â€¢ Apple reclaimed the title of the worldâ€™s most valuable company $415B vs Exxon Mobilâ€™s $413B (Yahoo Finance)
â€¢ The $97.6 billion in cash that $AAPL has is higher than the market value of 448 of the companies in the S&P 500. (Capital IQ)
â€¢ This was the 2nd highest profit quarter of any company ever. ExxonMobilâ€™s Q3 08 profit of $14.8 billion needed $147 barrel oil and $140 billion in revenue. (WSJ)
â€¢ Sales rose 73% to $46.3 billion â€” so much for the law of big numbers working against them (CNN/Money)
â€¢ In 2009, Apple sold more iPhones than it did in 2007 and 2008 combined. In 2010, Apple sold more iPhones than it did in 2007, 2008, and 2009 combined. Last year, Apple sold 93.1 million iPhones, slightly more than it did in in 2007, 2008, 2009, and 2010 combined (Matt Richman)
â€¢ Appleâ€™s profit of $13.1 billion was equal to their revenue in Q4 2010
â€¢ If Apple was a country, its market cap would make it 29th biggest nation, its annual revenue would make it the 52nd, its cash position 66th, and its earnings 79th, in terms of GDP (Global Macro Monitor)
â€¢ Appleâ€™s profits ($13 billion) exceeded Googleâ€™s entire revenue ($10.6 billion)
â€¢ Apple has now sold 315 million iPhones, iPads and iPod Touch devices running its iOS software (CNN/Money)
â€¢ Google would activate 59,653,187 Android-based devices during Appleâ€™s fourth calendar quarter. Apple has said that iPod touch sales make up more than half of all iPod sales. That means Apple sold at least 7.7 million iPod touches. And that number, plus 37.04 million iPhones and 15.43 million iPads, means iOS outsold Android last quarter. (Matt Richman)
â€¢ Apple sold three times as many iPads as Amazon sold Kindle Fires (Tech Crunch)
Credit: Barry Ritholtz
Author Archive for GPS
â€¢ Apple reclaimed the title of the worldâ€™s most valuable company $415B vs Exxon Mobilâ€™s $413B (Yahoo Finance)
Black Swan is the buzzword for economists and other street guys across the world. Black Swan is the name of the book written by Nicholas Taleb in which he says that Black Swan is an event which is beyond our thinking.
People across the world have started to call recent financial crisis as once in life time event. If you ask anyone theyâ€™d say its almost impossible to predict magnitude of event like this that would happen once in our lifetime or generation.
Would this economic crisis be called as Black Swan?
My answer is NO. Letâ€™s speak about India.
Our crisis started from realty which started to bubble after unrealistic prices across the board in India. Every tom, dick and harry become Real estate tycoon and people got sucked in the name of owning a house.
10 Lacs worth of house was sold around a crore and people went on to buy despite beyond their reach. Their logic- Todayâ€™s 1 crore house would get a value of 4 crore within 5 years. People started to think an asset would always appreciate than thinking about the real value.
Banks started to give loans to real estate companies without assessing the real value. Their aim is to mint millions in interests. But these banks have forgotten to assess real value of realtors. Banks started to concentrate on variety of activities other than banking. They ventured in Forex, and derivatives which no one understands in the world.
Greed is reason for this crisis. Every product and service was priced artificially and companies have been started overnight and it looted money from public. â€œOvernight millionaireâ€ was the motto for most of the entrepreneur.
Companies went on to stretch beyond their capabilities and core competencies. They took too much leverage. If you donâ€™t think big, youâ€™re dumb. Every company becomes dumb by over expanding in new businesses that are not their core competence. They employed thousands of people and borrowed through various innovative instruments which would be subscribed by a genius called private equity.
Whole India ran at leverage and domestic growth story. If pantaloon enters in retail business, why we should wait was the question asked by Birla group and they acquired some retail companies and started MORE which is now creating more problems for Birla group.
Stock broking is another business in which everyone from Kashmir to kanyakumari started to capture their share in India. Insurance is another. Likewise everyone started everything and they went on to demolish brands and made every service as a commodity.
Everything has been created based on DOMESTIC GROWTH STORY which has been misunderstood by corporate managers who work in air-conditioned room with their PowerPoint presentations. They went on to give amazing numbers to their bosses and as a result everyone went on to venture in a crowded business and made it unviable for everyone who has started it without knowing ground reality about the business.
Whole mess has been started by corporate managers who doesnâ€™t know any ground reality about business but who play efficiently with numbers, statistics, case studies and PowerPoint presentations.
