Sentiment is shifting among technology investors.
While the once cult-like faith in Apple Inc. has developed cracks over the last year, bullishness towards arch-rival Google Inc. has been steadily rising.
Over the past 12 months, Apple's share price has tumbled 31 per cent while Google's has risen 30 per cent.
The shift indicates which company investors now believe has the clearest path to tech supremacy, and suggest that Apple's stumbles are increasingly being seen as Google's gains.
The companies' fortunes began to diverge last September, just days after Apple introduced its latest smartphone, the iPhone 5.
Initial sales came up short of upbeat expectations. Then Apple got entangled in a spat of its own making when the company decided to remove Google's mapping software from iPhones and iPads.
Unfortunately for Apple, its alternative mapping product debuted with problems, prompting a public apology from chief executive officer Tim Cook.
The launch a month later of Apple's iPad mini only accelerated investors' concerns. The smaller and cheaper version of Apple's original tablet was designed to fend off encroaching challengers, which include Samsung's Galaxy Tab, Amazon.com's Kindle Fire, Microsoft Corp.'s Surface and Google's Nexus 7. But the unveiling disappointed the Street, where some fretted that the iPad mini's price was too high, and others worried about weaker-than-expected sales for the bigger iPad.
Almost overnight, there seemed to be a realization that Apple was no longer going to blow minds with great innovations every product cycle. That notion has had analysts reworking the financial numbers on Apple as sales growth in the high-end smartphone market has begun to cool. Last week the company revealed that its decade-long record of quarterly profit growth had snapped, and it warned that sales this quarter could actually retreat by as much as 4 per cent.
"We believe total profit growth will remain stagnant unless Apple is able to create a massively successful new product or service category," Andy Hargreaves, an analyst with Pacific Crest Securities, said in a report following Apple earnings.
Google, in contrast, has been basking in plenty of good news during the same period. CEO Larry Page returned to work after a sick leave, the Nexus 7 received respectable reviews and mobile advertising rates began to show traction.
Google posted a 31 per cent increase in first-quarter revenue and a 16 per cent jump in profit. Analysts considered the results mediocre, but most sounded optimistic about the Internet search giant's prospects, especially in the area of mobile search and applications.
Google has protected its core business of web search and advertising by making sure that the new world of mobile computing runs on its own platform. The company created its Android operating system in consultation with more than 75 technology companies, ensuring it was open source so that any developer could create apps for it, and then it gave it to handset makers for free. Although Google doesn't receive any licensing fees from Android sales, it gets its search engine and other software that can make it money pre-installed on Android phones and tablets.
Today, lower-priced Android smartphones are flooding the market place. The leading manufacturers – Samsung Electronics Co. Ltd., LG Electronics Inc., Huawei and ZTE Corp. – all increased market share in the first three months of the year, while Apple lost ground.
Samsung boosted shipments by 60 per cent, to 70.7 million devices, giving it one-third of the global market.
Apple, in comparison, sold 37.4 million iPhones in the same period, as its market share fell to 17.3 per cent, from 23 per cent a year earlier, according to the research firm IDC.