Apple, Microsoft Need to Innovate, If They Can

NEW YORK (TheStreet) -- Accuse me of speaking out of both sides of my mouth. If that's what we call it these days, I'm not only guilty as charged, but proud of it.

In fact, I have an article forthcoming on the tragedy of pundits and peanut galleries portraying critical and reflective thinking as "flip-flopping" and "double talk," particularly in politics and the stock market.

But first, we must deal with the schizophrenia that surrounds Apple (AAPL) and Microsoft (MSFT).

Relative to Apple's greatness and Microsoft's mediocrity, it absolutely is all quite schizophrenic.

Where's the Innovation?

Talk about having trouble discerning reality.

Pandora (P) leads the Internet radio space. It continues to pioneer personalization and discovery.

Over the last year or so, lowlifes such as Nokia (NOK) and Research in Motion (RIMM) to more logical players like Clear Channel (CCMO) have introduced little more than shells of Pandora's service. Copycat after copycat has emerged, yet Pandora's audience, ratings and revenue continue to grow.

Now, rumors indicate that Apple might throw its hat in the same or a similar ring. Microsoft made its entrance official this week with xBox Music. Brilliant, enter a category somebody else not only created, but dominates and fail just like you did with Zune.

As I Tweeted on Monday, I am allowed to disagree, even vehemently, with CNBC and TheStreet's Jim Cramer, who thinks xBox Music is a Pandora killer. Yes, Jim lets dissent flow freely, even deep inside Cramerica.

In all seriousness, if you think for a second that Microsoft presents any threat whatsoever here, just examine the lowdown on the cost and effort associated with subscribing to xBox Music, courtesy of a Web site dedicated to gaming, IGN. Final verdict: xBox Music is Useless on xBox, but it could possibly, maybe, um, you never know turn into something in 2013 if everything just happens to fall into place for Microsoft from a mobile standpoint.

This move by Microsoft (and possible move by Apple) is the poster child for a lack of innovation at the top.

The bull case for MSFT sounds more like a plea.

On CNBC's "Squawk on the Street", Richard Sherlund of Nomura Securities said the following about Windows 8:

• It will have a slow roll out.
• It's "not terribly seductive ..."

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