Apple 2013 WWDC Round-Up: Welcome to the Post-Steve Jobs Era

Hola Todos!

I believe the blogosphere is just starting to grapple with that happened yesterday at Apple’s WWDC 2013 Keynote Address – Welcome to the post Steve Jobs Apple. We know that Apple has been highly criticized in the business press for “the lack of innovation” since the passing of Steve Jobs – especially recently over the last nine months since we have not had a major announcement from Apple (whereas Apple rarely when 3 to 6 months without announcing a major update of some sort).

Apple had a major transition in October 2012 updating the iPhone, iPad, iTouch and introducing the iPad mini in a 4-week span. By the end of that Oct, Forstall was gone and the entire management team was shaken-up and re-aligned.  Jony Ive was placed in charge of hardware and software and yesterday, we saw the first look at the post Steve Jobs Apple – further evidenced by the 90-second introduction video at the keynote and the new “signature” 60-second TV commercial.

One of Steve Jobs’ most famous quotes was “Design is not just what it looks like.  Design is how it works” and yesterday, Ive and team demonstrated that philosophy as the main driver in iOS7 and OSX Mavericks.  Apps that “nap” to conserve battery life – graphics that use less juice because they are flatter and more translucent (e.g., less 3D visual reputation) – resulting in a strikingly different look and feel for iOS7 and OSX Mavericks – so much so, that I bet there will be A LOT of people at the Genius Bar to get themselves a refresher course on their iPhones and Macs this fall.

The Keynote was long – 2 hours. What other tech company can hold an audience for 2 hours? Overall, the blogosphere has been measured and positive. The links below represents some of the most interesting links I found on yesterday’s event.

 

-The full 2-hour keynote

-The 90-second version

-A review from various Wall Street analysts

-A review from Apple super blogger John Gruber

-A list of stats from yesterday’s keynote

-11 Jaw dropping features of iOS7

-Apple is making Bing the default search engine for Siri!

-A video of one idiot who thinks Steve Jobs would strangle the current CEO Tim Cook for the lack of innovation

ALL something to check out today…

Best regards

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

The State of the Internet: Past & Present

Hola Todos!

Last week, The Wall Street Journal held its annual All Things D conference, of which the heavyweights of the heavyweights (Tim Cook, Sheryl Sandberg, Dick Costolo, Elon Musk and many others) came to Rancho Palos Verdes, CA to sit down with Walt Mossberg, Kara Swisher and colleagues to discuss the state of the tech industry.

Although all the presentations are nuggetworthy some way, shape or form, Mary Meeker’s (VC at Kleiner Perkins Caufield & Byers and formerly of Morgan Stanley) annual State of the Internet is especially noteworthy.  It’s amazing to see 117 slides go in 23 minutes flat – I mean this presentation moves! Moreover, I feel this presentation has been shared around the blogosphere more than any other at D11.  For instance, here’s one post from Philip Elmer-Dewitt of the Apple 2.0 Blog highlighting 10 of the 117 slides that pertain specifically to Apple.

I say watch the presentation and check all 117!

Best regards

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

 

Social Media Manager Needs To Think Strategically

Hola Todos!

One of my pet peeves when it comes to social is the overall lack of strategy.  Too many managers talk platforms first (e.g., Facebook, Twitter, etc.) and not strategy.  Even worse, imitation is often the main reason a manager decides to do something in social (note: insert nasally sounding high pitched voice of the manager of your choice when reading…I was reading Business Week the other day and I heard of this thing called a Twitter…we need to get one of those…).

In my eyes, there needs to be a strategic reason to do anything in marketing – regardless if it involves social or not.  I was happy to see this slide deck on LinkedIn the other day as it does provides a few strategic thoughts to why and/or how to use social.  I particularly like Slide 6 (improve customer service relations) and Slide 12 (gain more feedback before product launch).

Something to check out today…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

 

 

What is the Future of Business: A Podcast Interview with Brian Solis

Hola Todos!

A few blog posts back, I mentioned I met Brain Solis at a Philly Tweet-up when Brian was in town to discuss his new book “What is the Future of Business.”  I’m reading the book now and with a nice jolt of serendipity, Michael Stelzner of the to the Social Media Examiner podcast recently interviewed Brian.  The podcast provides a nice book summary and overview, as well as, explains in detail the four different “moments of truth.”

Something to check out today…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

 

Brian Solis: What is the Future of Business?

Hola Todos!

