Apple-Google War Escalates: Analyst
The rivalry between Apple and Google kicked up another notch recently when the iPhone maker announced that it would not include a pre-loaded app for YouTube in the new version of its iPhone and iPad software, one analyst said.
“We think Apple’s going to do everything they can to rip every vestige of that relationship out — from search to maps to YouTube to anything they can,” said Peter Misek, a senior tech analyst at Jefferies. “We see that relationship completely breaking down.”
Monday’s announcement is the latest sign of the growing rivalry between the tech companies that at one time were closely aligned, but now are vying for supremacy in the fast-growing mobile computing market. Earlier this year, Apple said it would dump Google’s mapping software from its mobile devices.
Misek argued that this decision and the rumored formal launch of big updates to Apple’s TV service are all part of the company’s video strategy — one that he thinks will help it differentiate from the pack.
Promoting YouTube was a key hole in Apple’s video strategy, Misek said. By equipping iPhones with YouTube or Google maps, Apple has been essentially putting revenue into Google’s pockets, which could then be used to develop Motorola and Android products, thus hurting iPhone and iPad sales.
“So they had no choice — they had to do this,” he said. “The war escalated, and it’s taking it on a new front now.”
One expected boon to revenue in Apple’s fiscal first quarter is the upcoming launch of the iPhone 5, which Misek thinks will be the biggest iPhone launch in history.
Despite the rivalry between Google and Apple, Misek remains positive about the Menlo Park company.
“I think it’s one of the better names certainly to own, but Apple is our top pick,” he said.
Gene Munster, a senior research analyst at Piper Jaffray, also encouraged investors to take a bite out of Apple stock.
“General take is you’ve got to own it,” he said. “People are going to have to be long for the iPhone 5 and what’s ultimately beyond iPhone 5.”
—By CNBC.com's Katie Little; Reuters contributed to this report. Follow Katie Little on Twitter @katie_little.
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Jefferies makes a market in the securities or ADRs of Apple.