Global Themes

On Globalization & Venture Capital

Apple, Sony and Nintendo: A Stunning Comparison

Courtesy Gerhard Fasol of Eurotechnology Japan, a fascinating comparison between Sony, Apple and Nintendo

…On October 22 APPLE announced spectacular full-year results with a year-on-year net income increase of 38%.

…on August 29, 2008 Nintendo revised the forecast for full-year net income upward by +26.2%

…in contrast, on October 23, 2008, SONY said that full-year net income (for the financial year ending March 2009) is expected to be 37.5% lower than previously predicted

Lets look at today’s (Oct 22nd) market caps:

APPLE market cap = US$ 85.6 Billion

NINTENDO market cap = US$ 37.2 Billion

SONY market cap = US$ 19.9 Billion

Why this dramatic difference? We believe its focus. Apple and Nintendo are companies with clear focus.

…In terms of sales, SONY = 3 x APPLE …(and)…SONY = 4 x NINTENDO

annual revenues of SONY, Nintendo, and APPLE

 

 

 

 

 

 

 

In terms of operating income, APPLE = 3 x SONY…(and)…NINTENDO = 3 x SONY

operating income: Apple, SONY and Nintendo

 

 

 

 

 

 

 

 

In terms of operating margin, APPLE = 9 x SONY…(and)…NINTENDO = 15 x SONY

operating margin: nintendo, sony and apple

November 5th, 2008 Posted by | Global Competition, Japan, Miscellaneous | 2 comments

Comparing Indian and Chinese M&A

Some excerpts from a great article comparing Indian and Chinese M&A, “Dancing “Dragon” and Running “Elephant” on the Stage of M&A  by Mark He at Zero2IPO Research.

*** Excerpts Begin (emphasis mine) *** 

Keep Reading…

August 7th, 2008 Posted by | China, Emerging Markets, Global Competition, Globalization, India | one comment

If any more evidence was needed re. “Globalization”

…here it is.

From “Who Captures Value in a Global Innovation System?” – The case of Apple’s iPod, this table that details “the geography of $190 of the captured value in a single $299 video iPod” (Thanks, Jason).

Apple iPOD Innovation 

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and from “Dreamliner 101: All About the Boeing 787“, this picture showing where the parts for 787 come from.

Boeing 787 Parts

September 19th, 2007 Posted by | Global Competition, Globalization, Technology & Innovation, USA and Asia | 3 comments

China, democracy and harmless freedoms…

I was a little surprised when I read this but not a lot….”China bans cyber cafes for a year”, (06 March , 2007, Reuters):  

“Fearful of soaring Internet addiction and juvenile crime, China has banned the opening of new Internet cafes this year, state media reported on Tuesday.

“In 2007, local governments must not sanction the opening of new Internet bars,” Xinhua news agency on Tuesday quoted a directive jointly released by 14 government departments, including the Ministry of Culture, as saying.

There are currently about 113,000 Internet cafes and bars in China, Xinhua said, citing the Ministry of Information Industry.

The notice comes as lawmakers at China’s annual session of parliament, the National People’s Congress, called for stricter regulations to keep teenagers away from Internet cafes, which are often seen in China as hotbeds of juvenile crime.

“It is common to see students from primary and middle schools lingering in Internet bars overnight, puffing on cigarettes and engrossed in online games,” Xinhua quoted NPC

Last year, a report from the China National Children’s Centre, a government think-tank, said that 13 per cent of China’s 18 million Internet users under 18 were Internet addicts.”

(Also at China bans new internet cafes

Although the report says that the ban is aimed more at curbing addiction to online games (and internet addiction in general), I suspect the truth is little more complex and there is more to it than appears at first glance.

This move goes to the heart of why China may loose some of its competitive edge in the long term (over several years, possibly decades)…I have written before on how democracy,  diversity and the freedom to openly debate/ argue/ discuss ideas is one of the core strengths that India has – thanks to its long democratic tradition* …and it may yet prove to be the winning card in the now boringly familiar debate around India vs. China. see e.g. this post (personally, I dont see this as a zero-sum game).

