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Abuse & Profits
#327 1/20/2009
Over the weekend, my wife purchased an iPhone 3G. She loves it. It’s great. It’s a Mac or PC in your hand. It’s fast. It’s powerful. And it’s kicking the pants of every competitor outthere.
The iPhone is no doubt a very well designed and produced product. It just works. Really well. Andit’s fun. It’s cool. What happened to Motorola? Nokia? Who? Hmmmmm... sounds familiar.But we’ve seen this before: remember when everyone used Yahoo? That is, until a little startupcalled Google arrived on the scene. I recall going to Barnes & Noble, until Amazon came on thescene. Now my trips to B&N are much fewer.Businesses change power periodically. Is that what is going on now? Maybe.Unless you are an Amish Farmer (apologies to any Amish Farmers reading this ezine), you couldnot have missed the news on TV, radio, internet and in print about the massive corporate closingsand job losses. The latest victim being Circuit City.The idea of entire industries getting slashed -- banks, car dealers, and retailers -- is not new. We’vebeen here before -- even during my brief lifetime.Why does one company crash and burn while another lives to serve its customers another day? Inshort, I think the company which survives (for now anyway), understood competition and thecustomer. They realized things can change overnight. Customers can lose interest or their jobs --both which can directly impact any business. Savvy business owners know this and prepare for it.Apple’s iTunes and iPhone/iPod rules the planet -- over Microsoft’s Zune and dozen of other musicplayers and phones. There are still many places to get music besides iTunes. Yet recently Applechanged its pricing and removed the copyright protection on music. The results? More sales.More enthusiastic buyers. More frustrated competitors at Amazon, Microsoft and Verizon. Thismove by Apple will better preserve its lead over the competition and give its customers what theyhave been asking for.Uncle Steve at Apple doesn’t have a crystal ball (okay, he might have a crystal ball, but I doubt it’sworking THAT well.) He is just savvy about caring for his business and his customers. Apple is notalone. For example, WalMart does something similar with Pop Tarts. Whenever the weather goespoor in the mid-West, WalMart knows many people will make a big run on Pop Tarts as snacks incase the power goes out. Thus, WalMart aggressively monitors US weather to know when andwhere to bump up its Pop Tarts orders with Kelloggs. Smart.It’s terrible to see so many businesses crash. It’s a personal and American tragedy to see so manylose their jobs. And yet, this is how a capitalistic economy prunes its dead and dying businesses.The economy is like a garden and it requires care. Each business is like a sharecropper who has
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