E3 2014

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What is E3?

E3 stands for the Electronic Entertainment Expo and is one of the Video Game industry’s biggest events in the year. It occurs every year at or around the beginning of June, starts on a Monday and is usually held in the Los Angeles Convention Centre. Various video game companies and publishers/developers alike come to E3 to showcase the games they have been developing and is usually an event to make new announcements. The main three companies which are usually focused on are Microsoft, Nintendo and Sony mainly due to their home consoles.

Microsoft at E3 2014

Microsoft tend to go first when E3 starts as they usually have the first 9AM slot on Monday. Microsoft usually use their time to show off the yearly Call of Duty games as they have a strong relationship with Activision (publisher of Call of Duty). This relationship is key to Microsoft appealing to the mass market of casual gamers who play shooting games and tend to buy only a few games in the year. Microsoft has also unveiled various games via it’s ID @ XBOX initiative focusing on independent developers creating low cost, unique games.

Microsoft chose to push it’s focus towards the core gamer rather than focusing on multimedia aspects like it did at last year’s E3 convention. Microsoft seemed to have learnt from it’s mistake and have listened to the consumer this year. An example of this is the Halo Master Chief Collection which has 4 Halo games, all remastered as well as various extra content. The feat of this collection is that it includes all the multiplayer maps also. The collection also allows the player to create their own playlist of levels from 4 games which is very unique.
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XBOX YouTube Channel

Sony at E3 2014

Sony’s 2013 conference was a hit with the core gamer and is evident in its sales for it’s most recent home console. The only issue with gamers was that the line-up for first party games was weak and was made worse with various games being delayed such as Watch Dogs from a launch game of November 2013 to May 2014.

Sony used their time to focus on the gamers and exclusive content. Destiny, which is produced by the developer who made Halo, was one of the main games showcased with exclusive content. Sony have also bundled the game with a new white PS4 console for slightly more than retail. This will be great value for money for the end consumer.

Entwined is an exclusive Sony PS4 game which released on the same day of Sony’s press conference. This shows that the Playstation brand is able to cope with new game announcements and give the product quickly to the gamers.

Sony expanded it’s product offering such as Playstation Vita TV which is already available in Japan. Project Morpheus, Free to Play games and a few films announcements were also present. The final trailer shown by Sony was a trailer for Uncharted 4. This was an important trailer to show as the developer who is making that game has had a lot of re-shuffling of staff members and layoffs who focused primarily on that game. Showing a trailer for Uncharted 4 was a good move to ensure that gamers know it is still in production and not cancelled.

PlayStation YouTube Channel

Nintendo at E3 2014 (kind of)

Nintendo have opted to do a digital presentation for the past couple of years which seems to work for Nintendo. They have not had a conference since 2012 physically at E3 and has online, direct videos instead over the year. This allows Nintendo to give gamers access to the announcements globally without any restrictions.

Nintendo are very laid back and have an outgoing direct video. They showed off gameplay from new like Yoshi’s Woolly World and known titles such as Super Smash Bros Wii U and 3DS. The majority of the time was spent speaking with Japanese developers who have been working on these games. Due to the format of which Nintendo present themselves at E3, a lot of the content is best shown outside of the 40+ minute video and are shown as small trailers.

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Nintendo have used their resources to show off their games. It is very important that Nintendo give what the gamers are looking for which are core games like Legend of Zelda and Mario games. These are usually the system sellers which Nintendo need gravely as they are currently last in this home console generation.

Nintendo YouTube Channel

What is next?

The video game industry has become more and more mainstream since the Nintendo Wii was released as well as the advent of mobile gaming and gaming on the go. It has allowed various ages of consumers to play games and in a variety of formats. The average consumer will be focusing on this but these conferences are held back for the hardcore gamer. These gamers are the main reason the industry continues to thrive as they are most likely going to the have high attach rate for games.

The next gaming convention is in August for the Game Developers Conference in Germany. Various European developers use this convention to give updates on games which are due to be released in Spring the following year.

Apple SWOT Analysis

Apple is a consumer electronics company which operates in hundreds of countries around the world. The company was founded by Steve Jobs and Steve Wozniak in 1976 where they produced a computer in a garage. The company has grown greatly since then but only gained worldwide popularity after the release of the iPhone. The share price of the company has been fairly stagnant up until that point, until it rose to make the company the most valuable company by market valuation.

