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Is Apple’s 5-STAR Business Network losing its shine?

5star-book-pub-menuJust one day after Microsoft announced its phone-based voice assistant Cortana, Apple made known its plan to dramatically improve Siri. With 15 acquisitions under its belt in the last fiscal year, Apple’s latest purchase is of Novauris Technologies.

The UK-based speech-recognition software company has a team of former Dragon Systems R&D employees. Some of its clients in the past include Panasonic, Verizon Wireless, BMW and Samsung for speech recognition system integration.

Apple’s acquisition, of undisclosed amount, is said to actually have happened last year. Analysts have pointed out that the tech giant seems to be working on Siri’s offline capabilities. One of the shortcomings of Apple’s signature voice command system is its reliance on an Internet connection to function.

“Given Apple’s recent CarPlay initiative, the importance of having stable voice command functionality while on the road is increasingly apparent.

“Meanwhile, we can expect to see intense competition from rival Microsoft’s Cortana, which is set to become smarter. Apple is quietly swallowing a number of smaller companies, giving it the advantage of fast integration and turnaround,” says Vivek Sood – CEO of Global Supply Chain Group.

Unlike its rivals such as Google and Facebook who routinely spend billions of dollars on high-profile purchases, Apple tends to acquire smaller tech companies along with their technology before launching new products or features.

In fact, Siri came to life after Apple’s purchase of a company of the same name in 2010.

Kristin Huguet, a spokeswoman for Apple, says: “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”

Also recently, Apple is looking to improve product displays and battery life through a potential purchase of a Japan-based company. Renesas SP Drivers, a unit of Renesas Electronics, develops LCD chips for mobile devices and owns about one-third of the global market share.

Investors are expecting a lot of product launches from Apple, who have just rebounded from the worst monthly loss in a year. Among the anticipated products are Apple’s iTV and iWatch.

Not only developing new products, Apple is also trying to protect its patents. The most recent, yet familiar lawsuit against Samsung, has evolved to include Google.

At the same time, Amazon is taking on both Apple and Google on the TV device’s front. The world’s biggest online retailer unveiled Fire TV priced at US$99 on April 3rd.

“One of the biggest challenges in this TV gadget market is setting up a network of partners that lets you fully showcase your product’s functionality.

“Google’s Chromecast has had recent issues persuading British media companies, Apple is negotiating with Time Warner, while Amazon’s Fire TV already includes Netflix and Hulu applications. The winner will be the one with the most extensive reach within its business network,” said Sood, author of the book “The 5-Star Business Network. “Gone are the days when companies used to create products on their own and market them on a standalone basis. In today’s networked business world, both product creation as well as marketing required strong ties with an A-class business network.”

A Revamped Business Model: The Introduction of Customer Centric

New challenges need new responses. The common organizational model looks like the generic drainpipe structure, meeting the mammalian need for an ordered hierarchy and flow of power within a business. Most companies have evolved in the last 2 decades and their functioning has become almost entirely customer centric.  Their customers’ priorities drive most of the business workings.  The traditional drainpipe model frequently stifles customer responsiveness and innovation, therefore there is a clear need for a new standardized customer centric model of business. The new customer centric model starts with customers at the apex of the organization.  It is the customers’ needs which the organization is trying to serve, so directly aligned with the customers is the sales team.  The function of the sales team is to have an https://www.viagrapascherfr.com/le-viagra-vente-libre/ intimate understanding of the customers’ needs.  Only then can an organization create successful products.  An organization can outsource almost everything else it does, but it can never outsource its sales. Two other key functions which are equally important and support the sales team is marketing and research & development.  Between these three we form the top tier of the modern organization’s structure.

sales and marketing

The Customer Centric Business Model

If Your Business Has Too Much Internal Focus, You Could Be Missing Out

It’s no surprise that customers hate companies with too much internal focus.  As organizations free up their inter-departmental planning from rigidities, the communications start to bloom.  Efficiency improves considerable and everybody starts running together, faster.  However, a higher set of problems emerge due to lack of external focus – on suppliers, customers, and end-consumers. Many times everybody inside the organization is running together, faster, but in the wrong direction.