Now these folks are calling this crisis as Black Swan. Mess that has been created by managers without understanding of real condition. Mess that has been created in the name of expansion and diversification. Mess that has been created by leverage. Mess that has been created by greed. Mess that has been created by fictitious value creation.
Boys and girls â€“ Donâ€™t call this as Black Swan. Instead call this as â€œBlack Magicâ€ which has been created due to ill attempts by companies in the name of diversification, leverage and growth.
Here is the funny lists of sites and its registrants.
Domain Name: HOMEGAINSUCKS.COM
Domain Name: ZILLOWSUCKS.COM
Created on: 2005
Domain Name: TRULIASUCKS.COM
Created on: 2005
Domain name: upssucks.com
Registrant:United Parcel Service
Created on: 1997
Domain Name: googlesucks.com
Created on: 1999
Domain Name: YAHOOSUX.COM
Created on: 2004
Domain Name: AMAZONSUCKS.COM
Registrant:Amazon Technologies, Inc.
Created on: 2002
Domain Name: aolsucks.com
Created on -1996
Domain Name: CNNSUCKS.COM
Registrant:Cable News Network
Created on: 1999
Domain Name: FEEDBURNERSUCKS.COM
Created on: 2005
Domain Name: BLOCKBUSTERSUCKS.COM
Created on: 2003
Domain Name: GODADDYSUCKS.COM
Domain Name: ORBITZSUCKS.COM
Created on: 2003
This seems to be buzzword in today’s web 2.0 scenario. We could see the mushrooming of social networking sites that are positioned for college goers, women, old age people, and may be to gay and lesbian (I’m not sure on this).
These sites provide tremendous opportunity for people to find new friends, enjoy time with people by getting date, even finding people for their business, people to sell their products and for satisfying day to day aspects in their life.
This space creates huge opportunity for intelligent guys who could possibly come out with innovative business model that could change the way we do day today things. Youtube is one of the greatest examples of this. This has certainly changed the way we think about our personal videos that could be shared online. It has really stood up against powerful competitors and eventually got acquired by Google for approx $1.65Billion.
Myspace is another example, but unfortunately founders of myspace couldn’t make killer compared to youtube (Even though it got sold around $565 million, analysts believe that it has more potential), but they made substantial returns. We knew the story of Facebook founder Mark Zuckberg, a young genius who refused billion dollar acquisition proposal from Yahoo (How many of us have the guts and confidence to reject this mind boggling offer). And Ofcourse there is flickr and another killer www.last.fm. Its software creates a personalized streaming radio station based on the digital music you already listen to, shares your playlists on the Web, and suggests music from other closely related playlists.
Americans are traditionally strong in founding brilliant tech companies that use to have innovative model with great business viability. So why not Indian minds couldn’t come up with the model that could eventually make millions for its founders. There might be lot of reasons behind this. May be, innovative model in this space might have been unleashed by the likes of facebook, Orkut (Not a brilliant site, but having good market share in India) and others who’re already in this business. I’m very much confident that there is huge talent, Infact genius minds available in India that could possibly works in order to bring unbelievable model that could have ubiquitous place in the history of web 2.0 culture.
www.slideshare.net is one of the brilliant examples of innovative model. It’s an online PPT sharing site which is definitely having the potential to become another blogger and wordpress. I don’t know how they’re going to commercialize it, but it’s definitely an innovative model from Indian Entrepreneurs.
We need online community that could provide support for Indian start ups to large extent. There is no doubt that there are numerous sites like venturewoods, startups.in that are providing support for them, but we need extensive support for start ups. There are lots of sites that are there in United States, but we don’t have any great site that could be helpful for startups. Startups need advice from great guys viz., Alok, Mahesh Murthy, and others. There are infact numerous intelligent people who’d be having tremendous experience in various sectors. We need online community that could connect and work for both of them. There are really quality people who would work for equity, who could work freelance and could effectively contribute for startups.
We need to create trust between persons engaged in this noble issue of building startups. It’s difficult, but it’s quite possible. There might be site in waiting that could really connect experienced guys with start ups. Who knows, because Indians always springs up with surprise like recent missile announcement by DRDO? I’m not kidding!
If you look into newspapers and websites of any journal from United States you won’t miss the word I-phone. Believe me, there are more than 100 articles that was written by technology experts, Apple lovers and others in this business.
Would it become a hit? Million dollar question. But it’s easy to answer. It’s going to be flop of this century. I knew that technology lovers and apple fans would hit at me. I love to get hit by the folks who’re fans of technology, convergence, and Ofcourse Apple.
