Tag: Google

Apple-opoly: It’s Not a Game

money (Photo credit: 401(K) 2012)

Some people can hardly contain their excitement when a company like Apple is thriving with sky high profits in the midst of a dismal global economy. Yet, this same excitement is seldom shared when banks or oil companies report similar results. Wouldn’t we all prefer reduced fees or lower gas prices over excessive profits from the very companies that portend to serve our best interests?

This past week a colleague forwarded an article from cultofmac.com titled Apple’s Astonishing Profit in Context. My colleague’s opinion of Apple’s incredible performance is also echoed in the article itself. Of course, I would be hard pressed to disagree with them as I’ve written many times before that “The proof of wisdom is in the results.” The following quote from the article puts Apple’s “wisdom” in perspective:

From October 2011 to September 2012 Apple made more money than Microsoft, Ebay, Google, Yahoo! Facebook and Amazon combined. In that same period, Dell, Asus, Intel, Acer, IBM, Lenovo, and HP (basically the entire PC industry) only made $19.3 billion in profit, which is less than half of Apple’s profit.

Who can argue?

Apple has effectively advanced available technologies into unique devices that have dominated several market segments including: Computers (Mac), Smart Phones (iPhone), Tablets (iPad), and Media Players (iPod). Although Apple did not necessarily “invent” the core technologies that define their devices, they did find innovative ways to integrate them to provide an extremely user friendly experience.

Hardware is not Apple’s only source of revenue as the “App Store” is yet another venue that continues to feed Apple’s bottom line. If I understand the terms correctly, Apple receives at least 30% of every App Store purchase and as Apple is quick to mention more times than not, the number of available apps is in the hundreds of thousands and continues to grow every day. That in and of itself is an incredible feat.

I contend that the level of success enjoyed by Apple has peaked. This article, “Apple Losing Lustre On Wall Street: 3 Theories Why” is one of many that have surfaced recently as Apple’s stock has plummeted over the past few days. As stated in my recent post, Apple’s Best Kept Secrets … May Be Their Worst Enemy, Apple’s products are expensive and are subject to higher rates of planned obsolescence giving people cause to “wait” before buying.

Waking Up The Competition

Many would suggest that there is no competition when it comes to Apple’s products and, to some extent, there may be some truth to that. The question is, “What really sets Apple apart from it’s competitors?” I contend that a key component of Apple’s success is driven by their exclusive integration of the iOS operating system into virtually all of their devices. When compared to the number of competing companies selling electronic devices based on the Windows and Android operating systems, we quickly learn that Apple is the sole proprietor of it’s core hardware / software environment and the current court battles with Samsung strongly suggest that Apple wants to keep it that way.

In other words, while there are a number of competitors in any given segment, Apple has no direct competitors that manufacture computers using their operating system thus allowing them to command the price at which their devices are sold. In this context, Apple can determine it’s own price points, void of any threat from a competing manufacturer. From a financial perspective, Apple’s strategy to stay the course is a huge success – at least it was until now.

Image representing Windows as depicted in Crun...
Image via CrunchBase

The wisdom of Apple’s strategy to integrate hardware and software is perhaps a lesson learned by Microsoft as they too have joined the tablet race with the introduction of the Surface RT and soon to be launched Surface Pro. There is, however, a very stark difference. Whether Microsoft intended to become a tablet manufacturer is open to debate but Microsoft did not exclude or attempt to prevent their competitors from developing devices based on the Windows operating system. Microsoft certainly intentioned to develop a hardware environment that will best reflect the capabilities and performance of the Windows 8 operating system.

Competition inspires innovation as manufacturers attempt to earn a bigger share of the market with more differentiating features and ultimately lower prices. As a result, margins are strained on Windows 8 devices and competing products using Google’s Linux based Android operating system among others. Unlike the exclusive Apple-opoly market, consumers continue to reap the greater benefit of an open competitive market in the “non-Apple” world.

