Monthly Archives: October 2016

On the 9^th of September, Apple released its new product iPhone7&Plus. On the 25^th of October, Apple announced financial results for its fiscal 2016 fourth quarter ended September 24, 2016. It can be seen that the sales of iPhone7 decreased and the revenue of Apple declined. According to this situation, and together with the change in Apple’s product life cycle (as my classmate mentioned in his blog https://blogs.ubc.ca/lucasjwong/), I would like to give some analysis from my point view.

Apple’s serious problems:

Low production capacity cannot satisfy the large quantity of demand.

Every time Apple releases its new products, consumers usually cannot get them in a short time and even though some of consumers booked it before. iPhone7 can be a good example. Both online and in-store storage is running short especially for the Iphone7 Plus.

The PODs of Apple seem to be vanished these years.

All smartphone brands are trying to improve phones in the same way. For physical features, less weight, a larger size of screen and a longer battery life. For technology, Android is getting better and is able to compete with IOS. At the same time, Apple’s new innovations are not attractive enough to beat their competitors. It might be because the technology of smartphone is getting matured. 

Through the problems to see if the change in product cycle helps:

“Moving to the three-year cycle also creates greater anticipation.”

I agree with my classmate that “Moving to the three-year cycle also creates greater anticipation.” The three-year cycle is beneficial for Apple’s innovation and problems solving, because a longer time is likely to make a greater improvement. I think this is not only my thought, everyone is likely to think so.

“The key for Apple is to capitalize on this anticipation to further promote its brand.”

Such anticipation helps promote products efficiently so as to boost the sales. Product with longer waiting time usually attracts the public’s attention and arouses their curiosity, so people will respond actively once Apple starts to promote the new product and consumers are more likely to buy a product that takes more years to invent. At the same time, high expectation and confidence make the demand for Apple stock in the secondary market increase so the stock price of the company will soar, which increases the value of the brand.

(To see the 4th quarter data summary:q4fy16datasummary)

To sum up, Apple has some problems which are the huge obstacles on its development way. It has to fix them so as to develop further. Changing to three-year cycle can help Apple to get over the challenges and it is a good strategy to adopt.

(430 words)

References:

http://www.apple.com/newsroom/2016/10/apple-reports-fourth-quarter-results.html

http://www.cbc.ca/news/business/apple-earning-fourth-quarter-1.3820749

Recently, explosions of Samsung Galaxy Note7 catch people’s eyes. The batteries of phones are easily to catch fire and burn the users. Now, Samsung is recalling every phone it had sold around the world and permanently ceasing production just six weeks after it went on sale.

What does Samsung lose?

-Profits. Samsung Electronics Co Ltd on Friday said it expected to take a hit to its operating profit of about $3 billion over the next two quarters due to the discontinuation of its fire-prone Galaxy Note 7 smartphone.

–Reputation. People began to worry about the quality of Samsung phones, not only the Note7 but also other types of phones. The sales of other types of Samsung phones are declined by nearly 26%.

-Market share. The competition of smartphone industry is always fierce, other brands like Apple, HTC and Huawei will share the pie of Samsung quickly since it was forced to quit.

Can Samsung stay in its leading position?

Absolutely yes. Samsung is likely to lose sales in the short-term, but it is possible for Samsung to win them back. To make a PEST analysis, for political and economic factors, Samsung Group may get support from Korea’s government since the group accounts for 22% of the total GDP of Korea. The whole Korea’s economy might be effected once the phone affair effects the Samsung Group. From social side, as a representative Korean brand in the global market, Korean citizens are volunteer to support the national brand and many foreign consumers who are into the Korean culture do so as well. Moreover, in technology part, Samsung is a global leader in Android phones and though others keep technology development, they still cannot beat Samsung to some extent.

What did others say? — About the smartphone industry

We might look back on Samsung’s battery meltdown as an inflection point in the history of the industry, when the frantic push for smartphone-makers to launch “revolutionary” new devices every year or two finally ran up against the physical limits of the form, and the lithium-ion battery in particular.

(http://www.slate.com/blogs/moneybox/2016/10/11/how_the_samsung_galaxy_note_7_s_exploding_batteries_will_change_the_smartphone.html)

This is an interesting point I found in Will Oremus’ blog and I quite agree with it. How can the makers blindly explore new tech but ignore the basic requirement for quality? As a consumer, I do not expect companies to release new smartphone that often since some functions are dispensable and sometimes we are forced to buy a new phone because of the so-called trends. I think it is time for them to consider lowering the pace of releasing new product but to focus on the quality of every phone produced.

Word count:  435 words

Reference:

http://www.wsj.com/articles/samsung-sees-3-5-trillion-won-profit-hit-over-two-quarters-from-discontinuing-galaxy-note-7-1476403566

http://www.cbc.ca/news/technology/samsung-galaxy-note-7-production-1.3799462

http://www.techcityng.com/top-five-mobile-brands-nigeria-201 4/

http://www.androidheadlin es.com/2014/09/samsung-face-serious-changes-lee-kun-hees-son-will-probably-take-company.html

http://gadgets.ndtv.com/mobiles/news/samsung-galaxy-note-7-explosions-reportedly-set-a-jeep-and-house-on-fire-in-the-us-1456614

“It is not about the shoes. It is about what you do in they. It about being who you are born to be. Just do it.” This is a classic advertisement of Nike, the famous sports goods brand. It is confused, why does Nike hardly ever mention the functions or the designs of the shoes, but keep telling a story or making encouragement? Why do consumers keep passion on Nike for these years? The one and only answer could be, it is not about products, it is about belief.

Concepts Delivery

In the vast majority of advertisements, there is usually a story of a famous sports star who pitted against a strong enemy, and after a great struggle, emerging triumphant. Though it is an old story, consumers can be inspired every time. They would believe that they were the hero like the one in the video and they have their own talents. Sometimes, the promotion could also be that I have energy and passion to do whatever I want, just do it. Such concepts attract lots of teenagers and young adults, because it responds to the ideas of new generation, which makes consumers have emotional response to Nike. They are likely to trust the brand and get more utility from consumptions. Hence, the value proposition contains the unique cultural factors as well besides great quality and design.

How does corporate culture play a role in the business model?

• Customer segments: The young generation who love sports and fashion, have great respond to the concepts and of course, can afford the high price.
• Cost structure: Nike does not produce but only design. Therefor, the cost of design and promotion account for the majority.
• Channels: Branding franchised store, shopping malls, online.

• Customer relationships: Online forum, new product releasing meeting, etc.

To conclude, the case of Nike explains how important the corporate culture is in some industries in today’s market. Since the all the products almost have already met requirements for functional use, it is better to differentiate brand and set up brand image by unique corporate culture. Consumers pay more attention to the products that can also brings satisfaction into spiritual level under this condition, especially the young generation who emphasize on personalization and unique lifestyle. In a word, resources are scarce but culture could be perpetuated. It helps to impress people and builds brand loyalty.

(Word account: 395)

Reference:

Advertising. 2015. Campaign . [ONLINE] Available at: http://www.campaignlive.co.uk/article/history-advertising-no-118-nikes-just-it-tagline/1329940#. [Accessed 1 October 2016].

News. 2013. Nike’s New Tiger Woods Ad Says More About Us Than Him. [ONLINE] Available at: http://www.adweek.com/adfreak/nikes-new-tiger-woods-ad-says-more-about-us-him-148172. [Accessed 1 October 2016].

Nike. 2016.[ONLINE] Available at: http://about.nike.com/ [Accessed 1 October 2016].