” Apple Inc is Core Competence Excellence ” – January 2015
Apple set up its victory lap for its twin achievements while declaring its Quarterly results on 27th, Tuesday :
(a) Biggest quarterly profit ever for a public company; and
(b) Vindication of its ‘Core Competence’.
Few known details on (a) here : $ 18 billion in net income in the last three months of 2014; $ 75 billion in revenue; free cash flow of $ 30 billion in one quarter; Stock jump of more than 5 %; Sale of 74. 5 million phones ( 34,000 of all models of phones every hour, 24 hours a day, during the quarter ); Market cap of $ 683 billion ( more than double Microsoft’s current value of $ 338 billion ); iPhone accounting for 69 % of revenue and 100 % of its revenue growth.
A short note on (b) here : Apple sets itself apart from others in the same category by its unique approach and sustenance of its ” Core Competence” first advocated by Dr CK Prahalad and Prof Gary Hamel in 1990 in their book titled, “Competing for the Future”. Apple’s Core Competence lies in ‘ making devices user friendly creating a long lasting competitive advantage ‘ true to what late Steve Jobs had been saying that Apple focuses on what it does best. Apple has thus established and secured its leadership position adding value to its products.
Apple has also timed its announcement of shipping in April its Apple iWatch, ” the most personal device ever ” as described by its CEO, Tim Cook.
Of significance is the following :
Apple scores fittingly with the three cardinal criteria that Dr CK Prahalad and Prof Gary Hamel set for establishing the competitive advantage in the market :
1. Provide Customer benefits of Value : Apple’s journey to the Computer in the pocket (smartphone) with high quality, excellent design, and performance is fully meeting the needs and requirements of the customers now.
2. Hard for Competitors to Imitate : With android one can choose many devices but with iOS the customer has iPhone as the only choice, its ecosystem and quality making it unique and hence difficult to imitate in scale. Apple sets the trends.
3. Can be leveraged widely to many products and markets : In its user friendly iPod, iPhone, iPad, and iWatch, Apple’s march has been highly conspicuous and noteworthy capturing even emerging markets and becoming the leading manufacturer of smartphone in China now. It gained a $ 16. 1 billion in revenue from China ( including Hong Kong and Taiwan ).
Apple always thinks of new uses for ideas as evident in its (a) Original iPod ( from music player ) ; (b) Gorilla Glass – Steve Jobs learned of this and convinced Corning Inc to revive the largely unused tech so that it can be put in iPhone; (c) Liquid metal, a family of metal alloys which combines metallic elements. It’s the technique that rapidly cools the mixture in to a ‘metallic glass’ with a distinct molecular structure than conventional metals. It is 5 times stronger than aluminium and twice as strong as titanium, three times as elastic as ordinary metals, resistant to corrosion, resistant to scratch and wear and can be blow molded like glass or injection molded like plastic. Used for making outer cases for smartphones; (d) MacBook Pro : Super fast, super thin, super light, super long battery life, immense storage, rugged body, fast start-up, but expensive and popular. … .. .
Apple thus exemplifies Prahalad’s ‘Core Competence’ going strong as ever even amidst growing clamor for diversification.
Apple did its best in the past; it does its best in the present; what it can do in future will be determined by changing technology, newfangled approaches to trends, and customers’ intent.
Money put in Apple is safe even as Apple will be looking for another groundbreaking product.
” Dieu avec nous “
Saturday, January 31, 2015 – 10. 59 p.m. (IST)
Tidbit : Apple is a dab hand at thinking differently.