Skip directly to content

Transforming revenue streams

Apple’s revenue experiences first annual drop since 2001

Apple’s revenues had its first annual drop since 2001 after seeing a decline in iPhone sales. For the fiscal fourth quarter 2016, which ended in September 24, the company saw its revenue decline 9.8% to $46.9 billion and profit down by 23% to $9 billion. Sales of the iPhone dropped 13% year-over-year to 45.5 million units. Mac sales decreased 17% to $5.7 billion. Revenue from the iPad were more stable due to the new iPad Pro line. Its services division which includes Apple Music saw a 24% growth to an all-time quarterly high of $6.3 billion. Apple’s China market is not growing as fast as before, posting a 30% year-over-year decline in the fourth quarter. The company expects revenue for the December quarter between $76 billion to $78 billion, higher than what analysts are forecasting. The company will introduce new Mac products at its launch event Thursday.

Key Takeaway: 

Apple posted its first yearly drop in sales since 2001 after reporting its fourth quarter results which saw iPhone and Mac sales drop as well its China market decline; its services unit, however, grew double digits to a quarterly high of $6.3 billion.

Transforming Business Models: 
Publication: 
Publication Date: 
October 25, 2016

Rise in EV adoption will drive new opportunities for utilities

A new report from Bloomberg New Energy Finance states that the electrification of transportation will present opportunities for utilities faced with stagnant load growth as well as increasing pressure to innovate with new business models that incorporate distributed and clean energy as a resource. It is estimated that electric vehicle adoption will have greater impact on utilities by 2030 as they will make up 3% of global energy demand. However, electric cars are not expected to be competitive to internal combustion engine vehicles until the mid-2020s. Utilities can provide specific rate plans designed for EV charging to cater to this new market, as well as new vehicle leases that take account negotiated electricity rates. They can also participate in the build-out of public and semi-public charging infrastructure. Autonomous cars and car sharing models can speed the integration of electric vehicles as demand response assets. Much opportunity is also in used batteries which is expected to hit the market in large quantities by mid-2020s. They will be used for grid storage, enabling more clean energy to be integrated to the grid, as well as introduce lower peak demand prices for public charging.

Key Takeaway: 

Rise in electric vehicle adoption driven by declining battery prices as well as autonomous and ride sharing models, will present opportunities for utilities to increase their bottomline as loads are expected to grow and enable them to venture into new business models such as new rate plans and vehicle lease structures.

Publication: 
Publication Date: 
October 19, 2016

Amazon introduced its own music streaming app

Amazon introduced a music streaming service competitor to Spotify and Apple Music called Amazon Music Unlimited. Monthly subscription fee is same as Spotify, at $9.99, but for Amazon Prime Customers, the price is cheaper at $7.99. Amazon sees the connected home as the next battlefront for music streaming, after desktop and mobile. The company hopes to get customers to switch to its streaming service with AI features that enable users to play songs by quoting lyrics, mentioning the period when the song was released or through the use of adjectives such as playing happy songs on Echo using voice or through the Music Unlimited app. Echo users also get a discounted price of $3.99. It will be initially available only in the US. Aside from Spotify and Apple Music, Echo competes with the recently released Google Home, a smart speaker that also streams music from Google Play.

Key Takeaway: 

Amazon launched a new music streaming app called Amazon Music Unlimited which also works with the Echo device to play songs with artificial intelligence; the service is a direct competitor to popular streaming services Spotify and Apple Music as well as the newly released Google Home, a smart speaker, that streams music from Google Play.

Market Disruptions: 
Publication: 
Publication Date: 
October 12, 2016

Facebook's new Workplace will compete with Slack

Facebook launched an online platform called Workplace for enterprise communication and collaboration, competing with other services in the market such as Slack and corporate social networking sites from Microsoft, IBM, Salesforce and Oracle. The social media giant believes Workplace can soon replace internal e-mails, mailing lists and newsletters. The platform, which is still on beta, is ad-free and has been tested already by more than 1,000 businesses and organizations over the last year, including Oxfam, Columbia Sportswear and Booking.com. Some beta clients say the familiar interface is helpful, while others say it can break silos in their organizations and increase engagement. Workplace is cheaper than Slack's paid service, at $3 per user for the first thousand employees, $2 for the next 9,000 and $1 for every person after.

Key Takeaway: 

Facebook has created a new online social networking site called Workplace for the enterprise, which the company says it hopes to replace traditional communication systems; the service will compete with messaging app Slack. 

Market Disruptions: 
Publication Date: 
October 11, 2016

SpaceX to send humans to Mars in 2024

SpaceX has plans to send humans to Mars in the next few years. The plan entails building a spacecraft, refueling it mid-orbit through a reusable rocket, activating its built-in solar array, and finally another refueling on Mars with methane gas. A trip to Mars could take three to four months after which the spacecraft will be sent back to Earth. SpaceX's CEO Elon Musk foresees a million people sent to Mars via a fleet of more than a thousand such spacecrafts carrying 100-200 passengers each within a century after the first Mars mission. Musk also said the cost of a trip could be reduced to $200,000 a person from the current estimate of $10 billion per individual. The executive believes a Martian city will serve as an insurance for any potential doomsday event.

Key Takeaway: 

SpaceX announced its plans for a manned mission to Mars by 2024, which will make use of an interplanetary transport system to be built by the company, decreasing a trip's cost to the red planet to $200,000 a person.

Publication: 
Publication Date: 
September 27, 2016

Pages