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Business

2018: Huawei’s Year of Opportunity

January 2, 2018 By Jim Harris

Becoming The 2nd Largest Smartphone Maker Globally

Smartphone OS war is over. And Android won:

 

Android will finish 2017 with 85.1% market share and iOS 14.7%, predicts IDC. So, there are only two operating systems left standing. Android is dominant by market share and sheer volume of units shipped but Apple is taking the lion’s share of revenue and profit. From the chart above it’s clear that the open source Android operating system was a profoundly disruptive innovation to Symbian, Blackberry and Windows, driving their smartphone market share to basically nothing.

 

Why 2018 Will Be A Great Year For Huawei

Huawei surpassed Apple in market share globally in July 2017 according to Counterpoint. With the release of the iPhone 8 and X, Apple has regained the second spot but some fundamental shifts are favouring Huawei’s continued rise.

 

Samsung Crisis on Note 7 Exploding Battery

One: Samsung seriously faltered with the fiasco of the exploding Note 7 batteries. Up until that point, I had been a Samsung fan and had been an avid user of the Note 4. I had been planning on upgrading to the Note 7 but the fiasco turned me off. The product recall cost Samsung $6 billion and the stock price in the short term lost $17 billion. The biggest hit, however, was to the company’s reputation.

 Harris Poll ranks the reputation of the 100 most visible companies in the US and in 2017 Samsung dropped dramatically. In 2016, it was ranked seventh; in 2017 it dropped to 49th. (In 2015, it was ranked third.)

While Samsung created the phablet category with the Note, it lost its leadership position allowing Huawei to steal market share. (A phablet is such a large phone that it’s almost a tablet [like an iPad], so the term phablet means something between a phone and a tablet).

Apple’s Current Crisis

In December 2017, what we long suspected to be true about Apple was confirmed: Apple has been intentionally slowing down older iPhones. The company claims it was to protect system shutdowns. The real reason, of course, was to create dissatisfaction with older iPhones and get Apple customers to upgrade. I will be interested to see the impact on Apple’s reputation in the next Harris poll results.

 

Apple Has Become Too Greedy

This comes at a time when Apple launched its most expensive iPhone ever, the X. The 64GB model sells for $US999 and the 256GB model for $1,150. From my perspective, Apple has simply become too greedy. While Apple did sell out in 20 US cities – the iPhone loyalists seem to be completely price-insensitive, what will the less loyal do?

The average selling price for iPhones has been steadily climbing over the years with the release of each new model:

This ultimately is a risk for Apple – because a staggering 70% of the company’s profit comes from the iPhone. If the least loyal iPhone customers switch brands at the time of upgrade, Apple will lose both market share and long-term value.

So, the question will be, have iPhone sales stalled? I will be interested to see the analysis for sales after Christmas 2017. But since 2015 total iPhone sales have been flat. The only way for Apple to increase revenue and profit is to raise prices.

2018 A Year Of Opportunity For Huawei

I have been a Huawei Mate 9 Pro user since March 2017. And I am eagerly looking forward to the launch of the Mate 10 Pro at the Consumer Electronics Show in Las Vegas next week (January 9-12, 2018). Huawei is the largest Chinese smartphone maker. It’s the third largest smartphone maker globally and it has experienced exceptional growth. In the Chinese market, it dominates the high-end phone market.

 It is about to announce a partnership rumoured to be with AT&T to sell its phones in the US. Opening the largest high-end smartphone market will be a key strategic move for Huawei. I predict that this will allow Huawei to permanently surpass Apple and become the second largest smartphone maker globally.

Huawei’s philosophy is to provide cutting-edge features at the best value in the market. I believe it is a positioning that will serve the company well. Huawei’s spending on research and development surpassed Apple’s in 2016. It is now the 6th most R&D intensive tech company in the world:

Why I’ve become a Huawei fan

The Mate Pro series has some amazing features:

  • Two high-end German Leica lenses – on a 20-megapixel monochrome and 12-megapixel colour – resulting in amazing photos and 4K videos.
  • A fast processor and a huge 4,000 mAh battery
  • SuperCharger that can drive your battery capacity up to 80% in just 20 minutes.
  • The new Mate 10 Pro will have a 6-inch crystal clear bright OLED screen.

These are some of the features that make the Huawei Mate Pro series amazing smartphones.

