Weekend Edition – Will Apple Go The Way of Microsoft? - Dividend.com (blog) ~ StrictlyCome

In order to please investors and consumers, tech companies need to innovate with new products that lead to attractive sales and revenues. Otherwise, the companies that fail to push forward with new and inspiring products will get left in the dust as consumers stop buying their goods and investors pull money out of the stocks. While we tend to think of Dell (DELL ^[1] ), Hewlett-Packard (HPQ ^[2] ), and Intel (INTC ^[3] ) as companies that have underperformed in recent years due to the fluid landscape of Silicon Valley, even some of the most notable tech companies can struggle due to the cutthroat business in the tech world.

Microsoft’s Future

On Friday, the big news on Wall Street and in Silicon Valley was Microsoft (MSFT ^[4] ) CEO Steve Ballmer’s announcement that he would be retiring within the next 12 months. Over the past couple of days, there has been a lot of analysis about this developing story, with both positive and negative takes. In his tenure as CEO of Microsoft, Ballmer has been highly scrutinized for falling behind the pack in Silicon Valley, with investors upset that that have not gotten the best returns on their investments. Whether it was failed hardware products, like the Zune or Surface, or disappointing software and operating systems like, Windows Vista or Windows 8, the Ballmer era of Microsoft has left more to be desired for most investors.

It shows that even a company with the third largest market capitalization can still struggle in the ever-changing tech world. Going forward with whomever takes over as CEO, Microsoft will still need to maneuver the declining PC market, which it is highly exposed to, in order to not fall behind like the aforementioned tech companies above.

While Microsoft has been widely covered over the past three days as the tech company that has struggled since turn of the millennium, there is another tech giant that may be facing some of the same obstacles over the next 13 years that Microsoft has faced in the past 13 years: Apple (AAPL ^[5] ).

Where Will Apple Go From Here?

Apple, which is the largest company in the U.S. in terms of market capitalization, has struggled over the past year on the stock market as it has not lived up to its previous extraordinary expectations. Since the release of the iPad, the Cupertino, California-based company has failed to impress consumers or investors with any new innovative products. The only thing we have heard so far are rumors of an iWacth and iTV, but who knows whether these products will come to fruition or whether they will make a splash on the market. Unless Apple is able to regain its shine and start inspiring consumers and investors again, it may be settling in a state of limbo on Wall Street, just like Microsoft.

For both Tim Cook, Apple’s CEO, and Steve Ballmer, it had been a tough time replacing iconic founders and leaders Steve Jobs and Bill Gates, respectively. It shows that leadership is extremely important in shaping the culture and future of a company, especially in Silicon Valley. Ballmer has showed that he was largely unable to fill the shoes of Gates in his tenure as CEO. Now, let’s see if Cook, whose first two years as CEO have not resulted in much hope, will be able to turn it around in the post-Jobs era of Apple.

An Investor’s Take

For investors, especially dividend investors, Microsoft and Apple have been intriguing investment options. Because they both offer above market yields with well known names, I’m sure they have played rolled in many dividend investors’ portfolios.

But for long-term investors, it is still tough to tell whether these companies would offer the best returns over the long-term while building wealth for retirement. Technology companies like Apple and Microsoft are a different breed than more traditional dividend paying sectors like Utilities, Telecoms, and Consumer Staples. These tech companies need to always be striving to stay ahead of the pack with new products and better innovations, otherwise the next big thing will be nipping at the heels of the companies, eventually over taking the position as the hottest tech company on Wall Street and in Silicon Valley. So while dividend investors may be getting nice dividend payouts from Apple and Microsoft in the short-term, it could be for nothing if the stock’s share price fails to appreciate even a little.

Thank you for sharing part of your weekend with me, and please be sure to pass this post on to anyone you think we can get inspired and educated about money, building wealth, and using common sense to do so. Also, don’t forgot to check us out on Twitter @dividenddotcom ^[6] . Have a great weekend!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here ^[8] ^[7] .