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Google's Rumored Smartphone to Lock Horns with iPhone
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If rumors are to be believed, Alphabet Inc. (GOOGL - Free Report) owned Internet search engine giant Google is in talks with mobile operators to launch its own high-end smartphone by the end of 2016. The Telegraph published a report on Monday to that effect.
Google has been dabbling with phone hardware for some time now. Its first attempt was through the purchase of Motorola, which it subsequently sold off to Lenovo while retaining many important patents. Then came the Nexus line of devices that it designed and then outsourced the actual manufacturing to third parties. Project Ara is perhaps its most ambitious attempt thus far, wherein phones comprise hardware modules that can be replaced with other modules depending on the functions being used at the time. Lenovo is the only manufacturing partner for these devices (Moto Z or Moto Mod line). So a smartphone from Google doesn’t come as much of a surprise.
Why the Move?
Four out of five smartphones sold worldwide run on the Android operating system developed by Google. The company also endorses a wide range of smartphones under the Google Nexus brand that are made by its partners, LG and Huawei.
However, unlike Apple Inc. (AAPL - Free Report) , which builds and therefore controls the necessary hardware, software and operating system for its own smartphones, Google just focuses on developing the free operating platform that runs on these phones, giving it less control over the hardware market.
It is highly unlikely that Google will manufacture its own devices given the complications and cost involved as well as the competition with third-party Android phones. But if it did, it would obtain significant control over these devices and could also ensure quicker software updates.
In a market where Google is constantly targeted for antitrust reasons because of the popularity of Android, the company may have to give in to government demands in many markets, which will hurt its revenues and lead to further fragmentation of the Android OS. Android is effective today because Google has thus far been able to prevent fragmentation through agreements with device and component makers. If these arrangements fall through as they now are, Android will lose value. That’s where a Google branded phone may come in handy.
At present, Alphabet has a Zacks Rank #3 (Hold).
Stocks to Consider
A couple of better-ranked stocks in the broader technology space include Blucora, Inc. and Blue Calypso, Inc. , each sporting a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Google's Rumored Smartphone to Lock Horns with iPhone
If rumors are to be believed, Alphabet Inc. (GOOGL - Free Report) owned Internet search engine giant Google is in talks with mobile operators to launch its own high-end smartphone by the end of 2016. The Telegraph published a report on Monday to that effect.
Google has been dabbling with phone hardware for some time now. Its first attempt was through the purchase of Motorola, which it subsequently sold off to Lenovo while retaining many important patents. Then came the Nexus line of devices that it designed and then outsourced the actual manufacturing to third parties. Project Ara is perhaps its most ambitious attempt thus far, wherein phones comprise hardware modules that can be replaced with other modules depending on the functions being used at the time. Lenovo is the only manufacturing partner for these devices (Moto Z or Moto Mod line). So a smartphone from Google doesn’t come as much of a surprise.
Why the Move?
Four out of five smartphones sold worldwide run on the Android operating system developed by Google. The company also endorses a wide range of smartphones under the Google Nexus brand that are made by its partners, LG and Huawei.
However, unlike Apple Inc. (AAPL - Free Report) , which builds and therefore controls the necessary hardware, software and operating system for its own smartphones, Google just focuses on developing the free operating platform that runs on these phones, giving it less control over the hardware market.
It is highly unlikely that Google will manufacture its own devices given the complications and cost involved as well as the competition with third-party Android phones. But if it did, it would obtain significant control over these devices and could also ensure quicker software updates.
In a market where Google is constantly targeted for antitrust reasons because of the popularity of Android, the company may have to give in to government demands in many markets, which will hurt its revenues and lead to further fragmentation of the Android OS. Android is effective today because Google has thus far been able to prevent fragmentation through agreements with device and component makers. If these arrangements fall through as they now are, Android will lose value. That’s where a Google branded phone may come in handy.
At present, Alphabet has a Zacks Rank #3 (Hold).
Stocks to Consider
A couple of better-ranked stocks in the broader technology space include Blucora, Inc. and Blue Calypso, Inc. , each sporting a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>