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Competition: Even though Apple has taken a major leadership position in the PC, CE, and even smartphone markets, the company does have some interesting competitors who are watching it closely and trying to figure out how to respond. But this competition is not coming from the traditional PC and CE players. Instead, it's coming from the likes of Amazon, Google, Real Networks, and to some degree, Sony, because of their strong investment in content. Apple's successful position results not only from its operating system, applications environment, and user interface, with its ability to simply manage a person's digital assets, however, but also from Apple's direct role in providing content for the user: music, movies, and applications for dedicated mobile devices such as the iPhone and iPod touch. So if content is part of what makes Apple king, then Amazon clearly has become a worthy competitor, with its content commerce model that delivers digital music, movies, TV shows, and books to end users. Amazon's cloud-based approach has made it easy for customers to access and even manage some of that digital content around a simple UI. But Amazon has a long way to go before it can deliver a localized approach to managing and accessing this content beyond standard PCs and basic mobile devices and across a broad range of products the way Apple does today. Another big Apple competitor is Google. Its Chrome browser is actually a Web-based OS with a UI that lets it manage a user's cloud-based assets in a single-user environment. This makes Google an adversary that Apple has to watch very closely. And of course, Android, Google's OS and apps for smartphones, is quickly evolving into a product that could challenge the iPhone. If the content players are smart, they will find ways to make sure their content gets into the Google ecosystem as well as into Apple's. If content is core to a competitor's ability to compete with Apple, then Real Networks is also a player. I have known Real Networks CEO, Rob Glazer, for decades. And early on, he saw that content would become a key driver of competition. He has been trying to make his former employer, Microsoft, understand this--but up to now, Microsoft has only dabbled with creating anything like Apple has: an easy, commerce-based solution to content access, management, distribution, and playback. Of the group of competitors, Sony is in perhaps the most interesting place to challenge Apple directly. It has movies, music, e-books, and console and mobile games. If the company was able to create a Sony-driven user environment that could manage just its own content across an ecosystem of Sony products, the company could emerge as quite a serious competitor to Apple as well.Next: The PC & CE Players >

So, Apple has revolutionized the music business, reinvented the phone and is leading the charge with its iPad. Plus, they make some computers as well. Not bad for the 35-year-old company that its co-founder Steve Jobs likes calls the worlds biggest startup. Each time Apple entered a new market, it caught its competitors on the wrong foot, leaving them

perplexed and dumbfounded. Steve Ballmer who laughed off the iPhone isnt laughing anymore. RIM executives who thought the original iPhone was impossible in 2007 because it would have terrible battery life had found out when the device was released that it was virtually all battery plus some silicon. Nokia bosses used to point out how their days or weeks worth of sales matches Apples quarterly handset sales and now theyre going to bed with Microsoft of all companies to become relevant again. As of late, computer companies like Acer and smartphone vendors like Nokia and LG Electronics have seen their CEOs step down due to the Apple effect. Read on
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Struggling to keep pace with Apples string of smash hits, several competitors have axed their CEOs, citing their inability to come up with the right recipe to stop the Silicon Valley consumer electronics powerhouse, sources tell Digitimes. This includes Acers ex-CEO and president Gianfranco Lanci, with the company pledging tooverhaul its operations in the wake of the iPad challenge. Nokias ex-CEO Olli-Pekka Kallasvuo and LG Electronics ex-CEO Nam Yong also stepped down in part due to the iPads coming out party, author Monica Chen explains: The sources pointed out that the appearance of Apples iPad significantly impacted the netbook market in 2010 and messed up Acers lineup for the entry-level notebook market, causing the company to see almost no growth in shipments. Although Acer revealed its own tablet PC products in November 2010 aiming to grab back some market share, comparing to either iPad or Asusteks Eee Pad, Acers devices are still outmatched in terms of both hardware and software. In the smartphone world, the iPhone is instilling fear in Apples rivals because its disrupted the industry and grabbed a significant portion of the mind share, if not market share: Since first-tier smartphone and PC brands are still unable to find an effective strategy to counter Apples advance with Lanci the most recent victim of Apples assault, the sources believe executives of brand vendors such as Motorola, Sony, Toshiba, Asustek Computer and Lenovo are all in danger of being dragged off by the wave.
Apple's iPad owns the tablet market, according to a new study of Internet traffic in the U.S., but that doesn't mean the competition is going away.

