But which company is the most vulnerable in today's quickly changing market? None other than Apple, according to one panelist speaking at the Techonomy conference. Despite Apple's massive market cap and blockbuster products, it's the most vulnerable because it has to constantly maintain its innovation advantage in hardware to keep consumers coming back, said Alec Ellison, chairman of investment banking at Jefferies. In terms of "stickiness," Apple doesn't have as many hooks to keep consumers coming back, he said. "Stickiness is key. If you look at those three, Apple I think is the weakest from a stickiness perspective. It has the most valuable brand, but it has to maintain the innovation edge to continue its position in the marketplace." (Jeffries has buy ratings on all four companies, Ellison noted, though his analysis was his own view.)
Ellison also said Apple's retail stores, which have been a source of strength in showing consumers the Apple experience, could become a source of weakness and an "albatross" in the future. He said the stores could become like Disney stores, which were popular but became a drag after people stopped visiting them.
Facebook, meanwhile, has questions over the quality of its management team, said Mark Mahaney, formerly an analyst at Citi. He said Techonomy's David Kirkpatrick knows Facebook CEO Mark Zuckerberg better than anyone else. Investors do not know Zuckerberg or the management team very well. "David (Kirkpatrick) spent more time with Mark Zuckerberg than anybody else has. That's a bit of a problem." It will take a while, just as it did with Steve Jobs or Jeff Bezos for Facebook's management team to prove themselves, Mahaney said.
Facebook also hasn't invested enough in mobile and it was late with its iPad app, Mahaney said, citing Facebook's admission that it made mistakes in its mobile development. "Facebook's margins are too high. They need to be much more into investment mode," Mahaney said.
Google has the most data on users and Facebook may be second in that category. But Amazon has the most "interesting commercial data," Mahaney says. "They have the richest set of data on consumers, I think," Mahaney said. "That to me will be the database winner over the next 5 to 10 years." That gives Amazon a powerful defense in the future.
Video is the next big battleground for these companies, and the winner will be determined by who gets the most compelling video content, said Steve Hasker, president at Nielsen. In addition those that can reach the hardest-to-reach audiences will have an advantage, he said.
For startups it's hard to directly challenge Facebook, Amazon or Google, which each have "very deep competitive moats" around their businesses, Mahaney said. Facebook has strong network effects, Google has spent more than $20 billion perfecting its search engine and Amazon has spent years establishing its distribution and retail network. They could create a vertical in ecommerce like Fab.com or smaller verticals in search, Mahaney said.
Even though these four companies are powerful, there will definitely be a disruptive company to break into this group in the next five years, Mahaney said. It could even be a company from outside the U.S. such as Tencent, he said.
