It’s a thin slab of polished metal and glass. Press a button and it lights up in kaleidoscopic colours. It contains most aspects of your life. So far over, 700 million iPhones have been sold. No wonder Apple (NASDAQ: AAPL.US) is the most profitable company there has ever been.
But, the odd thing is, personally I’d rather buy a Samsung or an HTC. I think Android is better than iOS, and many experts would agree. iPhones are more expensive than competitor phones, and I, personally, find it difficult to justify the premium.
So why on earth is this company so successful? The answer is simple: it is all about brand. Apple is, by some distance, the most valuable brand in the world. Forbes reckons it is worth a cool $145.3 billion.
It represents original thinking, perfectionism, simplicity, and a certain balding, bearded man in a turtle-neck sweater. Or, more succinctly, it represents winners.
Tim Cook has been a very clever CEO. How can you make a good company even better? By maximising the positives and minimising the negatives. Apple now makes more product variants, and has built alliances in the fastest growing markets. It now sells more smartphones in China than anyone else, and I suspect China will soon be its biggest market. It can’t be that long before Apple moves into India.
This company has built enormous momentum, and it will take a long time for this momentum to dissipate. That’s why I think the share price could rise yet further. At some point it will surely peak, but I think we are several years from that point.
If Apple is about brand and perfectionism, Google (NASDAQ: GOOG.US) is about function above form. Every Google product works ridiculously well, yet I see little work expended on polishing the brand.
I use Google search not because it’s cool (though it is), but because it is far better than any other search engine. I like Android because it just works well, it is fast, and it has far more apps than any other OS.
You can already tell that the technology that Google is developing for driverless cars will be the best and most robust in the industry. Chrome has less bells and whistles than Explorer, but it’s faster, and it’s more popular.
Google makes the nuts and bolts of technology, while Apple is making the sex appeal and the glitter. Apple outshines Google, but I think Google doesn’t mind.
The thing with trends is that they tend to go on far longer than you ever thought. There will be ups and downs, but I expect these two companies to dominate US stock markets in the next decade. A world of all-pervasive technology is now here. I’d buy both.