Coming back to the ban though – what exactly is the government trying to accomplish?

I am looking forward to comments from my Chinese readers and those familiar with China.

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P.S. In case you thought that curbs on “harmless” freedoms (such as surfing the net/ online gaming) are limited to online activities, think again….according to an Associated Press report

“…some 170 Chinese cities limit or ban motorcycle use or ownership, largely because they are viewed as underpowered, cheap, polluting machines that clog traffic and endanger others.” and apparently..

“Motorcycles have been banned from almost all the main streets in Shanghai, Huang said, and the city stopped accepting (new) motorcycle registrations in 2002.”

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* As an aside, the democratic tradition in India goes back over a millenia and is not just a result of Britain’s colonial legacy as is commonly believed.

March 9th, 2007 Posted by | China, Development Issues, Global Competition, India, Miscellaneous | 4 comments

“The Pain of Second Place” – excerpts

In the Feb 12, ’07 issue of Forbes, came across this piece by Jerry Flint: “The Pain of Second Place” – very readable…  

It has this graph that shows the staggering and relentless growth of Toyota over the past 30 years which will culminate this year in its finally overtaking Ford as the world’s largest manufacturer of autos.

 toyota-gm-comparison.gif

Some excerpts from the story:

“The General Motors era is over. This year Toyota will overtake General Motors as the world’s largest manufacturer of autos, selling something more than nine million vehicles, probably half a million more than GM. This seems certain. It is even plausible that in, say, 2011, when Toyota has built more factories and hired more dealers as GM sales keep falling, the Japanese Godzilla will outsell GM in the U.S. I am not predicting this, just saying it’s possible with present trends.

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The psychological effect of GM’s fall to the number two position will be enormous. Sure, there is maybe one good side to it. People will stop blaming General Motors for everything that goes wrong in the world. The company won’t be blamed for destroying the air we breathe, for not doing enough for safety or diversity, for not saving the polar bears. People don’t pick on the second-ranked guy. 

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…At first GM will try to prove that it hasn’t lost. We call that denial. When GM ruled, it led in technology, inventing or popularizing the automatic transmission, the high-compression engine, the collapsible steering wheel, the catalytic converter — and those great designs…

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But this preeminence has been fading for decades. GM puts four-speed transmissions into its big Cadillac when Toyota has an eight-speed in its biggest Lexus. We all know about those hybrid Priuses. And when it comes to engines, GM still is catching up to the newer overhead-cam designs pushed by the Japanese. We may not understand what overhead cam means, but we buy them.

Keep Reading…

February 20th, 2007 Posted by | Global Competition, Japan, USA and Asia | no comments

The new Geography of Science & Innovation

Demos In 2005, the leading UK think tank, Demos began an 18-month study of science and innovation in China, India and South Korea to understand how the emergence of ideas & innovation in unexpected places is altering the global landscape of science and technology.

As they say on their website,

We used to know where new scientific ideas would come from: the top universities and research laboratories of large companies based in Europe and the US. While production was dispersed among global networks of suppliers, it was assumed that more knowledge-intensive tasks would stay at home.

All that is changing fast

Since 1999, China’s spending on R&D has increased by more than 20 per cent each year. India now produces 260,000 engineers a year and its number of engineering colleges is due to double to 1,000 by 2010…

…These shifts in global knowledge production are likely to be every bit as significant as the shifts in manufacturing that occurred in the 1970s and early 1980s. The big question is how we should respond. Some view Asia’s growing scientific strengths with alarm, fearing it will mean the loss of highly-skilled jobs in Europe and the US. But innovation is not a zero-sum game: more in Asia does not mean less in Europe or the US.”

The “Atlas of Ideaswas conceived as a project to delve deeper into these issues and understand the implications for Europe and US.

The final report will be launched at a conference on 17th/ 18th January in London where these issues will be debated and discussed in more depth by a wide range of experts. I am really looking forward to the proceedings and the final reports.

January 8th, 2007 Posted by | China, Conferences and Panels, Global Competition, Globalization, India | 2 comments

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