Apple May Find Itself at Risk in Legacy Core Business 12 comments
-
Font Size:
-
Print
- TweetThis
I’ve been a happy customer (and frequent stockholder) of Apple (AAPL) for a few years now. Apple has had a substantial lead in design, technology and platforms like iTunes. They leveraged this in a spectacular way with the iPhone. But there have been some nagging issues along the way like the proprietary nature of their products, their great reluctance to admit to any mistakes or shortcomings and relatively high prices which generate high returns but also fund increasingly swanky store locations.
There’s no reason to get down on Apple. But at the same time I’m getting a bit tired of them and even their products. It’s been years since I was thrilled by my first installation of iTunes (AAPL was around $19 I think) and then my first Mac laptop, then desktop, and so on. I didn’t move to the iPhone due to my heavy use of a keyboard and longtime Blackberry orientation. But still an iPhone might have been in my future if it were not for Android. Apple has proven to be less-than-helpful at really making things like iTunes, AppleTV and even the Touch and iPhone work in the way that I want them to. At the same time there are not many third party solutions to turn to.
Windows 7 is going to be a big help for the PC industry. It’s going to revitalize what still represents the vast majority of the computing business and be an important catalyst for Microsoft (MSFT) and related vendors. Google (GOOG) is effectively embracing and extending the Windows space with their browser and cloud-based services like Wave.
Google also clearly wants to do more with infrastructure services and communication. The recent divergence between Google and Apple makes it clear that Apple will be seeing Google in their core markets much more in the coming years. What we don’t know yet from Google is how they will deal with media assets beyond what they are doing with YouTube and books.
Apple is a great company with great products. They have executed incredibly well. However they have also done so without much competition. Google and Microsoft are poised to be much stronger players. And by pitting themselves against companies like Verizon (VZ), they have opened themselves to more competition than their stockholders and analysts are fully prepared for.
Fortunately for Apple, the current strength of the iPhone, iTunes and the iPod will make them hard to beat in any of those areas directly. Strangely enough, they may be much more at risk in their legacy core business of computers and software than anywhere else.
Technology and markets never sleep.
Disclosure: The author holds a personal position in Microsoft call options at the time of this writing.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 12 comments:
If Google was quite serious about Android adoption, it would be pushing the agenda much more vigorously.
The truth seems to be that different manufacturers are producing their own interpretations in a bid to play catch-up with the iPhone. None seem to be gaining traction, which is a shame - I like the HTC Magic and Hero. They simply don't have the brand recognition yet. Even the Razr had more.
I still don't understand Blackberry users. The keyboard thing. I always think about old dogs and new tricks. That's a personal choice - so each to their own.
Microsoft' Windows 7 is a welcome update. They've finally put things right that should have been right in Vista.
Most corporates take quite some time to adopt new builds of an OS, which means that immediate adoption simply won't happen from the business world. I work for a global telecoms corporate - and we're still using XP - that's worldwide.
On the consumer side, I think Windows 7 should do OK though. I anticipate slow and steady adoption - not a landslide.
Competition is always good - more and in different spaces where Apple sells.
I don't think you've shown where there is any competition - or what real strength any competition might have.
Apple appears to be leading - and others playing catch-up.
Finally - what relevance that bears on the share price is precious little.
You say, with all the sincerity you can muster, "There’s no reason to get down on Apple." - In that case why did you immediately precede that remark by:
"But there have been some nagging issues along the way like the proprietary nature of their products, their great reluctance to admit to any mistakes or shortcomings and relatively high prices which generate high returns but also fund increasingly swanky store locations." - and immediately follow it by:
"But at the same time I’m getting a bit tired of them and even their products." And this in the face of a massive earnings beat!
So, you are obviously completely out of touch with the market which is simply in love with them and their products.
You go on to say: "Strangely enough, they may be much more at risk in their legacy core business of computers and software than anywhere else." This in the face of a stunning increase in Mac computer sales and Snow Leopard OS sales. Punters were clearly so excited by your implied threat of Windows 7 that they decided not to wait for it's launch in just a matter of weeks!
Surely the story is in the fact that Apple can deliver industry beating performances month after month in a massive recession despite what you refer to as "relatively high prices" and that Microsoft is now desperately changing strategy to acquire it's own "swanky store locations". Stores which, incidentally, they plan to build in as close proximity to an Apple store as they can find. So, at least they know where computer buyers tend to congregate these days.
This 'article' lacks all sense of logic, true analysis and impartiality. It stinks.
Tough to take that line seriously. Apple came in at 2% market share, and (to take analysts word) , on deaths door. Now nearing 10%, the analyst view is that, well.... 98% of the market wasn't really any competition. Hmmmm...
Sheesh. This is pure dribble
What a strange article.
Sounds like there are demons getting to you. Change your line of work if I were you.
How does this desirable "poised" state occupied by Google and Microsoft have any significance to Apple or its customers?
What exactly is "proprietary" about anything an Apple customer is tied to? Not video, audio, pictures, mail, calendar, address book. It's Microsoft that's proprietary and near universal, but Apple also takes the trouble to buy licenses and interoperate out of the box with Microsoft's proprietary Office, Exchange and and SMB. All built on an open source OS foundation.
Even the iPhone App store is open to all. But it does guarantee that the provenance of your software is traceable, and that the performance and battery life of your gadget is predictable. If you think Android is so open, how can it be that Android phones are even carrier locked at all? And wait till you see what you can and can't do with a Verizon Android phone.
These are all design decisions made by Apple, and they are proving to be the right ones.
The author provides no evidence whatsoever for that statement. It is ludicrous in the face of rising Mac & Snow Leopard sales. Apple had its best quarter EVER--in the midst of a recession.
Of the current top 10 laptops at Amazon.com, *4* are by Apple--#s 3, 5, 7, & 9. Acer has 3 and HP, Toshiba & Compaq each have one.
all i can say is that if you prefer products from companies who aren't very good at fast innovation, while being good to customers...then stick with writing about those. There are plenty...Zune, Vista...Palm...and on and on.
Really, someone here should show- if not editorial oversight, at least something not unlike: "Is it me or is this poor chap just downright nuts?”
“Who cares boss; we need to fatten things up with a few more ‘comments.’ “
You’re right. WTF. I’d just like to be able to trace this bizarre ISP address. It might prove to all there _IS_ something not unlike "Life” somewhere else out there is outer space.