The Business Book

(Joyce) #1


The success of the iPad reflected
Apple’s resolve to develop a superior
alternative to the “netbook.” Companies
like Apple and Samsung need to be
ahead of the herd, not behind it.

its share of smartphone sales
collapsed to around 3 percent in the
first quarter of 2013. Throughout this
period, Nokia was desperately trying
to catch up with Apple’s iPhone—
but doing no more than throwing
new products at the problem, instead
of taking a deep strategic breath
and deciding what innovations
might earn it a stake of the market.
The contrast between Nokia’s
behavior and that of Apple’s could
not be greater. In 2008 and 2009
the big trend in mobile computing
was away from laptops and toward

“netbooks.” In 2009, global netbook
sales rose by 72 percent. The herd
instinct of businesses such as Dell
was to produce their own netbook.
At Apple, by contrast, boss Steve
Jobs announced that “the problem
with netbooks is that they’re not
better than anything.” He worked
to develop a superior alternative to
netbooks—the iPad. By mid 2013
the iPad had sold more than 145
million units and the original
makers of netbooks (Taiwan’s Asus)
had halted production completely.
Those who ignore the herd can
apply cool logic to their situation
and think ahead to possible future
scenarios. The herd tends to think
that tomorrow will mean more and
more of today. Those who ignore
the herd can identify fundamentals
that persist over time, while looking
toward what might be different
tomorrow. As US entrepreneur Sam
Walton advised, it often makes
sense to “swim upstream.” ■


Warren Buffett

Generally considered the
most successful investor of the
20th century, Warren Edward
Buffett was born on August
30 in 1930 in Omaha, NE. He
demonstrated an early ability
with mathematics and was
able to add large columns
of numbers in his head. His
father was a stockbroker
and congressman.
Buffett began investing
at the age of 11. He started
several small businesses
while still a teenager, before
going to the universities of
Pennsylvania, Nebraska, and
Columbia to study business. In
1956 he formed the company
Buffett Partnership, where his
investment successes led to
his nickname, “the Oracle
of Omaha.” In 2006 he
announced that he would be
giving his entire fortune to
charity. In 2012 his net worth
was estimated at $44 billion.

Key works

2001 The Essays of Warren
Buffett: Lessons for Corporate
America (with Lawrence A
2013 The Essays of Warren
Buffett: Lessons for Corporate
America, Third Edition (with
Lawrence A Cunningham)

We find that whole
communities suddenly
fix their minds upon
one object, and go mad
in its pursuit.
Charles MacKay
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