One of the mistakes I often see in business is short term thinking vs long term thinking. It struck me over the weekend when I saw this tweet:
Last quarter, Samsung's net profit from its mobile division alone exceeded Google's total profit from all operations (including adwords).— dustin curtis (@dcurtis) March 14, 2013
Sure Samsung is making a killing on handset sales right now. So is Apple. That goes to their bottom line and then onto their balance sheet. And apparently Google isn't making any money in mobile.
But when I think about who is developing the strongest franchise in mobile, it is obviously Google. They have gmail on so many phones. They have google maps on so many phones. They are getting the majority of searches on mobile phones. And that doesn't even begin to address Android itself. It is the dominant mobile operating system around the world. Just think about all the data they are getting from this enormous mobile footprint they have assembled.
You can change handsets pretty easily when all your data is in the cloud. There is no moat around a hardware only franchise these days. But the software you choose to use on your phone is different. There the moat is much bigger. And where your data goes in the cloud is even more important. Changing that out requires a major effort for an end user.
So my feeling is that Google is playing the long game in mobile while Apple is missing the cloud piece and Samsung is just a hardware player at this point. And the stock market understands that.