This highlights a principle of disruptive innovation: disruption is driven by companies that are hungry for growth, releasing cutting-edge features that enhance the user experience – at a price point that represents great value. By contrast, Apple is seeking to milk the market – extracting the highest revenue and profit that it can while bringing out new phones that don’t have any revolutionary new features.  

So 2018 will be the year of opportunity for Huawei.

 

Jim Harris is the author of Blindsided which focuses on disruptive innovation. It’s published in 80 countries worldwide and is a #1 international bestseller. You can follow him on Twitter @JimHarris or email him at jim@jimharris.com. He is also a columnist for i3 magazine.  

Image Sources:

https://www.statista.com/chart/4112/smartphone-platform-market-share/
https://www.counterpointresearch.com/huawei-surpasses-apple/
https://amigobulls.com/articles/81084-pricey-iphones-make-apple-inc-stock-a-strong-buy
http://www.businessinsider.com/apple-q4-earnings-2017-11
https://www.slideshare.net/barrabe/digital-economy-compass-2017

Filed Under: Technology Tagged With: android, Business, IOS, IOS vs Android, iPhone, smartphone

Still paying a fortune to the cable company?

June 24, 2013 By Jim Harris

This column began with a Rogers bill. I was paying $200 a month for cable and a PVR, and feeling gouged. I set about to explore alternatives. The term “cutting the cable” has become popular—a Google search nets 63.6 million results—and there are many alternatives for people frustrated with traditional cable providers.

Filed Under: Technology Tagged With: bell, budget, Business, cable, Green, netflix, rogers, save money, tech, Technology, TiVo, tv

2013: mobile continues its march, PCs still sell and no one wants UHD TVs

February 28, 2013 By Jim Harris

Two recent tech events highlighted a fascinating sea change in the global consumer electronics (CE) market. Only two categories in the market are experiencing growth: smartphones and tablets. They combine for 40 per cent of CE sales, worth one trillion dollars annually, but every other category is contracting. This trend was evident at both the Consumer Electronics Show (CES) in Las Vegas and Deloitte’s Technology, Media & Telecommunications (TMT) Predictions 2013. Here are the key insights:

[…]

Filed Under: Technology Tagged With: Business, CES, electronics, Media, tech, Technology, Telecommunications, Trends

Identifying barriers to adoption of sustainable business practices

December 17, 2012 By Jim Harris

In October, sustainability consultant and former federal Green Party leader Jim Harris presented the business case for sustainability to delegates of the CIMA Canada Conference 2012. Mr. Harris put forward the argument that sustainable business practices weren’t just a matter of ethics, but also tools for cost reduction and profitability, citing several studies and examples that proved his thesis. However, he also noted that few organizations have adopted sustainability practices because the issue simply isn’t on their radar. He recently spoke with the Financial Post’s Dan Ovsey about why he believes this to be true and what he sees as the biggest barriers to sustainability. Following is an edited transcript of their conversation.

[…]

Filed Under: News Tagged With: Business, Business Strategy, sustainability

Newspapers are suffering

October 3, 2012 By Jim Harris

It’s easy to blame craigslist, but the real culprit is economic short-sightedness

For newspapers it has been death by a thousand cuts: American readership has been falling by more than 700,000 a year since 2000, according to the Newspaper Association of America (NAA), and revenue was already down when the recession came along and shot another body blow to advertising income.

[…]

Filed Under: Technology Tagged With: backbone, Business, craigslist, digital, Economics, newspapers, print, revenue, Technology

In Business, Don’t Waste a Crisis

October 2, 2012 By Jim Harris


Many Canadians are trying to do more with less during this economy of thrift. But we all face essential expenses — those costs associated with “keeping the lights on” — often, literally.

Whether you’re managing a household or a large corporation, energy — that stuff that enables your car to move from one place to another, keeps your beer cold and your shower hot — is generally regarded as an essential expense. Sure, you could drink warm beer and take cold showers; but really? There’s got to be a better way.

During a poor economy, it can be a challenge for a business to increase profitability as competition for the “cautious consumer” intensifies and there is increasing pressure on margins. But a recession offers the perfect opportunity to question the way things have always been done — and drive out waste and inefficiency. One of Jim’s favourite slogans is: “a crisis is a terrible thing to waste.”

While most are cautiously optimistic about the North American economy today, it was a different story in the latter half of 2008 when Canadian Tire launched its Business Sustainability Strategy with an aspiration to profitably grow the business without increasing energy use or contributing to an increase in the carbon footprint of the economy.

