Apple's Next Competitor: Boeing?

There have been plenty of odd competitive mashups in our time of two seemingly unrelated companies stepping into the same ring to duke it out.

There's been Intel versus Netflix as well as Wal-Mart versus, um, Netflix, among many others. Here are the latest two juggernauts you probably never thought would be on the same playing field: Mac maker Apple (Nasdaq: AAPL  ) and highflier Boeing (NYSE: BA  ) .

As much as I'd like to tell you Apple has a secret project to develop a sleek, minimalist iPlane to take down Boeing's 787 Dreamliner, that's not the case. This rivalry in the making involves the aerospace company working to enter the smartphone business. That's right -- the "Boeing phone."

Boeing is making a smartphone that will run on Google (Nasdaq: GOOG  ) Android. Roger Krone, Boeing president of network and space systems, said this is likely a first for the industry, while another exec, Brian Palma, said the "Boeing phone" is readying for a late 2012 launch.

Let's be clear. This is not going to be just another consumer smartphone that you'll be able to waltz down to your local retailer and pick up. We're talking about a highly secure encrypted device geared toward the government, defense, and intelligence markets. Palma said similar devices that use proprietary software and hardware go for upwards of $15,000 to $20,000 per device.

Palma said Boeing will try to drive the price down, but we're still not talking about mass-market consumer-price levels.

The government market is specifically an area Apple has been increasingly tapping into lately. The Bureau of Alcohol, Tobacco, Firearms, and Explosives uses iPads and iPhones. The Department of Veterans Affairs recently canceled a long-term contract with Microsoft (Nasdaq: MSFT  ) , opening the doors to an iPhone transition.

More recently, the National Oceanic and Atmospheric Administration just ditched Research In Motion's (Nasdaq: RIMM  ) BlackBerry to make the iSwitch, after which the General Services Administration also kicked RIM to the curb.

This is a market where Boeing might see some success. While Apple is surely going after it, it's obviously more concerned with the consumer market and isn't going to plunk as many resources into chasing government agencies, as Boeing may be willing to do.

So Apple and Boeing may soon find themselves at each other's necks in a niche part of the market, but compete they will.

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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Intel, Apple, Microsoft, and Wal-Mart Stores. Motley Fool newsletter services have recommended buying shares of Microsoft, Google, Apple, Intel, Netflix, and Wal-Mart Stores, creating bull call spread positions in Microsoft and Apple, and creating a diagonal call position in Wal-Mart Stores. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (5) | Recommend This Article (16)

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  • Report this Comment On April 14, 2012, at 12:33 AM, applefan1 wrote:

    I wouldn't count Apple out on anything of this nature. Remember, Apple doesn't always have to go through a company like Boeing, that just raises the cost to the customer and adds another layer they don't need to add. iOS 6 is around the corner and they haven't mentioned any major features, YET. Personally, Android is wannabe OS. I think Boeing is out of their core competencies and these types of products have limited success since they can't compete on a lot of levels. Boeing doesn't design their own processors, they don't have the sheer volume of making these types of devices to drive their cost of mfg down. Plus, Apple has a LOT of apps that Android doesn't and won't get.

  • Report this Comment On April 14, 2012, at 1:34 AM, Sergey77777 wrote:

    $BA short target 55.88 (fibo 50%) http://mystockusa.com/wordpress/boeing/ #mystockusa #stocks

  • Report this Comment On April 14, 2012, at 6:57 AM, henrystar wrote:

    Applefan1 is right, it just won't fly!

  • Report this Comment On April 14, 2012, at 9:05 AM, Onigato wrote:

    applefan1, you are thinking of CONSUMER releases. Your inital argument of Apple going through Boeing is invalidated, since Boeing would be manufacturing the (probably) tablet sized knee-board replacement devices.

    Android is a solid Linux-based OS technology which has over 20 years of open-sourced tweaking behind it, FAR from being a "wannabe". Yes, the specific version that Boeing will probably use is going to be specifically tailored to their needs, but then again, this is for PILOTS, in a PROFESSIONAL setting, NOT CONSUMER technology.

    And WTF does the number of apps have to do with ANYTHING in this setting?! This is for pilots, designed to replace the old analog knee-boards, not so the pilot can play Angry Birds. Most likely there won't BE an App Market on the device AT ALL. Most professional devices lock such features down, just to prevent users from installing something incompatible with the core programming and installed Apps.

  • Report this Comment On April 14, 2012, at 4:52 PM, deemery wrote:

    applefan1 wrote "I wouldn't count Apple out on anything of this nature."

    But I would count Boeing out. I have substantial experience with Boeing's system integration abilities, and they inhale vigorously. Google "JTRS GMR" for a hint of Boeing's competence in this space.

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