Strengths

Innovation is the key to the company’s success. It has created unique products which have been ahead of the curve such as the iPhone which brought touchscreen technology to the mainstream. Other touchscreen phones were available at the time, but the products did not look appealing and did not have a good operating system. Other products like the iPad were created by Apple which also brought the market forward, in terms of design and in competition. This corporate culture towards research and development into new product ideas and thinking outside the box has created great goodwill within the company.

New way to access your phone and potentially pay for things.

One of things that Apple has been able to do with the successes of their product ranges is to collect a lot of money in cash. The company has over $100bn in liquid cash available on the balance sheet. The money has been criticised by its corporate investors for not investing it in companies or to return the money via dividends. Apple has started to take this information on board only after the death of Steve Jobs and has purchased companies, issued dividends and underwent share buy backs. This had inflated the share price more and also allowed Apple to use acquired companies technologies in their product range such as the Touch ID on the latest iPhone 5S.

Branding and brand loyalty is one of the best things that the company has going for it. Existing customers have been able to switch from on product to another product very easily due to the operating system. This has created a type of loyalty with consumers which is an excellent for Apple to keep and grow over time while it’s competition, particularly Android based smartphones, have found it hard to take some of this market back. The brand and the logo itself of the company is known globally by most people in the world and would be able to name at least one product made by Apple.

Weaknesses

The way in which the company prices it’s products can be seen as exploitative. The costs of manufacturing for the products are several hundred dollars less than the recommended retail price. This is the method in which the company has amassed its large cash reserve. The fact that the company has also been criticised for having questionable work practices in its manufacturing factories in China is also a problem which needs to be constantly monitored. These problems combined make it harder for the company to truly have a positive influence on the social aspects of the business.

How much premium per phone is too much?

The yearly product offerings of the iPad, iPhone and some MacBook products is a cause for concern for consumers and Apple also. When new products are expected to be released, Apple experiences a major decline in sales for that particular product which is expected. In most instances, consumers will be polarised in their opinions of new releases. Some customers can justify making a yearly purchase of a gadget which is useable just to get faster processors, while other consumers may not agree and find a product better for them elsewhere. Recently, the iPhone segment of the company has innovated in some aspects such as speed but lacks features which is found on various other mobile products made by competitors. Features such as near field communication (NFC) and better resolution cameras have been present in products other than Apple smartphones. Apple need to ensure that they can innovate enough on a yearly basis to justify a new contract renewal or upgrade from older handsets.

Opportunities

One of the main things Apple has been criticised about with the iPhone 5C is that the price point is too high. The greatest opportunity for Apple as a worldwide company to do is to create a lower priced budget smartphone to cater for the biggest developing markets in the world, China and India. Analysts expected Apple to price the iPhone 5C as a budget phone for the developing market, but was priced too high for that to be real. Under the new leadership of Tim Cook, Apple can create a budget smartphone for the developing markets to create brand loyalty from a younger age or to follow the wishes of Steve Jobs which is to be a premium priced consumer electronics company.

Growth is clear in the emerging markets. Why not cater to them?

There are various things the company can look into when choosing its future options. Reinventing existing products is the most common way in which all companies retain and possibly generate streams of revenue. Apple purchasing PrimeSense, which co-created the Kinect sensor for the Xbox 360, can yield future benefits. The way in which Apple could use this acquisition is to use the sensing technology in products like the rumoured Apple Television set or the Apple TV set top box. This would make the products have a unique selling point separate to conventional television sets or set top boxes.

Threats

Threats are usually considered to focus on the external factors, in the case of Apple, it’s the competition. The largest smartphone manufacturer Samsung is making it harder and harder for Apple to keep its customers. This is mainly done by the different features samsung offer on their smartphones. Even Nokia can boast the fact that they are creating smartphones for the developing market with their Asha range of phones which are available out of contract for a cheap price relative to the cheapest Apple product. Sony can use their imaging division to create smartphones with great cameras to entice photographer enthusiasts that want something compact which still produce compact camera quality images.

New features from old players.

The rapid movement in technology is a threat to Apple as well as a strength. If the industry moves faster than the company, Apple will lag behind. This is not the case but there can be potential for a rapid change in the way which products are used and interacted with in the long term. This would need to be considered when looking at the disposable incomes of its target market and how that will change as the global economy improves.

Twitter IPO

Twitter has file for it’s IPO S-1 form at the Securities and Exchange Commission in the USA. It is the most recent big tech based company to file it’s intention to float on a stock exchange after Facebook. The company as most people know, allows users of the social media site to “micro-blog” within 140 characters and gained major popularity after start up conventions such as South by South West (SXSW) and Consumer Electronics Show. Twitter also played an important role when it came to the 2008 US Presidential Elections where people tweeted about their opinions live during key moments of the race.

