Ronnie05's Blog

Dear Apple and Steve! We miss your insanity…

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 12, 2013

Apple has been one of the most innovative companies in the world. Based on the vision of Steve Jobs, it has created products that truly changed the world, such as the Macintosh, iPod, iPad, and App Store. Despite these accomplishments, Apple’s pace of innovation has slowed, causing the company to lose its edge as a market leader. Aside from creating products that delight consumers and starting an entire industry of app developers, Apple’s relentless and rapid drive for innovation has made investors wealthy. When the company released the iPod in 2001, Apple had less than $5.5 billion in revenue and its stock price hovered around $20; the company’s total market capitalization was $7 billion at that time. Today, Apple’s market capitalization is about $500 billion and its stock price is currently around $500.

Apple’s poor record on innovation in recent years is also reflected in market share numbers. According to IDC, Android has 75% of the smartphone market, compared to Apple’s 17%. In addition, Samsung holds a much larger share of the world smartphone market than does Apple.

Apple was once the leader, innovating rapidly and bringing the most interesting products in the world to market. Today, the company lives on past success and future promises, without the innovation we expect. So, yes, the lack of new products has hit Apple hard. For proof, look no farther than Apple’s poor stock performance, which is truly a measure of confidence in the company.Since Steve Jobs sad passing, Apple has released extensions to existing products rather than anything profoundly new. Product line extensions represent a natural evolution for established brands. For example, Apple has released new iPhones, faster laptops, and better screens on the iPad but nothing game changing since the original iPad.

Lack of innovation is the kiss of death for a technology company that relies on innovation as the foundation for its existence. Both Google and Samsung now offer phones and tablets in various sizes, experimenting with various form factors, sizes, and operating system features.As an interesting point of comparison, look at this chart comparing the stock performance of Apple and Samsung. The blue line shows Samsung while the red indicates Apple. Note which stock is doing more poorly:

apple-samsung-stock-performance

As Apple sits still, competitors are extending the concept of mobile devices and releasing numerous products. Samsung even introduced a smart watch ahead of Apple’s anticipated offering.

With the iPhone 5C and 5S, one has to sadly acknowledge that Apple’s glory days of innovation are past. There are many who opine that Apple’s products are so good that short-term product delays don’t matter in the larger scheme of Apple greatness. This tempting argument is wrong, however, because the company has run out of “insanely great” ideas. That the real problem and explains why the company once known as the world’s innovation king is now relegated to product line extensions and little more.

The iPhone 5C and 5S are great products – but they are not fundamentally new nor are they insanely great!!

Reproduced by ZD.net article by Michael Krigsman

Will Apple’s “Volksphone” re-invent its Smartphone strategy?

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 5, 2013

In 2007, Steve Jobs launched the iPhone and created the touchscreen Smartphone category. Apple had a 5 year window of opportunity and dominance, before Android touchscreen smartphones of comparable quality came anywhere close to the iPhone. Android rode on its strengths combined with Samsung’s distribution and LCD panel strengths to finally offer a comparable device to the iPhone in 2012. Android was also quick to capitalize on the low end opportunity to create volumes for itself as Samsung built dominance in smartphones with successive launches of Galaxy Note and Galaxy S series phones.

In the coming months, Apple will see a shift in strategy in the way it has driven iPhone with the launch of iPhone 5C.Its equivalent to Apple “Volksphones” – a device that targets the mid range of the markets. in doing so, Apple would go back to Jobs’s 1997 advice to Apple: take everything of value you can from the leading product and repurpose it into the next great thing.

iPhone 5C and 5S

Arguably, iPhone has hit its peak aand the way forward would be a decline if it were to persue a high end – high margin – low volume strategy. Instead Apple will now need to shift its strategy from high end – high margin- low volume to mid segment- low margin – high volume strategy. If Apple were to do this, it would be marked shift from the strategy that it has successfully pursued this far. In order to stay relevant and stay in the game, Apple would have to risk cannibalizing its high-end line (while continuing to add to its specs), by repurposing their resources into a mass-market device. There could be additional pickings through the iCloud, Siri and its Application store. Interestingly enough Apple would need to open to other arrangements such as Operator billing for Applications bought on the Apps store.

Apple has already reworked iOS into tablets and the AppleTV, and seems to have a vision for a wearable next device / phone peripheral – iWatch. Also the new Macpro by Apple, promises to be a technology disruptor with new and very high end media or gaming experiences. Thus Apple’s technology flagships are now poised to change from the iPhone/iPad to other devices – most signficatly the iWatch.

Apple has had a great run with its currently-for-sale smartphone strategy, but nobody, including certainly Apple, assumes it can continue. The question is how quickly they can re-invent the smartphone… again.

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