Years of taking trains finally caused me to spend some time on a simple question – why people are standing in overloaded trains, while there are available seats at the same train? Apparently simple question might have a bit complex answer.
In those days of tectonic market changes, while dinosaurs (Verizon-Vodafone) and dead bodies (MSFT-NOK) are eating each other, AAPL are unfortunately not surprising us and come with boring cost and technology driven values. It felt like they have planned something game-changing, but at the last moment things went wrong and they had to improvise with colorful market segmentation, performance that uncle Bob does not care about (usually gets on the way) and some software gifts on the house.
As I wrote previously, APPL are already on S-curve saturation stage (and even starting decline) at least couple projects ago for iPad and iPhone (starting 2012) and of cause for iPods (thanks to cannibalization) starting 2006.
Demand derivative for Apple products – Saturation or decline stages of S-curves
Let’s wait a bit (couple weeks) and tell based on “news peak” – the dynamic part of demand reaction to 5C/S what is the passion level? It has to be higher than the previous to keep the revenues same, in which I have a doubt. “World needs a New product” – the chart is screaming. New S-curve is close. It is going to be someone else if not you… if not now…
As for acquisitions… I learned that it works when lots of factors take place and in the first place it has to be symbiotic relations, while 1+1 is greater than 2. Otherwise it does not make sense to purchase another company – you just change one type of capital by another (even not taking a usual premium into account). If the bundle itself does not bring a newborn value, the result is going to be doomed. I know lots of companies that were destroyed by acquisition. And it is always pity, because something nice and unique is lost. What can we expect from non-innovative giant purchasing another failing one? Different cultures, different business domains, different histories, different legacies, different locations – those challenges are not going to assist in finding a new significant value in already existing HW/SW usage. If it was hard to ramp previously for MSFT, now it is going to be even harder. Good luck though with company that lost 70% in its value and in demand for its products during last decade. Old tech-world has its strong sides of legacy and deep pockets.
Verizon-Vodafone, I understand importance of horizontal expansion and economics of scale… but $146B!!! It looks like totalitarianism rather than scale. It is 54 times of annual revenue of Zimbabwe… I’m just saying.
Even if you are not familiar with the term “Worthington jet”, you are most probably familiar with this beautiful effect:
Pic 1. Worthington jet
It becomes less beautiful when it happens in the toilet. This is a very prosaic analogy, but the concept development should touch every problem regardless its beauty. There might be various approaches to the problem that are barely taken into account in today’s industry.
Here is couple of possible solutions I thought about. First approach is having middle layer between you and water while second is changing the problematic substrate – water (in TRIZ language “separation upon condition”).