Ever since the original iPhone introduction in 2007, YouTube has been one of the handful of apps that came preloaded on iPhones.
But now Apple (AAPL) has just released a new beta update of its mobile operating system, iOS 6, and it does not include the YouTube app. In other words, Apple has dumped Google (GOOG)-owned YouTube just like it previously dumped GoogleMaps.
iPhone users will still be able to access YouTube through the Safari browser, and the app did not include all of YouTube’s content and advertising so the financial impact on Google will be minimal, but the move raises a big concern: is Apple moving towards removing Google as the default search engine on its devices? If so, the financial impact on the latter would be material.
It is possible that Apple’s move may backfire as it may alienate its users, and Google may benefit as it will now be able to take control of its YouTube app on Apple devices and optimize advertising dollars.
These are precisely the kinds of moves that increase the risks in both stocks, but investors seem to understand the risk to a larger degree in Google’s case.
My focus is on generating high risk-adjusted returns, i.e., returns in excess of those commensurate with the risk taken. The risk in Apple stock has been rising, which is why I have been recommending taking partial profits in Apple stock while still holding a healthy long position in Apple….Read more at Forbes
