Dominant, disruptive Apple casts large shadow over technology sector

“Apple Inc. is crushing it, but its success is disrupting the technology sector in ways that could hurt the stocks of many other players—friend and foe alike,” Dave Kansas writes for The Wall Street Journal.

“Often a hot company helps drive its sector,” Kansas writes. “For instance, Apple’s 1980s success with the Macintosh sparked a personal-computing revolution that spawned many successful companies.”

MacDailyNews Take: Apple was ripped off by Microsoft who foisted an upside-down and backwards, productivity-sapping, inferior clone onto the world. Apple is finally getting their just rewards now, decades later. The world has finally awoken from The Dark Age of Personal Computing.

“But Apple has become so dominant that is becoming more a threat — rather than a sentiment booster — to the rest of the technology sector,” Kansas writes. “That isn’t to say investors should ignore other tech players—they just aren’t as likely to see the same kind of upside that Apple enjoys. To be sure, plenty of companies, such as Qualcomm and Arm Holdings, ride the Apple coattails. But that can be a dangerous game. Apple has become a sort of Wal-Mart of techland, able to drive tough bargains with suppliers as it builds dominant positions in key device markets.”

Kansas writes, “Research In Motion, which essentially invented the smartphone market, has taken a beating. Trading at near $70 in February, the BlackBerry maker is now in the mid-$20s. Nokia’s shares have been halved since February.. Tablet makers aren’t faring much better. CLSA, a research shop, estimates that Apple sold about 9.25 iPads for every Google Android tablet in the most recent quarter. This, despite a proliferation of new tablets coming from Research In Motion, Hewlett-Packard, Samsung and Motorola Mobility.”

MacDailyNews Take: Innovate, adapt, or die.

Kansas writes, “Perhaps the most disruptive aspect of Apple’s strategy is the way it is reshaping the personal computer space. Apple’s various Mac products are selling decently, but the emergence of the iPad has changed the PC calculus… Mobile devices, chiefly the iPad, are rapidly eating into the segment. And that will likely continue, perhaps faster than expected… 86% of Fortune 500 companies are ‘testing or deploying’ the iPad… Not surprisingly, PC-centric stocks have not done as well as Apple.”

MacDailyNews Take: PC-centric stocks don’t deserve to do well. Apple shifted the paradigm right out from under the bastages grown fat and lazy from years of sucking off the Wintel teat.

Kansas writes, “As Apple races to become the biggest stock in the land, it is swiftly becoming a sector unto itself. The non-Apple tech world is on its own.”

Read more in the full article here.

MacDailyNews Take: Where was the concern from the “rest of the tech sector” back in the early 1990s when Microsoft was taking advantage of a poorly-written contract signed by an unprepared sugared water salesbozo to screw Apple nearly to death? There was no concern, just gleeful profiting amidst the joy of taking Apple’s innovations and the trillions it was worth and dispersing it to Microsoft, Intel, and their millions of leeches; companies and investors alike. This time, there is no poorly-written contract. And the “rest of the tech sector” deserves exactly what’s coming.

[Thanks to MacDailyNews Reader “NuBee” for the heads up.]

69 Comments

    1. No it isn’t. You’ve got it completely backwards. The beauty of economics is that it is NOT a zero-sum game.

      Getting back to the story at hand, this writer makes the mistake of all writers who don’t understand economics. It’s easy to quantify the losses being suffered by Apple’s disruption, but it hard to quantify or even detect the company and the individual’s who are benefitting. The bottom line is that Apple is making a better product than all those other companies so the deserve to profit, and in the process, they are benefitting us all.

        1. Your scope is too narrow. You’re focused on the companies that are in direct competition with Apple and who are suffering from Apple’s rise in the market, but you are ignoring those companies and those individuals who are benefitting from Apple’s ascendency. It is most certainly NOT a zero-sum game. More companies and more people are benefitting from the rise of Apple than are being hurt.

          1. I agree, an example is the iPod/iPhone/iPad ecosystem (first HW now SW Apps) 10 years ago that didn’t exist. Apple can even be credited with spurring the development of it’s competitor’s Phone Apps market which without Apple breaking the carrier stranglehold on SW would not exist.

    1. Already largely priced in, troll. AAPL’s P/E is absurdly low. The cash on-hand also cushions whatever impact from the inevitable (hopefully years from now) time when Apple enters its post-Jobs era.

        1. I bought 8000 shares of AAPL the day Apple bought NeXT.

          Do the math.

          I have since taken profits and added to my position based on macro economic conditions.

          I have significantly more than the orignal 8000 shares in AAPL currently.

            1. Similarly, if you’d read these forums back when the iPod was released onto Windows you’d see many many posters were buying the stock then at $13-15 a share. The stock has since split 2:1, meaning each of those $13-15 shares is now worth $780 or so.

