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TheStreet Open House

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

According to IDC, for Q3 2013, "Others" accounted for 35.3% of the worldwide tablet market. Behind Apple, Samsung, Asus, Lenovo and Acer, there's a smattered fragmentation of names such as Amazon, Microsoft and HP alongside ultra low-end white label tablet makers.

That's opportunity?

Scrapping for 35% of a market served by one company with a potentially viable strategy, a handful of billion-dollar behemoths who have lost their way and dozens of relative degenerates who might not even rank a step above your local black market street corner purveyor of consumer electronics?

The worldwide smartphone scene shows the same thing. "Others" own over 40% of the market. But, again, what does that accomplish on an individual company basis? Does anything mired in that scrum translate to the type of long-term investment case you might make for Apple, Google or Amazon?

For goodness sake, domestically, according to comScore, the Windows Phone platform can't even muster 5% market share. It's stuck at 3.3% for the period ended September 2013, up from 3.1% three months prior.

Does anybody have any faith whatsoever that Microsoft can take 5% to 10% market share in smartphones or tablets? Or that HP can get its act together and get on the radar in tablets? Or that some other random company will emerge and hit a number worthy of a headline? And, if this happens, will it actually matter?

And, furthermore (!), are these effectively random others (outside of Amazon) selling anything that matters to go along with their inferior, corner-cutting and relatively low-priced devices? According to one analyst, 90% of iPad buyers over the weekend also picked up an Apple-branded smart cover. I know I did. My wife surprised me with an iPad Air. Within hours of receiving it I was at the Apple Store picking out my smart cover. I was hardly alone. Again, an experience, not to mention high-margin, impressive and, to top it off, well-made accessories the "others" simply do not have. 

The more I think about it, I'm not even sure if being part of the fight in this "other" category qualifies as opportunity, namely for relative has-beens like Microsoft. It's an opportunity by default; as to say, management at places such a Microsoft and HP have no idea what to do or how to proceed otherwise. They'll stake out obvious territory as opposed to actually reimagining and then reinventing their businesses from the inside out, not the outside in.

The more I think about thinking about it, the sadder it gets. It's a game of chase these once-iconic names have absolutely zero chance of coming close in, let alone winning. Picture yourself chasing the peloton at the Tour de France. That's what this pack of "others" is up against. Insurmountable. Waste of time. Waste of resources.

However, as they misguidedly spend money on dead-end smartphones and tablets and pose with false bravado against Apple, they keep telling investors how "excited" they are about their new products. Often the same products that didn't work last year. Half-truths and delusional thinking won't make them, lame tweaks and all, work any better this year.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist for TheStreet. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.
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