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January 28, 2008

What is the next step for Apple

Analysis of: Are Investors Unfairly Sour on Apple? | www.businessweek.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Gregory Birge
Founder and Managing Director, F5 Digital Consulting
Implications: The Apple stock price went from $10 to $200 in less than 7 years. This is a remarkable performance but most investors are worried and would like to have insights on Apple's next move.

Analysis: Few companies like Apple can maintain such pressure on the market, set such innovative trend, induce such envy from consumers, investors, marketers alike.

So how did Apple manage this?

The first reason is because Apple is a top down company. Decisions are made in Cupertino before they are being implemented properly through the chain of countries.
 
The second reason is because Apple is a design-to-technology company. Products are not created based on technology limitations but design visions.
 
The third reason is because Apple has a strong vision and consumer knowledge. Great innovations are created and pushed through the organization.
 
Having said that, however, the company fails or can miss the mark sometimes. The Newton, the Performa, the iSight and the Apple TV are not as successful as they were supposed to be.
 
Some other product lines are doing well, but still lagging behind the industry.
Laptops sales, desktop sales are continuously increasing but the overall Apple market share on those segments is far from reaching the perceived brand image value. Should you question people on the street, they would believe Apple's market share is around 20%-30%. The reality might be closer to 5- 7%. The recent MacBook Air will certainly not change the market share, but it does help contribute to its brand image.
 
Then comes the "Holy Grail", or the new success genes of the company -  iPod, iTunes Music Store, iPhone... The company created new icons and continues to push forward limitations in designs and innovations.
 
The company does what's right: take the consumer's needs and implement them properly in new products.
 
Perspectives are positive because iTMS is lacking behind in all other countries as compared to the US. It means that European markets and Asian market have not YET experienced the full scope of Apple's solutions.
 
On the other hands, barriers to enter those markets are higher than in USA. Apple almost had a fight with Orange in France and could not find a deal with China Telecom to release the iPhone in China. iTMS is only available in Japan and is not as successful compared to the other regions.

No one can tell you how the market will react to those elements. However, we can give you the right information for you to make your own decision.


Other Analyses of the Same Source Article:
Are Investors Unfairly Sour on Apple? - NOT !!!!
January 28, 2008, Author: P.J. Louis, President, PJ Louis LLC

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