Apple has become such a large company that its influence ripples throughout the market in ways we are just coming to understand. That, in turn, can dictate our personal technology choices in new ways.
I was fascinated by a recent article, an Apple Stock Watch story, by my colleague Bryan Chaffin. “Barclays: Apple Is So Big…”. In that article, Mr. Chaffin summarizes the findings of Barclays analyst Ben Reitzes. The interesting conclusion is that investors need to pay attention to three types of companies.
- Those aligned with Apple
- Those aligned with Samsung
- Those that are challenged by Apple and Samsung
Mr. Reitzes lists those companies. The conclusion is that Apple and Samsung’s power and influence are so pervasive that if you invest in group #3, your money is at higher risk.
Dell, Hewlett-Packard, Nokia, RIM and Microsoft reside in group #3.
The Consumer Side
What was left unsaid was that if investors need to be wary of the prospects of the companies in group #3, so do consumers. For example, if you were to buy a smartphone from Nokia with a Microsoft OS, you could expect to be working with companies whose marketplace challenges will percolate down and impact you.
If you’ll allow me some latitude, I want to extend that to home TV. While Sony wasn’t on the list, one could reasonably imagine that a big investment in a new (just for example) Sony HDTV in the year when Apple is suspected of trying to disrupt (challenge) parts of the TV industry would result in technological mismatches.
For example, for Apple customers who have a Mac, an iPhone and perhaps an iPad, there’s a happy, coherent family there. To go out and invest in satellite TV and a non-Samsung HDTV — or to pass on the (mythical) Apple HDTV invites problems. Those problems include technological mismatches, differences in corporate vision, different contractual alignments, conflicting IP rights, multiple customer service centers and so on. We’ve had that uneasy feeling, but now we can put our finger on it.
It’s basically a risk investment in group #3.
For a long time, the consumer electronics industry drifted along on standards. You could have a receiver from Denon, a Toshiba HDTV, a Samsung Blu-ray/DVD player and Bose speakers. And it would all work. Your Olympus point and shot camera could be attached to your Mac or PC and pictures would upload. Circuit City and CompUSA thrived, selling all these disparate gadgets. Now they’re gone, and we do one-stop shopping at Apple.
The pace of technology and the power of software combined with Apple’s vision has upset that status quo. Consumers no longer want tiny cameras with no e-mail interface and 200 page manuals in 4 point type. They’ll no longer suffer the challenges of PCs, Windows, viruses, print drivers, and printers that are a nightmare to set up. The iPad and the iPhone are considered by some, our new printers. And one company, on that group #3 list is feeling the heat.
The ripples of Apple’s influence have a touch interface.
Some may see an all inclusive family of iOS devices as restrictive, but there’s no doubt that the advantages are compelling for many consumers. My RPN calculator is my iPhone. My video camera is my iPhone. My printer is my iPad. My favorite radio station is my iPod, plugged into my car’s audio system. My HD Radio is my Mac, iTunes and the Internet. Pretty soon, perhaps my HDTV will also be a member of that appealing coherent, iOS family.
Mr. Reitzes is right. The spheres are aligning. Investors are paying attention to the winners and their TechSphere of influence. By and by, in a similar fashion, more and more consumers are pulled, by wisdom and necessity, into the same TechSphere, just to survive and protect their own investments.
And their technological sanity.
Ripples Image Credit: Shutterstock