4 Businesses Apple’s Siri Will Eat Alive

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No one could have predicted how popular Siri would turn out to be. After all, voice-recognition apps are nothing new. While initial skepticism over the new iPhone 4S’s technical specifications compared to the previous model had some wondering if the device would be a dud for the company, the smartphone has been a runaway success. Apple (NASDAQ:AAPL) sold 4 million iPhone 4Ses in just three days, and the device continues to do brisk business thanks to the novelty of Siri.

But now, as more people are figuring out Siri’s numerous uses, the program is increasingly proving to be a threat — and not just to other voice-recognition apps. The digital assistant is muscling in on multiple territories of the technology business. Here’s a look at some of the biggest businesses and products that should be worried about Apple’s new toy:

Google

GoogleThe domain of leviathan Google (NASDAQ:GOOG), search technology is the one thing Apple has not been able to revolutionize in the past 10 years. Until now.

A small study conducted by The Arora Report found that of 40 iPhone 4S owners, all of them see no need to use Google search if Siri can answer their question. More than half of the sample group hasn’t used Google since getting the phone.

During its recent quarterly earnings report, Google boasted that it controls nearly 100% of the market share in mobile search. Google reported $9.72 billion in revenue last quarter, and $6.74 billion of that came from search advertising on Google’s sites. If Siri’s use continues to expand and more users find it’s an acceptable substitute for search engines, Google’s coffers could be crippled.

Garmin

Garmin Ltd. GRMNGarmin‘s (NASDAQ:GRMN) glory days must seem so close, yet so far away now. Back in 2007, Garmin’s GPS technology looked like it was set to be a fixture in the tech world, and GRMN shares were trading around $120. Four years later, and turn-by-turn GPS directions are free in HTC and Nokia (NYSE:NOK) phones, while GRMN has lost 70% of its value.

For iPhone users, the Garmin app used to run $60, but now users pay just 99 cents a month to use it. Of course, why would an iPhone owner drop a buck a month on Garmin’s goods when Siri will give GPS directions that are just as accurate for free? Siri isn’t the final nail in Garmin’s coffin — the ubiquity of GPS technology in smartphones is itself a whole box of nails — but it’s certainly speeding up the burial.

Microsoft

Siri represents a threat to Microsoft‘s (NASDAQ:MSFT) business in a variety of ways. Bing, Microsoft’s perennial third-place search service, is just the tip of the iceberg. Siri likely will be integrated into all of Apple’s products, including Mac computers. This means that Microsoft’s voice-recognition software — which is so prominently marketed in its Windows 7 operating system — is less impressive to consumers now loyal to a voice-recognition brand in Siri.

There’s also Microsoft’s Kinect. The motion- and voice-control technology in Kinect is not only a centerpiece of Microsoft’s Xbox 360 business, but also its future in the television business and other enterprises, like retail. Siri already matches and surpasses Kinect’s voice capabilities. With Apple working on motion control interfaces and its own television that supports video games, Microsoft’s Kinect looks less and less unique.

OnStar

OnStar LLCSiri simply can’t do many of the things that General Motors‘ (NYSE:GM) OnStar can do. It can’t independently alert the police or emergency services if you’ve been in a car accident, and it can’t remind you to put on your seatbelt. Still, like Garmin, GM makes a significant chunk of cash on turn-by-turn GPS directions through OnStar.

The “Safe & Sound” OnStar package that includes all emergency and security features runs $19 per month; the “Directions & Connections” package, which is the same thing with turn-by-turn, runs $29 per month. OnStar currently pulls in more than $1 billion in revenue per year, but if even 10% of its 4 million paying subscribers drop to the cheaper package because they use Siri for directions, that’s $139.2 million (based on current number of subscribers and subscription fees) in annual revenue that disappears. Not a life-threatener, but no one likes to see money walking away.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, https://investorplace.com/2011/11/apple-siri-eating-businesses-goog-msft-nuan-grmn-gm/.

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