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Apple Inc. (AAPL) Macbook Dominance Threatened by Cheaper Chromebook

Apple Inc (AAPL) iPhone 7 and Air

Apple Inc. is navigating some troubled waters and Tim Cook must plug some leaks before the ship sinks. Latest news reports indicate that the weakness that Apple suffered in its iPhone sales has expanded into its Macbook product line. Now, the exponentially cheaper and less-imposing Chromebook from Alphabet’s Google outsold MacBooks in the first quarter.

Apple Inc (AAPL) Macbook air and iPhone

Chromebooks Outselling Apple Macbooks

IDC reports that in the first quarter of the year, more than 2 million Google-powered Chromebooks were sold while Apple sold about 1.76 million Macs. One could easily argue that a single firm sold the 1.76 million Macs while a number of firms such as HP, Lenovo, and Dell sold a combined 2 million Chromebooks. Nonetheless, IDC analyst Linn Huang notes “Chrome OS overtook Mac OS in the US in terms of shipments for the first time in 1Q16.”

However, it is worthy of note that Chromebooks are making the biggest inroads into the educational sector while the Macbook has a better demand in consumer/professional markets. One could argue that the low cost (usually under $200), simplicity, and portability of Chromebooks make them suitable for the educational sector.

However, the fact that Android OS apps are coming to Chromebook might be a game changer going forward. Android OS is the biggest mobile OS and Android users would have better incentives to buy a Chromebook if they could get their smartphone apps in desktop version. The growing interest in Chromebooks is not yet a threat for Apple but the future dominance of the Mac is uncertain. It is no longer news that iPhone sales is crashing and other products such as the Apple Watch and Apple TV, and Apple Music are still a long way off from gaining traction.

The iPhone maker posted less than impressive financials during the first quarter and its profit fell for the first time in almost one decade. Investors showed their dissatisfaction with the financials by voting with their wallets and the firm lost more than $40B in its market cap after the Q1 earnings report. More so, activist investor Carl Icahn dumped his stake in the firm and the bearish sentiment became more vocal and louder.

Glass iPhone to the rescue

Of course, Tim Cook is under tremendous pressure to deliver and he has been jumping hurdles and running from country to country in a bid to get Apple back to winning ways. However, the main problem is that Apple under Tim Cook has lost its innovative founder’s factor and consumers are no longer excited about Apple’s products  as they used to be. Interestingly, the firm seems to think that wrapping up the upcoming iPhone 7 in a glass body could get buyers excited about the firm once again.

Allen Horng, the CEO of Catcher Technology, one of the firms that supply iPhone components has confirmed that the iPhone 7 will have a glass body. The device will most likely be sporting a full screen minus a bezel; it would have wireless charging, among other new features. He says, “As far as I know, only one [iPhone] model will adopt glass casing next year,” the “glass casing still needs a durable metal frame, which requires advanced processing technology and would not be cheaper than the current model.”

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.