On the other hand, Google Inc (NASDAQ:GOOG) and Apple have proven their willingness to create new categories and to significantly improve existing ones. Apple Inc. (NASDAQ:AAPL) seems content on focusing on the next step of innovation, having been rumored to be working on an Apple TV as well as a smart watch. Apple has recently been filing for the iWatch trademark in numerous countries, including Japan, Russia, and Mexico. The company also recently released its own music streaming service, iRadio. Google has adopted an even more radical approach, working simultaneously on near term innovations and long-term ones, like self-driving cars and other far-reaching plans.
The second option, buying innovation, is equally viable, as evidenced by Google Inc (NASDAQ:GOOG)’s success with YouTube, Facebook Inc (NASDAQ:FB)’s with Instagram, and a myriad of other smaller acquisitions. Yahoo! Inc. (NASDAQ:YHOO)! and its CEO Marissa Mayer have been on a buying spree, looking for innovative companies with talented designers. The highest profile acquisition by Yahoo is Tumblr, which the company acquired for $1.1 billion in May. One way or the other, it is clear that innovation is the lifeblood of a strong tech company.
Both approaches have a downside; they consume lots of capital. Not every project will be a success. Nor will every acquisition, so cuts will have to be made. Yahoo! Inc. (NASDAQ:YHOO) has recognized this, just recently pruning itsflock of services and cutting those that are no longer viable. Google is also no stranger to this, routinely culling its services, the most recent to fall victim being the much-loved Google Reader.
Another viable option, though fraught with its own issues, is buying innovative companies and using them as the catalyst to maintain a dominant position. Facebook Inc (NASDAQ:FB) is no stranger to this, as demonstrated by its purchase of Instagram to maintain dominance of the social space. Yahoo! Inc. (NASDAQ:YHOO) CEO Melissa Mayer has been on a buying spree, snapping up startups and looking to increase the company’s talent pool.
Recently, Google has been rumored to being playing catchup with Apple, but even this is much more proactive than Facebook’s approach. In the end, I think the companies that are willing to embrace change or even bring it about will be the winners in the long run. To turn to a sports analogy, the best defense is a strong offense. Regardless of the recent decline in Apple Inc. (NASDAQ:AAPL)’s stock, if history is any indicator, Apple and Google Inc (NASDAQ:GOOG) should outperform both Facebook and Research In Motion Ltd (NASDAQ:BBRY).
Chris Moore has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook Inc (NASDAQ:FB), and Google. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL), Facebook, and Google Inc (NASDAQ:GOOG).
The article What Does BlackBerry Tell Us About the Future of Tech? originally appeared on Fool.com.
Chris 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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