The 9.7-inch iOS device accounts for 97 percent of all tablet device Internet traffic in the U.S. and 89 percent of tablet traffic globally. It also claims nearly 22 percent of all non-PC Internet traffic in the U.S. Tablets running Google's Android OS, by comparison, make up just 2 percent of U.S. online tablet usage and 0.6 percent of non-PC traffic, metrics firmcomScore says. Despite Apple's dominance, a few challenges may emerge in the coming months that could diminish the iPad's popularity. Amazon is rumored to be coming out with its own Android-based tablet, and Amazon is the only other company that could challenge Apple's content ecosystem for iOS devices. Amazon has an online music store, a new online music storage and playback service, a film rental and purchase store, e-books and the company recently launched its Appstore for Android. Hewlett-Packard's WebOS-based TouchPad rumored to hit stores in July may also be a good competitor to the iPad. A dark horse competitor to the iPad might be tablets running Microsoft Windows 8. Instead of putting its Windows Phone 7 OS on a tablet, Microsoft says the forthcoming refresh of Windows is being designed with touch devices in mind. Windows 8's interface will look similar to Windows Phone 7's well-received Metro UI. Windows 8 will also be designed to work on ARM-based processors--the most popular chip used for mobile devices. But it's still early days for Windows 8 and it will be a long time before we'll be able to see how well the new OS performs on a tablet. While comScore's study may not be surprising to those who follow tech news, the report has to be deflating for Apple's existing tablet competitors such as the BlackBerry Playbook, Motorola Xoom,Samsung Galaxy Tab, Asus Eee Pad, Dell Streak and T-Mobile's G-Slate.

Ever since Apple introduced the iPad more than 18 months ago, computer makers have been racing to come up with a response to Apple's tablet. But as Technologizer's Harry McCracken recently pointed out, Apple's competitors haven't been able to answer one fundamental question, "Why should somebody buy this [tablet] instead of an iPad?" Unlike its competitors, Apple pushes out regular OS updates for its devices designed to improve and extend the functionality of the iPad. And unlike Google's Android, Apple doesn't have to contend with carriers and manufacturers preventing the updates from reaching users. Apple's iTunes catalog of apps, music, movies, television episodes, and e-books also keeps people coming back for more.

For now, Apple owns the tablet world thanks to the iPad and that is unlikely to change before the end of the year.
Direct Competitor Comparison AAPL Market Cap: Employees: Qtrly Rev Growth (yoy): Revenue (ttm): Gross Margin (ttm): EBITDA (ttm): Operating Margin (ttm): Net Income (ttm): EPS (ttm): P/E (ttm): PEG (5 yr expected): P/S (ttm):
GOOG = Google Inc. HPQ = Hewlett-Packard Company RIMM = Research In Motion Limited Industry = Personal Computers

GOOG 191.74B 26,316 26.60% 31.12B 64.97% 12.16B 34.35% 8.35B 25.75 23.11 0.88 6.19

HPQ 72.57B 324,600 2.50% 127.94B 24.39% 18.35B 10.46% 9.22B 4.07 8.60 0.76 0.57

RIMM 13.84B 17,500 15.90% 20.58B 44.01% 5.57B 21.76% 3.34B 6.30 4.21 0.86 0.70

Industry N/A N/A 0.00% N/A 0.00% N/A 0.00% N/A N/A N/A N/A N/A

340.68B 46,600 82.70% 87.45B 39.07% 26.73B 29.02% 19.55B 20.99 17.55 0.67 3.86

Computer Hardware (US) Ranked by Sales Company International Business Machines Corp. Hewlett-Packard Company Symbol IBM HPQ Price 173.74 34.99 Change -1.02% -0.28% Market Cap 210.44B 72.57B P/E 14.59 8.60

Dell Inc. Cisco Systems, Inc. Xerox Corp. Seagate Technology PLC Apple Inc. NCR Corp. EMC Corporation Toshiba Corp.

DELL CSCO XRX STX AAPL NCR EMC TOSBF.PK

16.72 15.28 9.83 16.16 368.40 18.64 26.52 5.11

-1.47% -1.99% -1.80% -3.87% 0.95% -2.25% -1.08% -2.29%

31.55B 84.04B 13.77B 6.95B 340.68B 2.96B 54.57B N/A

10.01 11.93 15.46 10.04 17.55 18.13 29.02 N/A

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Computer Hardware (non-US) Ranked by Sales Company Canon Inc. NEC Corp. Fujitsu Ltd. Hitachi Ltd. Ricoh Co. Ltd. Seiko Epson Corporation Fujitsu Technology Solutions (Holding) B.V. Oki Electric Industry Company, Limited Acer Incorporated Symbol CAJ NIPNF.PK FJTSY.PK HIT RICOY.OB Price 46.91 2.00 29.38 61.03 55.00 Change -1.66% -10.31% -0.51% -1.53% 0.00% Market Cap 57.63B N/A 60.81B 27.57B 39.90B P/E 18.66 N/A 90.12 9.78 164.18

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