ERP Unraveled: Why Your Business Might Suffer From Inadequate Planning

To combat the symptoms of departmental silos many organizations implement a very rigid Enterprise Resource Planning (ERP) system. This helps run their internal processes and coordinates inter-departmental communication. By their nature, these systems are very formulaic and prescriptive with a one-size fits all approach to planning. Now a different bunch of problems start surfacing as a result.  If you’ve ever wondered why you see so much chaos, anxiety, blame game, and other such dysfunctional behaviors in businesses, this is the key reason.

The Effects of ERP

The Effects of ERP

In my newest book, Unchain Your Corporation, I explore the reasons for this perceived chaos in greater detail.  Feel free to visit unchainyourcorporation.com for more information.

Radio Interview of Vivek Sood on The Michael Dresser Show | 5-STAR Business Network

Topic:The 5-STAR Business Networks

Interviewer: Michael Dresser of The Michael Dresser Show

Interviewee: Vivek Sood of Global Supply Chain Group

(author of The 5-STAR Business Networks)

HERE IS An audio of the interview

 

Here is the entire transcript of the interview:

Michael Dresser: Welcome back! I’m Michael, you’re listening to the Michael Dresser Show, Vivek Sood with us, the author of the “5-Star Business Network” and the tremendous effect of supply chain in business networking. Social networks are proliferating and most people think that Facebook and Twitter are ultimate and power rich when it comes to networks, but no. Many marketers and businesses are missing another network that’s hidden in plain sight. Business-to-business networks, they’re called, supply chains, they are at least 2000 times more powerful and widespread. And now these networks are going global and also digital. Vivek is known among smart executives who might be CEOs one day for practical business strategies, practical because they’re crafted in real world, not academia. Vivek, welcome to the show!

Vivek Sood: Thank you, Michael! It’s a pleasure to be here with you.

Michael Dresser: By the way, am I pronouncing your first name right? I hope I am.

Vivek Sood: Yes, you are, absolutely!

Michael Dresser: Ok, great. Let me ask you this. What got you to take a look at business? Obviously there’s got to be that time in your life when you look at something and you say there’s something missing. What caused your journey, that search for what you found?

Vivek Sood: Michael, it’s been a long journey. I’ve been a management consultant to CEO for about 17 years now. I saw that lots of business transformations that companies are going through were failing for some very simple reasons. And those reasons had to do with business-to-business network of their businesses. And that’s when I started investigating these business-to-business networks.

Michael Dresser: You know, when we talk about it, we think business-to-business stay locally within a country. But we’ve expanded today. A business doesn’t do just work in their hometown, they do business globally. And if you are not aware of what’s available for you, and that rich that’s out there, a business that could be successful just won’t work, will it?

Vivek Sood: Absolutely! Michael, let’s go back a few hundred years’ time. All business was very local. The local village had all the artisans which could provide you with whatever you needed. Soon it became regional, because they could find better product, better artisans. And very soon after that we started looking beyond about this. Today the business is totally global. You name any product, you can track its journey all around the globe before it reaches the shelf. Before it reaches the customer’s hands, the product has traveled 5 thousand to 10 thousand miles around the world.

Michael Dresser: Absolutely! By the way, and the average consumer, we have a brand new consumer now. The e-consumer can sit in their house, press the button and track any button in the world.

Vivek Sood: Absolutely! Today I’m sitting in Australia, and I can order the best cold clothes, skis out of United States, track them and basically have them delivered to my home, to my office within a period of a week. And I have the world’s biggest inventory on my back and call, right there on the Internet.

Michael Dresser: By the way, Global Supply Chain group, which is the company that you founded. What’s the essence of the group, what does the group do?

