The World Wide Developers Conference was full of interesting presentations, figures, numbers, and people. The event sold out in 71 seconds and two-thirds of its attendees were first timers. No presentation was more entertaining than Phil Schiller’s introduction of the Next Generation Mac Pro. He claimed he was going to give it a “grand introduction, that is unlike any introduction that we have ever had for a product.” A few seconds later, a video played showcasing this new product. Was it innovative? Did Apple Inc. (NASDAQ:AAPL) respond to critics who claimed it has lost its innovation?
Phil Schiller wore his emotions on his sleeve. His first sentence following the video? “Can’t innovate anymore my ass.” So there you have it. Apple feels as though it has broken through the “stagnant” stage and is moving forward. The problem is that they are doing things that are new to them — not everyone else. To Apple’s credit, its new products look fancy, smooth, and glitzy. However, as far as the actual products, there isn’t anything new. It might be expensive to buy (which it presumably will be with Apple Inc. (NASDAQ:AAPL) as well), but they are available.
This is a picture showing the Mac Pro’s new appearance, something that was very appealing during the video as well.
Google Inc (NASDAQ:GOOG) recently had its I/O Conference and took every chance it got to badger Apple. Apple Inc. (NASDAQ:AAPL) did not take the same approach, and hardly acknowledged the other tech giant. It was interesting to see how Apple only showed the word “Google” a couple times. The two companies have seemingly taken “enemy” roles in recent months, as shots have been exchanged both ways.
While Apple may not have directly attacked Google Inc (NASDAQ:GOOG), it did present some interesting figures about iOS and Android. However, Samsung may also feel the effects of this. It’s not to say that companies aren’t always going to throw jabs here and there, but its how they respond that is important. Apple Inc. (NASDAQ:AAPL)’s comments weren’t necessarily jabs at Android, but rather proclamations of success. Some quick statistics that it released about iOS are as follows:
– Worlds most popular operating system
– 600 million iOS devices
– 93% of iOS users use the latest version of iOS
Differences
These companies differ in what they do, how they generate incomes, and what value they present to potential investors. With the understanding that Google Inc (NASDAQ:GOOG) differs from these other companies because it provides information and generate the majority of its revenue from ads. Apple generates its revenue from products and services, while striving to provide its customers with great products. Samsung aligns more with Apple Inc. (NASDAQ:AAPL) than Samsung, but how do these companies stack up against each other with regards to valuation?
Valuation
Samsung currently has a P/E of 10.4 and a dividend yield of 0.5% — both of which are lower than the industry average. Google doesn’t pay dividends to its shareholders, but its earnings yield and free cash flow yield are pretty solid. These figures are 3.8% and 4.3%, respectively. Google Inc (NASDAQ:GOOG) fans may give Apple’s cult-like followers a hard time with innovation, but they certainly can’t argue with the companies’ valuation.
With a P/E of 10.5, and virtually every other metric showing a cheaper buy than either Samsung or Google, Apple Inc. (NASDAQ:AAPL) fans can be certain of two things: cash and value. They are better valued than most companies, and have approximately $156 billion in available cash.
Innovation
Apple did announce plans to release iTunes Radio, but again, this wasn’t their idea. Pandora and other companies have been doing this for quite a while, but it will likely give Apple Inc. (NASDAQ:AAPL) yet another way to generate revenue. Google Inc (NASDAQ:GOOG) has an entirely new product in Google Glass, and Samsung is continuing to work on Smart TV’s and other interesting products. It is obvious Apple is trying to convey the idea that it has not lost its ability to innovate, but is it? This is yet to be seen. If it can successfully develop and release a product like an iWatch, many of its critics would be silenced.
Apple’s short-term future
Here is the deal. Apple Inc. (NASDAQ:AAPL)’s shareholders might not see the stock grow much in the next year or so, but they shouldn’t stray away because of this. The company plans to release $100 billion to shareholders by 2015, will likely experience revenue growth with some new products and services, and is building a “Spaceship” that should minimize other expenses. Personally, I don’t see the stock falling below $400 or rising above $500 any time soon, but with these other attributes, shareholders should be pleased.
The Foolish conclusion
Apple Inc. (NASDAQ:AAPL) and Google may be approaching their fight with each other in different ways, but the result is yet to be seen. Innovation may be on the rise for Apple, but it hasn’t exactly blown expectations away. It will be interesting to see how these companies respond to the boxing match that seems to be heating up.
Tyler Wofford has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG).
The article Apple Can Still Innovate, or Can It? originally appeared on Fool.com.
Tyler is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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