Former Apple CEO Steve Jobs died last Wednesday (see Li Wei’s blog post). In addition to that, the recentannouncement of the iPhone 4S failed to impress consumers as well as investors. Analysts were instantly hypothesizing that this event might have a strong influence on the company’s future product demand and accordingly, its stock price.

Apple and several wireless carriers all over the world started taking pre-orders for the new iPhone on Friday and according to AT&T, 200,000 pre-orders in 12 hours at this company alone make it the most successful iPhone-launch of all time. Besides the iOS5 and better hardware, sales are probably also boosted by the death of Apple’s icon, Steve Jobs: “I wanted to show support and help to knock initial sales out of the ballpark” (2).

Apple users mourning in front of an Apple store

Although Jobs’ morbid last service will only last for a short time, it can help Apple compensate its investors initial doubts about their new smartphone’s success. Furthermore, the availability of the successor for $199 increases demand for the iPhone 4 because it can now be sold at a lower price, for instance for $99 as part of a Verizon phone plan (4). Subsequently, by selling more old iPhones and already having set a record of pre-orders for the successor, Apple still remains a strong force in the smartphone market (3).

Comment on Li Wei’s post:

https://blogs.ubc.ca/weili/2011/10/06/what-will-happen-to-apple-after-jobs/

Sources:

1) http://www.huliq.com/3257/apple-stock-drops-sharply-during-iphone-4s-introduction Michael Santo, 4.10.2011

2) http://www.ft.com/intl/cms/s/2/72052fa8-eeb7-11e0-959a-00144feab49a.html?ftcamp=rss#axzz1ZhM6QQeX Joseph Menn, 5.10.2011

3) http://online.wsj.com/article/SB10001424052970203388804576615731788704032.html Geoffrey A. Showler & Ian Sherr, (8th paragraph), 9.10.2011

4) http://www.verizonwireless.com/b2c/store/controller?item=phoneFirst&action=viewPhoneDetail&selectedPhoneId=5782 Verizon Homepage, 9.10.2011

When Meg Whitman, former CEO of ebay Inc., joined Hewlett Packard as its new CEO, the company announced that she receives $1 of annual salary (1), following the footsteps of famous CEO’s like Steve Jobs and Larry Page. She was also “awarded options to buy nearly two million HP stock shares at $23.59” (2) which could generate her a profit of several million dollars.

Whitman's combined salary for 4 years? Not quite.

The most striking benefit of a direct link between company performance and personal income is that CEO’s are less tempted to act unreasonable. Long-term success of the company to make the most out of their stock shares replaces risky short-term success to earn bonusses.

This strategy is not only a valuable option for CEO’s who are confident to succeed and want their share of the profit, it can also serve to build longlasting trust between a company and shareholders because investors know the president has personal interest in the success of his or her company (3). The exclusive option of a $1 pay can most efficiently be exploited to strengthen the relationship between investor and company and to incite CEO’s to perform exceptionally well.

Sources

1) http://www.ibtimes.com/articles/223116/20111001/meg-whitman-hewlett-packard-california-politics-hp-salary.htm?cid=2 (2.10.2011), 2nd paragraph

2) http://www.sacbee.com/2011/09/30/3951450/whitmans-1-salary-at-hewlett-packard.html (2.10.2011)

3) http://www.businessweek.com/bwdaily/dnflash/content/may2007/db20070509_992600_page_2.htm (2.10.2011), paragraph “The Ultimate Pay for Performance?”

2006 – When Nintendo launched its new video game system “Wii”, it seemed like the start of a new era of video games thanks to the innovative implementation of motion control. By introducing “Wii”, Nintendo aimed at new target audiences in the video game market like elderly people and women.

The meaning of the term "playing Nintendo" sure has changed since 1989.

2011 – Five very successful years after the Wii’s launch, the sales are decreasing and Nintendo’s old customer base demands for a reorientation back to Nintendo’s hardcore gaming roots.

The company’s attempt to establish their brand in the minds of new target audiences could harm the company in the long run. The Wii’s novelty can’t easily be repeated. Furthermore, customers who are not intrigued with video games per se are probably not likely to buy a successor that isn’t perceived equally revolutionary by the general public.

Wii sales decreased by 68% compared to last year

Once the quantity demanded decreases because the market of new target groups has been saturated, Nintendo has to focus on either creating an or partially return to a more sustainable “core-gamer” image in order to stay competitive with Microsoft’s Xbox and Sony’s PlayStation which are both superior in this market segment.

Sources:

1) http://reviews.cnet.com/8301-10921_7-6637970-4.html (29. September 2011)

2) http://books.google.com/books?id=C8rHXoUCbfAC&pg=PA2045&lpg=PA2045&dq=nintendo+new+group+of+buyers+wii&source=bl&ots=h4u5Rpf9vB&sig=fg_HPtNEetlDJsj72xs96Czksa0&hl=en&ei=ueSITrOXC6_WiAKjkKykDA&sa=X&oi=book_result&ct=result&resnum=4&ved=0CDEQ6AEwAw#v=onepage&q=nintendo%20new%20group%20of%20buyers%20wii&f=false (28. September 2011; p. 66; 4.4.2. Designing a blue Ocean) (29. September 2011)

3) http://www.vgchartz.com/yearly.php (29. September 2011)

4) http://www.msnbc.msn.com/id/29645088/ns/technology_and_science-games/t/can-wii-win-back-hard-core-gamers/#.To4CZk-BtHs (29. September 2011)

5) http://www.pcworld.com/article/127884/so_many_game_consoles_which_to_buy.html (29. September 2011)