Vivek Sood: Global Supply Chain group has only one purpose. We work around the world with large corporations, who have supply chains, but their supply chains are not what we call A class supply chain, the supply chain 3.0. We work with these companies to improve the performance of the supply chain, and the difference is huge. When you jump from C class to A class supply chain, your profitability goes up by 5 times. And that’s what we help out clients to.

Michael Dresser: When we deal with business-to-business networking, obviously you’re not going to have two businesses with the same offering. So I’ve got a business, I have an offering, you have a business, you have an offering. If the offerings can complement each other, do we what? Do we joint venture? Or each one advertise the other’s business?

Vivek Sood: Absolutely! Let me give you an example. Let’s take one of the world’s biggest corporations, Apply Corporation. Before iPhone came along, there were already smartphones made by Samsung, but the screens were really bad. I actually happened to own one of those Samsung Omnias. You had to press a button three times. Apply figured out that the best way to get a new iPhone much better than the existing technology is to work on the screen. Apply didn’t have the screen technology, it went out and found a business partner which had that technology. It made a deal with this partner, who supplied them with this screen and which in the end gave iPhone the edge over the existing technology.

Michael Dresser: So effectively, what we’re really doing is engaging the businesses. You know, the business-to-business, the name is ok, but the actual engagement, complementing each other, implementing that certain something that’s missing within the business that causes them not to get where they need to be. So we find the expertise in particular businesses, we tie them together, and in essence there’s one unit going out there, even though their profitability is individual.

Vivek Sood: Absolutely! Businesses do not compete as businesses anymore, they compete as networks of businesses. Imagine a pack of wolves hunting, competing with a lone wolf hunting in the middle of snow. Obviously, a pack of wolves would definitely win.

Michael Dresser: By the way, when you come down to it, there’s a lot of businesses out there today. Everybody’s doing Twitter, everybody’s doing Facebook and they really are not aware of the next step. I guess Global Supply Chain group is really the next step beyond Twitter, and beyond Facebook, and beyond LinkedIn. LinkedIn is really the business opportunity, but when you come down to it, it’s the ability to put these places together, the ability to reach out. And not just reaching out, knowing how to reach out, because there’s got to be a strategy behind it, it’s got to have a process.

Vivek Sood: Absolutely! These things are now state of the art technologies, they’re state of the art methodology. And yes, you have to find the right partners, to reach out to them in the right manner. A team players always like to play with the A teams. So if you reach out to them in a wrong manner, or if you play the game not the way they like to play it, very soon you will find yourself not the part of the A team. At the same time, the social network are useful. You can’t say they don’t have a role to play, but they have a role to play more on the consumer’s side, when you engage your consumer into a conversation, to understand what exactly matters to a consumer and to a customer. For business-to-business engagement you need a much deeper and much more involved strategy. And that’s where we basically help our clients.

Michael Dresser: When we take a look at it, I want to go back to when I was introducing you: “known among smart executives who might be CEOs one day”. Getting the information, getting to know it beforehand is wonderful, but is there a wall, is there a challenge to get into a business, that’s already a multimillion-dollar business, they could become a multibillion-dollar business if they would listen to what you have to say. Are there challenges to getting these people to take a look at what’s offered, because, you know, too many people are making a certain amount of money, they’re scared to make that move.

Vivek Sood: Absolutely! I think you hit the nail on the head. A lot of businesses are in a comfort zone and they don’t recognize the need to move beyond the comfort zone, to actually 5-star network or a business-to-business network. Still, the competition comes in and eats their lunch. So imagine a Nokia mobile phones, before Samsung or iPhone came along. They were in a comfort zone, they never imagined that an iPhone would come along and certainly Nokia mobile phones become totally irrelevant.

Michael Dresser: Now, by the way, that’s really the key, it’s looking beyond what’s there, and especially in today’s market place, today’s world. We have technology that is changing almost daily. I can go back and remember the first computers, they’d fill up a room! But today, you know, you can walk around with something in your hand and that will give you everything that they did. And it is, it’s taking that step and realizing that there’s more. But the only way that you find out there’s more, is you have somebody who is doing it. They’ve got to have somebody “symbolical”, holding you by the hand, taking you through, allowing you to find out what’s available out there and, more important, how to use it.

