The Strategic Mistake Almost Everybody Makes

Every business and business model has a finite life. Products come and go. Customer preferences change. As Rita Gunther McGrath notes, competitive advantage is increasingly a transient notion. The companies that last over long periods of time do so by creating new products, services, and business models to replace yesterday’s powerhouses.

Scott Anthony makes some great points in this piece.  I stated in a previous blog how much focus is put on "churn" percentages.  In most industries it is very important to watch churn, however to keep customers as a defensive move will always result in long-term demise.  

Your customers will churn, this is a proven fact.  At what rate and when is always the biggest question.  The key is to have customers churn to your next innovation.  Apple didn't try to prevent churn in their iPod line as a defensive move, they were always on the offense.  Creating new form factors, adding color and video.  At some point they were so much on the offense, they destroyed this business with the iPhone, but I would imagine the positive churn of Apple customers is many times greater than if they would have played defense with the iPod line.  Compare this to Microsoft which has been playing defense with Windows for many years.  They are starting to see that negative churn by only playing defense, which has put them at a distinct disadvantage in mobile.  They played defense so much, their mobile strategy is Windows.  

Portfolio theory has its naysayers, but few argue with the fundamental idea that diversification decreases risks and increases a portfolio’s potential. Do you remember the most efficient buggy whip manufacturer or the most profitable distributor of packaged ice? Of course not.

I don't fully agree with what Anthony has to say here.  Where I disagree is with the size of the portfolio of the business.  Diversification is good if it remains within the core competency of the business.  Too many times businesses diversify into areas where they have little expertise just to increase the portfolio, which causes a loss of focus on the strength of the business.  The best companies diversify within the core, like Apple.  I think the proper strategy is to be the company that causes your customers to churn, this way you keep the customers loyal to your brand and you are always trying to be the next product in your industry.

Why Did Facebook Buy WhatsApp?

I have been asked my opinion on why Facebook bought WhatsApp a lot in the last week.  I mean $19bn is a big number after all.  How can a simple app be worth more than many huge corporations that have a history of making money and arguably have bigger customer bases?  I will admit that I do not have the answers, but I have my theories.

First, there has been a lot of talk recently about the under 30 demographic leaving Facebook in droves.  Well I don't know if droves is the right word, but many organizations rely on a metric called "churn" as their main metric, especially Facebook that gets paid by having a large number of eyeballs to create clicks on advertising to make its money.  So the negative churn of the younger demographic has to be a concern to Facebook.  Where are all the Gen X folks going?  They are going to apps, mostly messaging apps.  These messaging apps are building platforms on top of their basic messaging functionality.  This scares Facebook.  So they are going with the Microsoft strategy of buying up the competition.  The big problem I see is WhatsApp isn't the only platform that has a large user base in the messaging space.  So if customers are running from Facebook, then those customers will have lots of alternatives to jump from again, which will end up costing Facebook a lot of money.   

Second, the valuation of companies based on a per customer basis may not be the best metric to use.  I have heard Facebooks value as a company is equivalent to $140 per customer, they paid $105 per for WhatsApp.  That sounds like a great deal right?  The first issue I see is the WhatsApp and Facebook customer base is not mutually exclusive.  Some, and I would venture to guess, most of WhatsApp customers are already in the Facebook database.  So what is the real valuation under this model?  Do you take only the customers that aren't in the Facebook database?  Lets say that is 30%.  Then all of the sudden the WhatsApp purchase is valued at $350 per customer.  Very over priced.  

Third, the biggest bubble I see is the value of large groups of people that aren't willing to buy anything to be a part of the database.  Lets take WhatsApp for instance.  In an article by Bloomberg Technology, WhatsApp has cost phone providers a lot of money in text messaging revenues

Free social-messaging applications like WhatsApp cost phone providers around the world -- from Vodafone Group Plc (VOD) to America Movil SAB (AMXL)and Verizon Communications Corp. -- $32.5 billion in texting fees in 2013, according to research from Ovum Ltd. That figure is projected to reach $54 billion by 2016.

That's a lot of revenue being lost.  The problem with these customers is they are looking for "free" alternatives to not pay the text messaging fees.  I don't know about you, but I hate basing my business off of people that avoid having to spend money, I'd rather have a customer base that spends money.  Most of these customers are young, which tend to not be a loyal group of customers.  They will jump ship at the first sign there is something new and different.  So not loyal and looking to avoid spending money, not the customer base I would spend $19bn for.

