Apple capital: new love of apple’s finance arm

Our beloved Apple just hit the $800 billion mark in the market capitalization, midway this year. In the era of computer and mobile technology, where iPhones and Macs are ubiquitous, their sales was one of the most important factor for apple to reach this valuation and set up an industry standard. But in the hindsight, there is another factor which is also increasing the revenues for Apple Inc. day by day. The Apple Capital.

We all have a very clear picture of Apple as a pioneer in the technology industry by setting new standards every year with the release of its iPhones and Macbooks. Well, it looks like along with technology, Apple has also developed its interest in finance. In the post Steve Jobs era of Apple, the company has massively increased its investments in various financial instruments.

The long term marketable securities have a significant role in any company’s investment portfolio. But with Apple, this significance have been increasing day by day. Apple Capital previously used to invest in Government bonds mainly which were fairly risk averse, but now the course has changed. Around 68% of Apple Capital’s investment is in other type of securities which consist of corporate bonds. After Jobs, the company’s assets grew by 110%, but the growth of Apple Capital has been almost double of that by nearly 220%.Thus these investments have been a major part of the profits of the company. These investments have contributed 7% in the overall profits of Apple Inc.

How can this affect Apple?

Well, as the trend shows, the investments of apple are moving away from the risk averse towards the risky assets. With time passing by, the returns from these financial instruments will rise and so will the risk. The global demand of Apple products is on a declining trend. Samsung as well as the Chinese competitors are taking over the market with Google being a new competitor in the pond. In adverse situations, these investments will save Apple, but instead of sitting and waiting for it, Apple should focus on developing better and disruptive technology. The gradient of innovation by Apple is at an all-time low in the post Jobs era. Let’s hope Apple gets back its “Adrenaline for Innovation” back as soon as possible.

Is the disney-fox merger, a direct threat to netflix?

With the acquisition of Fox network by Disney Inc. It seems like Disney is prepared to take the next big leap in the world of entertainment 2.0. The reason behind majority of mergers and acquisitions is to maintain the ‘Synergy’ between the companies. Disney bought in a deal of $52.4 billion, the rights of 21st Century Fox’s majority of the assets including the movie franchisees and Fox studios. Well what was the reason for Disney spending so much. How will this affect the future of entertainment distribution? What challenges will the Disney-Fox merger bring in for Netflix?

/wp-content/uploads/2018/02/download1.jpeg
Disney-Fox merger

We all know how Netflix, slowly and steadily captured the entertainment market with its new distribution model. It has already kicked off Blockbuster and is on its way to do the same with the cable TV industry. Netflix has two major pillars on which it sustains against the competition or rather disrupts the entire market. One being its online distribution model and the other is its original content. The revenue model of Netflix clearly states that “Profits Aren’t Important” for them. Netflix has believed in investing heavily behind the original content it creates which is nearly $6 Bn. This when compared to its competitors is the highest as Amazon invests $4.5 Billion, whereas HBO and Hulu (owned by Disney) spend nearly $2.5 Billion.

/wp-content/uploads/2018/02/Netflix-revenue.jpg
Netflix’s revenue model

With the change in time, people’s mode of consuming entertainment is also changing. Media consumption on phones and tablets have drastically increased over the period of time. The players offering online video on demand services have benefited the most. Disney being one of the oldest giant in the media industry still had to deliver its content through the cable TV medium. Where the revenue generation was done through advertisement between the programs. The revenue incurred by offering subscription completely went to the cable TV operators. Even though a large number of channels were owned by Disney, the content was completely distributed across the channels and users don’t buy a pack of all the channels.

/wp-content/uploads/2018/02/TV-channel-viewership.png
Change in the time spent by different age groups in front of conventional cable TV

Netflix on the other hand has its own platform for offering online content. The revenue model being subscription based, there are no advertisements between the programs. The content from other companies like Viacom, Fox, Disney, Marvel which Netflix airs on its own platform is given least priority than the Netflix originals. The Netflix original movies and shows get a unique placement on the platform. As a result, the Netflix original content remains in the mainstream.

How can Disney-Fox merger be a threat to netflix?

