Category Archives: Technology

140 Problems

I know this story originally unfolded last year and I know that none of us ever want to think of 2016 again. But I promised to cover this story and by god I will cover it, no matter how late I am.

Twitter: Soon to be the main communications outlet for the White House and the United States government. Over three years ago, I wrote one of my first blog posts where I discussed Twitter’s IPO. Since then, if you decided to invest in Twitter and stuck around for the long run then I feel bad for you son. If my basic geometry knowledge serves me well, then this is not the kind of shape you would want in your stock price.

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Buyer’s remorse

How did Twitter get here? It’s market cap today is almost a quarter of what it had been in the beginning of 2014. Wasn’t Twitter once deemed as the darling of the tech industry along with the likes of Facebook and Google? Lets look back and see how Twitter got into the hole its in right now.

Riches to Rags

I personally enjoy using Twitter. The company made a reputation for itself by drawing users like me who can be the first ones to learn about an event just seconds after it unfolds. No news organization will be faster than Twitter’s platform when it comes to notifying its audience of a news story. It also gives opportunities for every day folk to interact with well known celebrities and has also been a platform for individuals to express themselves in less democratic societies. However, Twitter is facing several major issues.

First of all, rivals Facebook, Instagram and Snapchat have all been consistently growing their userbase in the past couple of years. However, as the graph below presents, Twitter has had quite sluggish growth in its userbase over the last year or two.

twitter-user-growth
Proof that Twitter is the last corner of the Internet where we can remain hidden from our parents

Although 317 million active users might seem impressive, its disappointing compared to the fact that Facebook has about 1.8 billion active users and Snapchat, despite being a newer platform, has seen about 10-15% growth in its userbase each quarter since it was founded.

There are two big reasons why Twitter’s userbase is stagnating. First of all, Twitter is not as user-friendly as other social media platforms. I’m sure by now that many of your mothers, fathers and 5 year old nieces unfortunately have a Facebook account. But I’m sure that neither of them have a Twitter account. As I mentioned, I’m a fan of Twitter. However, Twitter has not taken meaningful steps in recent years to make its product accessible and enjoyable to a wider audience. Secondly, while activity on Twitter peaks during important events such as the Olympics or the US elections, usage subsides if there are no juicy events unfolding.

Why does Twitter focus so much on its userbase? So advertisers can give’em more cash for ads. The slowdown in user growth has led to advertisers becoming more reluctant to place their adverts on Twitter. This creates a double whammy effect. As Twitter’s userbase stagnates, it also has a tougher time monetizing that userbase. Advertising revenues are the lifeblood of social media networks like Twitter. Those pesky promoted tweets are what keep Twitter running. No advertisers, no money ; its that simple.

Finally, ever since it was founded in 2006, Twitter has had shakeups in its leadership. More recently, in 2015, founder Jack Dorsey replaced Dick Costolo as CEO, and in 2016, the firm’s COO and CTO resigned from their posts. The inconsistency at Twitter’s C-Suite is also one of the reasons why both investors and advertisers have questioned the future of the company.

I Got a Few Dollars I Could Fight the Case

Of course Twitter won’t sit by idly as it crumbles. CEO Jack Dorsey has taken some initiatives to revive the company.

Remember Vine, that app full of nonsensical 6 second videos. Well that was owned and operated by Twitter. In October 2016, Twitter shut down the Vine network in an effort to cut costs. Twitter’s cost cutting measures have also included laying off employees by the hundreds. Not the best of times to work for Twitter right now.

Twitter has also attempted to capitalize on its reputation for being the platform where events unfold live. In a series of surprising moves, Twitter has won deals over rivals to be able to live stream sports events such as NFL, NBA, MLB and Wimbledon matches, with the latest being the most notable being the deal signed with the NFL in August 2016. Combined with its acquisition of Periscope in 2015, Twitter hopes to be able to draw in more users and begin attracting video advertisements by focusing on live streaming. The following video provides a more detailed breakdown of the deal Twitter has carved with the NFL.