              The latecomers to the game may not have seen this upswing coming, but those of us who have followed Apple for a while could see the profits to be made. Many MDN posters have made a million or more off Apple’s rise. This shouldn’t amaze you.

          1. So apple bought Next in dec 1996.. (just looked it up)
            Checked Yahoo finance… AAPL was roughly 5.22 in Dec 1996..
            So roughly 42k for 8000 shares.

            Only looking at that total then, and today’s worth… NOT figuring anything else.
            8000 shares at today’s market value of $393.30

            $3.15 million.

            Have i told you that i HATE you yet today? 😉

    2. When Jobs announces his retirement it’ll be an excellent time to buy tons of Apple shares, thanks to hysteria and trolls driving down its price.

      Trying to get a head start, eh, Paul?

  1. let’s be honest, Apple is all about retail….should retail fail in a big way, Apple will founder. There is nothing to stop the next recession being a doozy. Governments have maxed out the credit card 10x. People in developed countries could be looking at years if not decades of minimal growth and austerity. Then there maybe not enough time for the Chindia block to take up the slack.
    That’s not to say Apple will find a way out of the mess, but Apple’s products are high end and that could be the achilles heel.

    1. Apple can grow wildly by just concentrating on the Asian market.

      Apple already gets 2/3rds of it sales overseas. Roughly half the worlds population is in Eastern Asia and those people want to be winners. How better to be a winner than to move with the winners in products & services.

      I disagree with the prior commenter that it is a zero sum game. The world of customers for cell phones exploded in the last 20 years and is exploding again with “smart phones” and now the iPad has shown the way to digital communications and routine tasks (let alone the more complex like video editing).

      Apple is also on big run in retail expansion over there. It will be a decade before major penetration of the market is done in Asia, at least.

      Apple is doing it right. The article misses the point that if someone builds the most excellent tool with all the right accessories and the right price, there is little reason for a consumer to pick an inferior product.

      1. +1

        The original article sounded like an extended whine. What’s the issue with a company building arguably one of the best product lines from being successful? What’s stopping other companies from doing the same?

        There’s always room for more innovation. Apple hasn’t “used up” all available innovation, preventing other companies from coming up w/something better. Sure, others may not be able to build something out of metal and glass as cheaply as Apple, but if their pieces of crap plastic tablets were original and innovative, it wouldn’t much matter.

    2. Dude, we’re still trying to dig our way out of the deepest recession since the Great Depression. If anything could be considered a “doozy,” this was it. And yet Apple came through it smelling like a rose. In case you haven’t figured it out, the folks who can afford high end stuff tend to chuckle when the rest of us are struggling. That whole “Apple’s achilles heel” argument is very old and tired.

  2. This is an infuriating misperception of tech history. As MDN points out in the last take, Microsoft intentionally set out to murder anyone in their way and to stifle progress. Back then, no one shed a tear for Apple’s struggle, in fact tech and investment writers more often took pleasure in seeing its elegantly designed and engineered products get sidetracked. Apple innovated their way back making more advanced technology and the losers are just collateral damage.

  3. Leave it to a Rupert Murdoch rag like the Wall Street Journal to write a hit piece like this. I’m sure, behind the scenes, Jobs said no to something that Murdoch wanted, or that Apple showed tolerance to gays or whatnot, and hence the motivation behind this article. It does as much attention as anything else coming from Fox News and Co.

    1. i totally agree. Apple’s disadvantage is that it’s success is driven by only one person or leader. Take him out, you take apple out. Although, I never liked hearing news of people passing. It’s just a personal issue I guess. It’s just sad.

      1. While reading this, my thought were in sync with MDN take. Was not Microsoft, Comcast, Adobe, or any dominating company bad to competing products.

        Sure, just like Henry Ford, Sam Walton, Walt Disney. Whatever.

    2. Doubtful. He is smart and has surrounded himself with other very smart people. While Steve Jobs is brilliant and helped bring the company out of a slump in the late 90’s, Apple Retail was Ron Johnson, probably the most amazing leader in the retail arena, John Ives designs, etc. These people are brilliant too. Some might argue that Ron John even saves Apple as retail is seen as one of the most important steps Apple has ever taken. To say that Steve Jobs is the only person who makes Apple work is insulting all the other amazing people who work for Apple.

    3. Your fixation with the ‘one great man’ theory shows you are fixated on yourself. You cannot perceive of a world that is driven by ideas and not people. It’s common here. Me. Me. Me. A lot of 8 year olds are like that.

      Jobs is a great leader. He is not the only one. He showed the way, he is not the way.

