It’s not every day you can use the phrase “threatens Google” (NASDAQ:GOOG) without thinking of some upstart company who’s about to get bought out. By Google. This is one such day, where Google’s impressive coffers likely won’t save it. Apple (NASDAQ:AAPL) ticked up fractionally in Thursday afternoon’s trading as it revealed plans to get into search, and Wells Fargo analysts took notice.
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Analysts, led by Wells Fargo’s own Ken Gawrelski—backed up by a set of court documents in the recent Google antitrust case—noted that Apple getting in on search functions was not only likely but that it would prove a “rising risk” to Google. Apple is well-known as a walled garden operation, with many of its own proprietary tools in place on its own platform. If Apple can offer a search product that generates revenue per search that’s about 36% of what Google brings in, Gawrelski noted, then Apple is “made whole” and the project is all gravy from there. With odds like that in play, it’s therefore a safe bet Apple will take a run at the search market and, in turn, seize a substantial cut of the market from Google.
It’s Not All Antagonism
However, even as Apple is likely planning to seize one market from Google, it’s planning to work with it in another. Reports note that Apple plans to adopt the RCS standard for text messaging. That will make it easier for iPhones to text message Android devices and vice versa. Apple had reportedly been fighting the move for more than a year, even as a slew of device makers and other firms tried to get Apple to make the shift. That effort appears to have not been wasted, as Apple is indeed poised to pivot. But the walled garden will still hold, somewhat, as RCS will now work “alongside iMessage” instead of in place of it.
What is the Price Target for Apple?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AAPL stock based on 25 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 26.33% rally in its share price over the past year, the average AAPL price target of $202.73 per share implies 7.05% upside potential.
