Microsoft Buys Nokia: The Rule of Three

Hola Todos!

I apologize for being quiet for a while.  August was a great month to be outside and have fun the family.  In addition, I have my tenure packet due this October so between that and classes, DigNuggetville has not been as active.

That said, one of the biggest stories of the week has been Microsoft buying Nokia.  In short, Microsoft HAD to make this deal happen.  The future is mobile and Microsoft is still not a major player in this marketplace.  Moreover, Microsoft has a $7 Billion marketing deal with Nokia – the only smartphone manufacturer to use the Windows Mobile OS.  Microsoft has not been able to convince any other smartphone company to use their OS and if something were to happen to Nokia, Microsoft would be locked out.  In summary, this deal had to get done.

Beyond the fact that neither Microsoft nor Nokia is market orientated, my biggest thought on these events is The Rule of Three.  Without question, the smartphone marketplace is maturing (which is a major reason why we will see the more affordable iPhone 5c next week) and when marketplaces mature, the number of major players reduces.  Usually in highly competitive, lower growth zero-sum marketplaces, the only way to gain market share is to steal it from your competitors.  If this is the case, only a few firms will survive that cutthroat environment.  Therefore, there will be room for a #1, a strong #2 and finally weak #3 with perhaps a few small niche players.

Just as recent has 3 years ago, there were 6 major OS players in the market: iOS, Android, Symbian, Palm, Windows, and Blackberry. As I said many times in class, there is no way all those firms will survive.  This Microsoft deal places an enormous amount of pressure on Blackberry.  Microsoft has deep pockets, Blackberry does not…meaning something is going to happen to Blackberry relatively soon. Either they are going to go under due to the market strength of Apple, Android and the deep pockets of now Nokia or someone such as Samsung or Amazon who does not want their mobile future anchored to Android is going to buy Blackberry.

Something to think about today…

 

Best regards

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

The Wild, Wild West of Mobile Advertising

Hola Todos!

To be 100% direct, the nascent but developing mobile advertising market is what I call the wild, wild west – meaning there are no rules or established practices commonplace in more well developed areas of advertising.  The following article “The Incredible Shrinking Ad” from The Atlantic is solid and examines this topic in the tradition of 1,000+ word journalism that is becoming more rare these days.

Enjoy!

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

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

 

iPhone 5: FINALLY!

Hola Todos!

In the eyes of Apple zealots, it seemed if yesterday would never come; the day when we would finally see the iPhone 5.  Well, it finally arrived and to my surprise is was EXACTLY as expected – more on that in a moment.

In general, everyone was pleased with the specs and the press coverage. One journalist has even called it the new “gold standard” for smartphones.  Here’s a round up:

 

-Review from Mashable

-Mashable chart comparing iPhone 5 to its three closet competitors

-Apple 2.0 listing of all the stats/facts/details from yesterday’s event

-Apple 2.0 compiled commentary from the Wall Street Analysts

-Minute by minute how the Apple’s stock reacted yesterday afternoon

-90 Second version of the Keynote

-Full 90 plus minute version of the Keynote

-Apple Inc. video of iPhone 5 and all its features

 

Back to my earlier comment, what was missing from yesterday’s keynote was “surprise.” Pretty much everything – at least all the major specs – were strategically leaked to the press well in advance. The only real surprise, other than a incredibly improved iPod touch, is the rapid and aggressive rollout of this new phone – Apple’s biggest launch in the history of the company.

What makes yesterday so surprising was that in more than one interview earlier this year, CEO Tim Cook said Apple was going to “double-down” on secrecy.  If yesterday is the “new normal” then where was the “doubling down?”

Only a few possible explanations can explain Apple’s new-found opening up: (1) CEO Tim Cook is moving away from Steve Jobs-like secrecy and the “doubling down” is nothing but lip service, (2) iPhone 5 is “too big to fail” as a percentage of Apple’s overall revenues and Mr. Cook is risk-adverse, or (3) Mr. Cook is very, very, very concerned with competition and all the leaks to the press were more to the other players in this sandbox.  Not that I believe any of these three are mutually exclusive but nonetheless, how Apple behaves with new product launches is something to follow in the coming months.  Next up…something in October.

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

 

 

Nugget Keyword Dictionary – “Biting the Hand that Feeds You.”

Hola Todos!

Today’s nugget keyword, like last week, is a phrase:  “Biting the hand that feeds you” or as it is usually expressed “Don’t bite that hand that feeds you.”

