Stephen Foley: Apple is exceptional but its rivals are queuing up to take a bite
Saturday 16 October 2010
US Outlook: The world of technology has only one superpower, and it is Apple.
Little wonder that the doctrine of Apple Exceptionalism holds sway. Wave after wave of innovation attests to its unique culture, as personified by its founding father Steve Jobs. Enduring profitability attests to its strength. Above all, the wild popularity of its inventions and devotion of its followers is proof enough that it holds an exceptional place. But the doctrine of Apple Exceptionalism cannot endure in a multi-polar world, and that is what we are entering.
This is a prediction for the future. For the present, Apple is celebrating another milestone: its shares topped $300 for the first time this week. The iPhone and iPad maker is the second-largest company in the US these days (after ExxonMobil), with a market value of more than a quarter of a trillion dollars. I don't suppose there is a person in the West who doesn't know why. Under Mr Jobs, the company changed the way we listen to music, revolutionised how we think about our phones, and even persuaded us that we simply must get a tablet PC for Christmas this year.
The stock only passed $200 for the first time 12 months ago. At 20 times this year's earnings, falling to 16 times next year's, it is not as maddeningly expensive as some technology stocks, and it would be surprising if we don't see a number beginning with 4 before the end of 2011.
Underlying the share price move, though, have been a few developments in the past weeks that point to a very different trajectory for Apple as a company. The iPad, six months on the market, is now being rolled out for sale through discount retailers such as Wal-Mart and Target. The iPhone, meanwhile, will soon be available on a second carrier in the US, at long last. Both of these developments mean that Apple products will increasingly be seen outside the sleek, exclusive confines of Apple Stores and in side-by-side competition with rivals – just at the time when rivals are getting more potent.
Apple's present dominance has more to do with the joy of its operating system for the iPhone and iPad, with its rich choice of third-party apps, than it does with the admitted attractiveness of its devices' design. In smartphones, we have already seen Google's operating system Android proliferating and pressure from the competition authorities has seen to it that developers will be able to develop apps that work on both Apple and Google operating systems. Google is now heavily pushing Android for use by the makers of tablet PCs, too.
This Christmas will be Apple's holiday season, no doubt, but from next year there will be more competition from more devices offering comparable experiences – and serious competition on price.
Already, Dell, LG and Samsung are producing tablets using Android's operating system, and – as in smartphones, like in the personal computer market before it – the aim is to undercut Apple on price.
Now, Mr Jobs is no more likely to give up Apple's industry-leading profit margins in a price war than he is to swap his black turtleneck-and-jeans combo for Hawaiian shirts and sandals. Which means that, while this holiday shopping season might belong to Apple, this year could be the exception.
- 1 Unseen Charlie and the Chocolate Factory chapter deemed 'too subversive' released
- 3 Joan Rivers: 'Palestinians deserve to be dead'
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Israel-Gaza crisis: YouTube footage shows scale of destruction after 50 days of shelling
iPhone 6 'hidden code' could indicate sharper screens or bigger phones
Keira Knightley topless: Conservative actress does own take on #Freethenipple campaign for Interview Magazine
Joan Rivers: 'Palestinians deserve to be dead'
Ebola virus: It's ripped through towns – now the deadliest ever outbreak of the virus is heading for Africa's teeming cities
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
iJobs Money & Business
£40000 - £45000 per annum: Ashdown Group: An established professional services...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
£28 - 32k + Uncapped Commission: Guru Careers: A Business Development Manager ...
£40000 - £70000 per annum + Bonus+Benefits+Package: Harrington Starr: C# .NET ...