The hottest consumer electronics company is Apple. It has a strong developer eco-system for iPhone and iPad. Sales forecasts for these products will surpass analyst expectations. Apple is financially healthy and current stock market darling. Is Apple safe from government anti-trust litigation? Some argue they should be a target. I suspect it would be a very weak case and never pursued.
There has been some consumer and developer backlash of its policies, but most drink and love the company Kool-Aid. Some developers are mad and feel abused. There is excitement because of the launch of the Android phone OS and the Nexus One along with Google's book service; maybe they'll leave Apple, except the damned roll out of the iPad is so tempting and worth putting up with Apple's dictatorial behavior. Apple is betting on it. Since the market offers developers and consumers choice, no monopoly exists. The titans will clash creating healthy competition. Google is consistently on the defensive in court, while Apple consistently attacks.
Microsoft lags (OK, let's be honest, it's dead last) in the phone and 'reader' markets. Some suggest the company will never be a serious player in consumer smart / multi-function device space. They need to build a decent product before complaining. When Microsoft announced the Windows 7 phone killing Windows 6.5 / CE, it forced developers into catch-up mode. Google and Apple pulled farther ahead. Microsoft can't blame anyone but itself, end of story. Zune is a cool product, but lacks a cult like following that Amazon Kindle and Apple have with its customers. Kindle may crumble as reported by Jason Perlow. Microsoft will never be a threat to Apple unless it unleashed a serious price war. Doing so would have Apple filing a FTC suit the moment it did so. Zune products starting at $99.00 ? Nahhh....
Google has tentatively settled the book copyright infringement case. Google settled privacy and information sharing in Europe and Canada. It will be distracted for the next month or so in China, maybe longer. Still reeling from poor execution of Buzz and Wave is flat lining. Both have lots and lots of money. Spend it on lawyers?
Financial Comparison of Apple and Google
Apple (furnished by NASDAQ)
|Cash and Cash Equivalents||$5,263,000||$11,875,000||$9,352,000||$6,392,000|
|Short Term Investments||$18,201,000||$12,615,000||$6,034,000||$3,718,000|
|Other Current Assets||$3,140,000||$3,540,000||$1,413,000||$677,000|
|Total Current Assets||$31,555,000||$34,690,000||$21,956,000||$14,509,000|
|Cash and Cash Equivalents||$10,197,588||$8,656,672||$6,081,593||$3,544,671|
|Short Term Investments||$14,287,187||$7,189,099||$8,137,020||$7,699,243|
|Other Current Assets||$836,062||$1,404,114||$694,213||$443,880|
|Total Current Assets||$29,166,958||$20,178,182||$17,289,138||$13,039,847|
Information (via NASDAQ)
David Gewirtz highlights the fact that Apple will control iPad content. Lots of vendors of have similar policies. At least DRM content will be easy to port between a Kindle and a iPad reader, or so we've been lead to believe. Blocked content - drum roll please... maybe an issue for the FTC? If iPad owned 90% of the e-reader market, an investigation would be a no-brainer. Exclusive agreements are legal, just don't tell Jason Perlow that. I noticed that you don't mention a cancellation process for those that pre-order a iPad. With smart phones and laptops that can 'read' books, Apple is again safe from any federal laws. Apple's lawyers could use Steve Ballmer's CNET Conversations interview as part of its defense:
CNET (Fried): Obviously we're asking questions on the Kindle. You know, what about this e-book notion? Is that something that's interesting? Again, that's a market you guys were in. You had Microsoft Reader and protected books for compact devices a long time ago. Is it a market that you think is serious? What's the best device for it?
Ballmer: Obviously the number one reading device on the planet is the PC. The PC has passed print I would say probably. You know, for books probably people still more read on paper. For the things formerly known as newspapers, magazines, people primarily read documents, work documents, homework. People do a lot of reading on the PC screen. And we need to continue to improve the PC as a place to read, including making sure that content types, which are still primarily read on paper, can be read on the PC. And I think we'll see a number of the players who are doing dedicated devices take that as an interesting opportunity.
All three CEO's understand legal warfare and know each other well. Anyone know what happens next? I don't think DOJ, USITC or the FTC are hearing any complaints. Of course, who knew about Intel in advance? Perhaps the boys are dividing up the consumer space while putting on a show to keep the justice department away avoiding big court battles. Is there a future deal in the making that eliminates litigation? Maybe Google strikes a deal to license iPad or Google E-Book App on iPad? Apple would not be too far off the reservation with that concept; after all, Macs run Microsoft Office products - except the iPad which only loads iWork. Apple has room to maneuver and push the limits. Gizmodo published pictures last Friday that suggest Steve Jobs and Eric Schmidt are still willing to have coffee together. I would have loved to have been a fly on the table during that conversation.