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Google and Apple are Head and Shoulders Above the Rest


At a time when there are more choices and more confusion around every corner for non-techies...think about why Google and Apple's products are so wildly popular.


In my view there is one reason that Google (GOOG) and Apple (AAPL) are head and shoulders above their competition and why their stocks have performed so marvelously. Simplicity.

Google taught us a lot of lessons, but they are not being followed by too many technology companies. The more its competitors tried to gain ground, the bigger holes they have dug for themselves by throwing more and more on my screen. Google did the opposite. The company saved all the innovation and negotiation for its offices, not mine; away from my eyes. When I log in for the first time each day it's the same and it's easy which breeds loyalty and trust.

At a time when there are more choices and more confusion around every corner for non-techies like me, think about why Google and Apple's products are so wildly popular. Look at the front of each product. They are so plain they're beautiful.

Google has edged Apple in performance over the past year and two years. During that time my firm has been long Google for short periods of time, but sadly never Apple. It took me too long to understand the eventual knee buckling power of its simple elegance. Hopefully not too long, however, as we are now long Apple but not Google.

I think Apple may prove to be even more of a game-changer and this week's missive from Jobs about lifting copyrights might prove historic. Wal-Mart (WMT) gunning the download movement is also a milestone. A remarkable day. There is one reason that the often promised video on demand never took off in my house. It was never simple, never universal. Blockbuster (BBI) was supposed to be dead years ago. If so, I visit a lively graveyard every month with the kids.

When I sat at the media conference in Vegas down the road from CES last month, there was one question that stuck with me and I've wrestled with ever since...a money manager asked, "Will it take something like the iPod to do for video what it did for audio and finally make all this equipment come together in the living room like we've heard about for so long?"

What if it's the same company?

I am currently wiring a home for audio and video and by the time the installation is done, even with the most advanced solutions, I have a strong hunch that Apple is going to trump a lot of it. I think Apple could do for video what it did for audio because it seems to be the most brilliant about making something simple.

I think the reason that the content providers most reluctant to open up (movie studios) will finally crack is because nobody has had the stroke with customers like Apple and Wal-Mart.

I think DVD's are going to look a lot like 8-tracks before too long and I haven't even watched my Blue Ray copy of Goodfellas yet. I thought I was cutting edge two weeks ago. Not the first time my coolness missed estimates and was guided down. When I started thinking about this last night - and this is just one, non-expert, opinion in technology - I decided to not load up on too many more DVD's. I also need to call a friend who just put in a 400 disc DVD changer in his home theater. Since he didn't invite me to his Super Bowl party I shall give him a little razzing by predicting that pretty soon it will be no more useful than the CD changer that I just gave away.

P.S. I have the most grueling customer service story of my life to share, but I'm waiting until installation because I needed all the Kavorka I could muster just to get the order processed (interesting business model…forcing clients to beg to pay you then making them feel relieved when they take the order four hours later…hadn't thought of that). My hunch is that in a few short years this remarkable arrogance, their confusing products and pricing along with horrendous service will be relieved of increasing customer demand.

There is so much up for grabs for the few companies who figure out why Google and Apple are so appealing to customers and investors. Good engineers just like good investors have to violate human nature. Smart people want to include so many of their good ideas in a project but brilliant people take all of those and then build the opposite. They keep it simple.

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Position in AAPL, Short large entertainment center furniture, Long tiny docking station and room for one more.
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