Vivek Sood: Absolutely! What you need to see is basically benchmark your competition, but also look outside your industry. Look outside other companies in other industries, who are doing much better than where you are and find out the reason why. And you have to be constantly staring, what are the new threats of the horizon, whether they are technological threats or socio-cultural threats, like for example, consumer preferences are changing very quickly as well. As a two-way conversation is becoming possible, you cannot just talk to a consumer anymore, you have to engage them, using things like Twitter and Facebook, but also many other technologies that are available at the moment.

Michael Dresser: I know that everything is globalized, and the world has been global for the last, probably, 20-25 years, at the most, when there was an intensity here. But do you find, because of the different cultures and the different countries that it’s hard to make that connection or, is there that certain something that cuts through all of it that is recognizable to anybody anywhere?

Vivek Sood: Michael, I worked in more than 150 countries now on supply chain projects and business-to-business network projects. What I found is that on the highest level, the corporations are very professional. They understand what is happening around the world in cutting-edge methodologies and they want to learn. On the other hand, tier 2 and tier 3, they are well within their comfort zone, they don’t want to get out of it. They like to blame the events, they like to blame the government, the other people.

Michael Dresser: For what I hear you saying, that’s business oriented, not political. And if you have people with the same mindset, “business-oriented”, it really doesn’t matter what country you are from, because business has a language of its own, profitability has a language of its own and there’s a commonality in interest, in goal-setting.

Vivek Sood: Absolutely! Because in the end the purpose of business is always the same, to find a customer who will profitably buy the product and they can build big enough business based on their customer segment. And that is universal, it’s all around the world. After that it can become a little bit more complicated: how you fulfill the customers’ requirements and that’s where the business-to-business networks coming to play. And the language of business is the same all around the world, Michael.

Michael Dresser: Sure, because when you come down to it, when you look at any country, administrations come and go, presidents come and go, but the one thing that stays constant is the business, because business stays focused on the end result. And I think that’s what we should look at. If more countries looked at the way a business was run, we would probably have less problem that we do today.

Vivek Sood: Absolutely, Michael. We have had this eighty-year experiment in the former Soviet Union and communist bloc, where governments were in the business, running business and that failed quite miserably. So we are now in an era where it is clear that business of business is business. Governments are needed, but not to run businesses. In the end, what creates value for society, what creates value for community is the business. And that is universal around the world.

Michael Dresser: I think that’s the key for America today. We shouldn’t have politicians there, and I’m not getting political, just the point here is that we should have people who understand business, who have been in business, who understand profit and loss. Because when you think about it, you know, most of the countries, and especially in America, we are cash in – cash out. What’s left at the end of the month and what’s not left at the end of the month, what’s the deficit? And we ran this country here more in a business fashion. Most of the problems that we have today, we wouldn’t have. We would not be in this kind of debt.

Vivek Sood: I’m obviously not a political commentator or a political adviser. What I can see is that government is getting more and more into business in America as it is in some other places, and I don’t necessarily see this as a positive sign. Quite the contrary.

Michael Dresser: And the reason for that is, and I’m not being political, is that you have to have someone who has been there, who understands what to do, not from a position from politics. And I believe, when you come down to it, “The 5-Star Business Network”, you do something like that with all businesses and the businesses are succeeding. And when the businesses succeed, you have jobs, you have opportunity and you have a flow of income.

Vivek Sood: Absolutely! If you look at CEO’s job today, Michael, it is probably one of the hardest jobs on earth today. They are asked to do more with less. On the other hand, they are facing so many political pressures, you can’t even imagine.

Michael Dresser: Sure, no question!

Vivek Sood: And on the other hand, employee loyalty is also disappearing. So what can get them out of all this is really business-to-business network, which can allow them to do more with less, which can also allow them to look beyond employee loyalty. Because that loyalty went out the window about 20 years ago.

