Google still has a lot going for it; it still has the most used operating system on mobile devices, Android, with 75% of the market, 60% of the domestic search market, and according to some estimates, 90% of the search market for mobile devices. Google is still the toll booth sitting in front of the Internet no matter what Microsoft (NASDAQ:MSFT) and Facebook Inc (NASDAQ:FB) do. Even all those iPhone and iPad owners are still probably searching with Google.
Good news for Apple shareholders is that its global smartphone market share has grown 6.6% year-over-year according to latest IDC Worldwide Mobile Phone Tracker research. What’s more encouraging is that this is the first time Apple has grown its market share since 2009 — when Google’s Android started to reverse the trend.
Apple still remains the undisputed leader in the U.S. with more than 38% market share. In the international and emerging markets, though, it still faces stiff competition from lower-end phones. Apple plans flexibility going forward, and is rumored to introduce a low-cost iPhone to compete in the low-premium markets. This will decrease Apple’s gross margin, but higher sales of cheaper iPhones will enable it to achieve higher operating income even with a reduced margin.
Desktop’s demise will help Google
The impending demise of the desktop, which has hit Microsoft and Intel Corporation (NASDAQ:INTC) hard lately, could help Google. More people are switching to mobile devices, which means more Android users and more Google customers.
Microsoft’s recent advances in the battle for control of the desktop search business with Bing seem to be too little too late. The number of new PCs shipped in the first quarter of 2013 were 161.5 million compared to 174.3 million in the same period in 2012. That’s a drop of nearly 12 million computers, and there seems to be no end in sight.
Even if more desktop users are using Bing, fewer people are using desktops than ever before. Microsoft is winning the battle for a shrinking market.
Android is number one
Since Android is number one in mobile devices, you can see that Google has the biggest piece of the search market and will continue to keep it. That means Google is going to have huge amounts of cash flowing in no matter what happens with Google Glass or Google+.
Even if Google Glass proves to be a total flop and a bad joke, Google will keep generating huge amounts of cash. Even the dismal performance of Google+ hasn’t affected Google’s cash flow.
Google will keep growing and growing
This means we can expect Google Inc (NASDAQ:GOOG)’s share price to keep growing and growing for the foreseeable future, with or without a dividend. Investors see Google as a safe cash investment, and nothing seems to be able to deter that. The rate of growth might slow, but it will keep going up.
That also means we might see Google Inc (NASDAQ:GOOG) pass the $1,000 a share mark this year. It also means that we won’t see Google at a price under $800 a share anytime in the near future.
The article Can This Company Keep Growing and Growing? originally appeared on Fool.com and is written by Nauman Aly.
Nauman is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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