Everybody knows that the tech giants are gunning for Apple (Nasdaq: AAPL ) . Mr. Softy and Big G are spending a lot of money to make sure that they can do anything within their means to keep the class act of Cupertino from dominating the planet.
But what about the names that Apple watchers may not even see coming?
Apple's biggest rivals now can barely kick high enough to strike Apple's shins, so smaller companies may have to settle for nipping at its ankles. Still, never underestimate the power of a disruptor. As great as Apple is today, its two biggest products -- iPhones and iPads -- weren't even available five years ago. A lot can happen in a short time.
Let's look at three companies that may sneak up on Apple.
Baidu (Nasdaq: BIDU )
Apple's been a beast in China. When a new iPhone or iPad comes out, lines form overnight in the United States -- but we've seen riots break out in China.
You probably know all about Baidu. It's China's undisputed search-engine leader, commanding a thick 78% chunk of the market. Taking a page out of the global search leader's playbook, Baidu realizes that it needs to make sure that it's a force in mobile, just as Google (Nasdaq: GOOG ) has done with Android.
Baidu introduced its own mobile operating system -- the Android-based Baidu Yi -- last year. Later this week, China's dot-com darling will roll out its updated Baidu Cloud platform. A Baidu executive on Friday revealed that several Baidu Cloud partnerships will be announced in the coming days.
There's a reason China chose Baidu over the Western world's leader in search. Why wouldn't it also go for the hometown hero in mobile?
It's true that a lot of China is still poor, but there are now more Chinese mobile customers -- 356 million as of last year -- than there are people in the United States. Apple will want to keep a close eye on the developments here.
Sprint Nextel (NYSE: S )
There's no fear that Sprint could take on Apple, but the country's third largest wireless carrier is more important to Apple than you may think.
Sprint committed to $15.5 billion in iPhone purchases over four years to nab the ability to offer the iconic smarpthone. It's been magnetic, attracting 3.3 million buyers over the past two quarters. That's less than 5% of Apple's global iPhone shipments, but bear with me.
Steep iPhone subsidies forced the carrier into reporting its biggest loss in years during the holiday quarter. The margin-gnawing ways of the iPhone had Sprint's CEO forgoing $3.25 million of his salary last week.
Yet Apple still needs Sprint. As the only major carrier still offering unlimited data plans to new accounts, Sprint gives iPhone buyers a differentiated choice while keeping its two larger rivals somewhat honest.
What happens if the stiff costs of keeping the iPhone around either forces Sprint to emphasize cheaper Android, BlackBerry, and Windows Phone handsets or causes the debt-laden, profitless Sprint to go out of business? The country's two largest carriers -- already getting quite vocal in their displeasure with the lousy margins of moving iPhone devices -- will have more control.
Hewlett-Packard (NYSE: HPQ )
The success of Apple's iPod Touch several years ago sparked an interest in Macs, and that also held true during the initial iPhone and iPad rollouts. The halo effect is running a few cherubs light these days. Mac revenue rose just 2% in Apple's latest quarter, and that includes a troubling 1% decline in MacBook portables.
A lot of this is simply the success that Apple is having with its "good enough" computing devices. If a casual user needs a PC only for surfing the Web, firing off emails, and streaming video, a tablet or even a smartphone may be enough.
However, how can it be that Hewlett-Packard -- the market-share leader here and globally -- actually gained more market share than Apple in this country over the past year? This goes beyond the "good enough" computing revolution eating at the industry.
A sensible theory is that as cloud computing grows in popularity -- and everything from spreadsheets to word processing to photo editing can be done and stored online -- it becomes less important to pay a premium for one operating system over another. As great as Macs are, the shift of processing and storage to faraway servers in this cloud computing revolution makes computing as operating system agnostic as ever.
HP, with its economies of scale to step up as a low-cost producer, suddenly has an advantage -- until it, too, gets disrupted by even cheaper Asian upstarts.
Will Baidu, Sprint, and HP really surprise Apple? As an Apple bull, I would argue that the company will find a way to respond to any and all threats as they emerge. However, it's never too early to keep an eye on the companies that may grow problematic in the future.
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