The networking site has over 200 million active users and has increased its user base year on year since it’c creation in 2006. The company was founded by 4 people with the most prominent being Jack Dorsey who owns 4.9% of Twitter shares and has founded another company named Square, payment solutions. Although the company has millions of active users, the revenue per timeline views is minimal and did not meet market expectations. The fact that this is the main way for the company to make revenues is questionable for the market can be a problem, but investors will still invest due to the push in social networking stocks. Facebook’s share price plummeted over the first 6 months going as low as $17 but has since hit $50 plus dollars, which was driven by increased profits generated by mobile services.

Twitter could experience this growth however it may take years to happen since the company is making a loss on operations for the past couple of years. Twitter needs to find a way to create a way to generate profits from mobile, especially since a majority of its users access the site via mobile applications on smartphones and tablets.

Twitter has seen great popularity especially among celebrities. The biggest celebrities such as Justin Bieber and Lady Gaga have millions of followers and allows them to connect with their fans. Another big change is the need for companies to have a social media presence and Twitter is seen as a way for the companies to interact with consumers. Many companies use Twitter to reply to customer services such as customer complaints as the tweets from customers will be public to everyone to see.

With the problems surrounding the Facebook IPO, Twitter has chosen to use NYSE instead of NASDAQ, even though NASDAQ is home to various other technology based companies like Google, Apple and Microsoft. NYSE is currently undergoing testing to ensure that there are no problems with the IPO and to prevent any problem the NASDAQ stock exchange faced fines from technical problems with Facebook.

Nike SWOT Analysis

This is a post based on the sports apparel company Nike and will look at the business model focusing around the SWOT analysis.

Strengths

Nike has a strong global brand which everyone will know by its logo. The logo itself needs to be presented without the name and everyone will know what it is, that is how powerful the brand is. Some companies require their names to be present but in this case that is not true. This is garnered a long term customer loyalty base where the products are synonymous with high quality clothing and fitness trainers. The power of the brand is also evident in the fact that Nike has well known athletes and other celebrities which will put further backing to the brand if it is deemed to be “cool” to wear. Athletes like LeBron James, Roger Federer and others such as Andrew Luck where each of these people represent a different sport from basketball to tennis to American football respectively. They promote the company by wearing Nike branded clothes from head to toe to more recently wrist in the form of the Nike FuelBand.

Nike FuelBand

The company is a clothing brand and there is little to innovate in. However, Nike has managed to find ways to innovate their products and to provide a range for various different price points to cater for different demographics. This shows that the company is versatile in its product offering, whilst also remaining relevant as the industry leader. The new Flyknit running shoes, the FuelBand wristband and the Dri-Fit clothing technology are all innovative and are applicable to different products. The Flyknit trainers are very unique where they allow the runner to have a bare foot feel experience, while the FuelBand moves into the new market of wearable technology with a focus on keeping active. The FuelBand allows the user to connect it to their smartphones and to compete against their friends to give a competitive side to always moving and being active.

Weaknesses

Due to the strong brand, the company can be seen as exploitative and greedy. The company can stick their logo on a plain white t-shirt and sell it for over triple the manufacturing cost, not to mention the fact that the company has had problems in the past with its manufacturing processes. The high mark up on the basic products allows the company to generate large levels of profits which can be a seen as unethical, but they do operate as a for profit company. The supply chain is the most important aspect of Nike’s business model, as they need to ensure that they have a solid supply chain from sourcing raw materials to manufacturing and to delivery logistics. Each of these areas creates a cost for the company, much like any other, and they could try to squeeze their factory workers with lower wages and/or bad working conditions.

Workers rights violated?

The profit margin of the company is impacted by other factors which aren’t the supply chain. The other main restrain on the margin is the retailer cuts where the retailer will push for a lower wholesale price in order to keep lower prices for their customers. The only way Nike can bypass this is by having their own physical stores, however this would result in an increase in fixed overheads such as wages, rent and utilities which can make it counterproductive. The only way in which this would work is if the store is locating in a central location with a high number of footfall, the best example for the UK is London Oxford Circus, which gets domestic and international tourists entering the branch.

Opportunities

Technology is moving very quickly, and the industry is coming up with new different form factors of usable technology. Mobile phones became smartphones, CDs became MP3 players and VHS became Blu-Ray discs. Nike has dabbed it’s hand in technology when it created Nike+ with a collaboration with Apple where is was sold as a smartphone feature to track running distances and calories burned. Nike had then moved onto making its own wearable fitness technology with a fitness watch, the FuelBand and with a game with the Kinect camera for Xbox 360. Nike could look at investing into more of these types of wearable technology so that they technology is already placed in smartphones. This would be an excellent way to create licensing revenue as well as having a wider reach of consumers.

