In 1984 Steve Jobs commissioned one of the most famous adverts of all time, a vision of a dystopian future. You may remember the rows of nondescript people, lit in grey, industrial tones,marching through a tunnel in front of a monochrometelescreen, when arunner appears, sprints and throws a hammer through the telescreen.
People often talk about a dystopia; but I think, with hindsight, the runner won. The future we now have, led by companies such as Apple (NASDAQ: AAPL.US) and Google (NASDAQ: GOOG.US), is about as far from a dystopia as we could possibly be.
Both Apple and Google have a stake in the technology of the now and thefuture: but which is the better buy?
Steve Jobs was, above all else, a perfectionist. It was both his main strength, and also his great weakness. It meant that he created in the iPod, the iPhone and the iPad devices which were well-nigh perfect (in contrast, remember the Apple Newton?) This is now Apples main strength it makes products and designs software to such an impeccable standard no other company can match it.
Thats why Apple is now the leading brand in the world; it represents in touchscreen, metallic box form, Jobs perfectionism and good taste.
But Jobs perfectionism also meant that Apple failed to share its OS with other companies, and this market is now dominated by Googles Android. It also meant that while competitors such as Samsung would broaden the market byproducing a myriad different forms of smartphone, Apple would produce just one phone. So Apple was behind with releasing the larger-format phones thathave taken so much of the market.
Tim Cook has realised this and is widening the variety of Apples products while still maintaining the premium feel of Apple products and the innovation that Jobs espoused. This more balanced approach is, I think, the main reason why Apple is now even more successful than when Steve Jobs ran it.
If Apple is about perfectionism, then Google is about (how can I describe this?) democracy. Think about Android, Googles smartphone OS. This is being shared free-of-charge to all smartphone manufacturers.
Instead ofimposing its software on people, Google has let people choose its products simply because they are the best products around. Chrome is the fastest web browser,and it is now the most popular web browser in the world. Googles search engine emerged as the worlds leading search engine because it is better than any other search engine. And Google web pages are ranked depending upon how many people have read these pages as pure a form of democracy as you can think of.
Likewise, products such as Google Docs, Google Maps and Google Translate are popular because they work so well. Googles brand is really about speed, efficiency and simplicity.
In a similar way, when it researches future products, Google employees havebeen let loose tothink up ideas about anything and everything, from driverless cars to renewable energy.
If all this democracy and empowerment is a very positive thing, I think it is also Googles weakness. Why? Because I think it has made Googles innovation rather disparate and lacking in focus. I just wonder whether Google could learn from Apples more focused innovation, and its greater strength in marketing and brand-building.
Whats more, although Apple is the more valuable company: it is on a P/E ratio of 17.8 compared to Googles 27.9, plus Apple pays a 1.6% dividend.
Because of these reasons, although both areimpressive companies, I think Apple, at the moment,just has the edge.
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Prabhat Sakya has no position in any shares mentioned. The Motley Fool UK owns shares of Apple and Google (C shares). We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.