  4. I always love the doomsday bozos… when jobs is leaving FUD meisters. They can’t wait to see Apple fail.

    I’m sure the stock of M$ tumbled when Bill Gates left…. NOT

    1. Yes, it does get old. But depending on your age it’s really business as usual, isn’t it? These have always been the voices that get the attention – the nay sayers. Inspite of two decades of militant nay-saying look where Apple actually is. As a consumer look at the real-world innovation you have access too. One of the core reasons Apple has and will continue to succeed into the foreseeable future is that they succeed by buying out their competition, they succeed by beating their competition.

      As for the investment marketplace, read the many articles on understanding how to really understand a companie’s true value and you’ll find Apple fits the definition of a truely strong foundationed company that stands financially solid with consistant, well founded growth tear over year. Over-simplfied views of a low P/E do not even begin to tell you how strong of a long term investment Apple has become. Seven years ago you could have bought into Apple for about $30/share, and now, during one of the U.S.’s biggest financial downturns look at what your investment would be worth. Walk street doesn’t get Apple anymore than the traditional pc user does.

      There’s a very old adage: “By their fruits you shall know them…”

      Cheers

          1. it is Xerox PARC, moron. (Palo Alto Research Center)

            And they weren’t the competition, they were a research center / think tank. And they weren’t trying to design a graphical operating system, they were trying to design an electronic document. And as falsely claimed, Apple didn’t steal anything from them, they got the idea for creating a user interface graphically from them, that’s all. Apple already had an advanced graphics engine (QuickDraw) they were looking to utilize.

  5. This is naked politicizing of the pragmatics of capitalism working at its best. Apple, along with a few other key players that get the need for the balance between investment and liquidity to create true long lasting value for itself and in turn for its investors, (which traditional Wall Street simply does not get), has been among the very few in these trying times that have kept the market place alive.

    I’m with MDN’s final take on this one.

    As an end-user (and investor), I come from an age where I was told what computer I would use, not asked, and I will never go back to that again.

    Thanks Apple for doing your part to keep the economy alive, and for always providing a true alternative. If it’s time to move beyond the traditional pc/laptop era then so beit – and it doesn’t surprise me at all that Apple comprises the very front edge of that wave. Others will follow, as always, and Apple will always have a competitor nipping at its heels, and all will be as it should be.

    And yes, this is so totally Rupert. Is he in jail yet. The guy is total brain damage.

  6. Apple can’t help it if their competition is incompetent. For decades now, “innovation” in the tech sector meant producing geek-friendly products by stuffing them full of features, and occasionally copying what Apple did. Now that’s not working any more, and all these companies are hopelessly adrift.

    We need another company that thinks like Apple. Unfortunately, I don’t think a single existing tech company is capable of filling that role. Apple’s real competiton in the future will come from new companies, founded by young people who cut their teeth working at Apple.

    ——RM

  7. All those whittering on about Apple foundering if/when Jobs leaves are totally ignoring the other equally important Apple emloyee, the man responsible for some of the finest industry design of the 21st century, who was responsible for the original iMac, iPod, Mac Pro desktop, PowerBook, MacBook, iPhone, iPad, iPod Touch…
    Jonny Ive, the Brit who Jobs rescued from obscurity when he came back to Apple and who continues to drive Apple’s design department with an obsessive eye for detail and user satisfaction. Jobs might be the drive behind Apple as a whole, but without Ive Apple would have none of their outstanding products to sell.
    As a Brit I’m incredibly proud of the fact that it’s a fellow countryman who’s responsible for the creation of such outstanding technology.
    And he drives a Bentley Continental GT.

  8. Yes, mdn take is spot on. I never seemed to read writers sounding the alarm when Windows 95 stormed the land. Everyone seemed quite gleeful to anoint Microsoft and Bill Gates as the Edison of our time, as the entire world standardized on Windows, and Microsoft crushed any competition mercilessly and, at times, illegally.

        1. It was very different. You had highend UNIX vendors like SGI, IBM and Sun in the business sector.

          On the desktop was apple and IBM was behind OS/2.

          VERY different landscape.

  9. Lord, how the world has changed. My Apple stock has gone from $7.00 to the current price AND I held on. Bought when Steve came back as iCEO. My company is 100% Mac. Servers, desktops, laptops, iPhones and now iPads. This is a $10M company and it all “just works”

    At 67 I bless Steve, Apple and his team. Amazing how people have quit calling me crazy and are asking advice.

  10. The bar has been raised and the rest of the industry can start slamming products over the bar or die.

    I don’t apple for others failing to make a great product.

  11. “Where was the concern from the “rest of the tech sector” back in the early 1990′s when Microsoft was taking advantage of a poorly-written contract signed by an unprepared sugared water salesbozo to screw Apple nearly to death? There was no concern, just gleeful profiting amidst the joy of taking Apple’s innovations and the trillions it was worth and dispersing it to Microsoft, Intel, and their millions of leeches; companies and investors alike. This time, there is no poorly-written contract. And the “rest of the tech sector” deserves exactly what’s coming.”

    One of your best, MDN.

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