Andreas Scherer on Business and Science
Apple reportedly has begun testing a premium iPhone with a revamped display and body, which could be one of three new models the company is expected to launch this fall. The other two likely will be upgrades to the two existing iPhones.
Read more here!
Most companies would be delighted to present results similar to those of Apple. The company announced a $10.33B profit which turns out to be the 23rd highest quarterly profit posted by any company. But then there are three major issues with the Q2 results that we should not take lightly. First, the company “only” sold 51.19 million iPhones during the quarter compared to 61.17 million in the same quarter one year ago. Second, for the first time in 13 years Apple is not able grow its top-line. So, revenues are down. The company reported $50.6 billion in Q2 which is less then the $58 billion reported in the same period last year. Third, profits are down year over year as well.
So, the question arises, is Apple still a growth story? Was this just a blip or is this a beginning of a new trend? A maturing iPhone market, increased competition in the PC market, questions about its ability to further penetrate the Chinese market and general concerns about the macro-economic climate are surfacing. In addition, there is this perception of Tim Cook being a masterful operator but not that visionary product whiz like Steve Jobs. The recently increased focus on paying out dividends and increasing the stock by back program don’t help. These are typically moves by maturing companies to prep up the stock.
In the end, these are no real problems for Apple. The next quarter can answer most of these questions, if Apple is able to get the iPhone sales numbers back on track.
Please find my quote in Ecommerce Times here.
Google solved two major issues by setting up an in-house incubator. First, the company is full of high potentials with bright ideas. Over the years Google employees have left the company to start successful businesses on their own. They are part of a network called Xooglers (short for ex-Googlers). Some have even started their own venture fund like Aydin Senkun who runs the angel fund Felicis Ventures. The incubator gives Google employees an opportunity to work on their ideas and build a business without leaving the Google ecosystem. So, this investment vehicle can be viewed as the ultimate retention tool. Second, the whole idea of Alphabet was to run all businesses that are not core to Google’s mission as separate entities under an umbrella company. This step was designed to increase visibility of all the various business activities such as X, Google Capital, Google ventures. Following the thought process behind the formation of Alphabet, the incubator gives Google the opportunity to build a structured process around the creative energy within its organization. So, instead of implicitly funding ideas by tolerating employee driven side projects, there is a clear vetting process overseen by investment professionals.
Here is the link to the E-Commerce Times article.
Amazon is doubling down on its payment business. Started in 2013 it has reached about 23 million users outside its own web properties which is only a fraction of the 170 million active PayPal accounts. With the recent launch of the Global Partner Program, the idea is that other retailers can set up an e-commerce site using the Amazon log-in to process the transaction. The participating companies are able to offer a convenient shopping experience that doesn’t require their clients to reenter payment information. Obviously, Amazon is charging for this service. By ramping up this business, it will be able to benefit from sales transaction outside its core retail business.
Obviously, Amazon is going after PayPal. By providing convenience and perhaps aggressive terms on its payment service, the company would be well positioned to grow, but there is a catch. Retailers have to think long and hard before they reveal their client data to another retailer let alone the world largest retail e-commerce site. Via this service, Amazon learns what people buy, who they are and what they paid for a particular item. That’s is very valuable information to have in a hyper competitive industry. Retailers choosing PayPal won’t have to fear any conflict of interest now and in the foreseeable future.
You can read my comment with E-Commerce times here.
You can read my quote in TechNewsWorld here.