unveiling and roll out of the Trump tax plan. We can hardly stand the anticipation, speculation, Dems bipartisanship, yadda, yadda, yadda. The only real question is how much pork is Wall Street being served up and how far in debt does the country have to go to appease these corporate overlords. So they want the 20% rate or lower which we all know transcribes to a near sub 10% effective rate, really? Then there’s the issue of a pending government shutdown, which will no doubt-ably be averted last minute with a strong kick of the debt can down the road. Anyway the equity markets were whipsawed with the SP500 running putting in a rarified 2% move in about an hours’ time on Friday. A rare increase in volatility, we are suppressed the bots recovered. The NASDAQ market seems to have already started to roll over and seems to be having difficulty holding the 6400 level.
Staying on the tech theme we can’t help but to do some of our own digging into one of the NASDAQ’s stalwarts, that is Apple Inc. We have been studying them for quite some time, going back and researching their troubled past and trying to uncover if and when their blue ocean strategy will finally mature itself into a standard sea of red. For those that don’t know what the Blue Ocean strategy is, it can be defined as a corporate innovation that reconstructs industry boundaries and creates new and untapped market space and creates a whole new demand paradigm.
This is basically what Apple did to revive its failing business back in 1996. Steve Jobs came back and reintroduced the iMac desktop PC as a stylish, trendy unit that took computing to a new level of sophistication and style. This allowed them to survive the dotcom crash and introduce their real innovation, the Ipod and then subsequently, open the Itunes music downloading service. That was their real “Blue Ocean” and it allowed them to transform the way people listened, downloaded and purchased music. The one stop shop if you will prime, primped and combining sleek tech with brick and mortar Apple stores to take care of all your fiendish needs. Apple was on to something, with their superior innovation and must have style. They were an innovator who succeeded where Sony and Samsung seemingly failed. However that was over a decade ago and it seems as if Apple’s success comes at an increasingly and alarming cost, that is lack of differentiation.
There is no doubt Apple’s success comes mainly from its brand recognition and loyalty, but it’s also in part to its consistent cost leadership. Meaning its production costs are superior to any of its competitors and thus enjoys the benefits of higher margins, however, we think things are changing and changing rapidly.
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