Apple Gets Into the Search Game
In technology today, it feels as if every giant is expected to be great at any new piece of technology. Whether mobile, video services, email, music software -- you name it -- Google, Microsoft, and Apple are constantly fighting for a lead. In the following video, Motley Fool senior technology analyst Eric Bleeker explains how being a dominant platform allows companies to profit without the distraction of becoming a top dog in yet another field. Take Facebook and gaming, for example. By creating a platform for games and a payment system, the company is able to collect 15% of its sales from Zynga's efforts creating compelling games.
We're now seeing a similar situation with Apple in search. Chinese search leader Baidu has been unable to gain traction with its own mobile operating systems. Instead, the company has begun offering a "cut" of search revenue to handset partners. The result is a default position in 80% of branded Android phones in China. Likewise, the company has now struck where Apple receives revenues for searches on its devices.
Eric says this shows the power of Apple's ability to leverage its strong negotiating position to collect revenues on a platform. While some investors have clamored for the company to take efforts in digital video -- like buying Netflix -- Apple's position is much stronger staying neutral between content providers and creating the dominant television platform. Apple seems to be the only tech company to get the point, but sometimes less is more.
Apple and Baidu have teamed up to battle Google, but the fact is they're all just pieces of the largest technology revolution in history: the mobile revolution. To better prepare investors for this new revolution, The Motley Fool has just released a free report on mobile named "The Next Trillion-Dollar Revolution" that details a hidden component play inside mobile phones that also is a leader in the exploding Chinese market. Inside the report, we not only describe why the mobile revolution will dwarf any other technology revolution seen before it, but we also name the company at the forefront of the trend. Hundreds of thousands have requested access to previous reports, and you can access this new report today by clicking here now.
At the time this article was published Eric Bleeker owns shares of no companies mentioned above. The Motley Fool owns shares of Netflix, Google, Apple, Baidu, and Facebook.Motley Fool newsletter serviceshave recommended buying shares of Netflix, Google, Baidu, and Apple and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.