Google Inc (GOOG): The Real Reason It is Making Glasses

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Google Glass Could Rob the iPhone of a Key Demographic

A popular criticism of Google Inc (NASDAQ:GOOG)’s Android operating system has been to proclaim that the OS was merely a cheap alternative for those who couldn’t afford Apple Inc (NASDAQ:AAPL)’s iPhone. That could soon change dramatically.

Currently, Google’s MyGlass App is only available in the Android app store (Google Play). This app allows users to control Glass through their smartphone. Ultimately, Google could choose to bring this app to Apple’s app store, but if it doesn’t, it would be a huge blow to the iPhone.

Glass testers have been charged $1,500 for Google Glass. The final retail price is unknown, but the device likely won’t come cheap. That means that those who will be buying Google Glass early — those with ample funds to spend on gadgets — will be some of Apple Inc (NASDAQ:AAPL)’s best customers.

If an Android phone is required to get the best experience from Google Glass, then many affluent smartphone users could opt to replace their iPhones with an Android-powered device.

How successful will Google Glass be?

The investment consequences surrounding Google Glass will come down to the device’s success. If Google Glass is a niche item, then the resulting consequences will be minimal.

But if Google Glass sells well, it will continue Google Inc (NASDAQ:GOOG)’s dominance in web services. Restricting the best Google Glass experience to Android handsets could hit Apple Inc (NASDAQ:AAPL)’s iPhone at the high end of the market, while increasing reliance on Google Hangouts (and therefore Google+) could create a powerful threat to Facebook Inc (NASDAQ:FB)’s social networking dominance.

At any rate, with Glass, Google continues to show that for the Internet search giant, the future is web services.

The article The Real Reason Google is Making Glasses originally appeared on Fool.com and is written by Joe Kurtz.

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