Do You Mind if I Look Around the Car a Little Bit?

However, as of yet, Twitter’s foray into live streaming has not had the desired results.  Continuing disappointment in revenues led Wall Street to continue punishing Twitter. With its stock struggling, rumors began swirling that given its cheap price, Twitter could be the target of a takeover.

In fall of 2016, news broke out that potential buyers had indeed lined up to prepare a bid for Twitter. Alphabet (parent company of Google), Disney, Verizon and Salesforce were some of the interested parties that were discussed in the headlines. However, shortly thereafter, all interested parties pulled themselves out of the running. Citing the issues the company has had attracting advertiser, all potential bidders with the exception of Salesforce decided to opt out of an acquisition.

Many analysts thought that Google would have made the most suitable acquirer for Twitter. Google also generates a significant portion of its revenues from advertising and there are many possible ways Twitter could complement Google’s own social media platforms. However, it was Salesforce that ended up being the final contender. Salesforce is not a company that makes the headlines in pop-culture. So what is Salesforce and what did they expect to gain out of acquiring Twitter?

Son Do You Know What I’m Stopping You For?

Although Salesforce sounds like it could be an avid shopper’s dream come true, the company’s business model is actually a lot less exciting. Salesforce is a cloud computing company that offers businesses cloud-based applications that allow them to manage relations with their customers. Salesforce’s main product provides services such as allowing customers to connect with other customers via a social media platform and the ability for businesses to perform analytics on the services offered to their customers.

For a while now, Salesforce has wanted to complement its business with a social media platform where they could assist companies in connecting with their customers. In June 2016, Salesforce lost out to Microsoft in a bid for LinkedIn. Thus, Salesforce saw Twitter as a second chance to get into the social media game.

However, when news broke that Salesforce might be interested in Twitter, something very interesting happened; Salesforce shareholders revolted against management. Through emails and letters, Salesforce’s institutional investors vocally expressed their concerns about the deal to Salesforce CEO Marc Benioff. As mentioned in the video below, Salesforce investors did not see any potential synergies being created between Twitter’s advertising business and Salesforce’s software services. They also found Twitter’s $25 billion valuation to be tad bit expensive. Following investor backlash, Marc Benioff, who had previously called Twitter “an unpolished jewel”, stated that “Twitter is not the right fit for Salesforce”. That’s the change in tone that occurs in most relationships once they’ve passed the 6 month mark. At this point, I wouldn’t have surprised if Benioff had said that it wasn’t Twitter, it was us.

Bounce on the Devil, Put the Petal to the Floor

So what’s next for Twitter. Unless they can find a way to make money off of every Trump tweet, Twitter will continue facing an uphill battle. Revenue generation and userbase growth will continue to be at the forefront of Twitter’s concerns in 2017. The company can cut costs only so much, and with no potential buyers coming to the rescue any time soon things do not look good for Twitter. For future updates on the social media giant, stay tuned to Symmetric Information.

Epilogue

Finally, for those of you who caught the Easter eggs I’ve been sprinkling in this post, here is your reward.

“Twitter is great to connect with fans and be transparent. I enjoy that aspect about it. But really, I’m still trying to figure it out.”
– Kobe Bryant

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The Bank of Facebook

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Ever feel as if Facebook is taking over our lives? We use the social media website to publicize photos from memorable moments of our lives, rant about our deepest emotions and affirm our social bonds with likes and hashtags. Well it looks as if Mark Zuckerberg has decided to plunge us further in to the Matrix by entering into the financial services industry. Last week, Facebook applied to the banking regulatory agencies in Ireland, where its non-US business is based, to permit electronic transfer of funds for its members in Europe, Africa and the Middle East. If Facebook’s application is approved, users in those regions will now be able to send each other money just like the way my relatives keep sending me Candy Crush requests.