As you might see I am not a big fan of this deal.  Of course it will take time to see how this plays out, but I can't see how this will ever make sense for Facebook.  To spend $19bn on something I would want to get $100bn of worth from the deal, I don't see that happening.  I think Facebook has knee jerked a couple of transactions as of late and it will be interesting to see how that plays out.  This is a lot of money for technology that is easy repeatable.  Should be interesting.

Microsoft's Bad Bet

Microsoft bet the company on an operating system that had a market share under 5%.  Why would they do such a thing?  Because the bloggers told them to.  But did they listen to what they wanted to hear or did they truly believe this was finally the time to change the paradigm of Windows that had been basically the same since 1995?

When Windows Phone 7 came out with the now defunct Metro monicker, the blogs went crazy.  "Microsoft has out designed Apple," they cried.  Microsoft was riding high in the blogs and with the tech pundits, probably a first for them.  So can you blame them for being so excited?  We are finally cooler than Apple, lets run with this!  Time to change Windows.

The blog was going crazy because it was different.  It had its own voice.  The tech pundits had been waiting for something new.  Android, WebOS and Blackberry OS's had done little but copy the spirit of iOS, yet here were these tiles that had live data, so different.

But there was just one problem.  Consumers weren't jumping to the new platform.  Even though Microsoft was spending millions of dollars to advertise the new platform, customers didn't have a connection with the platform.  They had a high defection rate compared with iOS and even Android and even though they dominated the enterprise, Windows Phone had little to no penetration in this cash cow segment.  

So it shouldn't be a surprise that Microsoft is now backpedalling on its Metro bet.  The next version of Windows is going to launch into the old desktop of Windows 7 by default, which relegates Metro as no more than the dashboards section of OSX.  So Microsoft will have to figure out their next steps.  Are they going to fork the OS's and create a true tablet OS (like they did with RT) or are they going to try and make their all in one solution with Windows 7 being the default?  I would say they need to brush off RT and make the phone and tablet more compatible, similar to iOS,    

How to Find, Assess, and Hire the Modern Marketer

Who is the modern marketer?

Regardless of the role in marketing, the expectations related to data and analytics need to be consistent. While there will always be more advanced analytical and technical positions, there is a new baseline for all marketers. The skill set includes a knowledge of data management principles and analytical strategies, and an understanding of the role of data quality, the importance of data governance, and the value of data in marketing disciplines. Today’s marketer needs to go well beyond reporting and metrics, and be more proficient in a full range of analytics, which may include optimization, text, sentiment, scoring, modeling, visualization, forecasting, and attribution.

Marketers need to have experience with the technology, tools, and design approaches that leverage data and analytics. Campaign design, multi-channel integration, content performance, personalization, and digital marketing can all be driven by fact-based decision-making, ideally with direct accountability to results and the ability to very quickly react and adjust to the demands of the customer and the market. The marketers I am referring to have a distinct blend of creativity and reasoning talents; they are inquisitive, inventive, and enthused by a culture that is advanced and agile.

Great article that really describes what marketers are becoming.  I believe this change in what a marketer is has been happening for quite a few years now.  A a marketer It is so important to understand the tools, data and how to analyze the data.  

Windows 8 and the Cost of Complexity

The WSJ – and prevailing wisdom – blames two factors for the decline of PCs: PCs have become “good enough,” lengthening the replacement cycle, and more and more time is being spent on tablets and other appliance-like devices.

However, I don’t think these factors are independent; it’s not just that tablets occupy more of a user’s time, but that by doing so they make any performance issues on one’s PC less pressing simply because you use it less. To put it another way, users are likely to have a higher standard for their primary computing device than they are a secondary one; as PCs become secondary devices for more and more people the standard for “good enough” becomes lower and lower.

Ben Thompson has been on a kick as of late talking about his Chromebook, but I believe he hits the nail on the head with the title of the article.  However I have to disagree with his statements above.  I don't believe it's that PC's are good enough because they are now secondary devices, I believe most people were using their computers to do things that are better served in the tablet form-factor.  

People have been using computers to do email, browse the web, go to Facebook.  Most people who owned computers were not using them up to their full capabilities and didn't need all the complexity that is inherent in a PC Operating System, Mac or Windows.  Most people just want to be able to do a few things on a computer and it has to be very easy.  While I am very computer literate, I love my iPad because it is totally simple.  I enjoy the simplicity because I just don't have the time to tinker.  So the iPad model solves problems for all levels of users.  