Last night, I went to the Old City section of Philadelphia for the Philly Tweetup w/Brian Solis. Brian was in town to talk about his new book “What is the Future of Business?” My current and past students will understand this immediately when I say… this is a strategy book.  Brian lays out the why much more than the how – the idea is for the reader to start their journey (e.g., their Hero’s Journey) to apply the how.  I read the first three chapters last night and I enjoyed the message and the design (and I mean design as the book was designed from front to back).  I thought the early chapters were sharp as they have a strong focus experience – particularly – the customer experience.

This is something to check out today…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

Social Media: Wheel of Fortune

Hola Todos!

Please come up to Seton Hall University on Tuesday March 19th for an excellent event titled “Social Media: Wheel of Fortune”.  I will be on a panel along with William Giovanniello, Managing Director, Transaction Advisory Services, BDO, Suzanne Brock, Esquire, Gibbons, PC, and Sarah Cirelli, Senior Marketing Coordinator, WithumSmith+Brown.

We will be discussing the wild, wild west of social media including what employers are looking for, the difference between social media tactics and strategy, and how to find mentors and industry experts using the various social media platforms.  The event s sponsored by Seton Hall’s Center for Entrepreneurial Studies, as well as, the New Jersey Turnaround Management Association

I hope to see you there.

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

 

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

iPad Mini: More Pricing Thoughts

Hola Todos!

As I mentioned in the last post on this topic, I was very surprised Apple went for the $329 price point for the entry-level iPad Mini – it was too high I thought. Beth Quartel asked a question in the last post:

Dr. Dan-o,

I do agree with you that the price is too high, but maybe part of Apple’s decision was they didn’t want the mini-iPad to cannibalize sales from the larger iPad? Based on the pricing decision, I think they were only looking inward rather than looking at the competitive marketplace.

Beth – you, me and everyone on the planet except those who have the company names Amazon, Google, Motorola, Samsung, or Microsoft on their business cards thought Apple priced the iPad Mini too high.  Here’s my thoughts from the last 24 hours as I have tried to think of every logical reason why Apple aimed so high price-wise for the iPad Mini.

-Cannibalization is clearly one argument.  Not only could the Mini cannibalize some of the $399 and $499 iPad sales, it also has the potential to eat into some of the new iPod Touch sales at $299.  That said, Apple has never been shy about cannibalization as long as it was Apple eating into Apple’s sales and not some other competitor.

-The Asian supply chain is also another plausible argument.  It is well known, that Apple was having problems sourcing and manufacturing the iPad Mini so I doubt the retail channel numbers are has high as Apple wanted them to be.  One way to limit demand is to raise price.

-Related to this, the Apple faithful tend to be agnostic when it comes to price and Apple could move a number of units to the diehards for the first 6 to 12 months on the market.  When that demand dries up, Apple could drop price to increase demand for those who have been sitting on the sidelines.

-The higher price (and therefore higher margins) will help with the initial R & D costs with first time development of the new product.  Manufacturing of scale effects will kick in with iPad Mini 2 and we will see a lower price.

-Apple could also have numbers and forecasts indicating that the tablet marketplace – particularly the smaller 7-inch segment of the marketplace – will not grow as fast as most analysts think over the next 12 months.  Why not take a better margin at $329 with lower volume and then be ready with supply chain issues remedied and economies of scale kicked in?

-In today’s 4th quarter earnings call, we were not surprised that the pricing of the iPad Mini was one of the earliest questions.  In response, CFO Peter Oppenheimer towed the standard Apple line listing the “profound” difference in quality between the Mini and the competition, stating its “more expensive to build,” and finally, “gross margin is significantly below” corporate average – adding “hoping to become more efficient.” Nothing new in those comments.

Not that any of the items listed above are mutually exclusive but if there was Asian supply chain problems, no economies of scale (e.g., margins are lower now), competition was very weak (e.g., at least 12 months away from something good), and a certain percentage of the Apple faithful will buy something new at a fairly high price, Apple could decide to be very conservative with pricing the iPad Mini the first go around.  Moreover, this is very Apple thing to do this – remember the first iPhone started at $499.

Mark my words – the price of the Mini will drop by this time next year – either $279 or $299.  In addition, the price will drop to at least $249 for the iPod Touch as well as this product shares many of the same parts as the iPhone 5; more supply chain/economies of scale issues worked out by then.

The competition has a whole year to breathe as Apple gave them 12 months to figure out their next chess move.  Personally, if I were in the Apple war room, I would have advocated to go in for the kill – go for the jugular – margins be dammed.  At $249, there would be no competition to talk about for 2013 Christmas season. (Well perhaps Amazon – Bezos lives on razor thin margins).