There is indeed a price to be paid to sustain a company that attempts to maintain an exclusive monopoly in the market place. I contend that Apple has more to lose and very little to gain as competitors continue to define and differentiate themselves in their applicable market segments.

The “App” Store – Remember Your Roots

Chart showing downloads and available apps on ...
Chart showing downloads and available apps on the app store over time, since the App Store was opened in 2008. (Photo credit: Wikipedia)

If Apple’s devices are the cash cow, then the App Store is the cash calf. As mentioned above, Apple’s take is 30% of every App Store purchase. For a developer, losing 30% for the opportunity to sell an “app may be a great deal but … to a company like Microsoft, nothing could be further from the truth. Presently, Microsoft is subject to the same “App Store” rules of engagement as any other developer and this has now become a major point of contention between the two companies.

When it comes to Microsoft, Apple’s memory seems to be lapsing. In 1997 Apple (very much like RIM) was struggling to stay afloat and Microsoft’s Bill Gates stepped in to bail them out. It seems this gesture of goodwill has waned as Apple has subsequently grown to become a monopoly of it’s own making. In the world of Windows, Microsoft’s Office suite is unparalleled and I suggest the same can only be true in the world of Apple.

It appears that relationships between people still matter in the world of business and we can only wonder if Steve Jobs would feel differently about giving Microsoft a break in the App Store. Clearly, Apple would be a different company – or not exist at all – without the injection of Microsoft’s support as announced on August 6, 1997 at Mac World Boston. As Steve Jobs himself said during the conference:

“We have to let go of this notion that for Apple to win, Microsoft has to lose.” – Steve Jobs

Steve Jobs encouraged the audience in this video to “think differently”. Perhaps those who have succeeded Steve Jobs have forgotten (or never had the opportunity to remember) what it was like all those years ago when they were struggling to just to stay afloat. If there was ever a move to burn bridges with a once “rival turned ally”, the app store’s rules of engagement is one of them.

The Extremes

Remember RIM and the BlackBerry? They too have an exclusive operating system and hardware platform that at one time lead the smart phone segment by storm. The BlackBerry Messaging (BBM) service between BlackBerry devices is second to none and now includes BBM voice calls. Apple’s iPhone was a major disruption to both hardware and software as we knew it, offering users a substantially improved experience with available technologies. RIM’s market share and stock prices decreased dramatically for failing to introduce fresh, innovative technologies in a timely manner. Whether RIM’s OS10 can reignite the passion for their products and the profits in kind remains to be seen.

So hopefully what you’ve seen here today are some beginning steps that give you some confidence that we too are going to think differently and serve the people that have been buying our products since the beginning. Because a lot of times people think their crazy, but in that craziness we see genius and those are the people we’re making tools for. – Steve Jobs

Today, RIM is in a place where Apple once stood. Unfortunately for RIM, there is no rival stepping up to bail them out. In today’s world, rivals simply wait for their competitors to fold or file for bankruptcy before swooping in to reap what’s left behind. It is unfortunate, but as time will tell, consumers who are left with empty pockets will soon part ways with companies that choose to monopolize a market that serves the best interests of their shareholders and the bottom line.

Lessons Learned

Value is Not Market Share – In the delicate ecosystem of finance and business, the underlying theme is the perception of “value” for the consumer, the company, and it’s shareholders. I commend and praise Apple for the design and quality of their hardware with few exceptions although I have expressed my dissatisfaction with the frequency at which these devices change. As for their software offerings, I am also somewhat underwhelmed, at least from a business perspective. As for connectivity, Apple provides a seamless bridge between devices with unparalleled ease.

However, knowing that up to 40% of the purchase price is gross margin, the question for Apple devices still remains, “Does the price reflect the true market value?” Fundamental economics would suggest that the value of a product or service is determined by the price the consumer is willing to pay. I contend that in a society based on capitalism, competition will yield a price that better approximates the true value of a product or service.

“Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” — Andrew Grove, co-founder Intel

Competition = Innovation – The Windows 8 and Android operating systems give us a greater appreciation for how real competition can lead to innovative hardware and software technologies at lower prices that benefit consumers versus those that ultimately aim to benefit shareholders. RIM’s new BlackBerry 10 reaffirms the inertia that exists within a company where only two options exist – to survive or die. With that inertia, we now see momentum building for the unveiling and launch of another new and innovative solution in hand held devices from BlackBerry.

Hansei / Reflection – Success can be both a blessing and a curse. Too few companies take the time to reflect on their history to appreciate their current state of affairs. Very few companies like Apple can claim to have risen from the ashes to become a self sufficient world renowned icon. However, in their wake, Apple’s success has also led to a certain “ego” or culture of arrogance that suggests “nothing can stop us now.” As we consider the current court battles with both rivals and allies, it’s difficult to discern which is which.

Collaboration = Mutual Successes – Success is seldom the result of one person’s effort and typically the result is greater than the sum of its parts.

We can choose to fight for the current state to preserve “what is now” or we can – in the words of Steve Jobs – “think differently”.

Until Next Time – STAY lean

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Why Twitter?

Image representing Twitter as depicted in Crun...
Image via CrunchBase


You may be wondering what Twitter has to do with lean or anything even related to manufacturing.  While there may not be a direct correlation to Twitter, the fact that it is still relatively new gave me cause to reflect on what it means to introduce a new system or way of doing things in our organization.  I’m going to share what I learned and why I finally decided to join Twitter.

I find that analogies, like business novels, put everyone on the same page and collectively we are more likely to arrive at the same conclusion when we follow a common model.  In this case I am assuming that almost everyone is at least aware of Twitter and maybe after reading this will also become part of the Twitter community, also known as the twitterverse.

First Impressions

For the longest time I wondered what could be so exciting about Twitter.  In fact, I originally rendered it to be  just another internet craze that was sure to fade away.  Well that didn’t happen and as Twitter gained in popularity I became even more intrigued.  Admittedly I visited the Twitter.com website quite some time ago and my first impression was that Twitter is nothing more than an internet-sized chat room.

I also wondered how Twitter was supported since it is free to use and there is no advertising engine that intervenes with your messages – remember the original “free” e-mail or websites where advertising was added automatically.

Another restriction is that messages can only be 140 characters long.  How much can you possibly accomplish with such limited space?

And finally, I wondered how it was possible to manage the 1000’s of messages that could potentially be published on any day at any given time.


As with every decision there are two choices, Take it or Leave it.  Of course I could have dismissed Twitter to be nothing more than a distraction and decide to ignore it or, I could least try to understand what Twitter was all about and learn to appreciate why people are so excited about it.  My decision to learn more about Twitter was driven by it’s continued persistence, support, and accessibility through many of the applications that I am presently using.  Almost magically, Twitter buttons started to appear on web sites and blogs (much like this one) that allow you to instantly share information with other people in your network with a simple click.

I decided to Google the term “twitter” to see what I could learn from the top hits.  I also went to the public library and paid a visit to the local book store to see what tangible information was available.  The library had a number of books that served to whet my appetite for more.  I finally purchased a copy of twitter power 2.0 – How to Dominate Your Market One Tweet at a time – by Joel Comm.  Even if I used my iRewards card at the book store, I discovered that I could get a better deal at Amazon.  The retail price at the book store, before my iRewards discount, was $19.95 CDN / $16.95 US compared to Amazon’s price of $9.97 at the time of this writing.