Untitled

A few years ago, Facebook attempted a similar move by creating Facebook Credits which would allow users to spend money on virtual items such as that one cute cow you were dying to buy on Farmville. However, the system was a flop and was shut down in 2012. Facebook’s new endeavor into the banking sector is different. This time around, Zuckerberg appears to be taking on money transfer companies such as Western Union and PayPal. Remittances, or the transfer of funds from expat workers to their home countries, is a large part of the economies of many developing nations. For example, China, India and the Philippines each received over $20 billion in remittances over the last year. Because of the low standard of living in these nations, many of its citizens are forced to work abroad to be able to make a living. I spent a majority of my life in Saudi Arabia and I can tell you from firsthand experience that almost a quarter of the country’s population is expat workers. Go out on to the streets and at times you may have a hard time finding a Saudi citizen. Because expat workers in these nations may not have access to traditional banking, they rely on money transfer companies such as Western Union and PayPal. With Facebook’s potential entry into this market, it could soon replace traditional money transfer firms.

The question then becomes, how much further can Facebook or other tech companies such as Google go in the banking industry? In the past several years, large traditional banks have lost consumer confidence due to outdated mobile interfaces and countless lawsuits over its past actions. People feel much more comfortable using Facebook and Twitter than they do using their online banking websites. With over a billion users, Facebook could build on its money transfer mechanism to provide even more banking services. Here is an energetic panel on CNBC discussing this issue.

As the panel mentions, Facebook has still a long way to go before we can consider it actually becoming a bank and taking on Bank of America or JP Morgan. You’re not going to be able to receive complex banking services, such as a car loan, from Facebook anytime soon. However, the banking industry is definitely evolving and with the familiarity and dependence consumers have in using social media websites, Facebook could be a threat to traditional banks in the future if they choose to go down that path. If Facebook pushes deeper into the banking sector by for example giving loans, I find it much more probable that it will partner with a traditional bank rather than becoming a bank itself. As the contributors on the CNBC panel described, being a banking entity would bring Facebook into a new realm of regulations and restrictions; a headache that I assume Zuckerberg would want to avoid.

There is one issue that makes me doubt if Facebook will be able to pull of being a financial services company, and that is privacy. The company is notorious for having shady privacy laws that its users still do not fully understand. One of the ways Facebook makes money is by selling the information of its users to advertisers and marketing companies. If you also add in the fact that Facebook is flooded with fake accounts, then its users might not trust the site to transfer funds or receive banking services from it. Despite the tarnished reputation of traditional banks, I’m probably not the only person to think that transferring funds over a bank feels safer than doing it over Facebook.

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Fake accounts are a serious issue for Facebook.

Over the past year, Facebook has acquired Instagram, Whatsapp, and Oculus VR, a virtual reality gaming company. In my opinion, these acquisitions show that  Facebook is trying to become much more than just a social media website and is actually attempting to have a larger presence in our lives. Thus, banks should ignore Facebook’s new move at their own peril.

“Payment schemes are the equivalent to credit cards in emerging markets and here is where Facebook can make progress … especially in those places where banking infrastructure is not as mature as it is in Europe or the US.”
-Brian Blau, Director at Gartner Inc.

The Future is Now – The 3D Printing Revolution

I created this blog and named it Symmetric Information to educate readers about the world around us. You can read more about it in my very first post. There, I discuss the imbalance in knowledge that is apparent in society. The few know too much. The many know too little.

To follow through on my mission, I want to discuss one of the most important upcoming inventions of our generation. Although it has been in development for roughly twenty years, only a few people are either aware of it, or its future potential. Ladies and gentlemen, I give you the 3-Dimensional Printer.

Your reaction right now is either one of the following:
1) Your jaw just dropped.
2) You’re calling your local priest to ask how this is possible.
3) You just shared this video on Twitter or Facebook.

This isn’t just a single bogus Youtube video. 3D Printers are very real. As usual, let me give you some background to these devices. Note! I am not an engineer. I decided to actually have a social life in college. Thus the following technical explanation is derived fully from research I have done myself over the past couple of days. If I make some errors in my explanation, please don’t send me death threats.

