Without these defenses, a business can fall easy prey to the wiles of competition, and lose investor confidence to boot. These days in the tech sector, it seems that piranhas and crocodiles come in all shapes and sizes, especially for the tech titans and Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL).
The Tech Sector’s Newest Defenses
First up: Google Inc (NASDAQ:GOOG), whose newest armor comes by way of a competitor’s weakness.
Fortune reports that Barnes & Noble, Inc. (NYSE:BKS) the beloved book-and-coffee seller turned tech-gadget maker , has been suffering from “Android envy.” It seems that its customers have not embraced the “Nook” tablet as they would have hoped, but have instead shunned it because of its lack of compatibility with Google’s Android applications.
Essentially, consumers apparently expected the Nook to be like the Nexus 10. As potential buyers found that this was not the case, they took off for greener pastures. In fact, according to Fortune, Barnes & Noble VP of Product Stephane Maes explained what happened as customers asked if the Nook could run many of Google Inc (NASDAQ:GOOG)’s Android apps: “When the answer was ‘no,’ we had people walk away….”
This departure has hit Barnes & Noble’s most recent quarter with a significant 26% plunge in revenue year over year. Combined with the company’s announcement last January that it would close nearly one-third of its retail stores (bringing the total number of locations to 500 or less), it’s clear that Barnes & Noble is struggling for a hook to reel in consumers.
Enter Google Inc (NASDAQ:GOOG). Barnes and Noble will be releasing a major software update that will give Nook tablets access to Google’s online store, Google Play. The store includes 700,000 apps, as well as digital books, movies, music, and magazines. This means that Nook tablet owners will be able to buy and read e-books from Google Play just as easily as they can buy books from Barnes & Noble itself, placing Google in a position to profit well from a tablet it has spent nothing to produce.
Simply put, B&N’s move provides Google Inc (NASDAQ:GOOG) with another school of piranha in its moat of competitive advantages.
On to Cupertino, or should I say Japan
Many reports state what many investors will probably not find surprising; Japan has had its hands on touchscreen tech well before the USA did. But in a surprising turn of events, some Japanese customers have been reportedly forsaking their homeland toys for a foreign brand –namely, Apple Inc. (NASDAQ:AAPL).
According to IDC Japan, the iPhone was the No. 1 best-seller for 2012 in both handsets and smartphones. That’s quite a feat for a phone that the country’s industry leaders said would fail at the start.
As Fortune put it, “Apple now has 15% market share, putting it ahead of Japan’s Sharp and Fujitsu, which both enjoy 14% of the market according to IDC.”
Two things giving Apple the edge in Japan
#1. Design: It seems that women just love a phone in uniform. According to Fortune‘s report, the iPhone sleek’s design makes it a “must have” among Japanese female consumers who enjoy the large variation in cases and ease of decoration.
#2. Refusal to Compromise with Phone Company Software: Many competitors of the iPhone in Japan have become bogged down by frontloaded, carrier-based software which users do not find appealing. Having stuck to Steve Jobs’ principal of software first, hardware,second, Apple Inc. (NASDAQ:AAPL) is able to provide consumers a less cluttered, more streamlined experience that seems to be winning out over its rivals.
Such a victory provides Apple Inc. (NASDAQ:AAPL)’s moat with a few crocodiles to call its own, too.
Foolish Parting thought: As the patent, customer base, and sales battles between tech companies are sure to continue in the future, any edge is a good one in helping you decide which of these players should have (or keep) a place in your portfolio. Don’t forget, the bigger the moat, the safer your investment.
Stay Foolish!
The article Meet the Piranhas and Crocodiles Protecting Google and Apple originally appeared on Fool.com.
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