Michael Dresser: Sure, and I’ll tell you why we have this employee disloyalty, so to speak. Because they don’t feel part of the business, they don’t have an identity within the business itself. When you have people who have identity within the business and they feel like they have an interest – not an ownership interest, it could be commissions, it could be perks, it could be something. But when they feel like they are part of their business and because of them, employees, the business is being successful, all of the sudden you have loyalty. We come up against with a wall, and that wall divides the business from the employees, the engagement isn’t there, being proud of what they are and what they do.

Vivek Sood: Absolutely! There are deeper socio-cultural reasons. When I started work at 17 as an apprentice, I owed everything to a company which taught me what I learnt. Those kinds of apprenticeships are now almost history. Today young people stay in college till they’re nearly 30.

Michael Dresser: I remember my very first job was 1.65 $ an hour, a hundred years ago. We are just about out of time, so let me ask you this: website we can find you at.

Vivek Sood: Yes, my website is www.viveksood.com. So my first name is Vivek, last name is Sood.

Michael Dresser: If anybody misses it, it will be up on our website.

Vivek Sood: The website of the book is www.5starbusinessnetwork.com.

Michael Dresser: Wonderful! And by the way, thank you so much for joining us today.

Vivek Sood: It’s been a pleasure, Michael. It’s a pleasure to talk to your audience.

Michael Dresser: Take care!

Apple’s Business Network Conundrum: To Dump Samsung or not

Has Apple learnt the lesson that Dell never learnt?

Apple has grappled with this conundrum for a while now – when, if at all, to dump Samsung? There comes a point in every business network when the erstwhile suppliers become more powerful than the ‘customer’. Dell continued to rely on its suppliers in far east while they were eating his lunch. Look where it landed Dell?

Dell’s supply chain conundrum is not well explained by the market analysts – many of its suppliers are also some of  its biggest competitors. Ten years ago, when Dell was a far bigger company that its much smaller suppliers it Asia, this did not matter much. But they have now copied Dell’s business model to perfection – making its business model redundant. They won market share by under-cuting Dell in the market place, while Dell could not invent a newer business model. No wonder Dell lost the competitve advantage it had created so assidously in the 90s by shrinking the cash-to-cash cycle and building volume.

Apple is concerned that Samsung is doing exactly the same thing to it in the mobile devices market. While it continues to persist with its lawsuit against Samsung, it does not yet desist from continuing to buy critical components from Samsung.

At the same time it also continues to expand its business network – e.g. see its attempt to enrol Intel into its fold.  The news report from BGR explains:

The move could improve the quality of Apple’s mobile chips thanks to Intel’s leading process technology, and an added benefit for Apple would be to finally sever all ties with rivalSamsung (005930), which continues to supply components for various Apple devices.

However, this move may not be an easy one.  Intel itself is re-inventing its own business business model in the post-pc world.  With the shrinking margins in the PC market, and the growing volumes in the mobile world, Intel needs to get into the mobile chip market in a much bigger way than it currently plays in that game. Yet, ‘Intel Inside’ branding strategy may not be popular at Apple. Afterall Apple knows where that left the PC makers in their business networks.

This newsreport from Reuters explains the situation better:

After Intel upped its capital spending budget by $2 billion to $13 billion this year, speculation grew that Apple could ink a deal to use Intel’s leading process technology to make better chips for its iPad and iPhone. Doing so could help Apple end its foundry relationship with Samsung, which has become a fierce competitor with its own smartphones and tablets.

Sunit Rikhi, vice president and general manager of Intel custom foundry, told Reuters last week his group is ready to take on a potential large, unidentified mobile customer, although he declined to discuss Apple specifically.

Intel spokesman Chuck Mulloy said the chipmaker is in constant discussions with Apple, which buys its PC chips, but he would not comment on negotiations about a potential foundry relationship. An Apple spokesman declined to comment.

