{"id":45361,"date":"2019-01-03T11:12:03","date_gmt":"2019-01-03T16:12:03","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=45361"},"modified":"2019-01-03T11:12:03","modified_gmt":"2019-01-03T16:12:03","slug":"whats-apples-problems-tell-us-about-innovation-and-corporate-organization","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=45361","title":{"rendered":"What’s Apple’s problems tell us about innovation and corporate organization"},"content":{"rendered":"

Fortunately, we sold all our Apple a while back. And we did not buy it back at lower prices. That was good.<\/p>\n

Last night Apple issued a dire earnings warning. Its stock plunged 8%+ this morning.<\/p>\n

This is not only an Apple story. It’s a technology story:<\/p>\n

If you don’t keep inventing new products consumers desire, your sales will suffer and your stock will decline.<\/p>\n

What turned me onto selling Apple (and telling you to do also), was simple: I asked my family. All have iPhones. None of them were interested in buying a new Apple phone. As part of my research, I also bought a new Samsung Galaxy Note 8 and compared it to my iPhone 8 plus. As a phone the Samsung works as well as my iPhone. In fact, over WiFi calling it works better. The reason I love my iPhone is PhotoStream — a constant flow of family pictures — and FaceTime\u00a0 video calling with the family. Samsung has equivalent features — but they don’t with mesh with iPhones. If you want photos of Eleanor, Zoe, Peter and Sophie, you must have an iPhone. Surprise. Surprise.<\/p>\n

Even though Samsung doesn’t hype its phones like Apple does — with advertising, billboards, massive press conferences, etc. — Samsung sells more phones worldwide than Apple. According to semi-reliable guesses, Apple has about 15%, and Samsung 20% of the world market for smartphones.<\/p>\n

Apple blamed its lousy sales on China. That’s politics. Maybe the White House will listen and do something about the Trade War with China? The Trade War is hurting all manner of American companies. Not just China. Good luck with an early end to the Trade War.<\/p>\n

Innovation. New products we\u00a0 want. New products I<\/strong> want. That’s what FANG companies need. The only one that seems to understand The New Product Imperative<\/strong> is Amazon. Here are the keys to new products:<\/p>\n

+ Inventing them. This is the easiest part. Even I can think of a dozen new products Apple should make and I’d buy.<\/p>\n

+ Making, marketing and selling them. This is the hardest part. Your company has to be organized for entrepreneurship. Apple isn’t. Like most companies, it’s top-down driven, bureaucracy aplenty, with zillions of unhappy worker-bees earning a nice living — but essentially doing nothing to make new products. In contrast , Amazon is organized for entrepreneurship. A recent trade article referred to “Amazon’s 100 CEOs.” Last night, Susan and I dropped by the Amazon store in New York’s Time Warner Center. It’s brimming with new products. Susan was in a hurry to get home and fee Rosie, otherwise I could have loaded up on the new Amazon products — especially those sporting Alexa connections.<\/p>\n

Predicting 2019<\/strong><\/span><\/p>\n

What with Trade Wars, the Government Shutdown (800,000+ employees affected) and economic slowdowns in China, and Europe, it’s hard to forecast ebullient times for 2019.<\/p>\n

There are four ways to make money in this market:<\/p>\n

+ Stay out of it. Earn 2.5% to 3.00% in short-term funds of treasuries.<\/p>\n

+ Go short on obvious technology names, like Google, Apple, Netflix, and non-tech names like Berkshire, and General Motors. My GM short is up 6.5% so far.<\/p>\n

+ My friend who trades a little, while still working 50+ hours at this day job emails me:<\/p>\n

One doesn’t need to be a genius to make money in this kind of market.
\nBuy low, sell high, repeat.
\nPut another way: buy panic, sell exuberance, repeat.
\nOr put yet another way: buy dips, sell rallies, repeat.
\nWhat part of this does David Einhorn not understand?<\/p>\n

He refers to a Blomberg report that wrote:<\/p>\n

“David Einhorn closed out 2018 with his biggest annual loss ever for the 22-year-old Greenlight Capital. The firm’s main hedge fund fell 9 percent in December, extending this year’s decline to 34 percent,<\/strong> according to an investor update viewed by Bloomberg.” For the full report on Einhorn’s miserable performance, click here.<\/strong><\/a><\/p>\n

+ Buy yourself a business. A friend sent me this listing:<\/p>\n

\"\"<\/a><\/p>\n

Learned over the weekend<\/strong><\/p>\n

+ Every major appliance in your house should be protected, including washing machines, boilers and refrigerators. Here’s a device: Click\u00a0here.<\/strong><\/a><\/p>\n

+ I replaced the motherboard on our Whirlpool washer. I bought the motherboard on Amazon and watched the “How to install” video on YouTube. It was blown by a power surge. From now on when I leave home, I’m unplugging the washing machines and turning off their water.<\/p>\n

+\u00a0Reset, Reboot, Power Off. All words that say Unplug it. Wait. Turn it back on.<\/strong> Some take 30 seconds. The Whirlpool washer took overnight — even with the new motherboard. Go figure.<\/p>\n

Worth bingewatching on Netflix<\/strong><\/p>\n

\"\"<\/a><\/p>\n

Stuff to read<\/span><\/strong><\/p>\n

+ As a grocery chain is dismantled, investors recover their money. Worker pensions are short millions.
\nPrivate-equity firm Sun Capital has filed for bankruptcy 5 times in 10 years, leaving $280 million unpaid.
\nFrom The Washington Post.<\/em> Click here.\u00a0\u00a0<\/strong><\/a><\/p>\n

+ The Malaysia Scandal Is Starting to Look Dire for Goldman Sachs.\u00a0A pioneering twist on third-world corruption might be the biggest scandal the Vampire Squid has ever faced by Matt Taibbi of The Rolling Stone.\u00a0<\/em>Click here.<\/strong><\/a><\/p>\n

+ Trump versus the Economy<\/strong> by Nouriel Roubini.\u00a0Between publicly chastising US Federal Reserve Chair Jerome Powell and escalating his trade war with China, US President Donald Trump has finally rattled the markets. While investors were happy to look the other way during the first half of Trump’s term, the dangerous spectacle unfolding in the White House can no longer be ignored.<\/p>\n

Financial markets have finally awoken to the fact that Donald Trump is US president. Given that the world has endured two years of reckless tweets and public statements by the world’s most powerful man, the obvious question is, What took so long?<\/p>\n

…Trump is now the Dr. Strangelove of financial markets. Like the paranoid madman in Stanley Kubrick\u2019s classic film, he is flirting with mutually assured economic destruction. Now that markets see the danger, the risk of a financial crisis and global recession has grown.<\/p>\n

Click here<\/strong><\/a>.\u00a0\u00a0<\/strong>Posted on Scoopnest.com.<\/strong><\/span><\/a><\/p>\n

Comment on the government shutdown<\/strong><\/span><\/p>\n

\"\"<\/a><\/p>\n

The taxidriver<\/strong><\/span><\/p>\n

A woman and her 12-year-old son were riding in a taxi in Detroit. It was raining and all the prostitutes were standing under awnings. “Mom,” said the boy, “what are all those women doing?”<\/p>\n

“They’re waiting for their husbands to get off work,” she replied<\/p>\n

The taxi driver turns around and says, “Geez lady, why don’t you tell him the truth? They’re hookers, boy! They have sex with men for money.”<\/p>\n

The little boy’s eyes get wide and he says, “Is that true Mom?”<\/p>\n

His mother, glaring hard at the driver, answers “Yes.”<\/p>\n

After a few minutes the kid asks, “Mom, if those women have babies, what happens to them?”<\/p>\n

She said, “They become taxi drivers.”<\/p>\n

\"HarryNewton\"<\/a>
\nHarry Newton, who did buy the latest Apple watch — because it had some new, serious health features an old codger like me wanted. But I’m still sporting an old iPhone 8 plus. I’m writing a chapter on “Why Nobody Listens and What you can do about it<\/em>.” The simple answer is run your own business. I don’t like beer. But I do like bagels.<\/p>\n