In 1984, Charles Hull, the co-founder of a firm named 3D Systems, invented stereolithography. That monster of a word is short for creating a three dimensional objects from digital data. To explain it in layman’s terms, once an object is stored as digital data, a powerful laser is fired at a vat containing the material that is to be used for printing. This can be polymer, plastic, resin, and even gold and silver. If my attempt at an explanation was unsatisfying for you, here is a 1 minute clip to help you out.

Over the next decade, Hull’s invention was further developed. Newer objects using never materials were printed at a faster pace. Originally, 3D printers were used to develop prototype engineering parts. But with faster, more accurate and more diverse 3D printing designs, its potential grew. Here are just a few breakthroughs in 3D printing:

-In 1992, the first house parts were printed.
-In 1999, technology was developed to scan cells and 3D print human tissue.
-In 2006, a 3D printer was invented that could use multiple materials in a single design.
-In 2008, a 3D printer printed some of the components for another 3D printer.
-In 2011, we got the first 3D printed car.
-And in 2012, a 3D printed prosthetic jaw was used in an implant
Below is a picture of the first 3D printed car

URBEE-A-660x438

That’s it. Phasers are next, and I hope you set them on stun. You can do more research about how these printers work and what they can print. The technology is still in its infancy. Intricate software designs cannot be printed just yet. You can’t print an iPhone or an Xbox.  However, I can bet a lot of money that this technology will continue to be developed. When Steve Wozniak first invented the mainframe computer, or when the Internet was first developed, everyone who doubted its potential back then has now been proven wrong. But for now, lets go on to the implications of 3D Printing.  In my view, there are three main issues to ponder about: the potential economic impacts, copyright issues, and gun violence.

Economic Impacts of 3D Printing

The first thing that came into my mind when I first saw 3D printing was that this invention would change the world of manufacturing. Much like the way the Industrial Revolution transformed the manufacturing industry during the 18th century, 3D printing could very possibly do the same within the near future.

First of all, 3D printing would change the supply chain as we know it. In today’s world, the supply chain for most consumable goods is very similar. Raw materials are collected and manufactured to produce a certain good. That good is then bought by wholesalers who later sell them to other stores. Finally, those stores sell them to consumers. This process can be very capital intensive (both physical and financial) and can sometimes require a lot of manual labor.

However, if 3D printers are introduced into the fold,  the only step in between the collection of raw materials and purchase by consumers could be the design and printing process. I’m sure you can imagine how this would make production much quicker and would save a ton of money and effort that normally goes into manufacturing.

The same impact could also be felt in inventory. Especially in small and mid sized manufacturing industries, the need to maintain an inventory might become obsolete. If a company can quickly 3D print a product desired by the consumer or another retailer, then why maintain a warehouse full of inventory. Thanks to 3D printers, supply and demand will be more in sync with one another. Note that I did not include large sized manufacturing industries in this analysis. I’m aware of the fact that as of this moment, if you go to a car dealer, you can’t just ask for a Honda and have them print it for you in 5 minutes. But this video shows that 3D printing convertibles might not be so far into the future as we assumed.

If you want an example of sales without inventory take a look at Shapeways.com. Similar to Amazon or Ebay, This website contains designs that you can buy and then print on your own 3D printer. Again, like Amazon or Ebay, you can even create your own personal designs and sell them to to others. It includes furniture, small gadgets, board games, jewelry, mechanical tools and even drones. None of these goods are sitting in a warehouse. They’re all just designs ready to be printed. If you have a 3D printer at home, then you don’t even have to go to a store, making the supply chain even shorter. To give you a better understanding, Here is a screenshot of Shapeway’s home page.

