Watching scoreboards in Apple vs Google
Published: Monday, May 20, 2013 at 6:01 a.m.
Last Modified: Friday, May 17, 2013 at 1:57 p.m.
Any sports lover knows that defining moment when the momentum has clearly shifted from one team to the other. From the gridiron to the bingo hall, an observor can feel the air being sucked out from one side and into the sails of the other. It is so profound that victory often hinges on the timing of these sudden shifts.
The tech industry is experiencing a profound shift of its own right now involving two powerhouse rivals: Apple and Google. While observors might not be able to see this shift “on the field,” they can see it on the corporate scoreboard known as Wall Street. Nasdaq, to be exact. That defining moment occurred in September 2012 when the price of Apple stock, off a record-high of more than $700 per share, dipped below Google's stock price. Today, Google stock is worth more than twice as much as Apple's, a monumental shift.
Last week Google topped the rarified air of $900 per share heading into its annual developer's conference while Apple continues to trend close to the $400 mark per share. For Big A, this represents a 40 percent decline equal to nearly $300 billion in market value. The coach needs to call a timeout or at least a huddle.
Truthfully, the tepid highs and lows in the markets are determined by factors far too complicated to draw hard technical analysis. I am not a scoreboard watcher in that regard but more a ball watcher. Follow the ball to know what is happening in the game. The ball in the tech world is innovation, and Google seems to have picked up an apparent Apple fumble back in 2012 and is taking it to the house. That's the end zone, if you didn't know.
How do you analyze these Xs and Os? Well, using the football analogy, both teams are good at offense and defense, which we will call hardware and software, respectively. Additionally, Google plays special teams like no other with its Internet search engine and advertising business. Apple does not; it simply must watch Google consistently return punts and kickoffs for long financial gains.
Apple's game is hardware, which is the tech version of offense. It has set scoring records for the last decade because it had the best “quarterback” to play the game. Steve Jobs' literal job was to score lots of touchdowns. He did that with deep strikes, like the iPhone and iPad, that could not be defended but also rushed the ball at will down the throat of Apple's opponents with a running game featuring stylish laptops and desktops that redefined the entire industry.
Google's hardware offense is based around game management with dip and dunk passes and creative runs. It doesn’t need a star quarterback. Truth is, its “special teams” create such good field position, it doesn’t have to compete head-to-head on offense. Its hardware, like the recent Chromebook, might get a first down but seldomly scores touchdowns. On the mobile side, it develops good but not great products and lets other companies make them.
On the software end (the tech defense), Google has improved greatly and is pushing the competition around the field. It learned to rush the quarterback with Android and stopped Apple from running wide open with IOS. It’s stout against the running game well with Gmail, Chrome and programs like Google Drive. Google software is not a finesse unit but one that throws the entire kitchen sink at opponents.
Herein lies the momentum shift: Apple lost its star quarterback and its ability to be prolific innovators. Without new devices or revolutionary upgrades, the Apple team has been resigned to kicking field goals lately. That’s three points. Google has wooed away many casual tech fans with its nifty software and inexpensive hardware. It doesn’t make the best stuff or the big plays but ugly doesn’t matter if you win the game. Problem is many people got accustomed to Apple winning pretty for so long.
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