Ronnie05's Blog

Is Apple lapsing into the ordinary?

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 23, 2012

Even while iPhone is the best selling smartphone ever, the loose, tardy iPhone map application make one think, that Apple’s penchant for beautiful and complete products is perhaaps getting over as the Steve Jobs effect begins to fade away. Sharing the lament fron New York Times.

If Steve Jobs were still alive, would the new map application on the iPhone 5 be such an unmitigated disaster? As Apple’s chief executive, Jobs had no tolerance for mediocre products. The last time Apple released a substandard product – MobileMe, in 2008 – Jobs gathered the team into an  auditorium, berated them and then got rid of the team leader in front of everybody.

No doubt, the iPhone 5, which went on sale recently, will be another hit. But there is nothing about it that is innovative. Plus, it has that nasty glitch. In rolling out a new operating system (OS) for the iPhone 5, Apple replaced Google’s map application with its own, inferior, application, which has infuriated its customers. With maps now a critical feature of smartphones, it seems to be an inexplicable mistake.

Part of the reason is obvious: Jobs isn’t there anymore. It is rare that a company is so completely an extension of one man’s brain as Apple was an extension of Jobs. It’s just not the same without the man himself looking over everybody’s shoulder. But there is also a less obvious reason that Apple’s best days may soon be behind it. When Jobs returned to the company in 1997, Apple was in trouble. It could afford to take big risks and, indeed, to search for a new business model. It had nothing to lose.

Fifteen years later, Apple has a profitable business model to defend – and a lot to lose. Companies change when that happens. It happens in every industry, but it is especially easy to see in technology, as things move quickly. Less than 15 years ago, Microsoft appeared to be invincible. But once its Windows OS and Office applications became moneymakers, its strategy became geared toward protecting its two cash cows. Now it is Apple’s turn to be king of the hill – and, not surprisingly, it has begun to behave in a similar fashion. You can see it in the patent litigation against Samsung, a costly and counterproductive exercise that has nothing to do with innovation.

And you can see it in the decision to replace Google’s map application. Once an ally, Google is now a rival. Apple wants to force its customers to use its own products, even when they are not good. Once companies start acting that way, they become vulnerable to newer competitors that are trying to create something new, instead of milking the old. Just ask BlackBerry, which once reigned supreme in the smartphone market but is now roadkill for Apple and Samsung.

Even before Jobs died, Apple was becoming a company whose main goal was to defend its business model. Yes, he would never have allowed his minions to ship such an embarrassing application. But despite his genius, it is unlikely he could have kept Apple from eventually lapsing into the ordinary. It is the nature of capitalism that big companies become defensive, while newer rivals emerge with better, smarter ideas.

Apple and the power of a cult brand

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 18, 2012

Apple demonstrated the power of a cult brand with the launch of iPhone5. While the Androids (HTC One, Samsung Galaxy SIII, Samsung Galaxy SIV) are already at par with the iPhone5 as a device, which led a luke warm reaction to an otherwise hyped launch of iPhone5. However, if the demand/pre-orders are any indication – iPhone5 is a blockbuster already.

The Queue of early buyers outside the Apple store at Fifth Avenue

Consider this-

1. iPhone5 sold of 2 million units in 24 hours of the phone going on sale

2. It is expected that iPhone5 will sell 58 million units before the year closes (Bloomberg). Contrast that to Samsung Galaxy SIII which will have sold 30 million units in 8 months. iPhone5 would have sold double of the SIII numbers in half the time. Thus the sell thru rate is 4X of the Samsung Galaxy SIII.

3. iPhone5 will generate $36.2 bln. More importantly Apple’s early release and carrier/channel commitments would mean that it would have effectively blocked volume build up on Nokia Lumia series from channels and carriers. Apple has already taken 73% of operating profits in smartphone space. TheIphone5 frenzy could end up furthering that number such that there is not such space left for competition.

4. FBR Capital Markets predicts Apple will 250 million iPhone 5 units over the device’s lifetime. That amounts to $144 billion in revenues, or roughly three times all the revenues that Apple has made from the iPhone in its five-year history.

