10 Threats to Apple's Core Businesses

By Don Reisinger  |  Posted 2010-04-21 Email Print this article Print

NEWS ANALYSIS: Apple is one of the most prominent and successful companies in the tech industry. For the last several years, Apple has enjoyed unbridled success in several endeavors, including the iPod, iPhone and now the iPad. But Apple's past success doesn't necessarily mean that it will sit atop the industry forever. Here is a look at 10 issues that could potentially set Apple back.

Apple, unlike so many other companies in the tech business, is difficult to bet against.

Although Apple has had its share of tough times, it is now enjoying unprecedented profitability. That success is due to the smart decisions Apple CEO Steve Jobs and his executives have made during the past decade. From doubling down on the iPod to delivering the iPhone - a touch-screen device that revolutionized a market - Apple has pushed all the right buttons. And in the process, it has effectively cemented itself as a reliable company to get behind.

But what if that success started to dry up?

Certainly Apple can't make the right decisions forever. Eventually, the company will slip up and it will finally feel the effects of making a poor decision. Of course, Apple fans would say that if that ever happens, it won't occur for years to come, since Apple is well-positioned in the marketplace. But who would have thought that Windows Vista would been such a misstep for Microsoft? Who would have believed a decade ago that Palm would potentially be on the acquisition block due to poor performance in, of all places, the mobile space with its Pre smartphone? Things can change quickly in the tech industry and to believe Apple is immune to such shifts is ludicrous. Believe it or not, there are current market factors that could set Apple back.

Let's take a look:

1. The HP Slate

HP's Slate is a wild card for Apple right now. Although the hardware company is delivering the 3G version of its tablet at the end of the month, which should help it gain even more market share in the space, the Hewlett-Packard Slate is lying in wait. HP's device boasts Microsoft Windows 7 and a USB port, making it more accessible from a software perspective, and more capable from a peripheral perspective, than the Apple iPad. Plus, reports claim the Slate will feature a camera -- another major omission from the iPad. HP has an uphill battle ahead in the tablet market, but if consumers believe the Slate offers more value, Apple's touch-screen plans might need to be revamped.

Google Chrome OS

Google Chrome OS could be one of the most important (and groundbreaking) releases of the year. Currently, Google is planning to offer the Web-based OS to netbooks. Users will be able to access all their content online, use Google's many online tools and surf the Web. It could be an extremely useful mobile companion. And if successful, it could fire a shot over Apple's bow. Not only would Apple need to worry about users opting for a Chrome OS-based netbook over an iPad, but depending on the response to Google's operating system, it could eventually impact Apple's computer sales, since consumers might opt for Chrome OS-equipped devices over a Mac. If any company can take Apple down, it's Google. And Steve Jobs can't forget it.

3. Microsoft's Kin smartphones might make sense

Although Microsoft's Kin smartphones are being criticized by some who believe the devices lack the "wow" factor Apple's devices offer, there is a chance that they will appeal to consumers. Microsoft's research has shown that the vast majority of teenagers and twenty-somethings want to be able to communicate with friends over their mobile phones. But they also want it to be affordable. Microsoft is attempting to target that sector of the market. Whether or not it will be successful remains to be seen, but casting it aside as a loser right now probably isn't the best idea.

4. Windows Phone 7

Speaking of Microsoft, the company is directly targeting Apple's iPhone with Windows Phone 7. The software, which is admittedly late to the touch-screen party, boasts some of the most unique design ideas we've seen in the mobile market in quite some time. And considering the support Microsoft has already received from several hardware vendors, it's possible that when the software launches later this year, consumers might consider a Windows Phone 7 device along with an iPhone when they make their buying decision. If they opt for Windows Phone 7, Steve Jobs will need to scramble his team to start improving the iPhone's software.

5. HP and Dell could start building nice computers

Part of the appeal of Apple's products is their design. Consumers looking for devices that reflect well on them will find that from Apple. But so far, they have been unable to find similarly well-designed products from HP or Dell. That said, both PC vendors are starting to realize that computer design is just as important as the software a computer runs. And as recent design choices have shown, both companies are doing a better job at offering computers that can compete with Apple. But they need to do more. With a greater reliance on computer design, HP and Dell might finally be able to turn the tide and for once, best Apple on design. If that happens, Apple should be concerned -- it's one of the company's core selling points.

6. Steve Jobs' departure

This one might not happen for years, but as Steve Jobs' recent medical issues have shown, the Apple CEO won't be at the helm of his company forever. What will happen to Apple when Steve Jobs leaves is anyone's guess. Will the person who takes over run Apple the way Jobs does or will that person keep a hands-off approach? Will the new CEO change strategy or stick with Jobs' game plan? If anything can derail Apple, it's Steve Jobs' departure. Lest we forget, Steve Jobs is Apple. Without him, who knows what Apple will become?

7. iPhone 4G

The fourth-generation iPhone has been in the news quite a bit lately. But whether or not leaked photos of the device are real is unknown. And even if they are, there's no telling if the upgraded phone will appeal to consumers the way its predecessors did. Apple's success with the iPhone is both a blessing and a curse. On one hand, it's sitting on a product that could easily dominate the mobile space for years to come. But a single slip-up could hurt the company's mobile division. The iPhone 4G could be the next big thing in the mobile space -- or it could be a liability for Apple.

8. The unknown

If nothing else, a company in the tech industry should know that at any point, the success it enjoys can vanish with the release of a single, groundbreaking product that sets the standard in an industry. At one point, Palm was near the top of the mobile-phone market. So was Microsoft. Nowadays, those companies are trying to survive in a market where Apple was able to provide something new and innovative. Although its fans might not like to hear it, Apple could have a similar fate if a competitor delivers something above and beyond the iPhone, iPod, iPad, or any other product it offers. Apple isn't as insulated as we might think.

9. Apple's lawsuits

Apple is currently embroiled in lawsuits with HTC over the company's alleged use of several different patented technologies in its products. If it wins its lawsuit, Apple could effectively eliminate a major competitor and ensure that the software used by other vendors would need to be changed to its liking before it hits store shelves. But what if it loses? A loss would provide the competition with a precedent that it would need to offer several mobile-OS functions that Apple seemingly believes is a threat. Of course, HTC offering those features now hasn't affected Apple sales, but a victory for HTC could do more harm than good for Apple. And it knows that.

10. The rising Android tide

Apple's iPhone is undoubtedly a success that won't be undone so easily. But in recent months, Google's Android platform has been gaining market share. Part of that is due to the sheer ubiquity of Android devices, but its success can also be attributed to the fine software design Google has put into it. Android isn't the also-ran in the mobile market. On many fronts, it's actually a fine alternative to the iPhone. If Google can keep that momentum going and continue to appeal to consumers through solid design and application availability, we might watch the two tech giants battle it out. Apple would be the front-runner, but Google has a shot at supplanting iPhone OS as the most-viable touch-screen operating system on the market.


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