What if Google brought Apple?

What if Google brought Apple? This can be a game changing move and result in concern for many as Google services will hold more ground but this may not be the case. This can be the first Trillion dollar company.

There are three major possibilities in which Google buys Apple:

  • Apple retains its market capitalization and cash reserve
    • Google uses Apple to grow itself
    • Apple is put under Alphabet and seperate from Google
  • Apple loses its market capitalization
  • Federal Trade Commission steps in to break the monopoly

Some facts

Some facts:

  • Apple has a cash reserve of $215 Billion
  • Google has a cash reserve of $73 Billion
  • Market capitalization of both Apple and Google > $500B
  • Google is a software company with failed hardware ventures
  • Apple is a hardware company and builds software to support its hardware
  • Work culture of Apple and Google are vastly different

Hence, it is not possible for Google to buy Apple but it is possible for both companies to get merged to form a larger company.

Let us assume that somehow Google buys Apple.

Apple retains its market capitalization

If Apple retains its market capitalization and Google buys Apple, then the immediate result will be:

  • First Trillion dollar company
  • Hold 90% Mobile Operating System market
  • Google successfully ventures into Hardware
  • Google search services becomes the permanent default of several systems
  • Cash reserve goes beyond $300B and makes it very strong and stable

Under Alphabet

A good option will be to allow Apple to run as a separate company (independent subsidiary) of Alphabet (Google's parent company). Google and Apple will become sister companies.

As Google and Apple will come under the same Aplhabet ecosystem, there will be more stronger integration of services.

  • Google Maps will replace Apple Maps completely
  • Apple devices will have Google services (like Gmail, Drive) by default
  • Apple's macbook will replace Google's chromebook completely

Direct implications will be:

  • Alphabet will have a market value > $1.1 Trillion and become the most valued company in the World
  • Google's android has market share of 67% and Apple's iOS has market share of 27%. This will bring the total market share to 94%.

Apple loses its market capitalization

Let us assume somehow Apple loses its market capitalization due to various reasons and opens itself for aquisition. As the market cap is low, Government will not interfere as this will not create a monopoly.

Even in this case, Apple will be valuable because of the research that has been put in. The main points are:

  • Apple has several game-changing patents which Google can use to its benefit to enter the hardware market and try to regain Apple's once dominant market share.
  • Apple's focus area is different from Google but Google is known for doing experiments at large scale and investment. Apple's resources and knowledge will help Google to start a new focus with good chance of success.

Apple's core hardware products include:

Macbook Apple TV

Apple's softwares are mainly used to support its hardware resources and does not form a core part of their focus.

Google on the other hand has strong software products with dominant market share but its hardware products are not equally strong and are not a strong focus on future path. Google's hardware products include:

Google Glass
Google Chromecast

A significant part of Google's revenue comes from Advertisements and a merger of Google and Apple will bring two different strengths and will be a strong move in the market.

Federal Trade Commission steps in to break the monopoly

If Google buys Apple, then Federal Trade Commission may need to step in to break the monopoly. There will be a risk that such a merger will create monopoly in several markets.

It is very likely that Google+Apple can create a monopoly in Mobile market both in terms of Hardware and Software. This will give a significant control and all software platforms like Facebook will directly see a threat.

Eventually, the monopoly can expand to social and software services and force other companies like Car manufactures to partner with Google and make their systems more user friendly.

The monopoly will be in customer related domains but still domains controlled by Developers like Cloud Services will see competition among companies.

After acquisition

After Google buys Apple, the main points are:

  • Google will remove its biggest rival in several markets
  • Google need not worry that Apple will replace Google as the default apps on Apple systems
  • Google will start gaining mobile hardware market share
  • Coporates will start seeing conflicts as the work culture of both companies are different.

A direct result for customers will be:

  • Apple products like Macbook and iPhone will become cheaper
  • Ads will start appearing in Apple products

So, do you want Google to buy Apple? Even if it happens it is good.