Untitled

Of course, like all breakthroughs in production and technology, 3D printing will have a profound impact on the economy. Companies that adapt it into their business model early on will have a greater advantage over their competitors. The act of 3D printing will also mean that a lot of traditional manufacturing jobs will be lost. However, similar to all major shifts in social and economic trends in history, new jobs will surely be created. When the automobile was first created, carriage drivers and horse doctors lost their jobs but taxi drivers and auto mechanics appeared. What’s most likely to happen with 3D printers is that manufacturing jobs will become more local. Instead of having to import manufactured goods from East Asia, companies will be able to save on massive fixed and variable costs by just maintaining printers closer to their point of sales.

Of course, I’m no prophet. I could be proven wrong but this is my best guess of how 3D printing will effect the economy in the future. For now, lets move on to copyright issues.

Copyright Infringement 

With the ability to scan and digitally reproduce objects in 3D printers, intellectual property infringement issues are bound to occur. If 3D designs fall on the internet, similar to the way movies are shared on P2P website online, there will definitely be people who will opt to illegally download scans. Today, people are torrenting the latest Breaking Bad episode, tomorrow they will be torrenting the designs for a 3D printed robot. Similarly, if someone buys a product from a store, they could surely scan it at home and produce copies of it.

This isn’t just a problem that will happen in the distant future. It’s already starting to happen now. Earlier this year, HBO sent a cease-and-desist letter to an individual who was 3D printing iPhone docks that looked like the Iron Throne from Game of Thrones.

peoa3

You may have already seen the similarities between the music/film industry and 3D printing regarding copyright issues. Its true that there are many similarities. Napster, Kazam and Limewire forced the music industry to adapt and save itself from near extinction. The music industry responded with the likes of the iTunes store and Spotify. Manufacturers and designers will also have to adapt when the time comes.

However there is one important difference to observe. Songs and movies are all artistic products that can be copyrighted. Of course you can produce unique artistic objects on 3D printers too. But what about simple objects such as chairs, shovels, and as we saw in the first video, wrenches. Have a nice time trying to get a patent for a chair. See how that works out for you. But what if you design a chair with a unique design or ornament? Is that original? If I download your design and print it out, can you sue me? This is where things are going to get legally messy. In turn, a new profession of lawyers will have to be hired. As I stated in the economic impacts, even though jobs will be lost, new jobs regarding 3D printers will be created.

How will manufacturers and designer fight back 3D printing? Only time will tell. In the meantime, expect the intellectual property disputes to proliferate, almost as rapidly as the technology itself.

Weapon Production

3D printing copyrighted material is the least of our worries. Whats to stop criminals from 3D printing guns based on designs posted online? Of course that hasn’t happened yet right? No one is that evil. Right? Right?

Oh boy. Here we go. Its has been human nature to weaponize every technology we create and it appears that we are doing it again. Governments can put regulations on sales of weapons manufactured and sold by gun producers as much as they want. But what about guns posted online and printed on 3D printers? I don’t want to start a debate on gun control here but we have to recognize the fact that this technology, if used for violent purposes, will make it easier for criminals to obtain guns than ever before.

Conclusion

At the outset of the Internet or the steam powered engine, I’m sure that people did a similar analysis to the one I have done now. And back then, the ones to act first and adapt were the ones that became more successful than their peers. The price of 3D printers are dropping rapidly. Today, a personal 3D printer can be purchased for less than $10,000. Thus, it is extremely important to not fall behind on this great opportunity.

My predictions may not come entirely true, however I believe that it is important to bring this invention to the attention of the public. The way to end information asymmetry starts by educating people about crucial impending events, and I hope that with this post, I have done my part for today.

3D printing is already shaking our age-old notions of what can and can’t be made.”
-Hod Lipson, director of Cornell University’s Creative Machines Lab

Twitter To Go Public – #dontfallforthehype

The company that is single-handedly destroying modern language with hashtags has decided to go public. On Thursday, Twitter announced that it had filed for a secret initial public offering (IPO).  What’s so secret about it? I’ll explain that later. But if everything proceeds as planned, Twitter will follow the footsteps of other social networking websites that have gone public such as Linkedin and Facebook.

tweeet
Before discussing Twitter, it is important to comprehend why companies decide to go public. Most companies in developed markets are privately owned. Even some big names such as Domino’s Pizza and IKEA are private firms. Being private allows the management and owners of the company to implement policies with more ease since they aren’t continuously under the scrutiny of analysts and shareholders.

