Apple Inc. (AAPL), Microsoft Corporation (MSFT): Where’s The Magic?

Technology will always improve, but major innovations come in stages. TVs advanced from black-and-white to color, and then from tubes to flat-screens, and while each innovation spurred a wave of purchases, there was little need to do so in between. Once an innovation has been fully adopted, the need to continue upgrading is essentially eliminated. The smartphone market is a bit different, as telecom companies subsidize upgrades, but the need to have the newest, hottest phone on the market is gradually declining. After all, a product life span of just a year or two would be considered extremely short in any other industry. Even desktop computers, another tech product with built-in obsolescence, have three- to five-year lifespans.

Apple Inc. (NASDAQ:AAPL) will remain an admired company, and its products are sure to be coveted, but for investors that will not be enough. A new iPhone every year will not be sufficient to move the needle. With its already massive sales and profits, and a market value to go along with it, Apple will need to find yet another disruptive innovation — whether it be in smart watches, TVs, or another area that’s escaped the media’s attention — if its share price is going to move up significantly.  Without that, it will become this decade’s Microsoft Corporation (NASDAQ:MSFT), a hugely profitable tech giant with a stock price plodding along with the market.  

The article What Features Will the New iPhone Have? Who Cares? originally appeared on Fool.com.

Fool contributor Jeremy Bowman owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. 

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