Latest quarterly results from bellwether Apple
Inc. ( AAPL ) have shown how
precariously placed the technology company is at the moment. Once
the darling of the markets, many believe that the best days of the
iPhone maker are over for all practical purposes. We are now
looking at IBM Corp. ( IBM )-like prospects
from the company, with above average growth but nothing like the
kind witnessed in the salad days of the late Steve Jobs.APPLE INC (AAPL): Free Stock Analysis ReportABERCROMBIE (ANF): Free Stock Analysis ReportBEST BUY (BBY): Free Stock Analysis ReportFACEBOOK INC-A (FB): Free Stock Analysis ReportGOOGLE INC-CL A (GOOG): Free Stock Analysis
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In fact, Apple's current boss Tim Cook has had to reassure
investors that the company has "some really great stuff coming in
the fall and across all of 2014." This is in sharp contrast to
founder Steve Job's secretive (some would say arrogant) approach in
the past. In fact, Cook has adopted an open attitude which is
designed to show how concerned the company is about customers who
spend a large amount of their time using Apple products.
All this clearly illustrates how fickle the fortunes of a
technology company can be. So if a technology firm, even a giant,
falls behind the level of innovation required stay on top of its
game, it is looking at hard times. A survey released by
Piper Jaffray Companies ( PJC ) this month shows
that Facebook, Inc . ( FB ) and YouTube --
owned by Google Inc ( GOOG ) -- are fast
losing popularity among teens compared to a year ago.
This is a trend which, if largely true, could prove to have
far-reaching effects for companies from the retail, fashion and
gaming segments as well as others catering to this age group. This
is because teens constitute a consumer segment worth $819 billion.
And what people have to say on social media significantly impacts
the purchase decisions of customers. According to the study, more
than 50% of teens have said that social media influences their
This is why marketers focused on this segment have to constantly
match the changing preference of teens and their social networking
behavior. The report from Piper Jaffray shows how this phenomenon
is reflected in the real world. Abercrombie & Fitch
Co. ( ANF )
and Best Buy Co., Inc. ( BBY ), who were on the
list of top ten ecommerce websites but no longer figure this year,
have lost out in terms of sales as well.
While YouTube continues with its attempts to push up revenue
through innovative advertising, Facebook has more than a few
problems on its plate. The likes of Whatsapp are fast grabbing
share of the time people until very recently spent on Facebook.
More and more time is now being spent using these messaging apps,
and Facebook is fast losing its young and contemporary image.
Meanwhile, Google Plus has increased its number of "social sign
ins" significantly in a relatively short period of time. And Orkut
still remains a force to reckon with in India and Brazil.
Facebook often says that its huge database of user information
gives it a major edge over other social media networking options.
However, how high the switching cost of Facebook actually is
Of course, Facebook continues to be the most popular website
worldwide. Users continue to spend several hours a week on the
site. However, it has fallen behind on the technology front, as is
illustrated by the Whatsapp example. The newly introduced "Graph
Search" function has yet to achieve much popularity despite the
hype surrounding its launch. Meanwhile, the new Android-based
launcher "Facebook Home" has received largely negative reviews. It
remains far from popular on the Google Play store.
In contrast, a more focused site like LinkedIn
Corp. ( LNKD ) has increased
revenues and profits through a clear and decisive strategy. Its
switching costs remain high since it focuses only on business
professionals. As users switch off from Facebook to allot more time
to their real lives, the social networking behemoth needs to become
more relevant to users and advertisers alike. Technology, strategy
and management all need to be changed radically. It seems Mr.
Zuckerberg has his work cut out for him.