retail news in context, analysis with attitude

by Kevin Coupe

Two competing pieces of news emerged from the technology world yesterday that illustrated the different paths and fortunes of two companies.

Apple said yesterday that it sold a record nine million new iPhones over the weekend, when its new iPhone 5S and iPhone 5C were available to consumers. According to the San Jose Mercury News, "Sales easily topped analyst estimates, which mostly ranged from 5 million (the same amount Apple sold in the debut weekend of its last iPhone) to 8 million, and exhausted the supply of the more expensive model."

At virtually the same time, the Wall Street Journal writes, "BlackBerry said on Monday that it had reached a preliminary agreement to be taken private by a group led by Fairfax Financial Holdings. The company signed a letter of intent that would pay shareholders $9 a share in cash, a deal that values the faltering smartphone maker at about $4.7 billion, according to a press release. Fairfax, a Canadian insurer, already owns 10 percent of BlackBerry.

"BlackBerry entered into the agreement on the recommendation of a special committee of its board, which has been evaluating strategic options for the company as its market share has continued to erode in recent months." The theory is that "being privately held would allow BlackBerry to restructure without worrying about bad news affecting its share price."

I don't think that share price is always the best barometer, but it is worth noting that at its height, Blackberry shares were selling for $148 per share in June 2008. (To be fair, Apple's stock price is well below the more than $650 per share that it was worth a little over a year ago.)

But the real lesson here is how important it is for companies to continue to innovate, to continue to be relevant. BlackBerry, by virtually any standard, lost touch with the market and the evolving consumer. And its downfall should be instructive to Apple, which, in the post-Steve Jobs era, is facing questions about its future.

"We're gambling on our vision," Jobs once said, "and we would rather do that than make 'me too' products. Let some other companies do that. For us, it's always the next dream."

Wise words.
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