The downturn in the PC industry is simply because a technology (product) came out that made it easier to do what users wanted to do.  If the iPad was more complex (like Android or a Chromebook), we would not have seen this downturn in PC sales.  

The iPhone Keynote 7 Years Ago

I have been reading all of the annual anniversary articles about the iPhone keynote 7 years ago.  Every once in awhile I like to go back and watch the keynote over because I believe it was the best technology keynote ever delivered, Steve Jobs at his absolute best.  

One thing has always struck me when Steve goes into the three revolutionary products part of the presentation.  There was a widescreen iPod, a phone and a revolutionary internet communicator.  What strikes me is the audience reaction to all three.  The first two get very loud applause, while the third, the internet communicator, gets no applause, well a cursory clap I would say.  

Why this is interesting is that 7 years later, it is the internet communicator that has been the most important one of the three.  Very few people in the audience appreciated what was being introduced.  In 7 years the constant communication with the internet has been the killer app.  

It took the creation of the app store and third-party apps to really take full advantage of the internet communicator, but it has revolutionized our lives.  I cannot remember how bad phones were before the iPhone.  I had Palm Treo's, Windows Mobile and Blackberry's before I bought the first iPhone and they were all very limiting.  They all fetched email (the Blackberry pushed), made calls and were decent for SMS.  

There was something different when going to the internet with the iPhone.  It was night and day.  Also, the maps were incredible, they still are.  But behind all of the data on the maps were communication to the internet.  That app showed just what was possible when you could have a revolutionary internet communicator going along with a rich client application on a mobile device.  Most apps that have come since have used this same model to create amazing mobile applications that the web alone cannot replicate.  The brilliance of Steve Jobs was seeing the future and by announcing this functionality as he did, instead of something like an enhanced web experience, shows that he knew what the iPhone was all about.  Hats off Mr. Jobs.

Interactive Data Visualizations - It's Still About the Data

With so many data visualization tools out in the marketplace, it is a wonder why most organizations are still struggling to get these easy to build dashboards adopted throughout the organization.

It usually comes down to the data.  The data still has to be accurate and up to date and reliable.  So many organizations still struggle with this.  I believe it comes down to structure within the organization.  How does IT still control the data in many organizations?  IT tends to create processes and documentation that takes data forever to get into the hands of the users.  

It all depends on the size of the organization.  When organizations are very large, this type of process and documentation is needed.  Most organizations are not this size.  The data is used by a handful of people within the organization and a more agile approach to data needs to be taken to always have the best data at the soonest possible time.  Long lead times and processes that make moving things forward difficult lead groups within the organization to get their own data in many different ways and this leads to many different versions of the truth and lack of trust in the interactive dashboards.

Organizations need to move the data ownership into the hands of the data users to ensure one version of the truth.

The Chief Data Officer: An executive whose time has come

I often ask people whether they know what Netflix, Harrah’s, Amazon and Wal-Mart have in common? The answer is pretty simple. They use data analytics to leave their competitors in the dust. Many other businesses are trying to do the same, spending millions of dollars on data software.

It takes more than a steep investment, however, to squeeze business value out of data. Companies have to establish an entire system to use data to drive competitive advantage.

Data as a competitive advantage needs a department that is responsible for the analytics and getting all the needed data.  The data owners and the data users should reside in the same division to ensure the right data is always available and up to date.  Also, the decisions on resources should be within that department, not within IT.

When IT is in charge of the data, they tend to not understand the business as well as needed to facilitate data.  The operations does not understand databases and technology, however the analysts understand the business and the technology, so they should own the data and the facilitation of the data.  

Critical importance of data visualization

Clear presentation of data using graphics are critical to how fast people can understand the information and how comfortable they are in interpreting the information.

Great article using the Edward Tufte visualization of the data from the '86 Space Shuttle crash.  The engineers were very concerned about the temperature on the day of the launch, which they felt heightened the risk of the O-rings being damaged.

The engineers presented all the data to the decision makers through multiple reports and with the data spread out on many different pages.  Of course it was hard to put all the data together and understand the severity of the issue.

The actual fax of one page of the data to decision makers

As you cab see, not really something that shows the severity of the issue. 

Edward Tufte's visualization of the severity for the launch

The graph shows 2 things.  

