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Apple’s Latest and Greatest

http://www.nytimes.com/2012/09/03/technology/rivals-jostle-for-spotlight-before-apple-announces-new-iphone.html

A quick look at the relative stock values of Apple, Microsoft, Motorola, and Samsung over the past five years gives a very informative picture of the technology company landscape, specifically with regards to cell phones and tablet computers. Samsung has a roughly 100% stock increase over this period, Amazon is at 191%, Microsoft is at 6.50%, Motorola is at 59.6%, and Apple is at 408.89%. While all of these companies have seen stock increases during this time, Apple has outshined the competition magnificently. Now, with less than a week’s time before an Apple news conference where it is expected the next iteration of the iPhone will be announced, this New York Times article discusses the ever-increasing attention these companies are paying to each other’s marketing strategies.

Drawing on the basic principles of game theory from class, it makes perfect sense why Apple’s competitors are rushing to release their products before Apple’s iPhone release. Historically, iPhone product launches have been enormously successful- with lines forming outside of Apple’s stores hours before they open. If a competitor such as Samsung or Motorola wanted to maximize the publicity of their product launch and increase the resulting sales, it would certainly make sense to release their device before the iPhone (and the news explosion that will likely accompany its release). Additionally, however long between their product launch and Apple’s is time where their product’s main competition is not yet on the market. In a fast-paced market such as smartphones, those extra few weeks could result in a substantial increase in sales- and thus be a significant driving force for pushing up a product launch. Apple’s competition has a brief window where they can maximize their sales without having to compete directly with the iPhone- and they’re taking advantage of it.

Further, we can analyze the dynamic between these companies by considering all of them as part of a single, highly interconnected network. Interestingly, it seems the effect these companies have on each other is not always reciprocal- for example, we hear much more about Samsung and Motorola’s response to Apple’s latest technology than we hear about Apple’s response to either Samsung or Motorola’s product launches. Rather, Apple seems to focus on having fairly consistent (yet long-lasting) product cycles, with the hope of generating large consumer interest at each product launch. This is in stark contrast to the strategy of Samsung and Motorola among others, who have been releasing new smartphones at an alarming rate, with the hope that when given a choice between a newer phone and an older one, customers will favor the former. So far, it seems Apple’s technique is working quite well- although its competitors are certainly closing the gap. But in such a fast-moving market, there’s no knowing if what worked yesterday will work tomorrow. Will Apple’s competitors’ timing be able to put a dent in the new iPhone’s sales? We’ll have to wait and see.

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