Steve Jobs left Apple in a great place for successor Tim Cook. The Apple iPhone has been a spectacular success and destroyed the competition; the various iPhone models now garner 36% of the smartphone market. The iPad has been almost as successful; who would have believed people would go for what is essentially a laptop without a traditional keyboard? Apple owns 43% of the tablet market. iTunes has done even better, with close to a whopping 80% share of the digital music market.
Yet Apple's stock has been tanking recently, causing some to question Cook's leadership. On March 14, Samsung will launch the Galaxy SIV smartphone, which some predict will seriously challenge Apple's share of the smartphone market.
What skeptics fail realize is that there is no competitor even close to competing with Apple right now. There is no one to surpass it. There is no alternative in the smartphone market. Android phones and Blackberries have become a bitter disappointment, with outdated hardware that cannot keep up with the incessant software updates. Want a flashy case or accessory for your Android or Blackberry? Dream on, manufacturers have all but stopped making them.
People are now finding they cannot live without their iPhones, and frustrated Android users are flocking in droves to iPhones. If the Galaxy SIV is anything like previous Android phones, it will be rife with technical annoyances. It is difficult to remain satisfied with a phone that is constantly freezing up because the hardware cannot handle very much software. Users who enjoy downloading multiple applications have found themselves limited in recent years with Androids and Blackberries.
Although Apple is pricier than most Android phones, there are ways to buy iPhones less expensively, and many consumers are finding the extra cost worth it to avoid the technical hassles of Androids.
The drop in stock value may simply be due to the lag in time since Apple issued its last hot new product, the iPad. As soon as Apple comes up with another creative, catchy product, its stock will predictably rise again. Cook told investors that the company's secret to success is focusing on the long term, which will ensure that revenues and profits follow. Apple grew $48 billion over the past year under Cook's leadership, more than Google, Dell, Microsoft, HP, RIM and Nokia combined.
As long as Apple continues updating its most popular products like the iPhone and iPad speedily, and continues coming out with innovative products like them, it can maintain its hegemony for a long time. There are no product launches expected this spring, so it might be a while before the stock turns around.
Mary Buffett writes over at the Huffington Post:
"In the short span of three decades, no other single company has been able to connect the dots between computing, the internet, music, telephony and reconceptualized it as Apple has done."
Apple really has become the new Microsoft.