how amazon and apple show that high profits stop companies from dreaming big - digital pen and pad

When Amazon first launched its own tablet, it seemed like it was just another me --
It has also entered the hot field pioneered by Apple.
Five years laterlast Saturday), Amazon.
Com has introduced a new model
The obsession with price has reached the extreme.
The latest Fire HD 8 Battery life is 12 hours with a storage capacity of 200 GB.
It includes not only front and rear cameras, but also Alexa-the voice-
A controlled assistant who answers questions, plays music on command, orders pizza, and does more. The price? A jaw-dropping $89.
Compared to Apple's 8-99
The ipad starts at $399.
So while the tablet market as a whole has seen some sharp declines in recent quarters, sales of Amazon tablets have soared 5,421% in 2016.
Every respected business school teaches at least one thing to aspiring mba professors: give priority to investing in innovations that promise the highest returns.
That's why a regulated chief financial officer in each company will evaluate investment opportunities and carefully allocate company resources.
Ideally, with the introduction of more profitable products over time, the company's operating profit has grown steadily.
Apple is a typical example of this.
The company's profit margin is close to 40%, more than 16 times that of Samsung.
3%, attracting investors.
Apple remains the darling of Wall Street, a model for MBA courses and the world's most valuable company.
But none of the companies operate in a vacuum.
The real trouble with Apple is its high profitability;
It has competitors who are more than happy to live at a lower profit margin.
Amazon's favorite motto of Jeff Bezos is "your profit is my chance.
Amazon has built an empire to sell books, CDs and DVDs.
Followed by video streaming, followed by the Kindle, followed by the audiobook company.
Amazon's profitability is declining.
Instead, it "trains" investors to accept razorsthin margins.
However, adopting this strategy will also have an impact on areas outside Amazon.
It creates an unstable situation for a well.
High-margin companies like Apple, whose sheer profitability severely limits what it can now pursue.
Apple is by no means an exception.
Think about Moleskine, the iconic laptop with elastic straps, a hard cloth cover, rounded corners and expandable inner pockets.
In the era of smartphones, iPads, Evernote, and Adobe, Moleskine has an unparalleled reputation as a note-taking tool.
Millennials are the fastest growing generation of companies.
The growing market segment and Silicon Valley start-ups have already stocked up Moleskine stationery as if it were a corporate uniform.
The company has never lacked celebrity endorsements: it claims to have a long-standing pedigree and is well received by prominent creative figures such as Picasso, Van Gogh, Hemingway and Chatwin.
Between 2015 and 2016, Moleskine's revenue grew by more than 12%;
It has sales of more than $100 million and an enviable operating profit margin of more than 20%.
This is a lucrative performance for a paper company.
Wall Street analysts don't even think Moleskine is a stationery maker, but an "Italian luxury company ".
Morse King, however, was not complacent.
It has repeatedly sought to adapt to the digital world.
Milan, 2014-
Developed a synchronous manual application based on the company
Draw pictures with Photoshop.
In April, the smart writing set notebook was released, with its stylish digital pen equipped with built-in
In an infrared camera, it can track strokes on tiny objects
Order a notebook of paper.
The laptop bridges between simulation and numbers.
You can also tape it.
Recording a meeting or phone call and seeing your work miraculously reproduced on the iPhone screen, like graffiti on paper, is fascinating.
Reporters and journalists are raving about it.
However, the price is as high as $199, which is clearly not the price of daily consumers.
So what are the alternative strategies for success?
Let's do a thought experiment and imagine Amazon, Uber, Airbnb or any company that prioritizes growth rather than profit growth.
First, the price of the smart writing set will be sharply lowered to be consistent with the price of Amazon's latest tablet, if not lower ).
The price is around $50, low enough to attract wellto-
The same is true for managers and college students.
Moleskine can then open its software application to third-party developers so they can come up with virtual stickers and other ancillary features.
The digital pen will not only be black (
It's reminiscent of Henry Ford's Model T.
But also in Rainbow tones to promote selfexpression.
With the growth of the fan base, Moleskine can also sponsor conferences such as TED or South by Southwest (SXSW)
Attendees can share and compete for "Graffiti Worth Spreading ".
"Nothing will happen except sports.
A low obvious advantage
The price strategy will be the absolute quantity of product sales, which in turn can justify increasing spending on new technologies, which will make the product more attractive.
Moleskine can spread the cost of the investment to a large number of products it sells.
By contrast, the current high
Margin strategy hinders its ability to quickly improve product performance at critical early stages.
The contradiction is that the pursuit of fast
The growth strategy does not depend on financial resources within the company. Uber lost $1.
2 billion in the first half of 2016, but still bought Otto, an automatic trucking startup, for $0. 68 billion.
Amazon made $1 in revenue in 2000. 4-
So that it can invest in the future.
The real problem, it turns out, is not the currency itself, but the expectations of financial markets.
Once expectations of high profitability are set, it is impossible to narrow the stock price without a slump.
A company can always improve its shortcomings. term earnings—
It's easy to cut R & D or Labor.
However, to sacrifice profits for the long run
Long-term growth requires unwavering courage.
Knowing all this, what can Apple do?
Although Amazon is gradually joining, it is likely to maintain a high profitability if it can implement another big idea in a timely manner. Who knows?
Although the company has closed itself
The effort to drive the car ended the long
The rumored project, Titan, is probably doing something more interesting.
One thing is clear: it is a very bad idea for Apple to raise its profit expectations by one notch.