It’s no secret that Apple Inc. (NASDAQ:AAPL) has been late to the social media game. But there’s good news for Apple investors and investors in general. Not only has the company figured out how to best leverage social media into its products, but Apple Inc. (NASDAQ:AAPL)’s social media strategy is also providing investing opportunities for those willing to pay attention to Cupertino’s ongoing social media moves.
Learning From Ping’s Demise
Apple’s first move into social media provided a valuable lesson for the company: Just because you built it, doesn’t mean people will use it.
If you recall, Ping was meant to connect people through music. The product allowed similar-minded music lovers to share and explore music within the Ping platform. Apple Inc. (NASDAQ:AAPL)’s long term plan for Ping was likely to expand the platform’s scope as it built up its member base — think Apple’s version of Facebook Inc (NASDAQ:FB).
Unfortunately for Apple, its music-based social platform wasn’t compelling enough to attract social media users already personally invested in other social media platforms, like Facebook or Twitter.
Ping’s failure seems to have led to a total shift in Apple Inc. (NASDAQ:AAPL)’s social media mindset, which now can be summarized as, “Why build it, when you can borrow it?”
You see, most social media platforms generate their revenues through ads and search; while Apple gets the majority of its revenue from selling hardware. So, the company has little at stake in terms of what social media platforms are accessed — as long as the user feels that Apple’s products provide the best experience for accessing social media.
So Cupertino’s focus is now on integrating social media solutions into its products using other companies’ media products, with companies like LinkedIn and Yahoo! all benefiting from being “built into” Apple’s product experience.
This strategic shift is great news to any social media company that finds itself tightly integrated into Apple’s attractive ecosystem, because it provides those companies with a pipeline to the internet’s most valuable online/wireless users. iPhone and iPad users have repeatedly been shown to have higher incomes, spend more time online, and spend more money online than Android users.
Now, the question for investors: Where does Apple Inc. (NASDAQ:AAPL)’s social media strategy provide any investment opportunities?
Apple’s iWatch and Yelp Inc (NYSE:YELP): A Match Made in Heaven
Integrated into Apple Inc. (NASDAQ:AAPL) Maps and Siri search in the iOS 6 update, Yelp Inc (NYSE:YELP) now constitutes a major component of Apple’s social media support. Searches for local businesses via Apple’s Siri voice assistant now return Yelp listing information and recommendations tied to Apple’s mapping application, along with other information provided by Yelp Inc (NYSE:YELP), including deals, contact information, and pictures of the business.
Yelp has shown that its business model works in mobile, with 36% of the company’s ad impressions now derived from mobile users. In addition, it appears that Yelp Inc (NYSE:YELP)’s business model might actually have more value in mobile, as reflected in its mobile real-time deals and check-in functionality.
While Yelp Inc (NYSE:YELP) is not expected to show a profit until 2014, revenue growth for the company is impressive, with Q1 2013 revenue up 68% ($46.1 million).
