Apple Has It; Dell and HP Want It

That special something: You have it or you don't. The French call it "je ne sais quoi." It's hard to define, but easy to identify. A lucky few have it. The rest of us can only recognize -- and covet -- it.

The same is true for companies. In the world of information technology, the "it" company (pun intended) is Apple (Nasdaq: AAPL  ) . Beyond its wildly popular iPods, iPhones, and iPads, the company's cachet extends to personal computers.

Most PCs may be old news, but the realm of make-your-friends-and-coworkers-envious, ultraportable notebooks remains hot. Apple redefined that slice of the market with its MacBook Air. Dell (Nasdaq: DELL  ) tried to compete with its Adamo line, which was discontinued in February after a series of pricing and feature missteps. Hewlett-Packard (NYSE: HPQ  ) tried to compete with its aptly named Envy 13. Introduced in September 2009 in response to the MacBook Air, the Envy 13 -- like Dell's Adamo -- suffered from too-high pricing and not-quite-right features.

That ain't it, man, that ain't it
There was much to like about HP's Envy 13, including battery life, graphics performance, and a high-resolution screen option. But the standard hard disk drive in the base model missed the mark. Upgrading to a faster, smaller, and lighter solid-state drive bumped the price up by $200. And like Dell, HP made the mistake of pricing its offering above Apple's. What were they thinking? Apple is known for its ability to command premium prices.

After aggressively dropping the price of the Envy 13 in recent months, HP discontinued it in February. According to HP, the Envy 14 is replacing it. But the Envy 14 is no MacBook Air competitor. In contrast to the MacBook Air, the Envy 14 comes standard with a hard drive instead of a solid-state drive. It is also bulked up with an optical drive. Compared to the Envy 13, it's about 50% heavier and 45% thicker … so, not exactly ultraportable.

Foolish takeaway
HP's PC advertising improved markedly after it hired a former Apple marketing executive in 2005. But when it comes to distinctive products, Dell and HP miss the mark. In the meantime, Apple is taking market share in desktops and portables and redefining products such as MP3 players, smartphones, and tablets with its iPod, iPhone, and iPad. In the wake of all these successes, Apple's stunning growth and premium valuation indubitably reflect its ineffable air of je ne sais quoi.

Fool contributor Cindy Johnson owns an HP printer and five Apple products. She does not currently own shares in any of the companies in this story. Apple is a Motley Fool Stock Advisor pick. The Fool has written puts on Apple. The Fool owns shares of Apple. 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.


Read/Post Comments (5) | Recommend This Article (6)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 08, 2011, at 12:40 PM, IraLA wrote:

    It's like somebody who raises a child but forgets what it's like to have been a child. The Apple folks have not forgotten what it's like to be users of what they sell. Anybody more in the "zone" with cool tech stuff than Steve Jobs? Are these folks simply pushing hardware out the door?

    Hardly.

    What they do is project the joy of discovery. Like a photographer in a darkroom who each time would revel in the joy of an image starting to appear in the tray of water. When life is a series of Aha moments, it is complete, rich, and good. To be realistic, not each moment can be like that, but the goal and the appreciation is what matters in this context; and Apple does, as you say, get it.

    http://wereport.com

  • Report this Comment On March 08, 2011, at 1:00 PM, makelvin wrote:

    I think we might be seeing history repeating itself. Motorola's Xoom is priced higher than the iPad 2 to compete with Apple's iPad line. Clearly, Motorola is no Apple; I wonder how this thing is going to turn out. I guess time will tell. :)

  • Report this Comment On March 08, 2011, at 1:59 PM, 1984macman wrote:

    Apple started to draw away from the pack about the time the new iPhone came out. Android helped to at least lend the illusion that others might still be able to compete. Now that Android has been shown to have feet of clay due to "malware-gate", that hope is looking more and more forlorn. On all fronts, the competition shrinks visibly in Apple's rear view mirror.

    Has there ever been a company like this?

  • Report this Comment On March 08, 2011, at 2:09 PM, noibs wrote:

    More and more I'm feeling like the pundits and commentators just don't get it. It's not about the hardware that HP and Dell (or Nokia and Samsung) can put together. It's about the user experience that is intimately tied to software. No matter what, Dell and HP are stuck with Windows. Nokia smartphones will be stuck with Windows Phone 7 and other smartphones will be Android-based.

    If you want the Apple experience, then Windows and Android just won't get the job done, regardless of how cool the hardware is.

    Until some other company or group of companies bite the bullet and invest billions of dollars in true user-oriented software, it's going to be very difficult competing with Apple.

    Windows won't ever get there because they have to kiss the back ends of all the corporations that want millions and millions of cheap PC boxes that are backwardly compatible with their previous software Andoid is never going to work in a profitable way because Google is giving the carriers control over the user-interface layers and the basic user experience. Linux is still too difficult for the typical iOS/Mac OSX user. No...there are no competitors right now who place the single, non-enterprise user at the top of the priority list.

  • Report this Comment On March 09, 2011, at 11:03 AM, BedfordNH wrote:

    Yup, AAPL still has a lot going for it. I do wonder, though, if being so controlling is going to be good in the long run.

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