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Google Inc (GOOGL) Just Took a New Market from Apple Inc. (AAPL)

Google Inc (NASDAQ:GOOGL)(NASDAQ:GOOG) might have nailed the key to making money from “poor” African and Asian countries while Apple is still ignores 90% of the smartphone market because they can’t afford its phone.

The Associated Press reports that Google is ready to launch a low-priced smartphone in six African countries in a move that will increase the chances of milking ad dollars from those countries. Google’s move contrasts sharply with Apple’s stance and Google will make money in emerging countries long before Apple Inc. (NASDAQ:AAPL).

Google Inc Android brillo and weave

The low-cost Android phone, which will be made by Infinix will cost about $87 and it will be sold in Nigeria, Ivory Coast, Morocco, Egypt, Kenya and Ghana. Local online retailer, Jumia, will sell the smartphones and there won’t be markup costs to the final buyers. Google had such a deal with Infinix last year when it build “Hot 2” as part of Google’s Android One program that started in India last year.

Searching for growth in emerging economies

Currency headwinds and rise of Chinese OEMs doesn’t make China look good. Hence, Google, Apple, and other smartphone makers are looking to the markets of India and Africa for growth.

Google is not fully involved in the hardware business of making smartphones – its Nexus plan didn’t go very well. However, the firm needs the Android platform to grow so that it can continue selling mobile ads for revenue growth.

Apple’s iPhone sit in second place behind phones Samsung phone srunning Google’s Android OS. Apple has been seeing a lull in iPhone sales as the markets of North America and Europe continue to mature.

Google’s Android One push in is a smart move and the firm will find it easier to monetize ads through cheap phones than it is for Apple to sell expensive phones. Apple doesn’t intend to leave its premium high-end phones for entry-level low cost phones; hence the firm will have to find a better way to make money in emerging markets with its iPhones.

Google’s gain, others’ loss

The low-cost Android smartphone is set to be smashing hit when it hits those emerging markets. For one, the price is a steal because $87 very cheap when compared to the $700 to $800 price range of Samsung phone running the latest version of Android.

Apart from the cheap $87 price tag, the smartphone will be powered by last year’s “Lollipop” version of Android. More so, it will be able to run the nest Android upgrade “Marshmallow” that is due to be released in the fall.

Apple won’t compete in that market, and it’s going to lose it before it gets a chance to move in. As with China, however, as incomes in Africa and India improve Apple may be able to convince people to buy an iPhone. That could take years, however.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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