Fred Wilson's criticism of Apple comes down to the bear argument: 1. Apple is a hardware company; 2. Hardware inevitably becomes commoditized over time. He has been bearish on Apple for some time and, so far, mostly wrong but, Apple does need to strengthen its cloud offerings imv.
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VC Fred Wilson: By 2020 Apple Won’t Be A Top-3 Tech Company, Google And Facebook Will
Fred Wilson of New York’s Union Square Ventures, one of the top tech investors around, believes that by 2020, the biggest tech company in the world — Apple — will cease to be the most important, and won’t even be in the top three.
Speaking at today’s TC Disrupt conference in NYC, he predicted that the top three tech companies, instead, will be Google, Facebook “and one that we’ve never heard of.”
Why? Apple, he believes, is “too rooted to hardware,” with not enough tied into the cloud, and that will make it too much of a challenge for it to evolve going forward.
“I think hardware is increasingly becoming a commodity,” he said. “Their stuff in the cloud is largely not good. I don’t think they think about data and the cloud.”
Twitter, meanwhile, he thinks will be “four, five, six, seven… but I’m not sure it will be number-two [or three].”
Wilson’s thoughts on Apple, on the one hand, run counter to what Apple’s stock has been doing in the past 12 months, where it has gone up by 31% as the companies continue to grow sales of its iPhone smartphones and iPad tablets.
But at the same time, Android has vastly overtaken iOS as the dominant smartphone platform, and with that a number of hardware makers, led by Samsung, building devices around the platform that are beating out Apple in winning new users.
Still it’s surprising to think that the tables could turn so dramatically in, effectively, six years. It wouldn’t be the first tech company to drop out in value even if it holds mindshare. Just look at Yahoo, which is expected to drop out of the Fortune 500 for the first time when the annual list gets published in June this year.
It would effectively also mean that the ongoing trope that “software will eat the world,” championed by other investors like Marc Andreessen, will actually hold true for years to come, with no one able to take hardware beyond the point of commodity status.
Speaking to Michael Arrington on stage, Wilson said he had no idea what will occupy number-three in Apple’s place, “I sure hope that I’m an investor,” he added. |