1. The dots are previous launches and the severity of damage to the O-rings.  As the chart clearly shows the colder the temperature, the higher the risk for damage
2. The Red X marks the temperature on the day of the launch in question.  Because the temperature is used on the axis and includes the launch day, it shows how far out of the normal ranges this launch was and since the damage increases as the temperature decreases, this shows the severity in a way that would have more then likely stopped the launch on that fateful day.

Now most of us won't be presenting data that will save lives like the example above, however it really shows how a good piece of visualization shows outliers and gives the decision makers easy to understand data to make better decisions without having to go through pages of data.

Why Netflix walked away from personalization | ThoughtGadgets

n 2006 Netflix offered a $1 million prize for anyone who could improve its movie preference recommendations by 10%. Netflix, at the time, made most of its money sending DVDs in the mail to users’ homes

Mathematicians went wild. The competition was lauded by business pundits as an example of crowdsourcing genius. Because this was damned hard math, the project took years. And then in 2009, a team of mathematicians called “BellKor’s Pragmatic Chaos” actually cracked the code, achieved a 10% lift, and Netflix gave them the $1 million.

And then … Netflix never implemented the winning algorithm. Because personalization at that point no longer mattered.

Personalization has been such a buzzword for so many years.  Netflix was one of the poster children for this.  It's interesting to look at articles like this and understand they really don't utilize it like say an Amazon does.

In fact, this article is very critical of Amazon and I'd have to agree.  Amazon has decent recommendations, but it seems to be a fairly basic market basket model that shows what others who bought similar items.  That may be the best way to offer items to customers.  Amazon has all the money in the world for R&D, in fact they flaunt how much money they put back into their business and if they are using this model, it must mean the personalization models of predicting other types of product must not bring in as much as the market basket.

Apple iPad: bashed by bloggers around the web

A very interesting look back about what everyone had to say about the iPad when it was revealed in early 2010.  Most were very negative, however it played out well for Apple.

I remember this reveal.  I was not going to buy one, I didn't really see the need.  But I took a risk on day 1 and I bought an iPad.  I will never forget the first time I held the device in my hand and played with it.  What an amazing device.  Was it a big iPod Touch?  Sure.  But what made it amazing is it was a big iPod Touch.  I used my iPad much more than I use my computer.  It is the device i have with me when I sit down at the end of the day.  It is the device I read at the beginning of the day.  It is the device that I take to meetings to take notes.  It is the best device I own.

Big Data Demands Big Context

When we entered the age of big data, many of us assumed we had left the age of big risk. We didn’t have to guess anymore. We didn’t have to go out on a limb. We’d follow the numbers, the “truths.”

But time and time again we’re finding that it’s not that simple. No matter how good the research is, big data is nothing without big context.

The promise of big data is a complicated one.  When I hear most non-statistical people talk about big data, they believe it will answer all the questions they have about their business.  Big data is just making sense out of larger data sets that may not be historically the data everyone has focused on in the past.  

Once you break down what big data is and what it isn't, the question then becomes how to use it.  Context is extremely important.  Not just in the form of survey or research, but in the form of humans that have been working in the business.  The human intuition and psychology of consumers is just as important as ever.  Just as before there was big data, organizations combined data with business acumen to make the best decisions.  Nothing has changed with big data.  There has to be business acumen to combine with the big data finding to build the best product and have the best marketing strategies.

This article looks at Microsoft and Windows 8 to put this into context.  

Microsoft’s engineers discovered that people were doing less of the time-consuming writing and creating that had once been the norm. Increasingly, users were socializing for short bursts.

The research also showed that people loved having “touch” functionality and were avidly consuming small pieces of live information.

Consequently, Microsoft decided that Windows 8 should feature navigation that enabled multitasking and quick interactions, and that it should also have touch and live tiles.

People love touch.  I love to touch on my iPad and iPhone all the time.  However, those devices are more intimate than a computer.  They don't have the bulk of a computer and they can sit on my lap or I can hold them up.  

It turns out touching a screen on a computer is very hard over time.  While little touches here and there will work, overall it is literally a pain to touch on a computer.  After time your arm will become tired and a trackpad can solve many of the problems.  While I believe at some point there will be a touch interface that makes sense in a computer, to have the whole interface built around touch does not make too much sense.  

But what people say and what they do are two very different animals.

This is so important to understand when doing any research.  It goes back to the famous Henry Ford quote of "If I would have asked my customers what they wanted, they would have asked for a faster horse."  

