In fact, the tech sector has been increasingly populated with companies that are in "coopetition"—cooperating and competing simultaneously. Look no further than Nvidia and Intel or Microsoft and Google . As it turns out, frenemies aren't limited to Lindsay Lohan's and Rachel McAdams' "Mean Girls" flick or middle schools throughout the country ... They also populate the tech sector.
And while it's true that competition can be bad for business, particularly when it comes to head-to-head products, that doesn't mean there always has to be just one winner.
Let’s look at the previous consumer tech ‘hot topic’ as a lesson: Netflix . The reason for its 60 percent drop in the last two months did, ultimately, come down to competition. Its stark pricing increases in order to encourage subscribers to switch to streaming were an utter failure because they were executed when NFLX hadn’t yet built up enough of a streaming library to maintain loyalty.
That said, while the bears ran a victory lap after the NFLX debacle, those same bears missed the upside of one of the top performers since the market bottom. For example, research house Wedbush and UBS both had “Underperforms” on NFLX since early 2010, missing out on what was a triple. And while Whitney Tilson’s ill-timed short correctly pointed to competitive concerns, he certainly didn’t profit from this foresight.
On Mad Money, we recommended NFLX at $54 in October 2009, catching a huge run, and as Jim recently said, while we always encouraged taking profits along the way, we should have pounded the table harder after the announced pricing changes. After all, as we’ve said, timing is everything.