven’t really changed the nature of the game,” Kay said. “The (Apple) Watch came in, it was kind of interesting, people liked it ... but developers are still searching for exactly how to use it.”

Google, meanwhile, has been evolving from a pure search engine to a leader in mobile with its Android operating system. And it has at the same time been investing in “moonshots” — grand ventures that might have potential such as self-driving cars, fiber networks and Internet balloons.

Google “has positioned itself well, through organic investments and acquisitions, for most of the major trends in consumer Internet: mobile, video, local,” said RBC Capital Markets analyst Mark Mahaney in a research note.

Kay said the Android system that powers some 80% of mobile handsets is a valuable franchise that helps Google’s mobile advertising efforts.

“The narrative that has boosted Google is the one about technology innovation and being at the wellhead of various important technologies,” Kay said. “That may or may not finally pay off. But they’re looking. They’re using their money to try to find innovative things to make the next big thing, whatever it is.”

For Apple, a key moment will come later this year with the expected unveiling of its iPhone 7, a test on whether it can keep up its innovation and entice consumers to trade up.

The two companies have a virtual duopoly on the smartphone market, but Apple makes its own hardware and software, while Google provides only the free Android software for handsets, including many made by low-cost manufacturers.

Google has been taking pains to show off its software and artificial intelligence. At its just-concluded developer conference, Google unveiled a virtual home assistant, as well as an upgraded messaging platform.

Google claims it is ahead of its rivals in artificial intelligence, and cites as proof its victory in the ancient game of Go by its supercomputer AlphaGo. And Google also has shown its interest in virtual reality, adapting its upcoming version of Android to deliver more lifelike images, which could help in its battle against Apple.

But few are ready to count out Apple, which is known for keeping its research efforts secret, and which has a massive cash stockpile of some $233 billion.

Apple is widely believed to be working on some automobile project, and recently announced a $1 billion investment in Chinese ride hailing app Didi Chuxing, the bitter rival of US-based Uber. Apple also moved to expand its global footprint by announcing plans for a development office in Hyderabad, India and a new app design center in Bangalore.

Even with Apple’s share price in a slump, billionaire Warren Buffett disclosed he had taken a $1 billion stake, suggesting the shrewd investor sees Apple as undervalued.

The research firm Trefis said the latest Apple investment in Didi “signals that the company could get more creative” in using its vast financial resources. Time, of course, will tell.

By Sophie Estienne

Copyright Agence France-Presse, 2016

Continue Reading

Popular Sponsored Recommendations

What Does Agility Look Like for Today's Auto Industry?

Dec. 4, 2023
Without modern technologies, enterprises aren't able to fully analyze the risks and respond to ongoing supply chain issues and semiconductor shortages.

How Digital Twin Technology is Empowering Manufacturers

Sept. 27, 2023
This FAQ delves into why this technology offers business value and considerations toward implementation.

The Benefits of Continuous Thermal Monitoring

Oct. 17, 2023
Read this eBook to learn more about collecting and using data intelligently to improve performance.

Process Mining For Dummies

Nov. 19, 2023
Here it is. Everything you need to know about process mining in a single book, written in the easy-to-understand, hard-to-forget style that ‘For Dummies’ manages so effortlessly...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!