History says that convergence won’t work in the market. Make no mistake, technologist love it, press love it but public think other way. Is it possible for anyone to think of having a system that could do printing, scanning, taking photocopies so on and so forth from single device? But intelligent people from different companies did that and eventually got failed.
When we think about printing, it’s only HP that’s coming to our mind. XEROX is better in photocopiers. This clearly states that divergence is here to stay and Ofcourse it’s only going to be winning bet. After so many millions and billions in advertising, still few companies love for another battle in convergence.
Apple with its I-phone is doing another mistake, which they did almost a decade before with Newton. For those ladies and gentlemen, who doesn’t know, Newton has been launched as hand held computer. It portrayed its handwritten recognition as key technology in its product. Today there is still palmtop, but there is no Newton. Newton got destroyed because of convergence. Its hand written recognition did lot of mistakes in recognizing and hell lot of funny stories has been written on it. Finally Apple winds up its plan and ended in wasting its precious time and money in the process creating successful convergence product.
I-pod is definitely not a first hard drive for music. But its first hard drive in the mind of people. Why it become instant success. Because it does only one thing in a perfect way- Digital Music. It had the capability of holding more music than any other MP3 players that could store music of just 2 CDs. Its classical example of divergence. It got enormous success because it is a specialist.
With I-phone I’d be able to watch movies, send email, listen to music and Ofcourse make calls. Which battery in this world could last longer by accepting all these functions combined in a single device? I think this is going to be huge task for the folks at apple to come up with realistic answer. Already BusinessWeek has come up with an article that I-Phone is not supporting few email clients. Make no mistakes there are much more to come.
There is another danger for Apple, where they might be getting into competition with focused competitors of Smart phone makers viz., Research in Motion (RIMM) and Palm. Apple is increasing its competitors which mean it is directly or indirectly creating enemies which are not good for its business. Well, you’d argue, if I’m in market, I’d be having enemies, but creating unnecessary enemies are not good for business.
Whatz the lesson for startups from Apple?
Ofcourse we always learn lessons from others or learn from our mistakes. From Apple launch of I-phone, start ups must know that they must be focused and must work as a specialist than a generalist.
If you’re in everything, it means you’re in nothing. Not only that, your business could unnecessarily attract more competition and it could add enemies in the industry. This is definitely not good for start ups.
Start ups must try to focus on a particular technology that should be new and unique rather than converging everything and does one-stop solution which had the history of failure than success in this market. Rational thinking should hold high than emotional thinking. This is one of the most important lessons from this launch.
Convergence stays in newspaper columns, Divergence stays in the market.
I-Pod – Greatest hit of 21st century. I-Phone – Greatest flop of 21st century.
Advertising, Brand building and sales.
Exactly! This is what every start up would think in terms of progress that could happen through advertising.
So whatz aim of advertising. Is it aimed to build brands or bringing customers or for just making a feeler in the industry? Tough question to answer. If you ask advertising pundits, they would say that advertising helps to build brands. They would say that advertising could be helpful to build intangible asset in the mind of public.
Biggest problem for us is that we don’t have any tool to measure whether it hold true to their given commitment. As we know start ups don’t spend much money on advertising. If any startup does have an idea to do so, I’d say its sheer waste of money.
It would be surprising to hear this word from a person who has worked for an advertising agency. But truth is a truth. Let’s see why it’s not wise for startups to go for advertising.
Advertising is costly one: Advertising is always costly. It’s immeasurable. We don’t know whatz return for a particular advertisement. Just single or couple of insertions won’t be enough for a start up. It has to be done constantly and obviously it could incur huge costs. Advertising won’t suit budget of small start ups.
Advertising lacks credibility: Being a start up none of your customers would know you. Moreover by just giving multiple insertions in a top notch journal couldn’t convince your prospects about your products.
Advertising creates competition: Biggest problem of advertising is that you’d get noticed by your prospective competitor. This is not good for start ups. History says that successful companies are averse to get noticed by competitors. Google is great example of how it was averse to get noticed by competition. They kept their biz secret till they get listed in the stock exchange.
Having said these, I won’t say that there is no need for advertising. Advertising could definitely be helpful to increase sales, provided it should be done properly. Advertising should focus on changing behaviour rather than changing attitude of your customers.
Once start ups grow there might be possibility for them to advertise their products. It might become imminent for them to choose advertising. They should try to advertise to focus group rather than working on generic advertising like changing attitudes of customers. By focus group I mean target customers.
