Monday 27 March 2017

Void at tech giant a major opportunity for rivals

analysis

Peter Flanagan

Peter Flanagan

THE resignation of Steve Jobs as head of Apple leaves a void at the top of the company, and potentially opens the door to rival firms who have been left in the dust by a chief executive who revolutionised three industries.

The challenge for new boss Tim Cook will be to reassure investors that Apple can move forward as a company without its iconic leader while preventing competitors from closing ground on the firm.

"There's so much long-term growth priced into the stock that everyone is kind of afraid what happens a couple of cycles from now," said Hussein Kanji, a venture capitalist and adviser to technology start-ups. "Apple has defined great products as a function of Steve Jobs, that's the worry for most investors."

Jobs's first act saw him make the personal computer a mainstream product in the 1980s, he then changed the music industry with the invention of the iPod in 2000 before making a smartphone -- up to then a boring device used mainly in the corporate world -- the most desirable tech product of its time with his iPhone.

Even now, the iPad tablet computer threatens the future of the PC industry he helped make viable 30 years ago.

For many, the genius of Jobs was not to invent new products per se, but to take existing technologies and reinvent them in a sleek, desirable package.

Portable digital music players existed before the iPod, but the fabulous simplicity of the iPod combined with the iTunes store gave Apple a product and closed ecosystem that competitors like Creative and iRiver could not compete against.

The same pattern has been seen with the iPhone, where touchscreens had been used on smartphones before. We now take it for granted that we are able to download apps for our phone but before the iPhone this was mostly a pipe dream.

The BlackBerry is arguably still a superior device for phones, texts and email, but few doubt the iPhone is a more desirable device for the consumer. It is a testament to the strength of the Apple brand under Jobs that people will pay a premium for an Apple product. Consumers will buy a MacBook laptop even when a Windows PC with higher specs can be had for a cheaper price.

Smartphones

The biggest challenge facing the company right now seems to be in the smartphone sector, where its iPhone is facing fierce competition from manufacturers running Google's Android operating system and others.

Microsoft has signed an agreement with Nokia to use its Windows 7 OS, while BlackBerry maker RIM is said to be planning phones that can run Android applications, giving their products a much-needed boost.

Korean electronics firm Samsung in particular stands out as a possible winner from Jobs's departure with its range of Android phones and tablets, says Mark Newman, a former Samsung executive who is now a tech industry analyst with Sanford C Bernstein.

"Even before his resignation, Samsung was getting more and more optimistic that they can actually take on Apple in the smartphone arena," he says.

"The game is really now Samsung's to lose. . . They are picking up market share in the smartphone industry."

Even so, Los Angeles-based money manager Daniel Genter does not expect the loss of Jobs to have a huge impact on Apple.

"He has been a strong figure in the company historically, but he hasn't been a driving force for the past two years.

"His resignation brings clarity. It shouldn't have an effect on the overall market, but it may have a short-term negative impact."

Irish Independent

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