Welcome to Week 24 of the Big Idea Portfolio. For the first time in this contest, I've fallen behind Mr. Market. Lack of faith in Google (Nasdaq: GOOG ) and Rackspace Hosting (NYSE: RAX ) accounted for the shortfall. More on both these companies, and other notable tech news, in a minute. First, let's dig into the numbers:
|Apple (Nasdaq: AAPL )||$422.46||$574.13||35.9%|
|S&P 500 SPDR||$126.50**||$134.14||6.04%|
Source: Yahoo! Finance.
*Tracking began at market close on Jan. 6, 2012.
**Adjusted for dividends and other returns of capital.
The results are in and we now know exactly what Tim Cook's Apple has planned for the months ahead, with new Retina MacBooks and a ship date for the new operating system -- next month for Mac OS X Mountain Lion -- topping the list. But it was a mapping partnership with TomTom that caused Google the most grief. The forthcoming iOS 6 won't have Google Maps, as expected.
Is this as huge a blow to the search king as the market seems to think it is? Opinions vary. Google Maps has a huge installed base that's growing bigger, with 900,000 Android devices being activated daily. On the other hand, Apple told coders it now has 100 million business listings and is creating a distinct traffic service that could make turn-by-turn directions particularly useful when the system goes live.
On a broader scale, iOS 6, which is due in the fall -- presumably at the same time as a new iPhone -- will feature a more conversant Siri. Apple's somewhat maligned voice assistant will benefit from integrating with OpenTable's restaurant reservations system, Time Warner's Rotten Tomatoes movie review site, and Twitter. Apple also plans to embed the service into the functions of the next-generation iPad.
And that's potentially a huge problem for Google. Siri is imperfect, but it's the closest thing we have to natural language -- or semantic -- search in any everyday, no-training-required device. The Big G needs to come up with an answer for Android, Chrome OS, and its browser-based search engine. Google can't let Apple be better at any type of search, voice-activated or no.
Separately, Rackspace fell when Amazon.com (Nasdaq: AMZN ) announced plans to cut prices on premium support for its popular Web-hosting environment, Amazon Web Services. The e-tailer has renamed its two highest service tiers -- to "business" and "enterprise" -- added proactive consulting, and included free 24-hour support for billing and "system health" issues for all customers. They're nice additions, to be sure, but in my view, they also fail to match Rackspace's commitment to Fanatical Support.
The week that was
Stocks rallied for the second consecutive week thanks a surging Dow Jones Industrial Average, which closed up 1.7%. The S&P 500 joined the Dow in rallying more than 1% -- up 1.30%, precisely -- while the tech-heavy Nasdaq added 0.50% and the small-cap Russell 200 rose 0.28% for the week. Each of the major indexes is once more in positive territory year to date. Investors also showed signs of remaining mostly optimistic as the CBOE Volatility Index, or VIX -- widely regarded as the best indicator of fear in the market -- fell a little more than a half a percent, CNBC reports.
Continued faith that central bankers would step in to stave off the possibility of a Greek default appears to have fueled the week's gains. Yet fears remain; my Foolish colleague Morgan Housel has details on the varying scenarios being debated by the punditry as I write today. What do you think will happen with Greece? Which tech stocks do you like now and over the next three years? Please weigh in using the comments box below.
See you back here over the weekend for more tech-stock talk. And remember to check out the Fool's latest special free report, "The 3 Dow Stocks Dividend Investors Need," and add the Big Idea portfolio stocks to your Foolish Watchlist for ongoing, up-to-the-minute coverage. If you'd like to stay up to date with our lead tech analyst's opinion on Apple, be sure to check out our new Apple premium research service.
- Add Apple to My Watchlist.
- Add Google to My Watchlist.
- Add Rackspace Hosting to My Watchlist.
- Add Riverbed Technology to My Watchlist.
- Add salesforce.com to My Watchlist.