That is the conundrum then, On one hand is Samsung, a known follower who keeps becoming into a bigger rival. On the other hand is Intel, a hard negotiator where only the paranoid survive.

I talk a lot more about Apple’s business network efficacy in my book 5-STAR BUSINESS NETWORKS – it appears that unless Apple continues to come out with some more designs and gadgets, it will have to now play this game on both fronts.

 

Are the Global Business Networks shortening the success cycle?

The first business book that I read was “In Search of Excellence” by Tom Peters and . It was a gushing account by two ex-McKinsey consultants truly in search of excellence among American businesses, and plethora of advise that to my then untutored mind (after all, I was still just an untutored merchant navy officer at that time) appeared rather obvious – for example walk around your operations to see what is going on.

What struck me most about the book was that in the intervening 13 years or so, between the time this book was written and I read it, most of the companies singled out as excellent by the authors were already in trouble. That impression – that companies once lauded as excellent can quite rapidly lose that mantle – has never left my mind as I read more than 5,000 business books, countless book summaries, business commentaries and news reports. Invariably each of these writings tries to generalize the key determinants of success from examples of certain companies. In more cases than not, those companies singled out as models of success falter in a few years times, sometimes victims of changing circumstances and at other times victims of their own success.

Today, it seems, that the success cycle has shortened even more. As George Colvin notes down in his recent Fortune magazine article (The World’s Most Admired Companies: Built for brilliance):

Success in today's economy seems volatile, momentary, evanescent. It's tempting to conclude that nothing lasts very long anymore. Yet that clearly isn't right; two of this year's top 10, Coca-Cola and IBM, are over 100 years old. The more accurate conclusion is that nothing today lasts very long without constant attention. That is a major change from 30 years ago. In an industrial economy based on physical products, plenty of things actually did last a long time on their own.

I think he makes a very good point in the article. Information networks have increased the speed of both – success and failure.

The speed of success has increased because you can use upside leverage of your business networks to to make up for your company’s weaknesses. The allows rapid deployment of new business models, and faster testing of these models in the marketplace. In that sense, your business networks may be even more valuable assets that your business infra-structure. After all, in the down half of the cycle your company’s physical infra-structure is always a millstone around your neck; just ask the airlines who have to park thousands of planes in the desert during recessions.

The speed of failure has increased too, because your competitors can outleverage you, using similar business networks. Beware of smaller, nimbler players with big business networks. They do not carry the overheads and yet can project their business power as far and wide as their much bigger competitors.

I discuss all these concepts in much more detail in my forthcoming book – The 5-STAR Business Networks – which will be released in April 2013. I invite thought leaders to contribute to the discussion by reading a synopsis of the book and providing feedback and recommendations – selected feedback and recommendations will be published on the book itself.

Which business models are now obsolete?

Most effective business leaders relish the challenge of answering questions such as the following:

If you are as deeply passionate about the world of business and supply chain networks as I am, and enjoy exploring similar questions and coming up with answers that will help immensely in using this wisdom to build your business, then you will enjoy this blog. When General Motors filed for Chapter XI protection in 2008, it also marked the closing of a chapter in modern commerce. General Motors was seen as the paragon of modern American management theory as popularized by Peter Drucker in the middle of the twentieth century. It was at this venerable company that Peter Drucker formed his early thoughts about management as a profession, separation of the ownership from management of enterprise, the key functions of management, division of labour, theory of leadership of enterprise, indeed the very concept of the corporation. His writings were the need of the time, and were picked up by ivy league business schools and corporations alike and formed the basic foundation of management profession. Indeed there was a time when General Motors and the US commerce were thought of as interchangeable entities with popular aphorism that “what is good for GM is good for America and vice versa.” Some people still think this is the case. They see the decline of General Motors as symptomatic of a wider malaise in the US economy. Others think that General Motors will rise like a phoenix again to become an industrial powerhouse. While we do not know what will eventually happen to General Motors, we know that new models of commerce, new industries, new technologies and new ways of solving old problems will be required to build a stronger economy on a global level. All of these will not necessarily come out of one country, one continent or even one region. In this (Your business model is obsolete) article published in the Fortune, Author Geoff Colvin, senior editor-at-large says: Not since the Industrial Revolution have we seen a longer or broader list of companies whose business models are suddenly obsolete. Start with virtually all companies in the media business, or any company that relies on owning copyrights or selling advertising. Then look at how major retailers — Best Buy (BBY), Target (TGT)Wal-Mart (WMT) — are rethinking their models in response to showrooming (browsing in-store and buying online), eBay (EBAY), and Amazon (AMZN). The whole education industry needs a new model. So do banking, the post office, computer makers, Big Pharma, music, and the telecoms. They all need new business models, and almost all are having a hard time finding them. There is no doubt you will have encountered many other examples of companies – whether in your supply chain, customer base or in the eco-system around you who are struggling on with broken business models. Inevitably these struggles are inelegant and fruitless. Recall the music industry’s struggle against the iTunes. Are there any others that come to mind? Share your thoughts below.

