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Google Vs. Apple: No More Mr. Nice Guy

Late developments suggest the landscape in technology may be about to change in a big way. How should you trade it?

The Street is buzzing with speculation that Apple may be the target of a full scale attack after Google Chief Executive Eric Schmidt stepped down from his position on Apple’s board of directors.

Apple CEO Steve Jobs said in a statement on Monday that with Google's introduction last month of its Chrome Operating System, "now is the right time" for Schmidt to step down from Apple's board. The resignation is effective immediately.

Google's Chrome OS will go head-to-head with Apple's OS X system as well as Microsoft’s Windows when it becomes available to consumers in the second half of 2010.

Meanwhile, Schmidt, named an Apple director in 2006, had already recused himself from discussions at board meetings that focused on Apple's iPhone, though it was not clear when that began. (Google's Android operating system is used in rival smartphones.)

In a statement, Schmidt said: "I have very much enjoyed my time on the Apple Board. It's a fantastic company. But as Apple explained today, we've agreed it makes sense for me to step down now."

Insights from Piper Jaffray's Gene Munster

I agree that it’s time for Eric Schmidt to step aside and allow the companies to compete more aggressively, says Piper Jaffray analyst Gene Munster. However, I think Google’s greater fear is Microsoft, he adds, especially after the deal they inked with Yahoo! last week.

But for investors, Apple remains primarily a hardware play while Google is a play on Internet search. And I don’t see them competing on those grounds.

What’s the trade?

If you must choose, over the next 6 months I think Apple has more upside than Google, says Munster.

I’d look at Microsoft, adds Joe Terranova. I think they surprise everybody and go after Google very aggressively.


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Trader disclosure: On Aug 3rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (MSFT), (MCD), (AMZN); Terranova Works For (VRTS); Terranova Is Short (TM); Seymour Owns (AA), (AAPL), (BAC), (BHI), (F), (RIMM), (YHOO), (EEM); Seymour's Firm Is Short (PBR); Seymour Owns (POT); Finerman Owns (RIG); Finerman's Firm Owns (MSFT), (NOK), (PBR), (RIG), (TBT), (WMT); Finerman's Firm And Finerman Own (BAC) Preferred Shares; Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Is Short (USO), (IJR), (IYR), (IWM), (MDY), (SPY); Finerman's Firm Is Short (WFMI); Grasso Owns (BAC), (BA), (COST), (CSCO), (FAZ), (OXY), (V), (WMT), (XLF); Grasso's Company Owns (ABT), (GERN), (MSFT), (NWS.a), (NYX), (PDE), (RDC), (ROK), (XOM), ;Grasso's Company Owns (SDS); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU)

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