Google Inc (GOOG) Is Breaking the Glass Ceiling, Will Others Follow?

Google Inc (NASDAQ:GOOG)‘s computer glasses, called Glass, are getting safety and privacy experts tied in knots. Rightly so, but the product is probably the best advance in technology since Apple Inc. (NASDAQ:AAPL)‘s iPad.

Google Inc (GOOG)

From distracting to disturbing

The critiques of Google’s Glass all have merit. For example, someone paying more attention to the images displayed on their glasses could easily walk across a street and get hit by a car. However, that the same thing happens today with cell phones. Privacy is also an issue, since Glass is capable of capturing audio and images. Those questioning Glass’ fashion statement, meanwhile, should take a look at such one-time necessities as bell bottoms, hoop skirts, and wigs.

The best advance

Despite the concerns, Google Inc (NASDAQ:GOOG)’s Glass is probably the best new device to hit the market since the iPad. This is true because it moves the technology needle in a way that challenges and changes the status quo. It takes computers from being a device we carry to one that is integrated unobtrusively into our lifestyle.

Apple Inc. (NASDAQ:AAPL)’s rumored iWatch simply doesn’t provide that type of benefit. It’s likely to be little more than a cell phone accessory. And, it suffers from just as many social and ethical drawbacks as Glass. If Apple does come out with an iWatch, it is more of a statement about the difficulty the company has had finding the next big thing.

A company in need

That could be a big problem for Apple since the company either needs a hot new tech gadget or new customers to maintain its current rate of revenue growth. The iWatch just doesn’t seem like the type of toy that’s going to push the accelerator. That said, top and bottom line growth have yet to falter, so the company probably has time to weather a few product gaffes along the way to the next big release.

Apple shares are still well off their highs and now offer investors a dividend yield of around 2.70%. The wildly profitable company is probably a good option for growth and income investors, particularly since a massive share buyback is in the works. And, if the iWatch flops, Apple could easily play me-too with glasses of its own.

Margin squeeze

Google Inc (NASDAQ:GOOG) shares, meanwhile, are trading near all time highs. That’s an interesting situation since the company’s profit margins have been contracting lately, falling about 10 percentage points in two years. Management warned in the last annual report that it doesn’t make as much from mobile ads as it does from online ads. Since mobile is where customers are going, margin pressure is likely to heat up, not cool down.