Forget Microsoft and Google, Apple is still #1

Jason is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

That’s the word folks, at least from Goldman Sachs anyway. The company recently released a 75 page report that heavily suggests that  Apple (NASDAQ: AAPL) is the main squirrel in the tech world, and others like Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG) are just trying to get at its nuts.

 CNN Money’s Brooke Crothers shared a synopsis of the report by Goldman Sachs:

What they had to say about Google’s position in the Android device (tablet/phone) market: "Tablet share loss leads to smartphone share defection." Android tablet share (excluding the Kindle Fire) will drop to 21 percent next year from 33 percent this year. Android smartphone share will decline next year to 53 percent from 55 percent this year. "We ultimately see Google as trying to find a way to stay just as relevant in the new compute paradigm as it was during Web 1.0 and 2.0."

Ouch. Could Google's fate in the Android device market really be that bleak?

Considering that in August of this year CNN Money reported that Google’s Android-based phones held as much as 68%  of the consumer market share, while rival iOS phones clung to as little as 17% (nearly four times less), this recent report by Goldman Sachs seems a little surprising to say the least. Yet it suggests that we will see some significant consumer reduction, or as they put it, “defection,” from Android-based tablets, which will in turn bleed into Android phone market share.

What they had to say about Microsoft:

“Market share of "total consumer compute" has fallen from 93 percent in 2000 to an expected 20 percent in 2012 due to smartphones and, more recently, tablets. Though Windows Phone 8 and Windows 8 tablets will help the company "reclaim some share in coming years," the consumer PC market will be flat in 2013 and Microsoft "would have to sell roughly 5 Windows Phones or roughly two Windows 8 RT tablets to offset the loss of one traditional Windows PC sale." 

Once again, ouch, but you’ve got to admit; this one you sort of saw coming.

Microsoft hasn’t been the sharpest stock on the market since its recent device debut, and I for one can admit that I am not surprised at how “un-revolutionary” Windows 8 has turned out to be. In my humble opinion Microsoft has been having trouble getting attention ever since it showed up late to the “smart-device party,” and Goldman Sachs seems to agree.

<img src="/media/images/user_13996/goldman-sachs-apple-google-microsoft-comparison_large.png" />


Point to ponder: if you are to leaning towards the points made by the Goldman Sachs' report, then you are clearly the optimist in the room whenever Apple’s current predicament is brought to attention. That predicament has seen Apple shares dip to seemingly “mind-blowing” levels, placing it at a 10 month record low. However, if you take a sober step back, things for Apple do not look that awful. Take a moment to reflect on the stock’s Year-To-Date performance and you will see that Apple is actually up more than 25% on the year.

Maybe its time to not believe the hype

To quote Highlander, “There can only be one!”  That said, only one of these can be the case: either “Apple Mania” is really over and the general tech market has been equalized, or Goldman Sachs reviewers are off their game.

The Oracle of Omaha, Warren Buffett, is noted for sharing this wisdom: “Be greedy when others are fearful and be fearful when others are greedy.” With this in mind, the today's Apple scenario could be a time for investors to get greedy.



MindOverMarket has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Goldman Sachs Group, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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