And the company has been somewhat successful: energy and fuel used to move product from vendors to stores is nine per cent lower, despite a 22 per cent increase in tonne-km of product shipped. And energy use for buildings and operations has been cut nine per cent despite more than a nine per cent increase in the amount of real estate square footage.

So sustainability cut costs and mitigated risk against rising energy prices. So how did Canadian Tire achieve this?

The first step was insight and political will. Business leaders need to view sustainability as a way of driving out waste and inefficiency — and a strategic tool in engaging employees and suppliers in transforming operations.

Second was measuring the energy and carbon footprint of the business and its supply chain — after all, what gets measured gets managed. This quickly identified two core operational functions responsible for most of the energy use: heating, lighting and cooling over 34-million square feet of retail space, and moving billions of dollars worth of product from over 50 countries from all over the world to a store near you.

The third step was to recognize that innovation is a social process. Employees formed “sustainable innovation networks” around buildings and operations, product transportation, and products and packaging, bringing together people from Corporate Strategy, Marketing, Merchandizing, Packaging, Real Estate, Supply Chain, Strategic Sourcing and Transportation.

These teams broke through their traditional silos to examine and optimize the systems that are Canadian Tire’s extended value chain, identifying inefficiency and waste. They brainstormed what more streamlined, energy efficient operations would look like in three, five and 10 years. And then the teams brainstormed the projects and initiatives that would get them there.

With the path revealed, they began their journey and started reporting progress quarterly and measuring economic and environmental benefits.

Three years and more than 1,350 business sustainability projects later, the energy use of Canadian Tire’s operations have become significantly more efficient. The amount of energy used to transport a tonne of product one kilometre has decreased by more than 26 per cent, and the amount of energy used to heat, light and cool a single square foot of real estate has decreased by 18 per cent.

That’s like having more cold beer at a lower cost while doing your part for the environment — it’s a win-win-win — or, for Canadian Tire, it’s the equivalent of realizing the net profit of three and a half additional stores without actually having to build and operate them.

So sustainability is a strategy that business should be pursuing, especially in a recessionary market.

Original Article

Filed Under: Magazine Articles Tagged With: Business, Business Strategy, Business Sustainability, Canada Business News, energy efficiency, profitability, Retail Industry, risk management, Strategy, sustainability

You Are Better Off Investing in Sustainability Than Stocks

September 25, 2012 By Jim Harris

It is surprising just how big is the “sustainability” opportunity is.

In just the energy efficiency (EE) field McKinsey & Company estimates that $2 trillion can be invested in EE by 2020 with an internal rate of return (IRR) of 17 per cent. To put that into perspective: that rate of return is better than investing in the stock market or in real estate over the long-term — the two investments we’re always told give the best long-term returns.

The net effect would be equivalent to cutting the need for 64 million barrels of oil a day — about one and a half times today’s entire U.S. consumption.

[…]

Filed Under: Magazine Articles Tagged With: Amory Lovins, Business, Business Strategy, Canada Business News, Canadian Tire Sustainability, Combined-Heat-And-Power, energy efficiency, Strategy, sustainability, Sustainability Canadian Tire, Toyota Prius, white roofs

How Sustainability Can Save Business

September 18, 2012 By Jim Harris

Decades of experience have shown that environmental initiatives pursued in isolation of the economic benefit are largely immaterial. But when environmental objectives are framed as business strategy and tied to business operations and measured in terms of cutting cost and increasing profitability — significant environmental benefits are generated. And so we believe that environmentalism can save business, as the more powerful engagement tool that business has at its disposal to drive innovation.

This is the first of a series of weekly columns to be published on Tuesday by Tyler Elm and Jim Harris on how sustainability as strategy cuts cost, raises revenue and mitigates risk for business.

Ever since Rachel Carson’s groundbreaking Silent Spring was published in 1962, environmentalists have been trying to save the planet. While there has been progress, overall the efforts have clearly failed, because the planet is in worse shape today than 50 years ago. We need not document the litany of damage here.

Decades of experience have shown that environmental initiatives pursued in isolation of the economic benefit are largely immaterial.

But when environmental objectives are framed as business strategy and tied to business operations and measured in terms of cutting cost and increasing profitability — significant environmental benefits are generated. Sustainability then garners executive focus and corporate resources. Companies like General Electric, Interface Carpet and Canadian Tire have realized the profound bottom-line benefit that pursuing sustainability as strategy yields.

