Today: Google jumps out in front in a hot consumer-tech market while Apple does some discounting. Also: Oracle stock drops after its earnings report, Pandora loses an executive and raises subscription prices.
The Lead: Google eyes smartwatches, Apple switches its low-cost lineup
So far, the Apple-Android rivalry has taken a familiar path: Apple innovates with consumer devices that become incredibly popular and generate massive profits, and Google offers other electronics manufacturers what they need to make cheaper versions of those devices and drive eyeballs to Google's Web advertisements. That path reversed itself for once on Tuesday, though, as Google beat Apple to the punch on smartwatches while Apple rejiggered its lineup to offer cheaper options for consumers.
Google officially launched its Android Wear operating system for smartwatches Tuesday, offering developers a sneak peek at what they will need to help supply an ecosystem that seems focused on using voice-control technology -- a la Siri, Apple's personal assistant. The devices are expected to begin rolling out this summer, with Motorola -- which Google is in the process of selling to Lenovo -- showing off its offering Tuesday; other manufacturers working with Google include Asus, HTC, LG, and Samsung.
"We're always seeking new ways for technology to help people live their lives and this is just another step in that journey," Google executive Sundar Pichai said in Tuesday's blog post that launched the offering. "Here's to getting the most out of the many screens you use every day -- whether in your car, in your pocket or, very soon, on your wrist."
Apple is believed to be developing its own smartwatch and has attempted to trademark the term "iWatch" in several countries, but the Cupertino tech giant has officially been mum so far on its efforts in the field. Instead, Apple announced Tuesday that it is offering a cheaper version of the iPhone 5C smartphone in certain countries while bringing back the fourth-generation iPad as a lower-cost alternative to the iPad Air.
The iPhone 5C, which has disappointed CEO Tim Cook with its sales since being introduced late last year, will be sold with less memory, 8GB, for a discount of less than 10 percent in China, France, Germany, Britain and Australia. The fourth-generation iPad will become Apple's lower-cost tablet offering, starting at $399 and offering "a dramatic upgrade in power, performance and value compared to the iPad 2 it replaces," Apple marketing executive Philip Schiller said in Tuesday's news release.
Apple has avoided cutting prices on its gadgets to compete with Android products, instead relying on its high profit margin to bring home the bulk of the proceeds, instead of revenues, from the consumer electronics market. As Cook memorably told Bloomberg Businessweek last year, "We're not in the junk business."
Meanwhile, Android has taken a commanding lead over Apple in the smartphone market, and took the tablet crown for the first time in 2013, bringing Google the audience it needs to generate huge advertising revenues.
Google stock increased 1.6 percent to $1,211.26 as the Mountain View search leader's long-running $1 billion lawsuit involving Viacom and YouTube ended in a stealthy settlement. Apple rose 0.9 percent to $531.40 while fielding questions about an upcoming books that says the company's best days are behind it amid continuing optimism for the company's next iPhone release.
SV150 market report: Oracle plunges after another strong day for stocks
Wall Street had a second consecutive strong showing Tuesday, but positivity dissipated after the trading session ended, as Oracle suffered following the release of its earnings report.
After gaining 1.6 percent to $38.84 in regular trading, Oracle stock fell lower than $37 at times in after-hours action following the release of an earnings report that showed gains, but not as much as analysts expected. The Redwood City software giant announced profits of $2.56 billion on sales of $9.3 billion, an increase of 2 percent and 4 percent, respectively; however, Oracle's adjusted earnings per share of 68 cents came in lower than analysts' expectations of 70 cents. "They still have heavy lifting ahead in order to declare this a turnaround story," FBR Capital Markets analyst Daniel Ives told Reuters. "Investors need to see more. It continues to be a 'prove me' stock in the eyes of investors."
Fellow Silicon Valley software stalwart Adobe also released earnings Tuesday, reporting profits of $47.05 million on revenue of $1 billion; San Jose-based Adobe's stock gained 0.5 percent to $68.52 in regular trading and stayed at similar prices after-hours. San Mateo solar-power installation company SolarCity filed its delayed earnings report, which showed profits of $26.7 million, or 28 cents a share, on revenues of $47.3 million; after roaring 4.6 percent higher to $77.10 Tuesday, shares fell back to less than $75.50 in late trading.
Pandora dropped 0.4 percent to $34.98 after Chief Technology Officer Tom Conrad announced his departure from the Oakland company he joined before it was an actual company, and the streaming-radio service announced after the bell that it will increase subscription prices. Hewlett-Packard jumped 3.7 percent to $30.56 after Barclays analyst Ben Reitzes upgraded the stock, explaining that he believes the company could take share in the server market as IBM transfers some of its business in that sector to Lenovo. Cisco gained 0.6 percent to $21.56 despite a downgrade from Barclays, while Tesla Motors increased 2.6 percent to $240.04 as New Mexico discussed its pitch for the Gigafactory.
Up: Splunk, SolarCity, Sandisk, HP, LinkedIn, Gilead, Workday, Tesla, AMD, Nvidia, Salesforce, Juniper, Applied Materials, Oracle, Google, SunPower, Yelp, Symantec, Apple, Yahoo
Down: Twitter, Netflix, Pandora
The SV150 index of Silicon Valley's largest tech companies: Up 21.01, or 1.36 percent, to 1,564.39
The tech-heavy Nasdaq composite index: Up 53.36, or 1.3 percent, to 4,333.31
The blue chip Dow Jones industrial average: Up 88.97, or 0.6 percent, to 16,336.19
And the widely watched Standard & Poor's 500 index: Up 13.42, or 0.72 percent, to 1,872.25
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.