5. The Apple share price topped $700 basis the pre-bookings that have been received by Apple. There’s still the 7” iPad thats left to rock the Android Tablets boat and taking the unassailable lead on the Amazon tablets.

6. The demand appears to be fueled by iPhone customers who are looking to upgrade. A survey in UK by Usurv indicates that 44% of existing iPhone users want the Apple iPhone 5, while 20% of all smartphone users want to upgrade to the new iPhone without needing any further information about it.

7. Meanwhile, the price for the iPhone 4S will drop to $99 for new contract signers, and the iPhone 4 will be free on contract. That again is a huge fillip to the consumers who intend to buy Apple.

8. Add to this, the fact that there are new customers in China which is untapped by Apple yardstick

Valuation of technology companies (source: finance.yahoo.com as of 17th September 2012)

Interestingly, if you look at the Market capitalization of Apple – not only is the most valuable company in the world – it is more than the combined m-cap of the Rank 2 (Microsoft) and Rank 3 (IBM) technology companies in the world.

It is more than the combined valuations of Rank 3 (IBM) , Rank 4 (Google), Rank 5 (Oracle) top m-cap companies in the technology space.

Dig deep and Apple ends up more valuable than the combined valuations of Rank 4 (Google), Rank 5 (Oracle), Rank 6 (Amazon) and Rank 7 (Intel).

On the final count Apple is a shade behind the combined valuations of Rank 5 to Rank 10 which includes Oracle, Amazon, Intel, Qualcomm, CISCO, EMC put together.

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How the iPhone5 measures up?

Posted in Mobile Devices and Company Updates by Manas Ganguly on July 7, 2012

At launch, iPhone was christened Jesus Phone and over the last 5 years, while there have been challengers to crown of the “World’s best smartphone”, iPhone has seen most of the challengers and challenges off. The list of iPhone contemporaries includes Moto Droid, HTC Evo 4G and Samsung Galaxy SII prominently.

However with every iteration, the Android army has gotten nearer to the iPhone so much so that Samsung Galaxy SIII is arguably a better device than iPhone4S. With a 4.1 upgrade, the Siri factor should also take care of itself (Google Now).

However, if rumours are to be believed the iPhone5 will do what it is expected to do. Raise the bar a notch higher for the Samsungs, Motos and HTCs to aspire for. Here’s how the iPhone5 scores over the Samsung SIII

1. Samsung will retain the screen edge with the massive 4.8″ screen. However to iPhone5’s credit, this is the first screen size upgrade to iPhone in 5 iterations in 5 years. Apple will thus graduate to 16:9 resolution, rather than the 3:2 currently.

2. It is rumoured that the Exynos processor, which powers the SIII will be the one that will power iPhone5 with a quad core.

3. In terms of design, Apple will hold the aces with a supposed Liquid metal which is quasi glass feel which in terms of touch and feel will be heads and shoulders above the Plasticy Samsung SIII

4. Perhaps the most earth-shattering change in the iPhone 5 is that it’ll reject the 30-pin connector used across iPods, iPads and iPhones in favour of a much-smaller (reportedly) 19-pin model. While a converter would be in scheme of things, this could momentarily create inconveniences for hardware/accessory makers in Apple stable.

5. Apple has sacrificed an increase in battery power to maintain the slimness of the machine. However one expects that it would still be higher than the 1430 mAh in iPhone4S

6. iPhone5 slimness quotient is worth raving. iPhone5 would cut the slimness quotient by a factor of 19% for iPhone 4S and 11% against the Samsung Galaxy SIII

7. In terms of pixel density, iPhone5(325PPI) would be 6% more richer than Samsung Galaxy SIII (305PPI)  and 13% richer than iPhone4S(305PPI).

8. Last and final, rumours abound about 3D camera given the Apple patents around the same. While its a long shot, it is a dream shot. Hope Apple gets this through because the camera story needs to more than a linear progression into something more meaningful

Any bets on the Apple share price at iPhone5 launch? I would bet $700

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