Apple Inc. (NASDAQ:AAPL) is no longer a stand alone brand in the tech industry. Recent events tend to justify this sentiment, as the tablets and smartphones war intensifies. Nonetheless, Apple seems to be just managing to maintain its status as a brand to reckon. The iPhone and iPad maker is facing competition from left right and center, and even worse, the competitors are becoming just as innovative. Indeed Apple Inc. (NASDAQ:AAPL) has over the years built its status entirely on innovation and never, on pricing.
However, the likes of Samsung Electronics Co., Ltd. (LON:BC94) Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) among others have put a strong challenge against the iPad and Macs manufacturer, which now is almost becoming public. The intensity of the competition is exhibited in three main areas, namely the Lawsuits, product launches and refreshments, and of course price wars. In fact, some of the competitors have gone as far as mocking Apple’s newly launched devices, especially the iPhone 5.
In April, Li Lu and Bruce Greenwald took part in a discussion at the 13th Annual Columbia China Business Conference. The value investor and professor discussed multiple topics, including the value investing philosophy and the qualities Li looks for when evaluating potential investments. Q3 2021 hedge fund letters, conferences and more How Value Investing Has Read More
Apple Inc. (NASDAQ:AAPL) has recently been involved in Lawsuits against its major competitors, including Google Inc (NASDAQ:GOOG), which provides a stern challenge in the platform business with its Android O.S against the iPhone maker’s iOS. The other one is Samsung Electronics Co. Ltd; the Korean-based smartphone maker has been involved in several lawsuits against Apple, a good example being the one it paid $1 billion worth of damages to the iPhone maker.
The most interesting part in the lawsuits its their implication. In a recent interview, Google Inc (NASDAQ:GOOG)’s Eric Schmidt noted that he dislikes talking about the patent issues and lawsuits. He also identified that tech battlefield is between Google and Apple while admitting that the lawsuits were doing harm to innovation, albeit to the benefit of consumers in terms of affordability of smart devices.
The other exhibit of the intensity of the battle is the manner in which the main players have prepared for the holiday season. Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), all launched new products last week, with the main highlight being the launch of iPad 4, which to some extent put a cloud on the highly hyped and anticipated launch of the iPad mini. The iDevices manufacturer also launched an updated iMacs lineup to try and freshen up the ailing business unit.
The launch of iPad surprised everyone. Actually, no one had predicted such announcement, as it was only seven months since the launch of iPad 3. This is a sting in the tail for the owners of the iPad 3, given that a majority of them has been with the device for less than six months. The act itself was contrary to Apple’s routine, which has a tendency of refreshing its devices annually.
Nevertheless, price sensitive buyers were concerned with the pricing of the iPad mini, whose price was set at $329, for the 16GB model. This represented a premium of about 65 percent, when compared to the cheapest similar tablet in the market, Amazon.com, Inc. (NASDAQ:AMZN)’s Kindle Fire, which is priced at $160 per unit. Additionally Google Inc (NASDAQ:GOOG) stirred things up, by updating the Nexus 7 tablet to 16GB model, priced at $200 and ready to compete with the 7.9 inch iPad mini.
Apple Inc. (NASDAQ:AAPL) also introduced a new iPad 4, but according to Google’s plans of launching a high performance Nexus 10, which suggestively has better features than the iPad 4, then Apple faces an uphill task to maintain the current profit margins. The new Nexus 10 is set to be priced at $399, a price that is very hard to beat, if Apple Inc. (NASDAQ:AAPL) is to maintain its gross margin of about 29-35 percent.
Additionally, Microsoft Corporation (NASDAQ:MSFT) has also launched its Surface Tablets, as well as the Windows 8 platform to challenge against Apple’s iPads and the iOS respectively, not to mention Samsung Electronics Co., Ltd. (LON:BC94)’s dominance in the smartphones industry, in terms of volumes. Apple is indeed facing a tougher battle than ever before, and according to the trend, it can only get tougher. So, can the most valuable company in the world, by market Cap stand the heat as it has always done? Only time will tell.