A Lesson for Apple Inc. (AAPL) from High School Biology

Pride Hath a Fall

In contrast, Apple’s hubris is now starting to cut it right at its roots. Steve Job’s brainchild, which rose to become the (only) winner in the space, bringing Research In Motion Ltd (NASDAQ:BBRY) Blackberry and Nokia to the verge of extinction thanks to its ‘unique appeal’ may not be so different anymore, after all. Hence the shift of consumer taste to its substitutes. You may argue, and I agree, that the tech giant is still incredibly profitable and continues to hold the biggest market share of smartphones and tablets in the US. However, we must also acknowledge the fact that there’s a world beyond the US and that Apple (both its products and stock) may now be starting to lose that ‘it’ factor. How else do you explain the stock price slump and the Q4 miss?

Additionally, until a new product like the Apple TV is launched, the company is bidding farewell to its high growth years and now entering the later, stable growth, mature phase of its product cycle. To maintain its stronghold in the industry and create an ecosystem of its own that is as big, long lasting and monopoly-like (caution: monopolies are controversial) as Google’s, it’s about time that Apple starts forming similar mutualistic associations. Imagine if Apple took advantage of the Microsoft-Google rift and had a few million dollars spent to have MS products and services no longer be Android-compatible, and in return, the iDevices ran Bing as the default search engine; what would that do to Google?

A synergistic acquisition or two wouldn’t hurt either. Acquired brands can retain their names, operations, and maybe even management, and function as partially or wholly-owned subsidiaries. It’ll not only help bring diversification to Apple’s operations but also help it sit at the top of the food pyramid and get fed in revenues by these subsidiaries at the bottom. Say if it were to acquire Facebook, as Cramer suggests, Apple could cause a massive blow to its rivals by blocking Facebook on non-Apple devices. Saying ‘there will be no Facebook’ is like saying ‘the world is coming to an end.’ Believe it! The model could be much like Amazon.com, Inc. (NASDAQ:AMZN)’s–just as you buy a Kindle, you’re forced to shop at Amazon. And we know how much the Wall Street loves AMZN.

Here’s to hoping that Apple management will pay some heed to investor concerns and finally put the cash hoard to its best use.

The article A Lesson for Apple from High School Biology originally appeared on Fool.com and is written by Palwasha Saaim.

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