Boston, MA 01/20/2014 (wallstreetpr) – Google Inc (NASDAQ:GOOG) is expected to report significant revenue improvement in the forthcoming fourth quarter results. Several research firms tracking the Internet giant have revealed that the company’s revenue from search and display ads will particularly be very high for the quarter compared to last year.
However, if the latest report by NPD Group is anything to go by, Google Inc (NASDAQ:GOOG) could be missing the point by a very big margin in the smartphone market. NPD Group recently released data for U.S. smartphone sales which saw Apple Inc (NASDAQ:AAPL) in the lead with more than 42 percent of the market share. The second position is held by Samsung Electronics at 26 percent. Apple Inc and Samsung noted improvement in market share from 35 to 42 percent and 22 to 26 percent respectively.
However, Google Inc (NASDAQ:GOOG) through its Motorola Mobility-made Moto X, had little to show during the fourth quarter trading period. The U.S. smartphone market share report shows that Moto X failed miserably despite the huge promotion that was done for it in the market. It looks like Google Inc (NASDAQ:GOOG) which acquired Motorola Mobility and unveiled Moto X as a flagship smartphone will be going back to the drawing board.
U.S. smartphone losers
Google Inc (NASDAQ:GOOG) was joined in the losers’ list by other smartphone vendors such as Nokia Corporation (NYSE:NOK) and HTC Corp. According to the report, outside the circle of Apple Inc and Samsung which control the largest share of the U.S. smartphone market, only LG Electronics showed slight improvement in sale during the fourth quarter.
Google’s smartphone strategy
If it is true that Google Inc (NASDAQ:GOOG) is not in smartphone business to make profits but to drive down the cost of the devices in order to feed its ad revenue, so then investors shouldn’t be worried. This strategy can be seen winning the game as Apple Inc and Samsung are starting to feel the pinch of cheap smartphones.
Key takeaway
Google Inc (NASDAQ:GOOG), which earns most of its revenue from ads, is pleased when the cost of smartphones is down. This is because it means the devices are getting into the hands of more people, who by accessing the Internet using the devices, feed its coffers.