In the early 2000’s a number of environmentalists were feeling the futility of the environmental movement’s historic approach to business. In 2004, this led Adam Werbach, then president of the Sierra Club — the largest US environmental group, to proclaim that traditional environmentalism was ineffective, outdated and dead. In a grist.org interview, following his speech called the “Death of Environmentalism” Werbach noted:

“Perhaps during the many battles between environmentalists and business people we have been asking the wrong question all these years. As generally proposed, the question is: ‘How do we save the environment?’ As ridiculous as it may sound to both sides, the question may be ‘how do we save business?’ When you look at the environmental movement, at the great ecological challenges that the planet is faced with, that humanity is faced with, environmentalism has proven utterly incapable of addressing them. The reason we called for environmentalism’s death is so that we could call for a new movement… (one) that can address these challenges.”

And it wasn’t just Werbach that was feeling this — but he captured the zeitgeist of the time. As a result, environmentalists in greater number began working with businesses to prove that going green has incredible bottom-line benefits. This is a fortunate trend for environmentalism and business.

Sustainability as strategy is a rallying cry for driving out waste and inefficiency. It is a powerful tool for engaging employees and suppliers in an innovation strategy drive to both incremental and radical improvements in operations while managing risk. In the two year period of 2010 and 2011, sustainability initiatives saved Canadian Tire approximately $10.7 million in annual avoided costs; 215,000 gigajoules (GJ) of energy (enough to power more than 2,000 homes for a year); 14,000 tonnes of greenhouse gas emissions and more than 6,600 pounds of waste.(LINK)

Just how much potential savings could sustainability generate for corporations and society? Amory Lovins, the founder of the Rocky Mountain Institute, has documented how using best available existing technology we could reduce current energy use in North American by 70 per cent to 90 per cent without changing our current lifestyle!

The Challenge

Like many large, established companies, growing from a single Toronto location in 1922 to the national retailer and brand management company, Canadian Tire, required specialization of business by functions — such as strategic sourcing, merchandizing, marketing, transportation, and the operation of distribution centres and stores.

While enabling the business to scale, the unintended consequence of this organizational structure is that individual functions optimize around an increasingly narrow core purpose, leading to the erosion of a system-wide perspective of the enterprise level. As silos evolve, business decisions in one area may be undertaken without the insight into the unintentional effects on other areas.

Sustainability as strategy forces siloed departments to work cooperatively to both define opportunities and devise solutions. Businesses that are using sustainability as strategy are realizing that it is the most powerful tool for driving cooperation and innovation in the organization.

The result: rethinking business activities, redefining peoples’ roles, responsibilities, measurement and incentives. The experience at Canadian Tire of pursuing sustainability as a strategy has been organizational innovation, while generating millions of dollars cost avoidance, new sources of revenue, and thousands of tonnes of avoided waste and greenhouse gas emissions.

Why CSR is Not the Answer

Today, many companies are focused on Corporate Social Responsibility (CSR). As we often see it practiced, CSR is about reporting the company’s activities. As a reporting function, CSR has little, if any, power to transform the organization. If we were cynical, we might say that many CSR activities are nothing more than a public relations initiative.

What excites us is sustainability as strategy. By dramatically reducing energy use — electricity, natural gas and fuel — companies not only cut costs, but mitigate risk against rising energy prices, and raise revenue from new products and services

Management literature has shown that the majority of change initiatives fail. But sustainability engages the hearts, minds and motivation of employees and suppliers and can become a truly transformative driver. It can drive innovation and create new business value. And tip the balance to ensure success of the change initiative.

When looking at sustainability as strategy you ask fundamentally different questions than looking at sustainability in the framework of CSR. The former focuses business performance, organizational transformation — looking at roles, incentives, re-engineering operational processes, and creating change through the whole supply chain — while the latter focuses on reporting.

And so we believe that environmentalism can save business, as the more powerful engagement tool that business has at its disposal to drive innovation.

 
 

Filed Under: Magazine Articles Tagged With: Business, Business Strategy, Canada Business News, Profit, Strategy, sustainability

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Jim Harris
Focusing on disruptive innovation, digital transformation, strategic planning with executive teams and boards & leadership.


#1 International Bestselling Author, Management Consultant, Keynote Speaker and Strategic Planning Facilitator.
Boost the bottom line of your business with expert advice from CURRENT Organization, a professional innovation consultant based business in Toronto, Ontario.
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