Apple (AAPL) churns out products that are revered by customers with cultlike obsession while Google (GOOG) dominates the world of Internet search and advertising, but only one of the Silicon Valley tech giants is feeling any love these days from Wall Street.
Even though Apple can't produce enough of its new iPad Minis to meet demand, investors have yawned at Apple's overall suite of recent products and are waiting to see if it will unveil a less-expensive iPhone and a 5-inch "phablet" this year in response to cheaper competitors. Its stock is nearly 40 percent lower than its all-time closing high of $702.10 Sept. 19. At the same time, Google has had phenomenal success with its Android software, which has made the company a huge force in mobile computing -- in addition to its search engine that continues to generate billions of dollars in annual Internet ad sales. Its shares are near their all-time high.
"Google dominates the search industry and has no serious competitor," said Tim Bajarin, president of Creative Strategies. "Apple now has more competition and that means they have to drive that much harder to innovate faster. The Street's only going to love them again if Apple continues to have significant products that drive huge demand in the Apple ecosystem."
Shares of Google closed Monday at $834.82 -- up 49 percent from June when its shares reached a recent low point.
Apple shares, by contrast, closed Monday at $430.47, down 23 percent in the same period.
Some of Apple's troubles with investors began in September when it unveiled a flawed Maps App feature in the iPhone 5 that misplaced famous landmarks and sent users on dead-end goose chases. The failure of Apple's Maps App led to the firings of two high-profile managers and caused Apple CEO Tim Cook to issue a mea culpa.
The embarrassment not only exposed Apple to ridicule -- Cook told users to turn to competitors' apps, including Google's, until Apple's map app improved -- but also offered a glimpse of its vulnerabilities.
"The maps debacle showed investors how valuable Google's technology was -- how hard it was to replicate -- and how Apple may struggle as the world moves beyond iTunes toward cloud-based services," analysts with Barclays Capital wrote to investors last week after meeting with Apple executives.
Cook seemed to scratch his head over Apple's disappointing stock performance last month at Apple's annual shareholder meeting -- even as he ticked off a long list of accomplishments for his company that included the launch of its popular iPad Mini in October and customers who sent 2 billion messages a day over Apple products.
Cook told shareholders that he and Apple's board of directors share their "disappointment" in Apple's stock price.
"I don't like it either," Cook said. "The board and management team don't like it."
Apple continues to follow a formula of trying to build the best phones, tablets and laptops on the planet but its recent products "have been a little bit underwhelming," said Ken Dulaney, vice president and mobile analyst for Gartner.
At the same time, Google remains a darling of Wall Street despite a philosophy of what Dulaney calls "chaos management."
"Some of what they do fails and some of it succeeds," he said. "But that's what they want. Google is like a giant university where if an idea fails it's no big deal. Just go on to the next thing."
Roger L. Kay, founder and president of Endpoint Technologies Associates, believes Apple shares should be trading higher and thinks Apple's stock performance is the result of an "emotional response" from investors.
"We like to play king of the hill and once you get to be king, we like to push you off," Kay said. "At one point, Apple could do no wrong. Now it can do nothing right."
Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.