Advertising – Behavioural aspects holds the key
Changing Attitude vs Changing Behaviour
“If your assignment is to change minds don’t accept that assignment” – Jack Trout, Marketing Guru
Its simple common sense that it’s impossible for us to change basic attitude of a person. You can’t ask a politician to be clean in his job. It’s almost impossible. But make no mistake most of the advertising gurus are trying to do that and are wasting tons of money in that process. Unfortunately they’re not isolated guys, their consulting counterparts are advocating it and they’re almost complimenting each other.
It’s well known that when we’re almost 14 years of age everything gets finished. We use to have judgment for everything from education, food, interacting with people, making friends and from a to z. Most of the behavioural scientists seem to accept this. We believe what we believe inside within us. We have some conclusions and we work accordingly. But suddenly if someone asks us to change this it’s not possible for us to accept them.
But believe me advertising people are not willing to accept this notion. They believe that attitudes could be changed. Indians like cricket, even though it’s not their national game. Now if you ask a kid on question about national game, you’d be surprised to hear cricket from its answer. That’s the perception. It’s been created and it’s quite tough to change that perception.
But advertising people could try to make people to know about new and unique issue about their products. They should try to focus on uniqueness of their products and they could ask the prospects to try them. This has been said by dozens of marketing gurus decades before me and it could possibly be said by marketing gurus decades after this. But it’s impossible to change one’s attitude. You can’t change attitude of advertising people. They’d always try to achieve impossible. There’s thrill in achieving impossible.
Now coming to the point of attitude vs behaviour, I’d try to make it simple for your understanding. I’m regular reader of business books. If any advertiser would like to advertise business books, they just can’t make me to get impressed by giving statistics of the book. May be just may be I could get impressed on knowing name of the author. That’s definitely one criterion. Other than that, nothing is there. If it’s well known author like C.K. Prahalad, Jack Trout everyone would pick that book. There is no need to advertise too much. If it’s not known author, what could be the gimmick to attract me.
Uniqueness about the subject could play crucial role for me to learn more about that book. May be new technology, new biz opportunity, may be writing about impossible achievement (Black swan), and others. This could be helpful for me to change my behaviour. Yeah, this is what I’m saying about changing behaviour. Everyone would love to learn new things viz., new opportunity, new technologies and others. This is about behaviour. My attitude remains same, but my behaviour might get changed to the given situation. Advertisers must try to change the behaviours of prospects than changing their basic attitude.
I’d give another example on changing behaviour. This is well known example.
“Avis is No.2 in rent-a-cars. We try harder”. This is classical example for behavioural advertising. Its simple logic that people always like winners. But still they love underdogs.
Your favourite team in cricket might be Australia. But still you love India, because its own country, plus they’re behaving as if they’re trying harder. Basic attitude of Indian team remains same, not winning big matches and winning on important occasion, but they tried to improve their status by creating world record (4 Centuries by top 4 batsmen) against Bangladesh and possibly with other minnows.
So whatz the aim of advertising? Quick answer “Building Brands”. How much of truth in it, remains a question. It seems to be ready made answer for any advertising practitioner across the world. We need to ask it to ourselves. Is it possible for us to measure this assertion? It’s really tough to come up with answer.
But we’re constantly proclaiming that Advertising Build Brands. If this is true, how it’s possible for Google, Linux, Microsoft, I-Pod to build brands. Any kid would say that these brands are build by word of mouth than advertising. So why advertising people are often behaving like “Confident Bluffers” than working truly towards their goal of acting as an insurance for brands. Advertising won’t build brands, but it acts as insurance for brands.
Brands could be built by public relations than so called advertising. But don’t misunderstand that advertising is not needed for a brand. Advertising is important for a brand, but it is not a tool to build a brand.
Advertising should be used as insurance for your brand. You must know how to use advertising. You shouldn’t use advertising as a strategy. It’s not a strategy. Ofcourse advertising in one or other way might become necessity, but it’s not a tool to build your brands.
Why advertising couldn’t build your brands. Let’s say for example, you’re coming with hottest technology in online space. Say you’re spending 100k in front page of a magazine. Do you believe that prospects would use your killer app just by seeing your advertising? Ask yourself, would you try others product by just seeing their advertising in front page. It’s not possible. You would love to read reviews of the product, you could probably ask for reference, you could love to get a demo and other writings in the press. Then how it’s reasonable for you to believe that your prospects would love the product by just seeing your front page advertisements.
To conclude, I’d say that advertising should be used properly like your martial skills. Advertising is a precious tool, so you should use it at right time that shouldn’t bring chaos for your finance department. Because Advertising is precious, it’s costly. Act accordingly!