There are various different types of shoes that Nike offer and the products are seemed to be blurring into other product ranges. Within the Nike Free range, there is Freerun 3.0, Freerun 5.0, Freerun+ 2ID, FlyKnit, FlyKnit Lunar1 +ID and it can be confusing when picking a running shoe. There are only slight differences in the product but the differences can be hard to understand when there is no expanded explanation. The only way in which a consumer can understand these differences is to spend time reading each one and comparing it, or physically going to a Nike store and getting a sales person to assist, and there is no guarantee that the sales person knows everything. Nike could try and streamline the naming of some of their products within certain ranges. This will allow the company to maximise the customers understanding of the products on offer and the features they represent.

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Threats

For large multinational corporations, the profit generated from different countries is a great way to continue operating when the domestic market is reaching saturation. The main risk with this is currency fluctuations and how a massive change in the foreign and domestic currency will make any profits overseas can turn it into a loss. Companies have had to create finance divisions specifically to manage their currency risk, most likely using a combination of forward contracts, futures contracts and call/put options. The recent decline in the Indian Rupee shows how the company can benefit from drops in foreign currencies where the goods that Nike will ship to other countries will be even cheaper. The main problem with any currencies changing would be domestic currency for Nike which will be the US Dollar. The US Federal Reserve choosing to continue its asset purchase scheme has allowed the US Dollar to strengthen stock markets to be more risk taking and choose the US market to invest in and the Federal Reserve seems to be continuing asset purchases for the foreseeable future.

All that money

The recent collapse of a Bangladesh clothing manufacturing factory caused major publicity problems for fashion retailers. The collapse brought to light the bad working conditions and the major problem of cutting corners in countries where building legislations are sometimes ignored, especially in the case of the Bangladeshi factory. Nike has had problems with their factories which they have actively and vocally created internal codes of conduct to address concerns of the public. When it comes to the problems of the collapse, the developed world would find it ways to boycott a company is there are seen to be unethical. Nike could find difficulties domestically if they encounter problems with sales if they have any problems with their factories.

Next generation of pioneers

Next Generation of Pioneers

There is a slight passion in everyone to be sustainable. In most instances, we try to be sustainable with our money and how we budget for the future. It’s quite nerve-racking to think that when we do this, we think about the short-term, which can even be as long as a couple of decades, for example getting a mortgage for a house. Others have a different magnitude of passion. Some individuals in the world try to push themselves in respect to sustainability and can even become pioneers in thinking differently. They would try to think outside of the box and try to make their ideas flourish by telling others either by protests or by presentations.

Here is an example of a young man thinking like a pioneer. He has used his personal passion of diving to come up with an ingenious idea to remedy the problems he encountered during his diving sessions. And he is only 19 years old and this is his presentation.

He has found a way to remove plastic from the oceans in a unique way which most people could not imagine, as well as making it profitable. There would be a few businesses who will invest in this man, but most likely for the wrong reasons. He could be employed by an oil company who would use his invention to capture spilt oil which can occur at any time or in any area of the world. He could also be employed by government, who are likely to use his idea for the right uses.

The Problem

There is a major problem when it comes to sustainability. It’s each to their own. There is never or rarely collective thinking to reduce the impact of humans on this planet. The fact that people all over the world are using different types of plastic on a daily basis but are not thinking what happens once its left the big bin outside their homes.This plastic has most likely have been dumped into rivers, lakes and into oceans and it is mostly to have been done on purpose. And yet this young man has found a solution to this problem, even though it shouldn’t be his problem to solve.

Businesses blame lack of governmental influence when it comes to these sensitive topics. Business would say government because businesses too need to be sustainable, they need to sustain their profits to appease investors. Governments on the other hand cannot afford to keep their environmental policies and investments intact for long periods of time, and this is because of politics. Political parties change on average every 4 years, and you can’t make change in that time. Hell, it’s even hard to change things during 8 years in office. When a new party comes into power, the first thing to change is environmental policies.

Tony Abbott winning the general election for Australia in late 2013 shows this will be the case. The previous government had introduced a controversial carbon tax on emissions which is likely to be scrapped by this new government. The only way in which policies would be kept indefinitely in law is with a communist based government. China has had subsidies for solar panel production and has caused controversy with Western manufacturers as they are finding it harder to sell their less efficient solar panels. The Obama administration has pushed to disallow new power plants using coal, which has angered the coal industry as expected, but has not had a strong push on an alternative toward producing new energy sources. The best example for renewable energy is California which is just a state pushing for policies on solar panel installations.