Context is important, but so is psychology.  Customers don't think beyond using the devises or tools they have when answering questions.  They want a computer to solve a problem that another device should solve, but thats just because they don't know about the other device.

Also, doing research on what a customer would do if they were given a choice of the following is very deceptive.  I never believe what a customer says they will do, I always rely on what they do in combination of what they say.  When you combine the two, you get the truth which is always somewhere in the middle.  Remember to never change an entire strategy based on customer surveys of "what they will do if" questions.

How to Get More Value Out of Your Data Analysts

Organizations succeed with analytics only when good data and insightful models are put to regular and productive use by business people in their decisions and their work.

Actionable data is a buzzword that I have used and heard for many, many years.  However, in practice it is much harder to produce actionable insight for business users.  C-level executives are always trying to dissect old information which can be very useful, but only in cases where the answer will have some actionable insight.  If the answers to question have interesting insight, but don't provide any action, it creates a time consuming chase in how to make something out of the data.

Organizations have to educate themselves of what is capable of their data.  It's no use to ask questions that the data will not be able to turn into actionable insight.  Organizations should spend time on questions that can be solved with the current capabilities, in other words the low hanging fruit.  Once there is no longer any low hanging fruit, enhance the analytics with new tools and modeling capabilities to find the next round of low hanging fruit.

If you want to put analytics to work and build a more analytical organization, you need two cadres of employees:

• Analytics professionals to mine and prepare data, perform statistical operations, build models, and program the surrounding business applications.
• Analytical business people who are ready, able, and eager to use better information and analyses in their work, as well as to work with the professionals on analytics projects.

Very true.  An organization can hire all the analysts they can handle, but if the analysts have no business acumen and the business has no data acumen, there will always be a disconnect.  

Organizations need to have both the business and analysts working together to find the best answers.  Data Scientists can find very interesting items for them, however the business side may provide insight that shows the data scientists work is a known insight.  The business may be working very hard to solve a problem that the data scientist can solve, taking intuition out of play and using data in the place of trial and error.

In my history I have always liked business and data analysts reporting to the same group.  Many organizations don't like this structure because it can lead to a group "grading their own paper".  However, the tight integration of the teams produces results more efficiently.  Analysts are not wasting time chasing problems that don't exist and business people can bounce ideas off of analysts for quick insight before making decisions.

Can You See the Opportunities Staring You in the Face?

I’ve come to believe that less than 1% of the data is truly useful.

Exactly!  Most businesses are very simple if you look for the key metrics.  So many times people want to show their worth by over thinking the problem.  If I can come up with some new innovative way to look at this problem, I'll be a superstar.  But more times than not it isn't a complex problem.  Humans are fairly simple to predict.  Most humans will fall into patterns and want very straightforward things.  New data doesn't need to be introduced until you have gotten everything out of the current data you have.

Big-data initiatives are proliferating, and the information is getting more complex all the time.

There’s a lot of potential benefit for both retailers and customers.

But only if the data is well managed and well understood. Statistics literacy isn’t very high in most businesses. A few educational institutions have realized this and are making a push to turn out business graduates who know their way around a regression analysis. But for the most part, businesspeople aren’t familiar enough with statistics to use them as the basis for good decisions. If you don’t understand the numbers, you can go a long way down a bad road very quickly. That’s why every team charged with making decisions about customers should include a trusted individual who understands statistics. If that understanding isn’t between your own two ears, make sure you bring a person with that skill set onto your team.

Being able to understand what the data is telling you is more important that having a degree in statistics.  Interpreting data is really where the opportunities present themselves, not in figuring out the most optimal model.  I suggest having someone who is proficient in building statistical models and ask a lot of questions from the output.  Start to understand what the answers  of models are telling you and simplify the results into something that can be used in the future.  A model may tell you that people who buy a particular item are likely to be loyal, but is it the item that drives the loyalty or is this just a coincidence?  The better you understand your data, the better decisions you will make and you don't have to be a data scientist to do that.

The Revolutionary Way Marketers Read Your Financial Footprints

Laube, 43, Cardlytics’ president and COO, and Grimes, 51, its CEO, have since helped pioneer a data-driven advertising niche called merchant-funded rewards. It targets people based on what they buy, not who they are. “If you know where and how someone is spending money, you know lots of things about them without having to know their personally identifying information,” Laube says.