Something to think about today…

Best

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

 

 

iPad Mini: Apple Messed up the Pricing

Hola Todos!

So much had been leaked about the iPad mini, that the only real mystery yesterday was how much was it going to cost? True, true, we were not sure what the name was going to be but the price was the key piece of information that was unknown.

When Phil Schiller announced it at the keynote yesterday (90 second version here – full-length version here), I could not believe my eyes and the first thought that popped into my head was that Apple blew it.

This was an excellent opportunity for Apple to go for the jugular and practically wipe out the 7-inch tablet competition.  I didn’t think Apple had to match the $199 price point – - $249 is still close enough to make anyone think twice about spending $200 bucks and trading off that much product quality and performance.  Even $299 would have psychologically kept the price under $300 bucks therefore being more of a threat to competition.  At $329, Google, Nook and Amazon breathed A LOT deeper yesterday, as they know they still have some breathing room at the entry-level price point.

As I say in class, the #1 rule in pricing is “Price what the market will bear” meaning the marketplace should determine how high or how low something should be priced to potential buyers.  Apple made a clear decision to forgo volume for margin and chose to ignore the marketplace for the most part, therefore aiming for lower volume with higher margin.  While that practice has been the traditional modus operandi at Apple, Apple has made exceptions in the past in marketplaces where volume/growth is exceptional (read=smartphones) and the marketplace pushed Apple to price more to market levels.

Perhaps the table market is not ready to explode and scale and Apple still thinks they have another 12 to 18 months to suck up fatter margins before some additional economies of scale kicks in.  I will be stunned if the entry price was NOT under $300 bucks this time next year when the market is gowning substantially faster.

Finally, I’m sure there were a lot of cash strapped school districts that were disappointed yesterday.  In essence, the entry price point did not get much better for them to be able to swap books for iPads. As usual, Philip Elmer-DeWitt of the Apple 2.0 blog is on top of this.  He posted two excellent columns in the past 24 hours; (1) illustrating the radical drop in Apple’s stock right after the price announcement and (2) the analysts’ reactions/comments to iPad mini and its high price point.  I’m looking forward to Apple’s earnings call on Thursday because I know CEO Time Cook will field a lot of questions (if not the first question) on why Apple picked the $329 price point.

Something to think about today…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

Apple Maps, Smartphone Survey, Campbell Soup Going Digital and Other Interesting Stuff

Hola Todos!

I have been quite busy over the last week so today’s post is more of a round-up of interesting articles.

I was reading Philip Elmer-DeWitt’s Apple 2.0 blog the other day and I feel he offered the best explanation to why Apple pulled the plug on Google maps.  I think more interesting is Apple’s C-suite of old is more to blame than Apple’s C-Suite of new.  Why didn’t this happen with iPhone 3Gs or iPhone 4G?

On another topic, we often talk about when markets switch from pure growth and shift to a mature marketplace that is zero-sum.  This link, also from Apple 2.0, adds to the growing evidence that the smartphone marketplace is getting closer to becoming mature.

Staying on the Apple theme, here’s a solid argument to why iPhone 5 opening weekend wasn’t as soft as everyone thought.

The history of computing in fewer than ten slides?  That’s a link checking out.

Campbell Soup’s CEO Denise Morrison has made digital media a top priority and Adam Kmiec, global head of digital marketing & social media at Campbell Soup Co., will get it done.  Campbell Soup, “will become the most digitally fit [consumer packaged-goods] organization in the world,” says Mr. Kmiec.

I’m consistently following Yahoo and everyone is curious to see what Yahoo will become once its irons out its strategy.  Now I wonder what acquisitions CEO Marissa Mayer will do with the Alibaba cash.

Finally, they may be the CEO but they are not very social; a great article from Harvard Business Review on why CEO’s don’t tweet.

 

Lot’s to think about today…

 

Best regards,

Dr. Dan-o

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

Navigating the Social Media Maze

Hola Todos!

Journalist Michael McDermott contacted me awhile back to discuss the wild, wild, west world of social media.  He was putting together an article for Comcast employees that would be associated with Inc.com.

I thought he did a fine job examining the multiple perspectives of social media including emphasizing the two-way nature as well as stressing metrics.  No surprise to the DigNuggetville readers that I highlighted a bottom-up perspective as I have in many presentations.

This is a good one to forward along to co-workers who are get getting their feet wet in this cloudy pool we call social media.

Something to think about today…

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Assocaite Professor of Marketing

Stillman School of Business

Seton Hall University