Apple's Billion Dollar Victory Affects Google 8.27.2012

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Simply put, Apple now has the power. They can threaten other android device makers with litigation, or offer them an alternative: namely, paying a royalty on every phone they sell. Many of the other companies using the Android interface will indeed be put in a very difficult position. They can deny Apple’s request to work out a licensing deal, and likely face legal action. After what happened yesterday and witnessing a significant win for Apple, most companies won’t want to take the risk of the same thing happening to them. The alternative is to work out a licensing deal with Apple, and pay a royalty fee on every device sold. If that happens, and Apple receives a $30 royalty fee for every phone (the offer they made to Samsung prior to taking legal action), Apple would actually end up generating more revenue from Android phones than Google would.This obviously wouldn’t be good for the search giant, and Google will have to make some tough decisions regarding their next course of action.

Another possibility for companies currently using the Android interface, is for them to sever ties with Google and Android completely. If these companies don’t want to risk litigation, and want to avoid royalty fees, they may ditch Android in favor of another platform, most notably Microsoft’s Windows. No matter how you look at it, the jury’s decision yesterday doesn’t bode well for Google and Android. As Steve Jobs famously quoted, “I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank to right this wrong. I’m going to destroy Android because its a stolen product. I’m willing to go thermonuclear war on this.” Based on what we all witnessed yesterday, it looks like Steve Jobs and Apple might indeed be headed in that direction.

Brandon Kieltyka is currently an undergraduate studying Finance at Daytona State College.

Twitter: @kieltyka05


Apple Update 8.23.2012

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Apple was quick to rebound, however, as investors took note of
the promising pipeline expected for the holiday season. It’s all but guaranteed Apple will be releasing
the widely-anticipated IPhone 5, an event many are calling “the most-widely anticipated product launch
in history.” The company is also expected to announce the launch of an Ipad Mini, a cheaper version ofits current tablet that will take away market share from competitors, most notably Google’s Nexus and Amazon’s Kindle.

Google’s tablets had nearly 30% percent market share in 2011. While that number still lagged far behind
Apple’s dominant 68% market share, there’s no doubt Apple’s not content. Apple has been steadily
distancing itself from its main competitor Google for a while now. Apple developed its own maps
application, and recently announced it will be removing the Youtube app from its future generation
phones. Apple’s Siri was another subtle move to undermine Google. Users can ask Siri questions and get
direct responses, rather than opening their browser and going to search Google for the answer. Google’s
primary source of revenue comes from search advertising, and if Apple can increase Siri’s reliability, it
could greatly affect Google’s mobile traffic. It’ll be interesting to see if Apple can improve Siri, and also if
its maps will be at least as good as their rival’s.

Another promising note for Apple is that the Iphone 5 and IPad mini are just two of the potential
catalysts for Apple’s stock in the near future. Apple’s current IPad had sales in the 3 rd quarter of 2012
that were up 84% year over year. And that’s not even considering that before July 20 th, the company
hadn’t been selling the IPad in China, an enormous market for Apple that it’s been steadily working into.

News has also recently come out that Apple is once again in negotiations with cable companies, and that
it hopes to develop a set-top box that would carry live television and other content. In his biography,
Steve Jobs’ vision for television became apparent: embarrass hardware makers, stiff content providers,
and destroy cable companies. If any company is capable of this feat, it’s Apple, and this could be the first
step in that direction.

In addition to the aforementioned points, Apple has another thing going for it that isn’t mentioned as
often. Point blank, Apple offers the best customer service available. I’ve personally gone through six
IPhones (we’ll not get into too many details, but usually alcohol was involved). Each time I’ve gone into
Apple for a replacement, they’ve gone above and beyond to help me out. Four of the six times they
actually replaced my IPhone for FREE. It really was unbelievable. With that type of experience, will
I ever purchase a competitor’s product? When it was time to purchase a laptop for school, I bought
a Macbook. And when I purchased a tablet, I only considered the IPad. They lost a small amount of
money when they replaced my IPhones, but the money they’ll make off me as a lifelong customer
greatly exceeds the money they lost. Even Steve Jobs would sometimes personally handle dissatisfied
customers, and offer them upgrades or free products. He realized that pleasing the customer is

everything, and Apple under Tim Cook hasn’t changed this philosophy at all.

Because of all these points, I believe Apple is poised to continue higher. There will be bumps in the road;
there always are. But as everyone looks for the next company that can offer significant returns the next
few years, and as Apple approaches the trillion dollar mark, I ask you: Why couldn’t the next Apple… Be
Apple?

Brandon Kieltyka is currently an undergraduate studying Finance at Daytona State College.

Twitter: @kieltyka05