THE GOOGLE INVESTOR: Android Market Share Down, Motorola Falling Apart, And The Stock Is Sinking

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Sinking Ship

Jasper Graham-Jones via Flickr

GOOG Sliding In A Positive Market
Stocks are on the rise after Alcoa numbers topped analyst expectations despite Tiffany’s cooling momentum. Shares of GOOG opened high with tech but are currently sliding near the flatline. Catalysts included continued Android momentum in the smartphone and tablet markets worldwide; Motorola acquisition approval and integration; regaining ground in China; resurgence of Google TV; the roll-out of Google Music, social network Google+ and Google Wallet; and progress in other newer initiatives (location-based services, mapping, gaming, daily deals, etc.). The stock trades at approximately 12.7x Enterprise Value / EBIT.Google Signs Big TV Makers For Google TV (Business Insider)
Google took a big step toward making Eric Schmidt’s dream of Google TV  shipping on 50% of all the new TVs in 2012 come true. The company announced a bunch of new hardware partners for Google TV, including three big TV makers: Vizio, Samsung and LG. Sony, who was one of the original Google TV partners, will also introduce new devices in the U.S. and the rest of the world. Together these manufacturers may indeed account for more than 50% of all TVs sold, but we are still a long way off.

Android’s Mobile Operating System Market Share Sinks As Apple’s Rises (TechCrunch)
According NPD, iOS’s U.S. market share (by sales) jumped from 26% in the third quarter of 2011 to 43% by October and November. Android came out on top, with 47% market share during those two months, down from 60% in the third quarter. Importantly, the iPhone 4S gave Apple a more level playing field from a market share perspective. Smartphone sales continue to grow, accounting for 66% in October and November 2011, up from 50% in the fourth quarter 2010.

Google Is About To Strap A Dead Elephant To Its Back (Business Insider)
Google’s Motorola acquisition might not have been the purchase of a bag of patents, but Google’s entry into the smartphone and tablet manufacturing business. Henry Blodget at Business Insider believes that Motorola is a huge, sick elephant in a completely different business than Google’s. And it will be climbing aboard Google’s back at a time when its business is rapidly deteriorating. If Larry Page really does want to make phones, he’s officially worried. Because Motorola screwing the pooch is no longer Motorola’s problem. It’s Google’s.

Motorola Blames Apple For Shortfall (Electronista)
Motorola made thinly veiled references to Apple as being largely responsible for the fiscal and unit drops. Its downfall was due to the “the increased competitive environment in the Mobile Device business and higher legal costs associated with ongoing Intellectual Property… litigations,” the company said. The iPhone 4S is known to have kept the Droid RAZR down in sales at Verizon, while the iPad has largely gone without serious opposition from any Motorola tablet to date. Additionally, Apple has been suing Motorola in multiple courts in what’s considered a proxy war over Android.

Google Stock Sinking On Motorola Results (Bloomberg)
Google stock dropped 4.2% yesterday after disappointing results from Motorola. That’s the biggest decline since August 18th. It underscores the hurdles it will face vying with Apple in the smartphone-hardware market. According to JP Morgan, “The MMI pre-announcement could serve as a reminder of the operational challenges for Google to enter the hardware space and the clouded optics surrounding an overall slower-growth, lower-margin Google once the deal closes.”

Google Stock Could Reach $800 This Year (Bloomberg)
Not how it’s acting right now. Scott Redler, chief strategic officer at T3 Capital, believes that Google stock can reach $800 in 2012. The stock has been in a $200 range for the last 3 years. When it hit is all time high, the company was all about search. Now with the diversified segments of their business firing on all cylinders, he is predicting the stock could see a $800 number this year.