For many tech investors and analysts watching yesterday's Apple
(NASDAQ:AAPL) event, the overall reaction was... meh. Our tech investing writers were slightly more positive about the changes, however. Here are their thoughts.
Smart Decisions: Four Observations on What Apple Got Right
By Michael Comeau
1. Apple Is holding the line on price, sort of
. While I was very frustrated that the iPad Mini 2 was priced at $399, it's not necessarily the worst thing in the world because the company does need to keep its status as a premium brand. Apple can't afford to get lumped in with the bargain-bin Google
(NASDAQ:GOOG) Android tablets that are gaining in market share but not doing anything for anyone's bottom line.
However, Apple's $200 price cut on the Macbook Pros may be a sort of admission of pressures in the declining PC space. Keep in mind, however, that those pressures are largely coming from Apple's iPad.
2. Apple is going end-to-end
. By offering the iWork and iLife app suites free with new hardware purchases, and integrating them across all devices (iPhone, iPad, Mac), Apple is making an aggressive play to keep people locked firmly inside its walled ecosystem. Since Apple makes plenty of money on hardware, it can afford to give these apps away.
3. Free OS X Mavericks is big
. Apple making OS X Mavericks and future operating system updates free is more than a nice gesture for loyal Apple fans. It's a strategic effort that will result in a simplified app ecosystem that keeps most (if not all) users and developers on the same OS. That's a big advantage over the Android and Microsoft
(NASDAQ:MSFT) Windows ecosytems, which are sprawling and fragmented in comparison. (Also see: Developer Explains Why Mobile Start-Ups Put Apple First
4. Microsoft should be ticked off
. Apple making OS updates, as well as iLife and IWork free should put Microsoft in a bad mood. Microsoft envisions a future of earning regular subscription fees from software maintenance and updates, and Apple is offering a nice alternative to that, particularly for businesses. Since, again, Apple doesn't make much money in software, it can sacrifice it in the name of strategic advancement against a key competitor. Apple's inroads in the desktop enterprise market will be inevitably slow, but this is a good way to make forward progress.
Michael Comeau edits Minyanville's Buzz & Banter and is also a regular columnist on Minyanville.com, focusing on technology and consumer stocks. Read more of his work for Minyanville, here.
(See also: Apple Rekindles Its Rivalry With an Old Foe
Apple Leads Innovation With 64-Bit Architecture
By Sean Udall
Just as I said with the iPhone 5S, the new iPads will be a big hit. Sure, I was hoping for something a bit more with the covers, but that was only a minor deal. Apple is once again leading the pack in innovation with 64-bit architecture. iWork and iLife apps being free with new devices is also a huge benefit to new buyers and long-time users who are upgrading.
In the enterprise arena, the iPad has between 85-90% tablet share, and the new iPads will certainly help retain -- or even possibly increase -- that share. All in all, given the embedded value in the OS and free Apple software, the bar is incredibly high for anyone else making tablets to compete effectively. Yes, there are cheaper tablets, but this is a product category in which you tend to get what you pay for. And Apple throwing in a lot of great software with the devices just notably raised that value proposition.
Another home run for Apple. The company is once again close to firing on all cylinders!
Sean Udall is an investment strategist, portfolio manager and proprietary trader with extensive experience across a wide variety of asset classes, including equities, fixed income, currencies, and derivatives. He’s a recognized trader, prolific writer, and the founder of the TechStrat Report, a technology-focused investment newsletter from Minyanville. Read more of Sean's commentary, here.
Sean Udall has a position in AAPL.
(See also: At Apple, Investors Still See Evolutions, Not Revolution
One Mistake? Not Making iWork and iLife Available for Androids and Windows
By Andre Mouton
For the most part, Apple’s event was about incremental updates – and there’s nothing wrong with that. As good as this company has been at developing new products and entering new markets, it’s just as good at churning out strong updates to existing devices. Both the iPad and the Macbook Pro are old product lines by now, but each continues to generate a lot of excitement. Apple has the best batting average in the business, and when it’s at the plate, people watch.
Software is another matter. iWork and iLife are now free with the purchase of new hardware, but Apple hasn’t bothered to offer Windows or Android versions like it does with iTunes. That’s a mistake. Most PCs run Windows, and most smartphones run Android. The digital world is a diverse place, and for Apple devices to succeed in it, they need to pair well with non-Apple devices. This means ensuring that both sides have access to the same apps. Microsoft made a similar mistake by refusing to release Office for IOS and Android. This fragmentation has driven consumers towards cloud alternatives like Google Docs – a development that neither Microsoft nor Apple wants.
Andre Mouton is an independent investor who cut his teeth in the dot-com crash and chewed his lip in the financial crisis. He is a former writer for Offbeat Magazine in New Orleans and a touring (but not itinerant) musician, who now lives in New York. Read more of his work for Minyanville, here.
No positions in stocks mentioned.
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