Apple’s Foreplay In-Car Lures Powerful Partners into a 5-STAR Business Network

Owners of cars made by a range of manufacturers such as Ferrari, Mercedes-Benz and Volvo will be able to voice-command their vehicles using iOS devices this year. Apple will unveil CarPlay, the integrated infotainment system, at the 83rd Geneva Motor Show, which takes place from Mar 6 to 16, 2014.

The first ever Apple integration into cars will be showcased, with vehicles effectively becoming “the second screen for the iPhone”, according to Frank Gillett, an analyst at Forrester Research.

“We’re looking at the coming together of some of the most powerful brands on earth, Apple – the most valuable brand – is leading the change in automobile entertainment by using its attractive installed base and business networks”, says Vivek Sood, CEO of Global Supply Chain Group.

At a glance, the new system will give drivers a familiar iOS interface for maps, music and Siri-based voice controls while incorporating standard knobs, dials and buttons in the car. Other basic phone functions can also be accessed, such as making calls, messaging as well as a host of third-party apps.

“CarPlay lets drivers use their iPhone in the car with minimized distraction,” Greg Joswiak, Apple’s marketing vice president for iPhone and iOS, said in the statement.

Currently, CarPlay will only support the latest generation of the iPhone, which means iPhone 5, iPhone 5S and iPhone 5C, and will be available as an update to iOS 7.

A report by Accenture in December says consumers are increasingly looking at in-car technology as the deal-breaker, even more than power and speed as their first consideration.

“Apple again has seized the spotlight, after signalling its attempt with the iPod and car audio systems a decade ago, and then fine-tuning its product family before finally announcing “We’re ready””, says Sood, who also writes the book “5-Star Business Network”.

Other carmakers expected to follow suit include big names such as BMW, Ford, General Motors, Honda, Hyundai, Jaguar Land Rover, Kia Motors, Mitsubishi, Nissan, PSA Peugeot Citroën, Subaru, Suzuki and Toyota.

In December 2013, Google announced the plan to work with Audi in developing a similar system. However, nothing has been heard since.

Google’s Android OS has also come under intense competition with the upcoming launch of Ubuntu-run smartphones and Samsung’s decision to ditch Android for Tizen in its smartwatches.

FACEBOOK’S $19 BILLION SPLURGE ON WHATSAPP: EASY COME EASY GO

girl-facebookI always start my analysis with a simple disclaimer that no matter how many Ivy League degrees one has, none can predict the future. With my near perfect GMAT score in quants, when it comes to analytical capabilities, I am confident that I am close to the top level. Yet it is necessary to note down this simple caveat at the beginning.

Because no one can predict the future, every acquisition is essentially a leap of faith – just like every marriage is. And, the parallel does not end there – similar to a marriage, probability of success of an acquisition is also rated just below 50%. Thankfully, that scary statistic does not stop people from marrying out of love, and companies from acquiring other companies out of – whatever leads them to get the urge to merge.

