) launched its new iPhones, while
) took its Xbox Music to rival devices.
Apple Doesn't Need a New iPhone
The long-awaited new iPhones
last week, sending Apple shares crashing. This is not the first
time that an iPhone launch negatively impacted share prices. In
fact, as Dan Gallagher of marketwatch.com pointed out, share
prices have declined after the announcement in three of the
preceding five years. But let's see what's different this time
First, the smartphone market in developed countries is getting
saturated and Apple is having a hard time attracting new buyers.
Second, the iPhone is a premium product in a difficult economic
backdrop with many competing products and it will get
increasingly difficult to get carriers to subsidize. Third,
Apple's marketing efforts leave a lot to be desired.
On the other hand, these factors have created the perfect
background for underdog branding, a concept that was very
effectively used by
) to take its market share from 11% to 35% back in the 1960s.
Avis used the slogan "We're number two, so we try harder." Today,
"Avis" is a premium brand, and the company's value services are
sold under the "Budget" brand.
The problem with Apple is it is pulling down its own brand.
Today, first-time smartphone users have many options and Apple
needs to tell them very loudly "Why Apple - Why iPhone?" Instead
it is saying "We also do plastics." It's true that a phone is a
commodity item and price erosion and progressively stiffer
competition should be expected. But it's also true that you can't
succeed by apologizing for who you are, or worse, if you
increasingly don't know who you are any more.
Microsoft Will Share Its Music
Microsoft has announced that Xbox Music is now available
across operating systems, devices and through free streaming on
the Web. First launched roughly a year ago, Xbox Music is an
all-in-one service, combining subscription streaming
Spotify-style, Web radio
)-style and individual track purchases iTunes-style. The new Xbox
Music apps that make the expansion possible are now available for
download from the Apple App Store and
) Play Store.
The app allows saving of favorites and playlists across
devices and will soon be able to create custom playlists,
artist-based radio stations, offline listening and
download-to-own. Additionally, Xbox One users will for the first
time be able to listen to music while playing games.
The expansion is a big deal for the music service, since
Microsoft has less than a 4% share of the mobile device market,
which is where all the action is. With the expansion, Xbox Music
gets an entry into the rest of the market. Music consumption
patterns have changed radically over the last few years and
Microsoft's service is now catching up.
Whether it catches on or not is a different story and its
devices strategy will likely play an important role. We already
have the Google ecosystem and the Apple ecosystem and it's good
to see Microsoft taking action to create the Microsoft ecosystem.
There's a humongous amount of work to be done, of course, but the
fact that Microsoft is showing some direction is encouraging.
At the Intel Developers Conference (IDF) held last week,
) displayed yet again how it remains the technology leader. It
said that 22nm chips were already shipping and 14nm would ship by
year-end. It also remains on track for further shrinks over the
next few years (in keeping with the tick-tock strategy).
The resultant decline in costs means better margins for Intel,
while the increased computing power and energy efficiency means
better functionality for customers. Intel is now getting inside
not just PCs, notebooks and ultrabooks, but also tablets and
chromebooks. It is working closely with both Google and Microsoft
and this year will see a huge volume and variety of Intel-powered
devices run by competing operating systems. In short, Intel plans
to be everywhere.
On that note, the company president Renee James described the
evolution of computing through three stages - task-based,
lifestyle-based and integrated computing. As the names suggest,
Intel was the leader in the task-based or desktop computing phase
and successfully defended its market for years. It was so
successful in fact that it was almost complacent, nearly missing
the current phase that is to do with lifestyle (computing where
you want it).
But there are indications that this phase will give way to the
next, when everything in the world (medical devices, home
appliances, industrial automation, wearable computing, etc) will
be connected and intelligent. And Intel promises to play a
leading role in that evolution.
Last 6 Months
Other stories you may have missed-
Dell goes private
) shareholders voted in favor of Michael Dell's privatization
plan (to close in 3Q14) and will be rewarded with $13.75 a share
plus a 13 cent dividend. The process became easier after activist
investor Carl Icahn withdrew from the fight.
) to be
Hewlett Packard (
) launches new
) launches Screen App
: Yahoo launched a video controlling app called Yahoo Screen for
iOS; channel swiping and episode switching have never been
easier. It simultaneously entered into an agreement with Viacom
to offer clips from popular Comedy Central shows through the app.
Comedy works, especially in small doses, and especially when the
device on which you're watching is hand-held. Yahoo hasn't said
if and when the app will be available for Google's Android.
) Acquires Whiptail
: Cisco forked out $415 million to acquire solid-state
virtual-memory system maker Whiptail. Cisco will integrate the
technology to improve the speed and efficiency of its Unified
Computing System (UCS), which bundles servers, storage and
networking products for data centers. Getting serious about SSD
storage for the enterprise is a first for Cisco, but the
acquisition is timely and represents a multi-billion dollar
Western Digital (
Yahoo Users (And Shares) Jump
: CEO Marissa Mayer said that Yahoo's user base (ex-Tumblr) has
grown 20% since she took over in July last year. Comscore
recently said that monthly active users of Yahoo properties
surpassed Google's, so this doesn't come as much of a surprise.
But the CEO warned that the turnaround plan (i.e. the impact on
revenue) involves three years of patience. In the meantime,
investors may be able to cash in on the Alibaba IPO.
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