Wall Street seems to favor companies that bleed money vs. those companies which create products that customers want to buy. I cannot be the only one who sees fallacious reasoning in that perspective. Why does Wall Street not ask, ‘How long can Apple’s competitors survive?‘
Another One Bites The Dust
Giant book seller Barnes & Noble is bleeding money and has decided to abandon the Nook tablet hardware business.
Instead, the company plans to limit risk by using a partnership model and find third-party manufacturers to build eReader devices which use Nook software.
Good luck with that.
The partnership model doesn’t appear to be in favor these days. Partnership model? Microsoft partners with PC manufacturers to sell Windows on desktops, notebooks, and tablets.
That partnership has worked out so well that Microsoft has been compelled to create their own line of tablets that compete against their partners. Some partnership, huh?
Allow me to point out the obvious. The partnership model of yesteryear is broken. Apple makes as much profit on the Mac as the next four PC manufacturers, and owns about half of the industry’s profits, with the other half divided up among the losers.
Google and Amazon partner with manufacturers to build the Nexus tablets and smartphones, and the Kindle eReaders and tablets. Both companies admit to selling their devices at near the manufacturing cost and will not divulge how many devices they’ve sold.
Up and down the product line Apple’s competitors are suffering in the marketplace. What they sell doesn’t make money. If that’s true, and it is, why does Wall Street favor Amazon and Google’s stock, while punishing Apple’s stock for enormous customer satisfaction and profit domination? I thought Wall Street liked monopolies?
Why don’t they ask this question? ‘How long can Apple’s competitors survive?‘
The partnership model used by Microsoft for decades is broken. Amazon, Google, Microsoft and friends must sell products with ever dwindling margins simply to keep pace to Apple’s profit gravy train. At what point do those massive losses translate from disaster-in-waiting to a full blown catastrophe?
Amazon, Google, and Microsoft have deep pockets and are used to losing money on new ventures. Compare that methodology to Apple where every new product of substance reaps massive profits. Not just the Mac. iPhone and iPad are huge moneymakers as is iTunes Music Store, and the App Stores. Even Apple’s lowly iPod, slowly fading into insignificance as smartphones become the norm, makes more profit than Amazon, Google, or Microsoft’s new ventures.
Isn’t that sad? How long will those companies put up with their losses? Are they so desperate they’re willing to bet everything against Apple?