Could Apple Inc Bite Into Google Stock?
Alphabet Inc (NASDAQ:GOOG) is going head-to-head with Apple Inc. (NASDAQ:AAPL) in the mobile payment market, as highlighted by the introduction of “Apple Pay” in Canada. Now it’s time to take look at the effect this will have on GOOG stock’s price.
Skies are not clear for Alphabet’s “Android Pay,” as it will be directly competing with Apple Pay. The future of GOOG stock hangs in the balance.
But what exactly is Android Pay up against and what does Apple Pay’s move into Canada mean for the GOOG stock price forecast?
Alphabet Stock: Is the GOOG Stock Price in Danger?
Apple Pay allows users to conduct mobile transactions and payments while on the go, all from their smartphones. The Apple “iPhone” can now be used to accept or transfer funds while out and about, giving users the ability to multitask while focusing on other, more pressing activities. (Source: “Apple Pay launches in Canada with American Express, available at merchants like Tim Hortons, Indigo,” The Financial Post, November 17, 2015.)
Now that’s what I call a serious increase in productivity and AAPL stock could soar in price on the back of Apple Pay’s expected success.
Now you may be thinking that this mobile service has been long overdue. The obvious utility and widespread application potential of mobile payments, however, has given rise to healthy competition. There’s no guarantee that Apple will be the company to come out on top, but right now, it’s Alphabet that has the most to fear.
In steps “Android,” Apple’s perennial rival operating system in the mobile device market. While this is not the only competitor to have stepped to the plate, it is certainly the most dangerous when you consider the market clout wielded by Android’s developer, Google (now under the company name Alphabet Inc).
Now, investors should keep in mind that Android Pay is Google’s second attempt at the mobile payment game; its first attempt was marked by the failure of “Google Wallet.” Android Pay is a pretty simple system, allowing for users to pay for things in normal physical stores, within apps, and online using just their mobile devices.
Google has announced partnering with more than 700,000 retail locations, which will be electronically equipped to deal with mobile transaction requests between phones and their terminals. (Source: “Android Pay vs Apple Pay: Which mobile payment system IS THE BEST?” TechNewsExtra, November 17, 2015.) Among those working with Android Pay are McDonald’s Corporation, Whole Foods Market, Inc., and Best Buy Co., Inc. Having said that, all of these companies will also be supporting Apple Pay.
How Will Apple Pay Affect the GOOG Stock Price Forecast?
Apple Pay functions very similarly to Android Pay, interacting with electronic terminals in partnered retail locations, in apps, or online. Apple has reported it will be partnering with even more retailers, such as Foot Locker, Inc., Panera Bread Company, Duane Reade Inc., and Whole Foods, to make Apple Pay even more convenient for iPhone users. (Source: “Apple Pay goes live in Canada for American Express customers,” The Verge, November 17, 2015.) But it doesn’t stop there; Apple has extended the mobile payment game to over 50 apps and online stores, along with a budding partnership with The Coca-Cola Company vending machines.
If this trend catches on, you can expect huge gains in the AAPL stock price, but a corresponding crash in the GOOG stock price.
And there’s reason to believe this could very well be the case. The number of retailers rushing to incorporate Apple Pay is rising quickly, from 220,000 in October 2014 to more than 700,000 in March of this year. (Source: “This iPhone app shows you which stores near you accept Apple Pay,” MacWorld, November 10, 2015.) The pace of this expansion can only pick up from here, as more and more retailers seize the chance to ride out higher spending rates facilitated by Apple’s mobile payment system.
Far be it from Apple to stick to retailers; there have also been a number of financial institutions that are partnering with Apple Pay. More than 2,500 banks and credit card companies are accepting Apple Pay, including Visa Inc., MasterCard Incorporated, The Toronto-Dominion Bank, Wells Fargo & Company, and others (Source: “Apple Inc. Entry Into P2P Payments Not A Major Revenue Driver: Merrill Lynch,” Business Financial News, November 12, 2015.)
Translation: this isn’t just another fad and the Apple stock price could be about to skyrocket as a result. Watch out for the opposing drop in the GOOG stock price.
Apple Pay is supported on the Apple “iPhone 6,” “iPhone 6 Plus,” “iPhone 6S,” and “iPhone 6S Plus,” as well as the “Apple Watch.” If Apple Pay catches on, it follows that users who wish to participate will have to upgrade to some of the latest Apple products to use this feature.
It doesn’t take an MBA to figure that this will translate to higher sales of Apple devices and a subsequent rise in the AAPL stock price. If and when that does occur, we could be seeing a huge GOOG stock price crash.
Bottom Line on GOOG Stock
Apple Pay is expanding at a rapid pace, and looks as if it will be taking the lead in this rivalry with Android. But trade-offs will have to be considered before a consumer makes their own personal choice of which mobile payment system to sign up for. While Android Pay is more prevalent due to its operating system being available on the majority of non-Apple smartphones, Apple Pay is used in more and more financial institutions and banks. This may just be the clincher that decides which stock will come out on top.
It’s for this reason that I’m highly bearish on the Alphabet stock price forecast through 2016. GOOG stock is one you really want to be keeping a close eye on.