iPhone 5 has been the biggest launch of a consumer product ever. Apple (AAPL) stock has been a monster. On the other hand, its main competitor Google (GOOG) until recently languished. Going into iPhone 5 launch, nobody could have predicted that Google would defeat Apple where it counts.
From an investment perspective, what counts is the stock performance. Google has outperformed Apple by about 15% in the past few months. There have been three reasons behind Google’s out-performance.
Apple Maps: The map flap exposes deeper issues than Apple has let on. Investors are coming to a conclusion that Apple has difficulty in executing large scale data driven projects. (See, “Buggy Apple Maps Point Way To Mediocrity In Post-Jobs Era.”) This is a leg up for Google.
Search Disintermediation: There had been high hopes that Apple would progress towards disintermediating Google Search in iPhone 5. In iPhone 4S, Apple took a giant leap to bypass Google search with Siri coupled to reliance on data bases such as Yelp (YELP).
As an example, when Siri is asked to find the nearest Indian restaurant with good reviews, Apple bypasses Google and Siri delivers results from Yelp. In iPhone 5 and iOS 6, Apple has not progressed much farther from the giant leap it took in iPhone 4S.
Facebook Concerns Fade: There have been big concerns that Facebook (FB) would siphon away large amounts of advertising dollars from Google. Facebook has not lived up to the expectations. Some of the money that has been coming out of Facebook has been going into Google…Read more at Forbes