However, a company may go public if they need to raise cash, or in finance-speak, capital, from external sources for the company to grow further. Of course being listed on a stock exchange also gives firms a considerable amount of prestige. Firms usually hire the services of investment banks such as Goldman Sachs or Morgan Stanley to publicize and organize the IPO so that investors are drawn to buy the company’s stock once it goes public.

Once a company does go public, investors will be watching over the company like a hawk. Earnings reports, management statements, new product launches will be observed with much more attention. Because of increased profit expectations, you can expect the company to either launch new products or revamp its business.

With that background information on IPOs, we can now focus on Twitter. Twitter is expected to be valued at around $10 billion and has around 200 million users. Even though Twitter has been successful so far, it’s a smaller company when compared to other Web platform giants such as Facebook, Yahoo, Google and Amazon. By going public and raising capital, Twitter will be seeking to cement itself as one of the big boys of the web industry. In order to develop itself, Twitter will attempt to generate further ad revenue, expand its features, and integrate itself even further with other products. In fact, in an effort to enhance its mobile advertising feature, Twitter recently acquired MoPub, a startup that focuses on mobile ad exchanges

So far it looks like its all going to be sunshine and rainbows. Twitter will go public, its share prices will rocket because everyone has a Twitter account, everyone will get rich, and world peace will be achieved. Right? Right? Wrong! Investors should be very careful when approaching IPOs and in my opinion, its best to avoid them altogether. There are several reasons why it is wise to avoid IPOs.

1)      Firstly, being a public company is a hassle for most firms. They must adhere to various regulations and constantly please investors. Thus most firms choose to stay public. But if they do decide to raise capital, they could do it via a private placement. As opposed to a public offering, a public placement is a way for companies to raise capital by only selling ownership to a few individuals. This process is much easier than having to go through a public offering. If a company has decided to engage in a public offering, it could be that the company failed to raise capital through a placement because they were unable to find large investors. Thus it is important to ask yourself, what is the state of the company I’m planning to invest in?

2)      The IPO will be the first time that a company will have to adhere to certain regulations and reveal its financial statements in detail. Thus your previous conceptions about the firm may be mistaken. The only solid information you will have access to will be the information provided by investment banks who are desperately trying to attract investors.  This is also where the term ‘secret IPO’ comes into play. According to the JOBS Act which was passed last year, a company with revenue below a certain point can release less information prior to an IPO than a firm with higher revenue figures. This makes Twitter’s IPO filing even more suspicious. What have these guys got to hide? Be wary. Wait a few months for the firm to be in the public domain and find its true value.

3)      Most institutions investors who purchase shares during the IPO tend to hold them for a few days and then dump them to make a quick profit. This is why after most IPOs, the price of the stock initially falls. To see a good example, take a look at Facebook. Its price plummeted after the IPO and it took 14 months for it to reach its original price.

Thus, after an IPO, its wise to hold back for a minimum of 4-5 months for the price to settle and the company’s shares to find its true value as opposed to the initial artificial IPO price. You can probably tell that I despise hashtags but if I ever had to use one, it would be as follows: #dontfallforthehype

For more insight, feel free to watch this clip from Bloomberg.

“I’m kind of like the person you would want to ask least about how to make a smooth IPO.”
-Mark Zuckerberg, in response to whether he had any advice for Twitter

New iPhones Unveiled – Has Apple Peaked?

On September 10th, Apple unveiled two new iPhones, the iPhone 5C and the iPhone 5S. Another year, another new iPhone, and another chance for me to share this classic Futurama clip.

Both iPhones will be available in the United States starting September 20th. This announcement had been expected for quite some time now. Over the past year or two, Apple had been facing several troubles.