The cheer squad is out justifying the deal – rolling out measures such as MAU (monthly active user), revenue per MAU, valuation per MAU and such numbers. It reminds me of the go-go days of the last internet boom where valuations per eyeball led companies such as Webvan, pets.com and others to use similar statistics as the justification of their valuations and shaky business models. As an example, here is one list of top ten dot com flops. Here is another one compiled by CNN. Curiously, both of them missed Myspace.com, the Facebook of 2005, acquired by News Corporation for an astronomical sum of $580 Million.

Here is a snippet from Andrew Beattie:

In the year 1999, there were 457 IPOs, most of which were internet and technology related. Of those 457 IPOs, 117 doubled in price on the first day of trading. In 2001 the number of IPOs dwindled to 76, and none of them doubled on the first day of trading.

Why do I quote these numbers and examples? Only to remind you how short memory can be despite figures and statistics being set in stone. I will not go on and on with digging the graves because I have a couple of very important points to make.

First is this – what are other comparable businesses to WhatsApp? You could say none – but that is not true. Essentially, both Viber and Skype do similar things and have a wide reach. I have been using Skype since 2000 and Viber for at least 3 years before I started using WhatsApp. In addition, there are many other apps, including iMessage that allow online messaging. So what is the source of magic in this deal?

Let’s first compare the number of users, because they are the sole reason for astronomical valuation. Skype has reported more than 300 legitimate users. Many of them pay substantial sums for the privilege of using its services. For example I pay between $50 and $200 every year for its service. Yet Skype was sold to Microsoft for $8.5 Billion in 2011.

Yes, there are nearly 450 Million users of WhatsApp – but what do WhatsApp users pay? Zero, nada, zip – most of them pay the company nothing. In fact that is its biggest attraction! And, also the reason why it is so popular in Africa and parts of Asia. How much revenue can derive from serving ads to populace with limited buying power?

Now this is where the story gets very interesting. Indeed, as pointed out by Prahlad in his book “The Fortune at the Bottom of the Pyramid“, there is indeed a fortune to be made there. WhatsApp’s business model was finely tuned by its careful founders. And they have made a fortune by selling to Facebook at the right time, at a very fortunate price.

The key question is will Facebook be able to make a fortune out of its purchase? The demographics of Facebook users and WhatsApp users are significantly different. As I said in one of my recent posts on QuoraI think social media will start differentiating itself further. Facebook is fast becoming a housewives’ platform while LinkedIn is fast becoming a recruiters’ platform and Twitter is becoming a journalists’/politicians’ platform. I know this is still a gross generalisation, but consider this – many Facebook groups (such as HARO) have now started their own social platforms that are growing very successfully. This phenomenon is only going to accelerate as the technology evolves. Generic social platforming technologies as not yet commercially available easily. But they will be. Similar to what happened with message board technologies, blog technologies and countless other similar plug-ins. Once that happens – potentially every LinkedIn group, Facebook group, Yahoo group and Google+ group could evolve into an independent social platform with its own sub-culture and rules.”

For this reason I think the current deal is yet another case of Easy come, Easy go. In this article, the authors (Andrew McAfee, associate director of the Center for Digital Business at the M.I.T. Sloan School of Management, and Erik Brynjolfsson, professor at the M.I.T. Sloan School of Management, director of the Center for Digital Business) note that WhatsApp is a company of 55 employees and $19 Billion valuation, asking “Are we building a jobless economy?”

My view is different. I think in this case, we are barely building any economy at all. As noted in my Quora post above – when the dust on social media segregation settles, and the users self-select to fall in the right camp for the right activity the valuations will settle down closer to the norm. At the moment, driven by relentless quantitative easing, and lack of real investment opportunities, anything that looks remotely promising is being valued way higher than it should be. In this dot-com bubble on steroids, looking for logic in investment valuations is akin to hang gliding in the eye of a storm – you may think you are safe, but that is just a temporary illusion.

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