Informed Decision

The book “twitter power” is equally relevant for beginner, novice, and more accomplished twitter users alike.  I learned that Twitter really is a simple communication tool that can help us in a variety of different ways:

  1. Twitter messages can be viewed as “headlines” or announcements that let your followers know what is going on in real time.
  2. Twitter messages can contain links to your or other websites.
  3. The limited message length keeps them focused on single topic (usually)
  4. Twitter can also serve as a two-way communication “chat” tool.
  5. Twitter enables you to access a wealth of potential experts 24 hours a day, 7 days a week.
  6. Twitter is accessible through your mobile phone.
  7. Communication is instantaneous, life as it happens in real-time.
  8. You can use the search bar to find discussions or sources for specific topics of interest.
  9. You can ask for help and possibly receive an instant response from anyone around the globe (the book references some great examples of life saving help).
  10. Twitter is all about networking and connecting with people first and foremost.
  11. Twitter makes it extremely easy to grow your network by offering recommendations for people to follow
  12. Twitter provides a means to stay connected with the real world of life and business at the same time.
  13. It can be used as a tool to help generate earnings for any Internet Marketer.
  14. Provides a means to find and interact directly with other entrepreneurs in your field.
  15. Current topics that are trending  in twitter are constantly updated  in real-time.
  16. #HashTags can be used to mark or search for unique messages.
  17. The Application Program Interface (API) is documented and allows third party vendors to develop applications.
  18. Third party sites exist that provide additional functionality to Twitter’s limited tool set (http://www.twitpic.com/http://search.twitter.com/)
  19. You can use twitter to offer support for your business or service.
  20. Restrictive account access is possible that allows you to set up exclusive access to messages.
  21. You can even send pictures and view them on http://www.twitpic.com/

I selected “twitter power 2.0” as it covers all aspects of twitter from introduction to setting up your twitter page to ultimately learning how to use it with practical examples.  Other complementary support sites for twitter are also discussed.  I became a student of the twitter world and learned all I could about this simple, yet very powerful application.  The book has 260 pages so it took me a few days to get through it the first time.  It is not my intent to discuss the ins and outs of twitter in this post.  I would rather leave that task to Joel Comm, the author of the book.


Twitter had much more to offer than I had first suspected and when I was duly informed, I decided to join.  Although I have only been active on Twitter for a very short period of time, I have been able to connect with people around the world.  I recall helping a person in Australia to resolve a customized formula for Excel, offering statistics advice to another person in the US, and helping yet another person in Canada with a research project.

The number of followers increases every day.  I have also learned that the Hash Tag #FF means FollowFriday and is sure to increase the number of people that follow you.  I have noticed a marked increase in the number of subscribers and visitors to our site as well as the number of files that have been downloaded from our Free Downloads page.  Twitter has proven itself to be a valuable tool even in the short period of time that I have been using it.


So how does this apply to lean?  Although I am usually excited and optimistic about the latest and greatest technologies available there have been occasions where the return on learning time simply was not there.  Hopefully you recognized that my initial response to Twitter is likely very similar to how our employees respond to a NEW or different way of doing things.

We not only need to inform our teams of the direction we plan to take, we also need to make sure we provide an ample list of reasons for doing so accompanied by appropriate hands-on training to assure success.  A lot of companies are known to have their “flavor of the month” or “program of the day” where employees have learned to “tolerate” the new direction until management decides it’s not working as intended.

I contend that once employees understand why and how to execute the new strategy successfully, they will not only embrace it but find even more ways to improve it.  You will note that we also cited a few of the many available metrics that allowed me to confirm the impact and effectiveness of twitter.  It is equally important to provide our employees with meaningful metrics that demonstrate the desired achievements by using the NEW system or methods.

Perhaps the most notable of all is that twitter provides new learning opportunities every day.  I have been meeting some terrific new people through twitter who have already proven their value to the world and lean practices.  As collaboration and co-creation are gaining increasing support as a viable business model, twitter becomes a natural extension to this new environment.

It is also worth noting that twitter is being integrated into applications that I am already using.  For example, if you are signed up for twitter, it is a simple matter of clicking the twitter button below this post and sending the tweet to your network.  From my perspective, the most powerful features of twitter are:

  1. Simplicity – easy to use, quick learning curve.
  2. Information sharing with just a few simple clicks.
  3. Networking:  Access to real people in real time all the time – 24/7

You can follow me on twitter @versalytics

You can also visit our Twitter page that offers more information, resources, and free services to enhance your Twitter experience.

Until Next Time – STAY lean!

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