What next?

It is very hard to deny the fact that the planet is undergoing problems due to the massive amount of pollution which is being put into both the air and the oceans. A strong legal position should be presented by various governments, particularly the G20 nations, in order to place a strong emphasis on sustainability. Corporations should lend a helping hand also by improving their own environmental procedures with a top down culture with continuous monitoring to ensure effectiveness. This recommendation is based on the fact that is can cost lots of money to get started, however the current cost is much less when compared to potential future costs which could be infinite as the damage can be irreversible.

iPhone 5C and iPhone 5S

iPhone 5C and iPhone 5S Announcements

The new iteration iPhone has been announced by Apple on the 10th of September, where the company introduced 2 different iPhone models. There was a strong negative impact on the company’s stock price where the price dropped by 5% the day after the announcement. The primary reason this could be because analysts and consumers were hoping for a much lower price point for the lower end phone, iPhone 5C.

iPhone 5C

This iPhone has a plastic backing with the same internal technologies as the iPhone 5 so there is not much of a difference in technical power. The phone comes in 5 different colours and with the new operating system for all iPhones, iOS7. The iPhone 5C is due to be released on the 20th of September 2013 which is a lag of 10 days between the announcement and sale dates. Apple has also created new colour cases which are made solely for this phone and have chosen the base colours amongst others to provide contrast such as black and white. There is a slight improvement to the camera with the same features as the iPhone 5S, but some features have been revoked which would be to give consumers more reason to buy the premium handset.

Although this phone is seen to be a nice addition to the roster of phones available via Apple, various market analysts felt that the price point needs to be much lower to ensure that the company can benefit from selling these devices in the market, particularly the developing market. Apple has had a hard time trying to expand into developing markets such as China and India where smartphones are usually not subsidised by the carrier with a long term contract. These 2 markets consists of over 2 billion people which Apple could have gained some market share in if it had priced the lower end phone at a much lower price. Apple’s competitors such as Samsung and Nokia are using their low price, decent technology handsets in these markets and gaining a large market share which Apple could never attain if the prices remain so high. Even in developed markets, the iPhone 5C is still priced high for a phone which has last year’s technology inside it.

iPhone 5S

This version of the handset has much more exciting technology inside it. The handset costs slightly more when bought out of contract or pay as you go, but that could be because of inflation. The iPhone 5S has 2 main features which makes it completely different from the previous iPhones, firstly the Touch ID home button and the 64-bit architecture for its A7 processor.

The Touch ID allows the owner to use their fingerprint to unlock their phones without having to type in their passcodes. A potential indication has been hinted that the user can authorise payments for music and movies with their fingerprints and would eventually be open to third party applications. There is little worry for identity theft as the company has put the fingerprint data onto the A7 chip which is only accessible to the handset only and can’t be copied out of the chip. Although this was pushed as a key security feature, there could be a way for hackers to find a way to get this information.

The other main area of change is the 64-bit architecture of the CPU in the phone which is said to be the first in the world for a smartphone. This A7 chip will allow applications to run at a faster rate than the 32-bit processors which can be a reason for consumers to buy new the handset if they want the faster phones all the time. The other aspect which shows that Apple is thinking forward is that they can port this A7 chip to its tablets which in turn would run better programs and have better computing power for running graphic intensive applications such as games. Another forward thing Apple can push for is reducing its independence on Intel processors which could be more expensive when compared to UK processor company ARM Holdings in respect to its laptops and other Mac products. This would be an excellent opportunity for Apple to acquire ARM Holdings fully since they do have a lot of money on their balance sheet, as well as restricting the competition from having the intellectual properties of their processor manufacturing methods.

Which to buy?

The purchase decision will differ depending on the person’s perceived value of the new phones. The features of the new phones can be apparent to those who have not made an iPhone purchase before and are getting tired of their own smartphone. However, existing users may see this as pointless such as me. I can’t justify tying myself to a new 24 month contract to get a phone with a fingerprint scanner and a slightly better camera. I have a compact camera (Sony NEX F3D) for taking pictures and I hardly ever take pictures on my current iPhone 4S, only for those “on the whim” moments. Most of the features which are being promoted on the new phones will be available to me for free, via iOS7. The operating system update alone will keep me satisfied for another 2 years since I tend to buy the “S” versions of the phones as Apple would have kinked out any problems in the normal “numbered” phone.