The Usingenglish.com free dictionary (which also includes idioms) defines this phrase as,”When someone says this to you, they are trying to tell you not to act against those on whom you depend” (click here).

One of the Microsoft story lines over the past few days has been, “Microsoft is really going to piss off their partners (e.g., Dell, HP, etc) by developing their own tablet.  They are going into competition against some of their biggest and oldest clients by developing a tablet!.” I even heard on a NPR radio broadcast that “Microsoft will have hell to pay for their actions.”

This storyline and all of its associated commentary sure has the flavor of “biting the hand that feeds you.” In Microsoft’s defense, however, its not like HP, Dell or anyone other Amazon’s Kindle and to a lesser part Amazon’s Fire, have done anything to dent Apple’s stranglehold of the tablet market. If I were Dell or HP, I would be cheering them on because without Microsoft, HP, Dell and anyone without an Android OS isn’t in fastest growing marketplace in the tech industry.

Something to think about today…

best regards,

Dr. Dan-o

 

Daniel M. Ladik

Associate Professor of Marketing

Seton Hall University

 

 

 

 

The Apple WWDC Round Up: What did I get wrong?

Hola Todos!

I’ve been crazy busy over the last four weeks so DigNuggetville has been quiet for a little while.  Things are starting to settle down so the nuggets on DigNuggetville will begin to flow again.

This has been a big week for Apple so far.  WWDC is one, if not, the largest event of the year for the team in Cupertino.  The reviews have been strong for all the software and hardware debuts – especially for Apple Maps, Siri updates, Facebook integration and especially the new Retina MacBook Pro.  The following are a few of the best links from Monday and Tuesday.

-For a 90-second video overview of Monday’s keynote (click here)

-For a play-by-play analysis of Monday’s keynote (click here)

-For an overview of how the major financial analysts viewed Apple’s new offerings (click here)

-For an interesting story on how Apple snubbed Google (click here)

On a final note, I have to come clean on this one.  I truly, and incorrectly, thought we were going to see a new Apple TV OS yesterday.  Perhaps I was reading too deep into the tea leaves (see story on Forbes.com – click here) or it was just too soon.  A few other journalists and analysts believe in the latter with multiple comments in the 3rd link listed above including ISI’s Brian Marshall stating, “…we believe presentations by Tim Cook along with senior executives (e.g., SVP of Worldwide Marketing Phil Schiller, SVP of iOS Software Scott Forstall, etc.) did a solid job keeping the AAPL faithful satisfied. While some may have been mildly disappointed that a new Apple TV OS was not introduced, we believe AAPL wanted to focus attention on the Mac platform which is positioned to continue taking (market) share.”

Finally, an excellent article describing the DNA for a future Apple’s TV OS is already in front of our eyes with AirPlay (click here).

Enjoy!

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

Instragram is off the Market, Who’s Next to Get Purchased?

Hola Todos!

The blogoshere is still talking about the Facebook-Instagram deal but the discussion has also shifted to exploring….who’s next?  The following article from Mashable (click here) is solid as it identifies nine prospects.  No surprise that Path is #1 but its always great to get a round up article for learning about developing players in the field.

Enjoy!

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

Has Yahoo Finally Found its White Knight? Surprise! Its Yahoo’s CEO

Hola Todos!

Yahoo has been an interesting company to follow as of late.  Late last year, I wrote that I was sick of the “who was going to buy Yahoo” stories in the popular business press and instead advocated that Yahoo save itself (for full post, click here for “Yahoo Should buy Twitter and than merge with AOL”).

That said, current CEO Scott Thompson has only been on the job for about three months now, yet, we believe he’s finally charting Yahoo on a path towards some specific strategy; something former CEOs Carol Bartz or co-founder Jerry Yang never did.  Although some elements of the new direction have been trickling out in the press, we should see the entire plan sometime next week when Yahoo reports its Q1 earnings.

Here what we know (click here): Thompson is cutting about 2,000 employees or about 14% of Yahoo’s workforce.  Beyond the balance sheet boost this will eventually create, the main purpose of this overhaul is to streamline the massive sprawl of Yahoo’s portal.  Most important, Thompson has finally directly answer the question that I, as well as, so many other strategists have asked over the last 5 to 8 years: What is Yahoo?  In Thompson’s view, it’s a media company and he wrote in a memo to Yahoo employees: “Our online media presence has long been our company’s clearest competitive advantage.”

What I also found interesting was Yahoo’s massive user base.  Yahoo’s network of sites is the third largest in the U.S., trailing only Google and Microsoft according to the latest data from traffic tracker ComScore. In February 2012, Yahoo’s network had 174 million unique visitors, even more than Facebook’s 159 million. WOW!

Now that Yahoo is only a clearly defined path as a media company, Yahoo and it’s new CEO must avoid the mistake of previous CEOs who guided Yahoo on a path to nowhere. Once the Internet’s first and largest Web portal, 17-year-old Yahoo has lost its edge in nearly every area to newer, nimbler rivals.

Thompson must get ahead of in some key areas before major competitors also claim those market places.  Two easy developing areas are mobile advertising and social browsing services like GetGlue or Miso.  The mobile advertising space has been hot in the last six to nine months with Google, Apple and other gobbling up the main players although a few smaller firms still remain and could be had at a good price.  Perhaps more promising are the social browsing sites such as GetGlue and Miso which allow users to actively participate in their favorite TV shows, movies and other verticals such as books, restaurants, stocks, etc. We know Facebook just dropped $1 billion on Instgram.  For $1 billion, Yahoo could buy 2 or 3 hot mobile commerce firms that could not only complement their new media content strategy but also chart Yahoo towards strong future growth.

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

 

Facebook Buys Instagram: More Details on the Deal

Hola Todos!

I was going though the articles on Facebook’s acquisition of Instagram as the news media gained more detail.  Here are some additional thoughts:

-It’s a cash and stock deal.  I was wondering why Facebook would part with that much cash even though the IPO will bring it back. Facebook needs cash right now as their model is not steller at generating cash and there are doing a lot of R & D experimenting right now. I bet the stock kicker was one of the tipping points for the Instagram founders to agree to this deal.  Facebook’s IPO will easily top Google’s record.

-Yes, this deal is all about mobile. Facebook also detailed that photos is one of main reasons users stay on Facebook longer than any other site.

-Finally it appears that Instagram’s founder and chief executive, 28-year-old Kevin Systrom, has a number of parallels that probably made this deal easier for Facebook to nab on the down low.  (1) Mr. Systrom was a former Google employee in product development and corporate and left to do other things.  No love for Google? Perhaps (2) Interning at a company that eventually became Twitter, Mr. Systrom met many of the leaders in tech including a young Mr. Zuckerberg, which Mr. Systrom considered joining Facebook but ultimately decided to stay in school.  With all the Facebook hype, you wonder if Mr. Systrom second-guessed that decision a few times.  (3) After his Google job, Mr. Systrom joined Nextstop Inc., a trip-recommendation site that Facebook later acquired for $2.5 million; another connection to Mark and Facebook.

Usually deals like the Facebook-Instagram one creates a knee-jerk reaction and starts a flurry of other deals by companies who what to “keep up with the neighbors.” The Wall Street Journal suggested Mr. Systrom would personally make $500 million from the cash-and-stock Facebook deal.  Who needs the lottery when you have a contact like Mark Zuckerberg, right?

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

Facebook Buys Instagram for 1 Billion

Hola Todos!

Yup – you read that headline correct – Instagram for $1 Billion; that’s billion with a B with a set of 12 zeros.  Click here for the CNNmoney article and click here for the All Things Digital article.

As we are all wondering  – why and….that much?  First the latter question – Facebook did this deal relatively quickly and very much on the down low.  The only way this happens is if Facebook paid a substantial premium.  Teams with much deeper pockets such as Google or even Apple could have easily created a bidding war so I have to tip my hat Mark and Sheryl for pulling this off.  It’s a major power play and it goes to show that Facebook is very serious about competing head-to-head with Google.

The former question – why – is much easier to explain.  While Facebook is already the king of web photos, Facebook is relatively weak on the mobile front and there is much improvement needed with Facebook in that arena.  I fully expect to see much effort, improvement and innovation by Facebook in the mobile space in the next 12 to 18 month.  Second, Instagram and its multitude of photo uploads is an excellent compliment to Facebook’s other major effort at the moment – Timeline.  Instagram make it that much  easier to get more information on one’s Timeline.

In closing, a billion bucks seems like a lot but Facebook will get all that cash back (if it is a cash deal) when they ring that IPO bell in 2012.  The best line from one of the two articles above: “Kodak goes bankrupt and Instagram is worth a billion dollars” – Wow.  Creative destruction (click here for full post) exemplified.

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University