1) It has lost the majority in the smartphone market share to Samsung. Though Apple is extremely dominant in the United States, Samsung, integrated with Google’s Android operating system, is outselling Apple in the rest of the world thanks to its cheaper prices.
2) Its earnings have dropped. Yes Apple’s products still have a very high profit margin and the company’s overall earnings are relatively high, but this year, the company reported its first decrease in earnings since 2003. As evidenced by the following graph provided by Yahoo Finance, this caused the price of Apple’s stock to decrease from above $700 in September of 2012 to a low of less than $400 in April 2013 (Apple’s current share price is at $467). The drop in price eroded almost $57 billion of market capitalization.

apple history

The expectation was that Apple would release a much cheaper iPhone, so as to sell more units in emerging markets such as China and India, where Apple is being outsold by firms that produce cheaper smartphones. China and India are the two most populous countries in the world with a total of over two billion people. Additionally, China is the 2nd largest economy in the world and India is the 10th largest economy in the world. The cheaper iPhone would have given Apple deeper penetration into these markets and would have allowed Apple to recapture the majority of the global smartphone market share, not to mention boost profits. What we got was the iPhone 5S and iPhone 5C.

The iPhone 5S is a more developed version of the current iPhone 5. Its most buzz creating features include its ability to allow the user to secure their phone with fingerprint recognition, noteworthy advancements made on the camera, a faster processing speed, and additional features added to Apple Maps and Siri. A side note on the faster processing speed. How much faster can phones get? Seriously! It already takes a mere second or two to run any application. If that’s what draws you to drop $500-$600 on a new phone, you are insanely impatient. I digress.

Apart from a few minor upgrades, the iPhone 5C on the other hand is extremely similar to the iPhone5. This is what was supposed to be the ‘cheap iPhone’. However, with its price, Apple revealed that they are not willing to give up their position as the premium seller in the market. The entry level iPhone 5C without a contract will be roughly 599 Euros in Europe, 4488 Renminbi in China and 35,000 Rupees in India. Those are still pretty high prices for those countries. Even though wages have risen in China over the past few years, they are still much lower when compared to developed nations. It is much more sensible for an Indian or Chinese individual to buy a cheaper lower-end smartphone.

The question is, will these new series of products (and the newly revealed ios 7 operating system) bring Apple back to its former glory? There isn’t much doubt that Apple’s new series of products will mend its short term concerns. The cheaper iPhone will help sell more units in emerging markets even if less than expected. It is also crucial to note that Apple is on the verge of hammering out a deal with China mobile, a Chinese mobile network provider that services 700 million users. Penetrating that customer base of 700 million will be a huge win for Apple.  Again, the new products will surely bring excitement to Apple and boost the firm’s profits as well. However, if we look at Apple in the long run, it is possible to say that Apple has peaked. For the moment being, the company is no longer an innovator, but an emulator. This is to be expected. In any economic situation, when one party supplies a scarce product or service, they will be profitable and will be able to charge higher prices. That was the situation when Apple first entered and formed the smartphone market. But as supply increases relative to demand and the product/service becomes less care, the company most focus on keeping up with the competition (eg. Samsung, Nokia/Microsoft, HTC).

Of course we don’t know what crazy projects Apple has got brewing deep inside their headquarters. I expect them to develop something similar to Samsung’s recently released smartwatch. There are also rumors of Apple being in the process of developing a television. I’m not saying that Apple is dead or that Apple’s days are coming to an end. The company is founded and run by innovators and visionaries. But competition is no longer idle, and unless Apple leads the way into a new revolutionary market, its highest point is behind us.

To end this post, here’s a little tip for all you investors out there. Don’t assume that the hype created by Apple’s product announcements equate to a massive spike in share prices. The following graph assembled by Bloomberg shows that after Apple’s past product releases, Apple’s share price either stayed stable or dropped in the short term. Play it safe for now.

apple release

“You have to be burning with an idea, or a problem, or a wrong that you want to right. If you’re not passionate enough from the start, you’ll never stick it out”
-Steve Jobs