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The Zacks Analyst Blog Highlights: Alphabet, Apple and Amazon
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For Immediate Release
Chicago, IL – June 11, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Alphabet (GOOGL - Free Report) , Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) .
The Financial Times and Politico have broken the story that the EU is getting ready to fine Alphabet for its monopolistic practices regarding Android. They also say that the fine could be significantly higher than the $2.7 billion charged last year over Google Shopping.
Since the European Commission’s report isn’t out, its reasons for charging Google aren’t clear as of now. But complaints against Google include the company’s policy of requiring hardware manufacturers to pre-install its suite of apps while preventing them from pre-installing certain competing apps.
As investigations are generally long-winding, they allow the accused, in this case Google to make changes to deal with certain objections. So Google has in the meantime relaxed its rules regarding the pre-installation of competing apps.
The case started with Yandex, which was the dominant search engine in Russia, losing significant market share to Google as a result of this policy. One might argue of course that in this case Google increased competition in the market dominated by Yandex. But the EU, to which Yandex went, decided to pursue the case anyway.
Google’s arguments (from earlier on) do look convincing:
The EU isn’t considering Apple as Google’s competitor, although its own findings showed that they do in fact compete. So Android being offered free to hardware makers means that many more hardware companies could take a shot at the market and many more and cheaper devices could enter the market, thereby increasing choice for customers.
Second, Google’s bundling creates a consistent Android experience across devices and prevents fragmentation, which is both expensive and cumbersome for developers since a fragmented ecosystem would require them to make multiple versions of their apps. Destroying this balance would kill the app ecosystem hurting millions of developers.
Third, hardware makers can also pre-install competing apps (Google apps now make up a third of pre-installed apps).
Fourth, the pre-installed Google bundle is free for hardware makers and users. Moreover, since Google earns from app usage, this helps it provide necessary support to Android and Play at no extra cost to users.
Fourth, Google doesn’t prevent any user from downloading any app of their choice from Play Store. It says that the average Android user in Europe downloads an additional 50 apps over the lifetime of their device. So if they prefer any app over Google’s, they are free to download it (they probably can’t delete the Google apps although this may not be such a big problem since they occupy a very small part of device memory).
To Conclude
Google’s position is rather unique because it has successfully created an ecosystem of not just developers but also hardware makers, content providers and advertisers. While this has created some tensions between various parties and its ability to earn profits from the system has been questioned, it’s impossible to deny Google’s contribution.
So the EU fine is not the end of the story. Google is definitely a monopoly of huge proportions but the service it provides is so unique that the EU will be hard pressed to find an alternative solution that’s also fair for all concerned.
We are at a point in history where we are re-thinking the concept of monopoly. Is a monopoly always evil? What about Amazon then, for instance, which has the effect of lowering prices across the industry? And what is the best way to regulate benevolent monopolies, if I can use that term? There are no easy answers. So these are questions that we will continue to debate as the Internet grows to take over even more of our lives. In the meantime, Google’s ordeals could well continue.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Alphabet, Apple and Amazon
For Immediate Release
Chicago, IL – June 11, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Alphabet (GOOGL - Free Report) , Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday’s Analyst Blog:
Google Looking at More Fines in the EU
The Financial Times and Politico have broken the story that the EU is getting ready to fine Alphabet for its monopolistic practices regarding Android. They also say that the fine could be significantly higher than the $2.7 billion charged last year over Google Shopping.
Since the European Commission’s report isn’t out, its reasons for charging Google aren’t clear as of now. But complaints against Google include the company’s policy of requiring hardware manufacturers to pre-install its suite of apps while preventing them from pre-installing certain competing apps.
As investigations are generally long-winding, they allow the accused, in this case Google to make changes to deal with certain objections. So Google has in the meantime relaxed its rules regarding the pre-installation of competing apps.
The case started with Yandex, which was the dominant search engine in Russia, losing significant market share to Google as a result of this policy. One might argue of course that in this case Google increased competition in the market dominated by Yandex. But the EU, to which Yandex went, decided to pursue the case anyway.
Google’s arguments (from earlier on) do look convincing:
The EU isn’t considering Apple as Google’s competitor, although its own findings showed that they do in fact compete. So Android being offered free to hardware makers means that many more hardware companies could take a shot at the market and many more and cheaper devices could enter the market, thereby increasing choice for customers.
Second, Google’s bundling creates a consistent Android experience across devices and prevents fragmentation, which is both expensive and cumbersome for developers since a fragmented ecosystem would require them to make multiple versions of their apps. Destroying this balance would kill the app ecosystem hurting millions of developers.
Third, hardware makers can also pre-install competing apps (Google apps now make up a third of pre-installed apps).
Fourth, the pre-installed Google bundle is free for hardware makers and users. Moreover, since Google earns from app usage, this helps it provide necessary support to Android and Play at no extra cost to users.
Fourth, Google doesn’t prevent any user from downloading any app of their choice from Play Store. It says that the average Android user in Europe downloads an additional 50 apps over the lifetime of their device. So if they prefer any app over Google’s, they are free to download it (they probably can’t delete the Google apps although this may not be such a big problem since they occupy a very small part of device memory).
To Conclude
Google’s position is rather unique because it has successfully created an ecosystem of not just developers but also hardware makers, content providers and advertisers. While this has created some tensions between various parties and its ability to earn profits from the system has been questioned, it’s impossible to deny Google’s contribution.
So the EU fine is not the end of the story. Google is definitely a monopoly of huge proportions but the service it provides is so unique that the EU will be hard pressed to find an alternative solution that’s also fair for all concerned.
We are at a point in history where we are re-thinking the concept of monopoly. Is a monopoly always evil? What about Amazon then, for instance, which has the effect of lowering prices across the industry? And what is the best way to regulate benevolent monopolies, if I can use that term? There are no easy answers. So these are questions that we will continue to debate as the Internet grows to take over even more of our lives. In the meantime, Google’s ordeals could well continue.
Google shares carry a Zacks Rank #3 (Hold). But better investment ideas are captured in the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.