Tag: Apple

Have A Bundle Discussion with Customers, Not A Product Discussion<span class="badge-status" style="background:red">Premium</span> 

Have A Bundle Discussion with Customers, Not A Product DiscussionPremium 

Bundle Pricing Negotiations Are Preferable to Product Pricing Negotiations Vendors have far more leverage with customers when negotiating pricing for a bundle/platform of products and services as opposed to an a la carte negotiation. There’s a reason why cable providers sold content bundles for years – it was the optimal revenue and profit model -…

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Apple Should Double Down on Apple Health Now<span class="badge-status" style="background:red">Premium</span> 

Apple Should Double Down on Apple Health NowPremium 

The iPhone Is A High-Priced Commodity The iPhone is little more than a high-priced commodity at this juncture. There is little differentiation between it and lower cost alternatives (OnePlus for example) both from a design and feature functionality standpoint. However, with 2 billion-plus devices in circulation, Apple’s future does not rest exclusively with new device…

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Facebook – Things Will Get Worse Before They Get Better<span class="badge-status" style="background:red">Premium</span> 

Facebook – Things Will Get Worse Before They Get BetterPremium 

Things Will Get Worse for Facebook Before They Get Better. A Second Act Is Required. Our thesis is simple. User growth has slowed and in the recent June quarter declined. We expect this trend to continue in the near-term as the following factors negatively impact Facebook’s business. Declines in User Trust and Engagement: The Cambridge…

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Don’t Be Disintermediated<span class="badge-status" style="background:red">Premium</span> 

Don’t Be DisintermediatedPremium 

Disintermediation Defined Disintermediation is when one party inserts itself between an interested party and its customers (see below table of “disintermediators” and “disintermediatees”).  Ironically, parties that suffer disintermediation often invite it upon themselves. Google Disintermediates Yelp and OpenTable For the past several years Yelp restaurant reviews appeared on Google business listings (this appears to have…

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Original Content Disclosures Are Lacking.  Introducing “Content Yield”<span class="badge-status" style="background:red">Premium</span> 

Original Content Disclosures Are Lacking. Introducing “Content Yield”Premium 

Content Is King Content is King to quote Sumner Redstone. At CEORater we spend a fair amount of time thinking about content. Over the past 24 months we have considered the following for our platform: 1.) video streaming of earnings calls with associated analytics 2.) employee video reviews 3.) business news (original and third-party) and…

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Disruption – It’s the Punch You Don’t See that Hurts<span class="badge-status" style="background:red">Premium</span> 

Disruption – It’s the Punch You Don’t See that HurtsPremium 

Disruption Rarely Announces Its Arrival Ask Curtis Stevens – the gentleman who was knocked on his posterior by Gennady Golovkin in our header image – if he saw the punches coming.  Ask former Microsoft CEO Steve Ballmer if back in the early 2000’s he knew SaaS/cloud-based service delivery models would dominate the software landscape.  Ask…

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Steve Jobs vs. Tim Cook – Innovator vs. Operator – It’s In Their DNA

Steve Jobs vs. Tim Cook – Innovator vs. Operator – It’s In Their DNA

Personality Analytics Holds the Key as to Why Apple Was More Innovative Under Steve Jobs than Tim Cook

Apple has lost its creative mojo under Tim Cook. Incremental product enhancements have become the norm, replacing a time when revolutionary new products, space age design and landmark advertising was the standard. What changed? Look no further than the CEO chair. Apple founder, CEO and creative genius Steve Jobs prematurely passed away in October 2011. Jobs’ hand-picked successor, Tim Cook, is by experience an operator with a background steeped in supply chain experience. Cook could not be more different from Jobs from a personality standpoint (see our table below).

The importance of assessing a CEO’s personality when conducting a CEO selection process (corporate boards, executive recruiters), or investment due diligence process can not be overstated. This is especially true of industry verticals marked by rapid change where the cost of having an ineffective CEO can be extremely high. It is not so rare to find a situation where a CEO, Board and institutional investor base were slow to realize that a given company’s customers were migrating elsewhere due to product obsolescence or other factors that ought to have been recognized. Few participants want to acknowledge this type of deterioration early or mid-cycle and only do so when it’s too late.

CEOs that create “adaptable” corporate cultures are less likely to lead companies that suffer irreparable declines due to product under-investment or other negligent factors. Adaptable cultures are less likely to be caught off guard and instead lead market change.

Corporate cultures are often an extension of the CEO’s personality. Yes, CEOs influence culture and corporate strategy even in mega-cap companies. Look no further than Microsoft (MSFT) during Steve Ballmer’s tenure as compared to Satya Nadella‘s time as CEO. MSFT’s product & services strategy is dramatically different as is the firm’s approach to competing and partnering with other technology companies.

We highly value the personality trait “openness” in large part because of its relationship to adaptable cultures.  Steve Jobs and Tim Cook score similarly on the openness scale – 92nd percentile and 94th percentile respectively. However, looking at the personality sub-traits under openness, Jobs scores far higher than Cook in the two most creative personality sub-traits: “artistic interests” and “imagination”.

Given that Cook lags in these areas, one would need to get comfortable with the idea that a non-creative personality like his (32nd percentile and 14th percentile as detailed below) is capable of generating massive creative output from Apple’s 120,000-plus employees. This is asking too much of Tim Cook in our view.  What doesn’t come naturally doesn’t come easily and may not come at all.

Our May 2018 CEO personality analytics research piece may be found here: Personality Analytics: Technology CEOs Analyzed

source: CEORater; IBM

 

 

 

 

 

Our recent podcast on the subject:

It’s People! It’s People!

It’s People! It’s People!

Human Capital is Key

“It’s people! Soylent Green is people!” shouted Charlton Heston’s Robert Thorn in 1973’s Soylent Green. Fast forward 45 years and people remain central to the process. Although the process we refer to isn’t recycled human foodstuff but rather the global economy where Intellectual Capital provides economic sustenance and Human Capital is the key ingredient (Intellectual Capital = Human Capital + Structural Capital + Relationship Capital).

Grist for the Mill

It’s only a matter of time before Technology giants begin to reach into public schools in an effort to identify and recruit top-tier talent in an Intellectual Capital-driven global economy.

Technology’s Four Horsemen – Alphabet, Apple, Amazon and Facebook – hired 247,714 net new employees in 2017, up 89% from the previous year’s figure of 131,196. Amazon alone accounted for 91% of 2017’s total and 84% of 2016’s total (this makes sense given the nature of Amazon’s retail-centric, distribution-heavy business model).

Technology companies require an enormous amount of human capital and brainpower. This is especially true of large technology companies that work to define new market opportunities and use cases. Waiting for the U.S. K-12 public education and university systems to produce inadequately trained professionals is both a suboptimal outcome and supply chain bottleneck. Therefore, we expect for companies such as the Four Horsemen to become increasingly aggressive and systematic in their approach to training and recruiting young people.

Technology's Four Horsemen.png
Employee Counts: GOOG, AAPL, AMZN and FB for Years Ended 2015, 2016 and 2017 (click to expand)

We have experienced early green shoots of this phenomenon with Peter Thiel’s Thiel Fellowship a foundation that awards $100,000 grants to high potential young people. Those accepted (104 fellows and alumni, 2,800 application last year), to the two-year program learn how to write code and build companies. Young people skip or step out of college to become Thiel Fellows where in addition to grant proceeds, Fellows receive support from the foundation’s network of entrepreneurs, investors and operators.

Another example comes from my personal experience in China 2006-2011 where a number of the large China-based IT Services companies set up company-owned “universities” to train recent college graduates in an effort to better prepare them for the type of work that they would perform on behalf of clients. My view is that these companies will reach further back into the student supply chain and begin to recruit and train students during their junior high and high school years.

Reduce Time-to-Productivity

A misconception that many have is that an engineer fresh out of college can hit the ground running at optimal efficiency and drive massive value for companies. That’s hardly the case. Universities do a poor job of preparing students for life in the real world. It makes enormous sense for companies to actively invest in the U.S educational system both at the K-12 and university levels. Short-term operating profit margin dilution will pay dividends over the long-term in the form of new differentiated products and services. To ensure a worthwhile outcome it is paramount that companies take a systematic approach to execution. If nothing else Alphabet, Amazon, Apple and Facebook excel in measuring outcomes and re-calibrating where necessary.

No Teachers Required

Given what we have posited it would make sense for the Four Horsemen and others to get involved in public education early in students’ academic careers. Further, it would be logical for companies to seek to influence the academic experience as much as is necessary to maximize the probability of optimal outcomes for both students and companies. Therefore, it is not unreasonable to expect that the Four Horsemen and a few select others will eventually shape student curriculum — particularly in Math and Science. This may range from content creation to teaching methodologies to the act of teaching itself. Teachers’ Unions ought to be concerned. From a technology standpoint it would not be difficult to replace public school teachers nor college professors with machine learning platforms wrapped in friendly AI skins. AmazonGo is already doing this with retail checkout lines. It’s less a question of “how?” and more a question of public will.

Is Apple Disney’s End Game?<span class="badge-status" style="background:red">Premium</span> 

Is Apple Disney’s End Game?Premium 

Yes if You Ask Us While AT&T moving to acquire Time Warner and Disney (and Comcast?) moving to acquire Fox are interesting deals, it’s more interesting to us what the next chess move may be in a world that increasingly values content (live sports and premium original content in particular).  We recently wrote about and…

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Meet Luminar Technologies – the LiDAR Company Powering Toyota’s Autonomous Vehicle Program<span class="badge-status" style="background:red">Premium</span> 

Meet Luminar Technologies – the LiDAR Company Powering Toyota’s Autonomous Vehicle ProgramPremium 

What Is A LiDAR System? Light Detection And Ranging (“LiDAR”) sensors are detection and survey systems to estimate the proximity of a target object. LiDAR sensor systems consist of four primary elements: 1.) Lasers 2.) Scanners 3.) Photodetector receivers  4.) GPS navigation systems. LiDAR systems enable autonomous vehicles (or robots), to observe the world with: a.) Continuous 360…

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