At the intersection of technology, finance and the Pacific Rim.

Sunday, May 14, 2006

To Ms. Do, oversupply in semiconductors or LCDs is a common occurrence. Of course, it is not as catastrophic as bananas or tomatoes. In such instances, the inventory value goes to zero mainly because people can eat only so many bananas regardless of the price. In the case of LCDs or semiconductors (especially memory) the vendors just end up putting in more of the stuff into existing systems--going from 512 to 1gb; or 15 inch to 17 inch--all for the same price range.

There were two interesting articles that run with the grain of our class themes. The first is an article by Walt Mossberg of the WSJ. You may remember in the Innovator's Solution that a key is defining the scope of the operation--that companies that develop disruptive "new" things will often need to control as many points of the value chain and system interface as possible whereas modular "cost" based technology companies define their specialty and outsource and rely on technology standards (such as GSM or CDMA, or Wireless Lan protocol 802.11 or Wide area wireless called Wimax or 802.16) or ready-made modules for the rest for the full development of the system. In this article Mossberg compares Apple to Microsoft.

Note that the WSJ is a subscription service. If KDI does not have a subscription, you would do the school good by asking for one. If you cannot get it, let me know and I will send it out.

A second article is on the fact that IPOD phones will be introduced in Japan through Softbank. How do you think the deal got started? Why would Apple choose to start in Japan?


Blogger LeftBack said...

I was not able to access the WSJ article so I will confine my comments to the Softbank – Apple collaboration.

What I see happening in the – let’s call it the “mobile communications” industry – is a convergence of services. You can listen to mp3s on a mobile phone or take digital pictures; most phones like mine also have a rudimentary organizer. But the quality of an mp3 player versus the iPod, or a blurry phone pic versus one taken on a Canon digital camera, or my phone’s organizer compared to a Palm device, is laughable.

Then there are the other mobile devices, each dedicated to a particular service that the vast majority of phones today are incapable of offering at a reasonable level of quality. The Blackberry, used for e-mails, comes to mind, as do: camcorders, tiny portable TVs and movie players, portable gaming devices, and GPS’s. People want all of these services, they want high quality, and they want them delivered in one place.

Softbank’s partnership with Apple is part of the trend to accommodate the demands of the market. Softbank’s recent purchase of the Japanese branch of Vodafone gives Apple entré into the lucrative mobile business as well as extra distribution channels in the Japanese market; meanwhile, Softbank can ride the coattails of the iPod’s instant brand recognition and entice consumers with the iTunes Music Store’s vast collection.

Whatever brand-name Apple and Softbank choose to give their new device (iPhone?), it will be sure to have traction in Japan, a wealthy and tech savvy country, enamored of the “latest and greatest.”

2:29 PM  
Blogger (01000100)...| Honungsklubba # said...

This comment has been removed by a blog administrator.

5:11 PM  
Blogger (01000100)...| Honungsklubba # said...

To make a long story short, Ipod machines are very successful in Japan and they have existed in Japan long before iTunes was established. I don’t want to generalize things, but if there is Ipod and it is successful, it is natural for Apple to launch the onlines music store,iTunes (for instance uk, us, finland and many others, an obvious pattern). And then move onto to something more innovative, as the ipod phone or the nifty name iPhone (thanks leftback for the idea). But, it is not the first time they do so... Remember Motorola ROKR... failure. The product was speed launched into the market, with flaws that exceed the first version of the steam car.

Launching this iPhone in Japan is their second shot and it could be Apples's attempt to prove the analyst wrong, who criticized apple for doing something so... irrational with Motorola. My gut feeling says that Apple wants to prove that iTunes can also succeed in cell-phone market, despite its failure with Motorola. In addition, my prediction says that the era of Ipod or any memory based mp3 player might be coming to an end where more and more cell phones has integrated mp3 feature. I mean, in 10 years who would even carriy a cell phone and an ipod at the same time...

In my opinion... they are strategically trying to prevent Ipod from being killed in the future, "remember the us company who made baking soda?" They almost went into bankruptcy if it were not for the innovative way of putting the baking soda into new use - the refrigerator.
Apple is doing the same way by putting the Ipod into another use due to the changes in customer behavior.


5:12 PM  

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