Apple Inc. (NASDAQ:AAPL) is reportedly in talks to broaden its partnership with Yahoo! Inc. (NASDAQ:YHOO), specifically in the world of mobile, and today analyst Shaw Wu issued a report to investors exploring the possible expansion of the partnership.
Wu calls Yahoo “the Switzerland of Internet companies” and the perfect partner for Apple Inc. (NASDAQ:AAPL) because it doesn’t have any mobile capabilities like Google Inc (NASDAQ:GOOG) does.
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He said it makes sense for both companies as they unite against Google Inc (NASDAQ:GOOG), a common competitor. Under the expansion of the partnership, it’s expected that Yahoo! Inc. (NASDAQ:YHOO) will provide more content to iOS devices. The search giant already provides stock and weather data and other bits of information for Siri.
He predicts that the expanded partnership could impact Google’s iOS mobile monetization efforts. Wu believes that even though Android has a much larger global market share than iOS does, the iOS platform is better for monetization. He points out that iOS accounts for 42 percent of mobile traffic compared to 31 percent for Android. Also iOS has 51 percent of the revenue share, compared to just 30 percent for Android.
However he said it’s important to realize that users do love Google’s services. Although Google Maps and YouTube don’t come pre-loaded on Apple Inc. (NASDAQ:AAPL)’s devices any longer, the iOS App Store charts show that both apps are among the most-often downloaded apps on Apple Inc. (NASDAQ:AAPL) devices.
According to Wu, it’s important to question whether Apple Inc. (NASDAQ:AAPL) or Yahoo! Inc. (NASDAQ:YHOO) can provide content and services that are better than what Google has to offer. He said it’s worth monitoring progress in Siri in places where it avoids Google services and traditional searches by providing information directly.
He has maintained his Buy rating on shares of Apple Inc. (NASDAQ:AAPL)