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TheStreet Open House

[video] Opportunity Apple Leaves Spells Doom for Microsoft, HP (Update 1)

Stocks in this article: AAPLMSFTHPQAMZNGOOG

Updated from 9:30 a.m. ET to include CNBC video and additional analysis on Page Two. 

NEW YORK (TheStreet) -- Toward the end of my Black Friday hit on CNBC, Simon Hobbs spoke of an "opportunity" for companies who do not premium-price their products the way Apple (AAPL)AAPL does.

Here's the CNBC hit where Hobbs refers to me as "a man of ... great wealth." I'm not sure where he got that from, but, nevertheless, this Apple discussion from Black Friday helps place context around the present article. It's what spurred my thinking and triggered my focus on the "other" category I concentrate on throughout. 

So, yes I conceded that Hobbs is correct. Opportunity exists for everybody from Samsung to Amazon.com (AMZN)AMZN to Microsoft (MSFT)MSFT to Hewlett-Packard (HPQ)HPQ to come in somewhere under Apple on price. But what's does going after this so-called opportunity actually accomplish?

If you're Samsung and Google (GOOG)GOOG, it brings market share. That's not Apple's strategy. It's not the type of approach I can get behind; however, it works. Samsung and Google have claimed their turf, gobbling up market share as vendor and platform, respectively.

In smartphones, Samsung and Google's Android trounce Apple for global market share. In the U.S., the Android platform beats Apple handily, while Apple holds a comfortable lead over Samsung as a smartphone OEM.

It's a similar story in tablets. Worldwide, Apple's the top vendor. Android, led by Samsung hardware and other fragmented players, provides the dominant platform.

So far, we have three viable strategies:

  • Apple as the premium smartphone and tablet vendor and platform.
  • Samsung as a (or the) major market share player in all areas, particularly global smartphone sales.
  • Google licensing Android to anybody who wants it as to extend the footprint of its ecosystem, chiefly its prolific advertising network and emerging software and services.

Amazon employs a fourth seemingly viable strategy.

Because Jeff Bezos has a pulse, he has no intention of competing directly with Apple, Samsung or, for that matter, Google. Instead, he uses Amazon hardware -- right now its line of Kindles -- to provide a direct conduit for AMZN e-commerce sales. Much like Google, Bezos uses e-readers and tablets -- and maybe, someday, smartphones -- to enhance a multi-billion dollar core business.

While my confidence in Bezos leads me to believe it does, there's no evidence AMZN's strategy works as well as Google's. Amazon doesn't provide numbers that illustrate how many dollars in sales Kindles generate.

On one hand, Apple's iOS platform dominates e-commerce traffic and sales. As IBM (IBM)IBM reported over the weekend, iOS users spent more per order ($127.92) on Black Friday than Android users ($105.20).

OTOH, we do not know (yet) how Kindles fared. But, beyond that sort of surface scratch data, we'll probably never know what really matters. Does Amazon super-serve its most loyal customers with e-commerce-focused Kindles? In other words, are Amazon devotees spending so much on their Kindles that they make up for weakness throughout the rest of the iPad-dominated food chain? That weakness being Kindle owners who don't use their Kindles to shop or, like me, have them collecting dust in some corner somewhere because they have gone iPad-exclusive.

In any event, we'll call the way Amazon "competes" in the tablet market a fourth viable strategy (with qualifications).

From there, we have the "other" category.

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