Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Google Inc (GOOG) and Apple Inc. (AAPL) Want You to Keep It in Your Pants

Page 1 of 2

The days of fishing in your pants or purse every time your smartphone beeps or buzzes will soon be a thing of the past. Here’s a Foolish overview of why wearable technology will transform mobile computing, and which company is best positioned to profit from this new category.

The Increasing Flood of Information to Your Smartphone

Smartphone users are already familiar with the problems of keeping up with push notifications: text and email messages, social media updates, phone calls, stock and sports updates

Cook, Page

The situation will only get worse. With the cost of sensors and controllers coming down, more everyday devices and services are being connected to the internet and accessible from your smartphone. The result? Push notifications will increase, and user search will become more frequent.

Wearables tethered to smartphones are seen as a solution to the increased information flow. With a quick glance, wearable users could review, reply, store, or ignore push notifications without fishing around for their smartphones. At the same time, ongoing improvements in voice recognition would allow wearables to become an easy access point for mobile search.

The Wearable Warriors

So what companies are likely to profit from wearables? I’ve taken a look at both Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) based on the following criteria:

Assets: Does the company have the technology to provide a compelling wearable solution?

Materiality: Is the wearable business likely to drive sizable, incremental profits?

Risks: What are the key risks facing successful implementation?


Google Inc (NASDAQ:GOOG) is the undisputed leader in online and mobile search. With its existing apps (Gmail, Google Maps, Google Search and Google Now) and excellent voice recognition technology, Google Inc (NASDAQ:GOOG) is able to provide a compelling, integrated wearable product. (Google has already launched a wearable beta product, Google Glass, and there are recent reports of the company’s plans to launch a smartwatch.)
However, it’s been reported that Google plans to allow manufacturers to use Android in their own wearable devices. Previously, only smartphones and tablets could be promoted using the Android name. Google’s willingness to open Android to wearable manufacturers is clear sign that the company plans to extend it’s mobile Android strategy into wearables. (Android is free to OEMs, while Google collects mobile ad and search revenue from Google Inc (NASDAQ:GOOG) search on the Android platform.) Hence, as in mobile, wearable hardware sales for Google are likely to be too small to affect the company’sbottom line.

Gartner estimates that mobile advertising and search will increase from $11.4 billion in 2013 to $24.6 billion in 2016. With a dominant position in mobile search, Google Inc (NASDAQ:GOOG) likely views wearables as another way to protect its share of mobile advertising and search. Since much of this anticipated growth in mobile advertising and search is already built in to Google’s valuation, wearables are unlikely to have a large impact on the company’s stock price.
The primary risk to Google Inc (NASDAQ:GOOG) in wearables, is the same it faces in smartphone/tablets. Android OEMs can modify Android as a way to capture advertising and search revenues. (‘s Kindle was built on Android, but operates as a separate platform, shutting Google out from search, advertising and service revenues. And, the majority of Android advertising and search revenue in China is being captured by, Inc. (ADR) (NASDAQ:BIDU))

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!