Recent troubles over at weakening tech giant Apple Inc. (NASDAQ:AAPL) ) should be troubling to those who have bet a lot on the firm’s towering stock price. The spread of smartphones, increased competition in tablets and a loss of certain amount of joiede vie have all taken a toll on the still expensive but not-quite-as-cool tech stock. The real question is: can Apple build itself back up?
A friend of mine, a newspaper designer named Kyle, years ago told me that other companies could release phones and MP3 players, but Apple Inc. (NASDAQ:AAPL) would always have the ‘cool’ factor going for it. Sadly, Kyle’s prediction only lasted so long. Sure, Apple products were pretty and well-designed. But others can design things well, too. Two firms, in particular, are posed to really challenge Apple in its core markets.
Google Inc (NASDAQ:GOOG)
The one other titan in the tech stock world. Yes, Apple Inc. (NASDAQ:AAPL) gets all the media flash for the iPhone, but Google’s Android is by far the most-used phone system in the world. A November 2012 report placed Android’s smartphone market share at 72%. Google has Android on a lot of phones and tablets and that allows them to capitalize on the install base in multiple ways.
The droid store, like Apple’s iTunes, locks customers into a purchase platform for their apps. Heck, I certainly feel that way, sometimes. So having that large install base up front, even with a sometimes lower margin, will allow Google to make strong gains in the after purchase market. Every single person with an Android-based phone or tablet is waiting to buy apps and music over and over again.
I think this presents a significant challenge to Apple Inc. (NASDAQ:AAPL) in the smartphone market. It’s beginning to show, too. Apple Inc. (NASDAQ:AAPL) has, if reports are right, begun to cut production orders for the iPhone 5, just a few months after launch. Combine that with the rumors that the firm is considering releasing a $100 version of the iPhone and it becomes clear that Apple is reconsidering its ‘you’ll pay anything because it’s cool’ strategy.
Microsoft Corporation (NASDAQ:MSFT) )
It can be easy to dismiss Microsoft. The Redmond-based tech firm isn’t flashy like Apple Inc. (NASDAQ:AAPL) or Google. Of the big players it’s the most mature of them. It doesn’t rely on the ‘cool’ factor to make its money and it’s prone to acting like a traditional industrial giant instead of trying to build partisan faith in its users. Still, there’s a reason the firm has some form of Windows on most of the PCs in the world.
Now, however, there are more than personal computers that need operating systems. Microsoft executives are aware of this and trying to build the firm’s market share in the tablet and smartphone worlds. With the launch of the Microsoft Surface, the firm’s new tablet and the Windows 8 phone OS, the race is on to see if Microsoft can catch up to Apple’s iOS.
Windows made a strong gain in 2011 when phone maker announced that it would put away its once-proud Symbian operating system and switch over to Windows for all future phones. Then Samsung and HTC both came out with Windows-based smartphones and there’s room to grow. Microsoft will never be flashy, and the firm’s marketing style will never seduce the too-young tech media, but they usually know what they’re doing.
