Apple Has More on Its Plate Besides Possible Tax Evasion

Submitted by Abby Joseph at Profit Confidential as part of our contributors program.

Apple Inc. (NASDAQ/AAPL) has had a nice upward run since declining to its 52-week low of $385.10 on April 19, 2013.

While the maker of the “iPhone” and “iPad” tries to rejuvenate its business in light of increased and fierce competition from rivals, Apple is also currently caught in a fight against the tax authorities on allegations of tax evasion.

This is not what Apple and CEO Tim Cook want at this time, given the company is under immense pressure to deliver fresh products to the marketplace that have that “wow” factor.

The iPhone has been around since June 2007, and to tell you honestly, with the exception of a faster processor, larger screen, and some refinements to its “iOS” operating system, the iPhone has really not kept up with the advancements in some of the competing “Android” phones, specifically those made by Samsung Electronics Co. Ltd. through its increasingly popular “Galaxy” line.

Apple continues to lead the pack in the U.S., but as far as the global market, Nokia Corporation (NYSE/NOK) is holding onto the top market position. Nokia’s “Lumia” line, operating on the “Windows 8” mobile platform by Microsoft Corporation (NASDAQ/MSFT), is gaining some ground.

Yet for Apple, the landscape for smartphones and tablets is changing rapidly; it’s now about which company can bring the best phone, armed with the best functionality, to the market the quickest.

I’m in the process of looking at changing my smartphone from my current “iPhone 4” to either the “iPhone 5,” “Samsung Galaxy 4,” or the “BlackBerry Z10” or “BlackBerry Q10” (with the physical QWERTY keyboard) by Blackberry (NASDAQ/BBRY), formerly Research In Motion Limited. (Read “RIM Replacing Apple as the Stock Market’s Tech Darling?“)

Having looked at the comparative features of the phones, the iPhone 5 really doesn’t jump out at me, compared to the Galaxy or Z10.

I wonder if other potential buyers are also coming to the same conclusion. If so, then Apple needs to deliver a next-generation iPhone “5S”—or whatever it will be called—that has the “wow” factor. There’s some speculation the next iPhone will have a fingerprint sensor and be available with more color options (Source: “Will the next iPhone handset be available in GOLD? Apple fans in a frenzy after new 5S parts leak online,” Daily Mail May 16, 2013.)

I’m not sure if I would refer to the reaction to the potentially new iPhone as “a frenzy,” as I just don’t think it will be enough to convince me to wait for the anticipated launch of the next iPhone in September. My thinking is that the Galaxy and Z10 are well ahead of the Apple iPhone. Even the speculation of a cheaper “Q5” phone with a physical keyboard is highly anticipated, especially as a competing product in the emerging (and key) phone markets, including China and India.

Don’t take my word for it: go take a look and compare the phones for yourself. I wonder if you will come to the same conclusion. If so, Mr. Cook will have a lot more pressing problems down the line than trying to convince Congress that Apple’s not trying to evade its taxes.