Alphabet Inc.’s Google (GOOGL) is working with Microsoft (MSFT) to bring progressive web apps (PWA) to its Play Store. PWAs- otherwise known as web apps- mark a 3-year push by the tech giants to bring internet-powered apps to the mainstream.
Web apps are powered by the internet as opposed to traditional apps that are natively installed on a user’s mobile device which powers the application.
Google’s collaboration with Microsoft accelerated last year when Microsoft launched an updated version of its open-source PWA Builder to help users build and deploy PWAs to the Play Store.
In a blog post on Medium on July 10, PWA Builder Community Member Judah Gabriel Himango stated, “We’re glad to announce a new collaboration between Microsoft and Google for the benefit of the web developer community.” He added, “Both web shortcuts and Android package customization are possible thanks to the collaboration between Google and Microsoft. We are working together to make the web a more capable app platform.”
Three years ago, Google spearheaded its initiatives to bring progressive web apps to user devices with its Google Toolbox and Bubblewrap. Google VP of Chrome and Chrome OS Rahul Roy-Chowdhurdy said on May 17, 2017, “The modern mobile web has gone mainstream.” A year later Microsoft started rolling out its web apps to its Windows platform in February 2018 which was followed by Apple (AAPL) quietly adding support for web apps in its mobile operating system 11.3, one month later.
The push to bring web apps to consumers has been a slow development because they are not typically sold on Apple’s App Store or Google’s Play Store. This also makes it difficult to estimate inroads with consumer adoption.
With native apps, however, consumers spent an estimated $23.4 billion worldwide in Q1 2020- the largest ever quarter, according to data from App Annie. The App Store yielded $15 billion and Google Play reaped $8.3 billion. Both amounts were an increase of 5% year-over-year on their respective platforms with Google Play up nearly 25% year-over-year with nearly 10 billion game-related downloads. The Q1 increase has been largely attributed to global lockdowns as a result of the COVID-19 pandemic.
Monness analyst Brian White on July 6 cut Q2 earnings estimates, citing the spread of COVID-19 along with the growing global privacy initiatives. However, he reiterated a Buy rating on GOOGL and a price target of $1420 (implying 8% downside potential). Likewise, Morgan Stanley analyst Brian Nowak maintained a Buy rating on GOOGL’s stock but with a price target of $1,700 which implies 10% upside potential.
Overall, 28 analysts assign Buy ratings, 2 Hold ratings, and no Sell ratings, giving GOOGL a Strong Buy Street consensus. The average analyst price target stands at $1,542.21 suggesting 0.21% upside potential, with shares already up 15% year-to-date. (See Google’s stock analysis on TipRanks).
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