Google Brings Honeycomb to the Frontlines of OS Wars

Posted Feb 11th 2011 3:40PM by Trefis
Filed under: Google (GOOG), Apple Inc (AAPL), Smartphones

Apple, Inc.'s (AAPL) gibe at Google Inc.'s (GOOG) Android OS is that it was not designed for tablets. Google answered that challenge last week with the launch of Honeycomb. Motorola Mobility's (MMI) Xoom, due out later this month, will feature Honeycomb and should make a splash in the tablet market as competition heats up among tablet manufacturers and affiliated operating systems.

Even with the older version, Android has already started to dent iPad's market share due to the success of Samsung's Galaxy Tab, and we expect that Xoom could improve Android's position intensifying the showdown between Android and Apple's iPad OS.

We have a $420 Trefis price estimate for Apple stock, which is 24% higher than the current market price.

OS Wars Are Heating Up

Devices that carry Android's Honeycomb could be a genuine threat to the iPad. Honeycomb is expected to bring features specifically for tablets, which includes support for big screens (7 to 9 inch), a totally revamped user interface, extensive multi-tasking and multiple home screens among other features.

According to Gartner, smartphones using Android OS have already surpassed Apple iPhone in the global smartphone market with Android's market share increasing from a mere 3.5% in Q3 2009 to 25.5% in Q3 2010 while Apple's actually decreased slightly to around 17%.

If Android could generate the same success with tablets, it will further benefit Google's search business as higher Android adoption expands its search business (See Google Market Share in Search to Grow from Android).

We estimate that the iPad constitutes around 7% of our estimate for Apple's stock. Apple sold around 15 million iPads in 2010, and we expect Apple to sell around 35 million by 2013. Using our modifiable chart above, for a 5 million unit change in iPad sales by 2013 translates to around 1% shift in our price estimate.

You can see the complete $420 Trefis Price estimate for Apple.

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Tags: aapl, android, goog, inthenews, ipad, iphone, mmi

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Reader Comments (Page 1 of 1)

2-13-2011 @ 12:52AM

A_Lil_Green_Gaybot said...

All the analysts do is hype this stock to the heavens and it drags and drags and drags, moving at a snail's pace toward $400. Apple is selling products to the max and stomping most rival tech companies to death. If Apple stock were in the Dell era back when desktop computers were selling like crazy, Apple would be at around $500 a share by now and nobody would be saying a thing about Apple being overvalued. Apple caught some freaking bad luck during 2008 and 2009 and analysts crapped all over Apple taking it down to $85 or so.

Now, investors have become damn cheapskates and don't want to put any money in Apple no matter how many iDevices are being sold. The hedge funds are also manipulating this stock to no end and the SEC can't do a thing about it. They keep shorting Apple on the premise that Steve Jobs is dying and making the dick-less shareholders sell off on every tiny Steve Jobs rumor. This slug of a stock is going to get to $400 by the end of 2011 if shareholders get lucky. If Steve Jobs leaves Apple, then long-term shareholders will lose everything since Wall Street says that Apple is only valuable if Steve Jobs is working there. He's got to be sitting at his desk in headquarters just for the stock to be valuable. What kind of a crap company is that to be only worth what it is because of one man out of 50,000 employees.

Apple's gonna have to break all sorts of iPhone and iPad selling records to get to $420 and I doubt that they can keep that pace up. WS has set impossible goals for Apple and it's not going to happen.