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): You’re Underestimating Android’s Business Opportunity

The current state of the smartphone industry pegs Google Inc (NASDAQ:GOOG) Android as a majority leader in terms of market share, but it earns a minority of the profits. According to IDC, Android finished 2012 with an estimated 68.3% market share, thanks largely in part to the abundance of sub-$250 Android smartphones in emerging-market economies. This large market share has not translated into the usage share that Apple Inc. (NASDAQ:AAPL) enjoys. Velti, which operates its ad impression network in 68 countries, found that 67% of impressions went to Apple’s iOS and only 37% went to Android. However, Google Inc (NASDAQ:GOOG) has a few tricks up its sleeve that should make smartphone gods take notice.

Google Inc (NASDAQ:GOOG)Kill the feature phone
The first order of business is for Google Inc (NASDAQ:GOOG) (with the help of its OEMs) to kill off the feature phone. Here’s looking at you, Nokia Corporation (ADR) (NYSE:NOK) . As of last quarter, feature phones made up 64% of Nokia’s device sales, which declined 19% from the year before. Low-cost Android smartphones are cannibalizing Nokia’s feature phone business and should be considered an imminent threat to that business. But not only is Nokia’s feature phone at risk, its smartphone business is in a vulnerable position as a result of its transformation into a full-fledged Microsoft Corporation (NASDAQ:MSFT) smartphone vendor. If Android captures too much market share, and/or Windows Phone doesn’t get the anticipated reception, Nokia investors may be in for trouble.

When the plan comes together
Increase the installed base of Android, and over the long term Google Inc (NASDAQ:GOOG) will continue to unlock more and more value out of its ecosystem. Piper Jaffray analyst Gene Munster envisions that Google will ultimately be able to tie offline activity to online activity, which in turn will improve the relevancy of its mobile ad network. This should translate into more advertising dollars being allocated toward mobile. Ventures like Project Glass offer the promise of connecting the offline world with the online world through a technology known as augmented reality. Combine this type of technology with Google Inc (NASDAQ:GOOG) Wallet and all of a sudden Android gets very, very powerful. Granted, we are still years away from this convergence, and until it happens, Android will continue to be underestimated. In the meantime, Google will continue killing off the feature phone.

The article You’re Underestimating Android’s Business Opportunity originally appeared on and is written by Steve Heller.

Fool contributor Steve Heller owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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!