I have found that the transactions of customers is the most important predictor of future behavior in all data I have studied.  While the demo, geo and psychographics of customers is very interesting data, to maximize the revenue from known customers is to really get to know their transactions.

While I don't know how good these algorithms are, the theory is solid.  I happen to be a Bank Of America customer and the deals I receive don't seem to be any better than say my Rapid Rewards dining offers which don't seem to know my eating habits whatsoever.  If these can be perfected, I think it's something that would get me to use my card more often instead of using my AMEX.  I'll be watching because this is very intriguing.  

Getting a bit creepy

It’s hard to describe what’s the tipping point, the point where things turn from useful/entertaining to creepy. To me those two examples did cross the line. And I wish I could put my finger on exactly what makes it creepy, but it’s hard.

Perhaps it’s when the application or service makes it blatantly clear that they can read your messages, that they actually have unlimited access to all the names and numbers in your address book. That they do track where you access the site from regularly. And not only do they have this information and access, they feel that it’s ok for them to use it rather openly. And they do make it personal. It’s not some trending data aggregated over millions of customers. It’s my data, extracted and pinpointed to be used on (or as it feels, against) me.

I’m trusting you with my data. I realise there are risks involved, but please treat my data with respect. Just because you can doesn’t mean that you should. And don’t be a creep.

The Fate of Apple in the Post-Jobsian Era

Apple has been an innovative company, but was Jobs the only man behind the magic?

Steve Jobs was an amazing innovator, but to say he was the only man behind the innovation is a crazy question.  Where I believe they will miss Steve the most is how dedicated he was to innovation.  Because he was in charge, innovation was the most important thing.  Does Tim Cook believe in innovation above all else?  Time will tell.

Apple has yet to release its latest new, breakthrough product. A careful observer would notice that about every three years Apple Inc. releases an entirely new product. In 1998 it released the iMac, in 2001, the iPod, in 2004 the Mac Mini, the iPhone in 2007, and the iPad in 2010. So 2013 should have been the year the world was to see Apple’s latest gadget.

What???  In 2004 the Mac Mini?  Now this is a stretch.  That's like saying the iPad mini was a breakthrough product.  What was so breakthrough about the Mac Mini?  I think the breakthrough was it was 3 years after the iPod, which made the math work.

I don't know if Apple will have another big breakthrough in a new market, but it wasn't a every 3 year magic as everyone likes to say.  The iPod wasn't the killer breakthrough as much as iTunes was the killer software that made buying music and syncing music very easy.  

Apple CEO Tim Cook might have been great as CFO, but he’s not the one who should lead Apple.

What??? CFO?  What is happening to CNN?  How does a major news outlet get something like this wrong?

Apple launched a “cheaper” iPhone, the iPhone 5c, made of plastic and cheaper quality than the premium iPhone 5s. Apple’s advertising places the iPhone 5c above the 5s, a move which suggests that it cares about the cheaper 5c more than the innovative 5s.

Another giant leap for techkind.  Because Apple is pushing for a higher margin phone to sell to the masses over the more expensive "S" series of phone, this means they are caring more about cheap products?  Not the innovative one?  Who edits this?  If Apple really cared about "cheap" over "innovation" they would have made the iPhone 5c much cheaper than they did and have the "true" low cost iPhone the analysts are all clamoring for.  The fact they built a mid-range phone shows they are interesting in protecting margins and staying away from the costly low-end.

Despite Jobs’ legacy as a great innovator, credit often falls short of the people who truly deserve it. Jony Ive, Apple’s legendary industrial designer, has played a key role throughout the years in designing iMacs, iPods, iPhones, and iPads. Apple Senior Vice President of Marketing Phil Schiller has also played an influential role at the company. Apple still retains many of the individuals who served under Jobs and helped to design some of Apple’s greatest hits. 

One cannot even count the legions of software developers and hardware engineers who have made these products possible. Apple today retains many of those same people who once served under Jobs, a good indication that the company has a strong future.

So Apple is not in trouble?  What is the point of this article?  

Apple also has over $110 Billion -- a number that’s not going anywhere in the next few years (if not increasing). With that much cash, it can easily stay afloat in the market.

Great reporting.  Any simple search would have let CNN know Apple has $147 Billion in cash.  The link baiting from the headline is the only reason this article made the web.  

