Apple Inc

NASDAQ:AAPL 9:52:42 AM EDT

159.99

+0.71 (+0.45%)

Alphabet Inc. and Apple Inc. Go After Facebook Inc.

Alphabet Inc. (NASDAQ:GOOGL) and Apple Inc. (NASDAQ:AAPL) Go After Facebook Inc. (NASDAQ:FB)

Date Published: 2016-08-17

Preface
News broke that Alphabet Inc. has released its new video-chatting app, called Duo, a sort of competition with the Apple Inc. native app Facetime. But it goes much, much further than that, to a Direct competition with Facebook Inc.

STORY
First we start with Alphabet's Duo, which is both very simple, but also pretty cool. Here are a few descriptions which Business Insider's Danielle Muoio included in her article.

"
It's a simple, one-to-one messaging app that doesn't come with a lot of fanfare — you simply scroll through your contacts to see who has the app, click, and connect.

But as Nick Fox, vice president of Google's communications division, told Business Insider, that was intentional.

The simplicity is nice, but one feature Alphabet did add, and will in fact be a problem with Apple's iOS, is the "knock-knock" feature. Here's who that works:

"
The video shows a live video preview of the person calling you before you even pick up the video call. That way, the person on the other end can start waving or show you were they are before you even pick up.

It's actually a really cute feature, and I could see it being fun to use if you want to tease exciting news like concert tickets you got for your friend.

Very cool, indeed. But, Apple blocks access to its lock screen to all outside app developers, and that means no "knock-knock" feature. But, friends, this goes way (way) further than Google creating a Facetime rival. Both Alphabet and Apple are going after Facebook, and in a dead serious way.

FACEBOOK IS THE TARGET
First, Apple Inc. (NASDAQ:AAPL) filed a patent that CML Pro broke that surrounded a new kind of social media. We cover it in depth in CML Pro, but the highlights are as follows:

Every iPhone user is automatically a part of it.
It surrounds real-life interactions as opposed to a sort of friend voyeurism.
It surrounds iMessaging, which at its peak hits 200,000 messages a second.

It falls under US patent Application US 2015/0127728 for those interested, or just join CML Pro and you get it all without the hassle.

So Apple's social media surrounds messaging, real-world interactions and of course iMessaging and Facetime. Now, Alphabet's Duo is a step in the same direction. As Nick Fox said, "you simply scroll through your contacts to see who has the app." It's not quite "auto-participate," but it's close.

Now Alphabet Inc. is famously known for its failed social media attempt called Google Plus, although it has saved the photo sharing piece and called it Google Photos -- which feels a little bit like Instagram, and it is huge.

COMPETITION
Facebook Inc. (NASDAQ:FB) has something similar, as does Snapchat and, of course, Skype. But there is one thing that Apple and Alphabet have in common here: they are going after video interactions rather than a social media site or application that turns into a site.

That subtlety shouldn't be lost on anyone, given that even Facebook's CEO and founder Mark Zuckerberg said "most of what people consume online is going to be video" within five years. He was referring to social interactions and advertisements.

Apple went further to file a patent for Augmented reality that sits on top of the iPhone, again we direct you to CML Pro for the details. But the point is, that Augmented reality functionality was centered around, you guessed it, social interactions and video.

Apple Inc. and Alphabet Inc. have likely given up on creating a social network as it exists in the Facebook ecosystem, but that doesn't matter. If the two tech giants use their leverage with the smartphone market, they can create a social media that is real-time, video focused with layers of artificial intelligence and machine learning to turn a social media interaction from one of likes and hashtags, to one of real-time, real-interaction, video.

This is what Google did with Duo, and it's exactly what Apple is doing with its patents.

The author is long shares of Apple Inc. (NASDAQ:AAPL). The author had no position in Facebook Inc. (NASDAQ:FB) or Alphabet Inc. (NASDAQ:GOOGL) stock at the time of this writing.

WHY THIS MATTERS
There's so much going on with Apple, Google and Facebook that it's nearly impossible to keep up with. But the real gems are the smaller companies that will power the technological revolutions that these three giants will get behind. These are the companies that win, no matter which of the big three own a market.

It's identifying trends and companies like this this that allows us to find the 'next Apple' or the 'next Google.' This is what CML Pro does. Our research sits side-by-side with Goldman Sachs, Morgan Stanley and the rest on professional terminals, but we are the anti-institution and break the information advantage the top .1% have.

Each company in our 'Top Picks' is the single winner in an exploding thematic shift like artificial intelligence, Internet of Things, drones, biotech and more. For a limited time we are offering CML Pro at a 90% discount for $10/mo. with a lifetime guaranteed rate. Join Us: Get the most advanced premium research delivered to your inbox along with access to visual tools and data that until now has only been made available to the top 1%.