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Apple ( APPL ) and its new suite of products won’t shake up Alphabet ( GOOGL )-owned Google Android, said Monness, Crespi, Hardt in an industry update Tuesday. Monness Crespi analyst James Cakmak called Apple’s new product launches that were announced Monday — items including a 4-inch iPhone, a lower-priced Apple Watch and iPad Pro, and updates to the company’s iOS and Apple TV — “lackluster at best.” While Apple’s new iPhone comes with a cheaper $399 entry point, “we believe it does little to disrupt Android’s stronghold on the global mobile market,” wrote Cakmak. “As of 2015, Android commands about 80% of the market vs. iOS at 15%, per IDC. To be sure, some will prefer the smaller form factor, but as far as changing the global mix, we see little potential shift, especially noting the influx of supply when iPhone annual upgrade plans come up for renewal.” Apple also is doing little to impact Google’s efforts in the Internet of Things, Cakmak said, with the actual front-runner so far turning out to be Amazon.com ( AMZN )‘s Alexa voice software — Amazon’s answer to Apple’s Siri, Google Now and Microsoft’s Cortana voice-activated personal digital assistants. And since “Apple is actually ahead of Google in encryption (due largely to the open-sourced nature of Android),” said Cakmak, that means “Apple fights the fight while Google can adapt accordingly.” He pointed to the FBI’s disclosure on Monday that it may not need Apple’s assistance after all to unlock an encrypted iPhone used by one of the San Bernardino, Calif., terrorist attackers, since investigators might have found another way to access it . “Should this hold, it would in tandem support Android’s encryption efforts,” Cakmak said. New iPad Said Still Behind Microsoft Surface On the tablet front, Cakmak said, “While the iPad Pro is looking to replace the laptop, we believe Microsoft’s Surface continues to hold an edge despite the latest updates from Apple.” Some investment banks, including Raymond James , are also expecting Alphabet’s Google division to become more competitive in cloud computing. As Google prepares to hold its cloud user conference, GCP Next 2016, in San Francisco starting Wednesday, Cakmak noted, “With Diane Greene making her first keynote in her senior vice president role, we expect to come away with a better understanding of Google’s angle in either placing more emphasis on the enterprise or storage. This can also provide better clarity into whether Microsoft or Amazon’s AWS should feel greater pressure.” Monness, Crespi maintains a buy rating and 900 price target on Alphabet stock. Alphabet stock was down a fraction, near 759, in midday trading in the stock market today . Alphabet “seemed to be in the shadows of Facebook in the first half of last year,” Rosenblatt Securities analyst Martin Pyykkonen wrote in a research report Tuesday. But Alphabet has gone on to outperform the market and finish “with a full year gain in the same range as Facebook, which was especially driven after new CFO Ruth Porat started at Alphabet in mid-2015.” Pyykkonen said Alphabet’s core business segments “are benefiting from most of the same key growth drivers as Facebook, including mobile, display and video ads, in addition to the longstanding core search advertising business. There has been increasing media attention on Facebook vs. Alphabet’s YouTube in terms of video advertising and revenue growth potential. We think there is room for both players within our current estimates through next year for each company, and video delivery is likely to remain different for each company.” Apple stock was up nearly 1% in midday trading Tuesday, near 107. Amazon stock was up a fraction, near 558. Scalper1 News
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