When I heard the news about the passing of Steve Jobs, I was saddened. Much has been said of this great man, but losing someone of this stature and ability will be difficult — if not impossible — to replace. He truly was one of a kind and should go down as one of the greatest innovators and businessman of all time.
I remember first extolling the virtues of Apple (NASDAQ:AAPL) in 2007. Here was a company that stood out for its ability to move forward in a very unique way. At the time, shares of Apple traded for less than $100 per share, iPhones were in their infancy and tablet computers were the stuff of science fiction. It is easy today to be bullish on Apple, but that was not the case in 2007. Clearly, things changed for the better.
But when I observe today’s landscape, I’m struck by something that has bothered me since the collapse of the dot-com bubble. Specifically, we seem to be lacking with respect to innovation and risk-taking. The entrepreneurial spirit has been replaced by a much more conservative approach that has left us with one of the weakest recoveries coming out of a recession.
Survey the rest of the market landscape and you will have a hard time finding a company as successful as Apple under Steve Jobs. During the past few years we’ve seen few big-name tech businesses step up, innovate, grow and create jobs. And with a lack of vision, the sector could continue to be in trouble.
Here are three technology companies that could use some of Steve Jobs’ innovative mojo:
Intel
It used to be that buying a personal computer meant doing so with Intel (NASDAQ:INTC) inside. So much so that the company made the concept — “Intel inside” — the slogan for its primary campaign to market its microchip processors. Intel was the king of the tech innards heap, making computers faster, smaller and more efficient. The innovations from Intel were fast and furious.
If you think about it, though, Intel’s innovations have yet to connect with the mass market in the same way that Apple has done. While Intel’s semiconductors are impressive, much of the power and capability of its chips are underused. The personal computer has more horsepower than many consumers need. That is a problem that vision could correct.
Jobs kept it simple. He harnessed the power of computing devices and kept them focused on things that people used on a regular basis. Intel’s chips can do calculations at rapid speed, but aside from a small segment of the population, most don’t have any use for what an Intel chip can really do.
It is not enough to develop a chip that keeps breaking the speed and processing barrier. Figure out a way to put that processing power to work in a way that truly improves the lives of the masses. Do that, and growth will return in a major way.
Research In Motion
Innovation can be a tricky thing. One day you have it, and the next day you don’t. That seems to be the case with Research in Motion (NASDAQ:RIMM). The company revolutionized smartphones with its BlackBerry’s e-mail optimization, but it has floundered in the face of stiff competition from Apple and Google‘s (NASDAQ:GOOG) Android. If you stop innovating, you risk complete collapse. Palm, which was bought out by Hewlett-Packard (NYSE:HPQ) is an example of how quickly things can go sour when you stand still.
Apple beat RIM to the next-thing punch with touchscreens and systems fueled by applications. Once it recognized the threat, RIM was forced to the role of imitator instead of innovator, and that’s where it has remained for years. If RIM simply keeps trying to leverage its customer base with imitation, the company will fail or be purchased by a larger player. What might work better for shareholders is a Hail Mary.
What does RIM have to lose? Why not blow up the BlackBerry and launch something altogether different? It’s a risk, but it could help the company regain its footing. Unfortunately, more and more companies view change and risk like the plague. I’m not optimistic Research In Motion will go deep anytime soon. As such, RIM’s likely final destination won’t be pretty for shareholders.
Microsoft
The king of software, Microsoft (NASDAQ:MSFT), had the world in its hands. By the mid-1990s the company ruled the world of operating systems, but it has since squandered its position in the technology world with missed opportunities. Instead, it did what any monopolistic company tends to do: It milked what it had and hoarded cash.
Microsoft hasn’t been associated with innovation in more than a decade. Even when it joined the video game foray, its consoles merely kept pace with the competition — though, to its credit, Microsoft impressed with its Kinect motion-sensing technology. But other than that, imitation. Internet Explorer? Netscape. Bing? Google.
Fortunately for Microsoft, the domination of its operating system allows the company to survive despite its middling results in its other endeavors. But the stock price has been stuck in the mud. Microsoft still has time to revitalize its name. Perhaps through the Xbox 360’s teaming with cable companies? Time will tell. But the only way Microsoft is going to remain relevant is to stop treading water and start moving forward.
As of this writing, Jamie Dlugosch did not own any a position in any of the aforementioned stocks.
