iCONOMICS: Six Key Takeaways From the Era of Apple
by ilene - February 16th, 2011 11:09 pm
Courtesy of Joshua M Brown, The Reformed Broker
iConomics is a word I’ve created to capture the state of doing business in a world that Apple ($AAPL) owns and the rest of us just live in.
Regular readers know that I am a fairly astute observer of market trends and themes. While lots of ink has been spilled about Apple’s ascendancy, no one has really yet formulated a good list of takeaways from it all. Below are what I view to be the key lessons for companies in the Era of Apple…
1. Don’t just invent the product, invent the market:
Nobody knew they needed an in-home Keurig machine to make cup after cup of coffee until Green Mountain Coffee ($GMCR) convinced them that they did. In much the same way, Microsoft had tried and failed repeatedly to kickstart a market for tablet computers over the last decade. Each failure was blamed on there being no market for the devices. Funny, Apple’s iPad came into the world with a similar lack of a market for tablets – so it had to invent one.
2. Pick needy partners:
Jamie Dimon awoke to his destiny in early 2008 as one of the few remaining pillars of strength in the financial world. While all the other bank CEOs were running around trying to do deals with each other, Dimon’s JPMorgan ($JPM) was busy partering with the government. He and his resources were needed so badly that he was handed Bear Stearns almost for free – a price he voluntarily raised it on his own because it was such an embarrassingly good deal. As the government got even more needy, it handed its new partner Washington Mutual while simultaneously eating all the bad debt – too good to be true. In much the same way, Apple launched its iPhone with the neediest of partners – the combining Cingular/AT&T ($T) colossus that, above all, needed a hit phone to overcome their patchwork coverage network. Apple was handed a monumental opportunity to have its untested hardware pushed to millions of new customers.
3. Consumer tastes are overrated:
Steve Jobs isn’t one of those guys who test-markets stuff to death. Rather than try to innovate by committee, he relies on his own taste and the prowess of his designers and engineers. And it works. He is delivering functionality like music-playing, web-accessing…