Apple will be fine in the short run.  Tim Cook is making sure the next product is fully vetted, and why not?  If Apple would have put out a watch or TV this year and it would have turned out like Samsung's great watch debacle Apple would have been panned.  Can you imagine the articles about Tim Cook if that happened?  Dammed if you do, dammed if you don't.

The Macalope Weekly: Hard lessons to learn | Macworld

“Android tablet revenue surpasses iPad for the first time (but not the last)” (No link, but tip o’ the antlers to … well, John Koetsier!)

Profit is a trailing indicator. And in the big picture, the overwhelming tide is to Android, in device diversity, in device quantity, in usage, in sales volume, in revenue.

This is a very interesting take on profit, especially in the tech industry, especially in hardware.  The times where hardware vendors have had a dominant position in market share, they have all either gone out of business or the businesses have been destroyed.  

To say profit is a trailing indicator is an insane comment.  The only way to keep a competitive advantage in hardware is to make a profit.  To gain market share usually comes at the expense of profit and is short lived.  R&D, customer service and quality of product are all things that suffer under the weight of large market share.  The only sustainable business model is consistent profits.  Sounds a lot lille Apple. 

Apple and Samsung’s smartwatches are going to be way too cheap

In the $60 billion-a-year watch sector, most of the money flows to those who sell the most expensive devices: 0.6% of the watches shipped in 2012, with an average price of $4,285, were responsible for half the revenue of the entire industry.

That’s a big potential problem for aspiring smartwatch companies like Samsung, and eventually Apple. If they don’t tap into the ultra-luxury market, they’re going to miss out on most of the revenue and the healthiest profit margins of the industry that they’re invading.

There's one big fatal flaw with these comments.  Apple is more than likely isn't going to enter the watch market.  Back when they entered the phone market, they changed what a phone was.  The phone became a personal computer that could also make calls.  

Everyone is trying to determine if Apple can succeed in the watch sector.  It really doesn't matter what the watch industry looks like today, because they aren't entering that market. Now I don't pretend to know what Apple is planning to do in the sector, if anything, but I know their history of entering new markets.  They don't compete with current incumbents of the space, they create a whole new space which has similar functionality as the market they are entering.

“People buy watches for a variety of very complicated emotional reasons, of which telling time is often just a precept or an alibi,” says Bill Geiser, a former executive at Fossil and currently the CEO of smartwatch startup Metawatch. It’s a common refrain: watches are essentially fashion, a personal expression, and therefore useful as a mark of status or a gift.

To believe Apple is not going to make a watch that is a status symbol or a personal expression is shortsighted.  Of course Jony Ive is going to design something desirable.  

It’s hard to imagine Apple or Samsung selling a smartwatch for more than their “hero” smartphones—much less for $4,285. And if only 15% of the revenue generated from the global watch market comes from devices under $500, it’s a far smaller market than some analysts have argued.

One device has nothing to do with the other.  A smartphone and a "watch" are two different things and I don't think Apple is trying to price items based on the phone prices.  Also, going back to my argument before, the size of the current watch market does not necessarily translate to what Apple will do with their smart watch.

“The wrist is beachfront property,” says Geiser. “The watch market has been around for hundreds of years, and it’s going to be around for another 1,000. All we’re doing is taking this existing market and dragging it into the modern era… By and large a smart watch is still a watch.”

Of course this is what everyone said about the phone market when Apple entered into it.  The phone market had nowhere near the history of the watch industry, however the incumbents learned very quickly that Apple was out to change the market, not compete in the current one.  

Whatever Apple does I believe they will be trying to change what people think a watch is.  They will surely not be trying to compete with the current watches of today.

Instagram and Youtube

People aren’t using Instagram for photos, WhatsApp for text, Line for stickers... they’re using everything for everything.

Seems to be dominated by the younger audience.  I look at my younger cousins and see their behavior with the apps.  They post and interact with many different social networks.  Not my cup of tea as much, but I use Twitter for most of my social network interaction, I post photos on both Instagram and Facebook so the family can see what's going on.  I use Linked In for business.

Is FB going to buy Whatsapp, Snapchat, Line, Kakao and the next ten that emerge as well? Sure, some of those will disappear, but it doesn't look like FB will crush the competitors the way it did on the desktop. On mobile, FB will be just one of many. 

I think this is the interesting thing about mobile also.  It is much harder to dominate like the desktop.  Moving between apps is so much easier than going back and forth between websites.  I think this is why the Chromebook is a flawed strategy.