Apple Inc. (NASDAQ:AAPL) advent and its rise to become one of the most loved brands delivered a lesson worth taking for Intel Corporation (NASDAQ:INTC), says a report from Forbes by Adam Hartung. Share prices of Apple have climbed from around $11 on January 2001 to over $500 today, which is an astonishing 45X increase.
Apple iPod- the trendsetter
When Apple planned on launching the iPod, Sony was the most dominant player in the personal music segment with its Walkman hardware products, with worldwide shipment through prominent retail stores such as Best Buy Co., Inc. (NYSE:BBY) and Wal-Mart Stores, Inc. (NYSE:WMT). It was hard to imagine that Sony Corporation (NYSE:SNE) (TYO:6758) will slip from its position once the iPod was launched. Moreover, the analyst’s numbers were also not in favor of Apple Inc. (NASDAQ:AAPL)’s iPod. But the prominent analyst firms like IDC and Gartner have more than once underestimated the unlocked power of Apple, be it the iPhone or the iPad. Steve Jobs, who returned to Apple, quickly ascertained the pulse of the market and recognized the increasing inclination towards mobility, which was more important that the historical sales analysis.
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Intel webbed in numbers
Intel Corporation (NASDAQ:INTC) seems to have learned nothing from Apple’s iPod success, and continued to look into the numbers when it had the opportunity to make chips for the iPhone. At the time, Intel was the most powerful company making key components for Microsoft PCs as well as the Macintosh. Intel managers studied the cost involved in making chips when they were offered an opportunity by Apple Inc. (NASDAQ:AAPL), and after considering cost and future volume estimates they decided to pass.
Later, Intel Corporation (NASDAQ:INTC) was proven wrong in estimating the cost and volume. The chipmaker analyzed the numbers expecting that PC market would remain strong without any doubt, and cost and price to remain consistent based on historical trends. However, they failed to identify the mobile trend that was fast emerging, and to an extent annihilated Sony’s profit in music as iPods became the latest trend.
Clayton Christensen, innovation guru at Harvard, said that today analysts are more comfortable analyzing past numbers and predicting the future trend because they believe that the future will be replicate the past. According to Christensen, a business market is incredibly dynamic and depends on numerous factors that keep on changing.
Apple Inc. (NASDAQ:AAPL) was just a one-product company until 2000. The company only manufactured Macs. Instead of excelling on just one product, Apple Inc. (NASDAQ:AAPL) identified the emerging mobile trend and started making iPhones and iPads though it was surrounded with the likes of BlackBerry and Motorola who were the most dominating force in the mobile market at that point of time.