This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Here's Why the Google I/O Conference Is Good for Google's Stock

NEW YORK (TheStreet) -- When the major computing ecosystem companies -- Google (GOOGL - Get Report), Microsoft (MSFT) and Apple (AAPL) -- host their annual developer conferences, they typically make long lists of announcements. It can be difficult hard to sift out what is important.

In order for a company to make a clear impact on its earnings per share and its stock price, it must do one of the following:

  1. Offer products at lower prices.
  2. Gain market share.
  3. Expand the size of its market.

Obviously, all developer conferences are also about product innovation and new features. Many of those improvements and advancements, however, can be a little amorphous. Many new features are either catching up to the competition or offering something that nobody was asking for and will never use. And then you have stylistic updates, from colors to fonts to new menu systems and notification pop-ups.

Still, what you want is more significant announcements that are not soft-soapy stuff that will be devoured mostly by the platform's already faithful. In this regard, I think Google delivered to varying degrees, and this was reflected by the increase in its share price during the Google I/O presentation:

1. Android One

Think of Android One as a cheap Nexus or "Google Play Edition" (GPe).  Google will help hardware makers to establish a reference platform for smartphones priced at $99 or less, which is what required to sell to the next billion people.  It will be a clean version of Android and get updates directly from Google.

Android One achieves all three impact objectives mentioned above: It enables the product to be sold for less, expanding the size of the market, and increases market share. Hence, it should lead to higher EPS and a higher stock price.

2. Ninety-Three Percent of Android Users Are on the Latest Version of Google Play Services

One of Apple's strongest arguments is that so many Androids are on old operating system (OS) versions. That is a legitimate complaint, but it is not the whole story. You have to look one layer deeper. A couple of years ago, Google started pulling important functions out of the OS itself and putting them into something called Google Play Services. The important core apps that you use -- Gmail, apps, maps and equivalent -- are being updated separately from the OS, and they contain more of the system experience within them. This partially compensates for the OS version itself being behind the current Android version.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GOOG $698.30 0.76%
GOOGL $714.24 0.90%
AAPL $93.66 -0.09%
FB $118.58 0.85%
TSLA $241.82 0.44%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs