He (Steve) draws a $1 salary, assumes a stake in the profits/performance, and provides leadership, direction and strategy to it (Apple, Inc.). It (Apple, Inc.) designs, manufactures the products, has a great history, strong management, an ardent fan following, generates profits and supplies it to him (Steve) & us. Let this mutual existence flourish for the well being of investors and propagate larger leaps in technology.
Lights on. Curtains up!
Now presenting - iPhone, a revolutionary product, designed, manufactured and marketed by Apple, Inc. The iPhone mania has touched disproportionate heights in the last few months. This is probably the most awaited and hyped product release in decades which has added so much brand equity to a product that is yet to be released! iPhone is the latest addition to Apple’s product portfolio, a sleek touch-screen smart phone that can function as an ipod, internet in the pal and other exciting services as well. The news of the iPhone has allowed Apple stocks to touch new peaks with Apple reaching a new landmark – a market cap of $100 billion. Meanwhile, entering into a billion dollar crowded market where many mammoths have established their base, Apple is venturing into unexplored territory.
Not so long ago, Apple changed its name from Apple Computer, Inc. to Apple, Inc. It was a suggestive shift from being just a computer maker to a broader consumer product maker. Apple will now operate 3 major business units – The Macintosh, ipod’s & iPhone that will generate billions in revenues for the Cupertino, California based firm. The iPhone is shrouded in extreme secrecy just like any other new Apple product, a corporate policy and means of unleashing positive anticipation in the market in a timely manner to inflate the value & demand as well as the buzz-level. Apple’s marketing strategy is sound and very different from its industry counterparts. Apple recently made a press release, that the iPhone would have a longer battery life and sport a scratch resistant glass screen instead of a plastic screen which was announced earlier resulting in a 3.81% increase in the share price. Yet another effective publicity gimmick from apple’s ingenious marketing playbook. Even the industry leaders including Nokia, Motorola and Ericsson are putting together their R&D to full motion to counteract the possible shockwave this product may cause to their businesses.
But the question still remains; will iPhone deliver the goods to the consumer? Will the patented multi-touch technology be user-friendly and react well to the finger movements? Will this cause a bleedover (or product cannibalization in marketing terms) & cut into ipod sales? Will Apple be able to bulldoze into this industry or more modestly establish its niche, opening the door to Apple’s entry into consumer electronics?
My personal opinion is that, truly basing valuation of Apple, on the iPhone is not wise even considering huge value addition. Apple’s intrinsic value is based on many other factors including the highly anticipated next generation full screen ipod lines, OS Leopard, ultra-thin flash based laptops and excellent earnings. Any guesses on Apple’s future products?
Analysts, consumers and investors eagerly await the release of iPhone on June 29th, available only at AT&T & Apple stores. So keep your calendars marked to see what the product really is all about. After all seeing is believing & sales leads to profitability!
*Wild predictions during launch*
- Nintendo in partnership with Apple to run games on the iPhone using a digital pad
- Several Google Apps to be incorporated into the iPhone
- iPhone Memory upgrades
- iPhone Price reductions
- Cool iPhone skins (different colors?)
Chandrachood
