Famed tech investor Fred Wilson of New York’s Union Square Ventures has predicted that by 2020, Apple (NASDAQ:AAPL) will no longer be the biggest tech company in the world. In fact, he doesn’t think it will even be in the top three biggest technology companies in terms of market capitalization.
At TechCrunch’s Disrupt Conference in New York City on Monday, Wilson said that the top three tech companies in 2020 will be Google (NASDAQ:GOOG)(NASDAQ:GOOGL), Facebook (NASDAQ:FB), and “one that we’ve never heard of.”
“I think that they’re too rooted to the hardware, and I think that hardware is increasingly becoming more a commodity. They don’t have anything in cloud to speak of, and the stuff they have in the cloud is largely not good. I just don’t think that they think about data and the cloud in the way they need to think about things,” Wilson said of Apple.
Wilson isn’t the only tech analyst feeling not so optimistic about Apple’s future. Earlier this year, Barclays analyst Ben Reitzes, a longtime Apple bull, downgraded Apple stock from Overweight to Equal Weight. “Frankly, we just couldn’t quite bring ourselves to use smart watches or TVs as reasons to raise numbers — nor were we fully convinced that these products could move the needle like new categories did in the old days,” wrote Reitzes. “As a result, we believe it is time to step aside, given a maturing smart phone market.”
Reitzes also believes that the company is simply relying too heavily on hardware and not giving enough thought to the cloud. He even went so far as to compare Apple to Microsoft (NASDAQ:MSFT), something that doesn’t exactly paint a rosy picture for the Cupertino, California-based company.
“We look at a valuation analogy versus Microsoft from 2000 to about 2010 and see no precedent that large-size tech companies simply start to broadly outperform again after a tough year or two if the law of large numbers is catching up to them and margins have peaked,” wrote the Barclays analyst. “As a result, there doesn’t seem to be anything wrong with saying shares could be range-bound as we move from product cycle to product cycle until we can see Apple creating entirely new markets in the cloud.”
Apple’s second-quarter results weren’t exactly encouraging either, as the company reported slowdowns in sales of both iPhones and iPads. While sales and earnings were both up, the company remains haunted by the fact that it hasn’t introduced a new product category in four years, since former CEO Steve Jobs debuted the iPad. New CEO Tim Cook hasn’t quite proven that he can be as innovative as his predecessor, and some are skeptical that the company can reach its former levels of glory again.
New Apple products that are rumored to be coming out this year include the iPhone 6, the iPad Pro, and the iWatch, which will represent a new product category. Analysts are pretty mixed on their feelings about these products, with some saying that rumored improvements to the iPhone and the iPad as well as the company’s first venture into wearable tech will boost sales; others are more skeptical.
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