Apple Inc. (AAPL): Yahoo! Inc. (YHOO) Partnership Is Its Best Option to Attack Google Inc (GOOG)’s Android

Yahoo! is a better option than Google

In the long-run, Apple Inc. (NASDAQ:AAPL) may have to step up and bolster its own online services (perhaps it could, like Microsoft before it, try to purchase Yahoo! Inc. (NASDAQ:YHOO) at some distant future date). To some extent, the company clearly realizes this, as it has been working on its own maps.

But in the meantime, working with Yahoo! Inc. (NASDAQ:YHOO) would be a better option than allowing customers to flock to Google’s services.

Devices running Google Inc (NASDAQ:GOOG)’s Android operating system are the biggest threat to Apple’s dominance in smartphones and tablets. A few years ago, Android devices may have been nothing compared to Apple’s — but that’s no longer the case.

Samsung has made great strides in creating high-end Android devices. In fact, Samsung has become so confident in its devices that it priced its Galaxy Note 8.0 at $399 — $70 more than Apple’s competing iPad Mini.

At the same time, there are more cheap Android tablets and smartphones available than ever before.

A consumer who purchases an Apple iDevice, but uses Google Inc (NASDAQ:GOOG)’s services, seems intuitively more likely to jump ship to an Android device. Thus, if Apple wants to retain its mobile market share against a wave of Android competition, it should work to reduce further reliance on Google. Partnering with Yahoo! could accomplish just that.

Yahoo! would be the big winner

But in the end, the biggest winner in any deal would be Yahoo!. Many years ago, Yahoo! competed directly with Google; yet, at some point, the company was passed by. Mayer seems to be poised to bring Yahoo! back to Google’s level, and a deal with Apple Inc. (NASDAQ:AAPL) would dramatically accelerate that process.

For its part, Apple would do well to go along for the time being. Helping Yahoo! compete with Google Inc (NASDAQ:GOOG) once more could help slow the growth of Android and keep consumers flocking to Apple’s iDevices.

Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.