Google Inc (GOOG), Apple Inc. (AAPL): One Has Surprisingly Great Mobile Prospects

In another move in the same direction, Google has also released its Google Now app for iOS. Google´s well reviewed digital assistant has proven to be a serious challenge to Siri, and it also competes against the Safari based Google search, which has been quite profitable for Apple over the last years.

Morgan Stanley estimates that Google paid Apple Inc. (NASDAQ:AAPL) $701 million in traffic acquisition costs last year in exchange for being the default search engine on iOS, a sum which could reach $877 million this year and 1.1 billion in 2014 according to the bank´s calculations.

Building and strengthening its ecosystem inside iOS could save Google Inc (NASDAQ:GOOG) some money in traffic acquisition over the next years; and higher quality also means more usage and increased revenue for Google too.

Besides, the strategic implications could be even more important than the economic ones in the middle and long term: Google is proving to device manufacturers and to users of both Android and iOS that the company is almost irreplaceable when it comes to critical functions like mail, web browsing, maps and video among others.

The company is simply better than the competition, and by being better it´s becoming bigger and more dominant, this is great news for investors.

Bottom line

Android is a remarkable success, and Google is also gaining strength in iOS by consolidating and integrating its own applications inside Apple products. When it comes to making money from mobile advertising over the following years, Google could hardly be in a better position.

Andrés Cardenal owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

The article Google´s Strength in Mobile Is Amazing originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.