Now after the Disney-Fox merger, what Disney will be planning to do is creating a similar platform for video on demand like Netflix. On this platform, Disney will be able to place its own content which it had to do so previously on Netflix. This in turn will bring the content from all the channels owned by Disney at one place. The platform will have same subscription based revenue generation model. Thus by buying rights from Fox, Disney will have rights to great content created by fox in the past. This also includes movies such as Avatar and Deadpool.

In a time of almost 1-1.5 years, we will be able to see this massive online Disney platform. Bringing in direct competition for Netflix as well as the existing incumbents in the market such as Amazon’s Prime video and HBO. The Disney-Fox merger will surely raise the standards as well as competition in the online media transmission industry.

How has the facebook scandal affected you so far ?

According to the generic definition, we humans are considered as social animals. But in the past decade, the SOCIAL MEDIA has been successful in changing this definition. Social media has been interlinked with our lives so much that now it is hard for people to re-imagine their lives without it. At the very core of this evolution of change in lifestyle and the way we look at things have been a few companies. These once so called small companies now control what people see online and try to mend the perspective of an average social media user by curating the feed and thereby changing the mindset of that person. These companies are none other than the social media platforms such as Facebook, Twitter, WhatsApp, Instagram, Snapchat and many more. The recent facebook scandal has been able to create the hype and seek attention of a large number of people. But some people have been ranting about such privacy breaches since a long time. It is now when people have started to notice them.

THE SCANDAL

In the facebook scandal, involvement of many third parties is the thing which makes it complex. Cambridge Analytica, which is a Britain based data research company was able to drive the opinion of a majority of US voters during the 2016 Presidential elections by supporting the Republican party. Things go back to 2014, when Cambridge analytica asked Dr. Aleksandr Kogan to develop an application named “thisisyourdigitallife” by paying him $8,00,000. This app by Kogan asked permission from the users to access their data and fill out a survey. But the app in hindsight also collected other personal data from the users, such as their likes, dislikes, the type of content they watch online and much more.

After collecting the data, a psychological profile of a particular candidate was prepared. Kogan collected the data of nearly 2,70,000 users, but the app was also able to collect the data of the friends of the person on FB who has filled the survey. As a resu;t, the data of nearly 50 million users was breached and then sold to Cambridge analytica.

Facebook scandal whistleblower: Cristopher Wyile

Cristopher Wyile, who was a former data scientist at Cambridge analytica came to know about the facebook scandal and the fact that Cambridge analytica has not deleted the data collected from Kogan’s app, but has been using it to build the psychological profiles of the users. These users were then targeted with curated content on their facebook wall. They were shown ads which were in favor of Donald Trump and asking for donations for the Presidential campaigning. This is how the opinion of millions of people was mended to bring in desired results.

HOW DOES ALL THIS AFFECT YOU ?

This is the question of majority people, that what can facebook or any other company which collects your data can affect you personally or individually? Well, the answer is diverse. It can affect you on a personal level and in the society which we live in. We are slowly handing over the keys which drive the society to these social media companies. According to a study in 2017, Google and Facebook captured almost 20% of the global digital marketing share. This statement in itself can show the future dominance of these digital media moguls.

The news which you watch on your facebook wall has been curated just for the user. The FB wall of an individual is like a personalized headline newspaper which is based upon the interests of the user. It has been created in such a way that people are getting addicted to it. Facebook is changing entire social fabric and the way people look at things. These social media apps have been created in such a way that the user spends maximum time scrolling through the posts. These also include Instagram and Twitter. ‘Fake News’ has been the buzz word of 2017. The amount of fake news which is created nowadays, and the speed at which it is shared by the users to their respective groups is creating a devastating effect.

 

Whatsapp is also playing a major role in this. Whatsapp started off as a messaging app. After the group feature has been created, people within the groups can share pictures and links. These groups have been a primary source of information for many people. But many a times, the news or the messages which are being circulated on these groups are baseless and fake.

WHAT TO DO ?

Well, if you think that you can not spend a day without these apps. Or if they have been an integral part of your daily routine, then congratulations! You are not alone. The addiction of social media is getting worse day by day. What you can do is at least don’t share news which are not credible, because what you share can be the primary source of news for many people in this new ‘social_media_addict’ world. Stay away from third party surveys which ask for your data. While installing a new app, take a pause and think logically before giving permission to any app. ‘Why would a simple collage making app require your microphone access?’

But ultimately, we are humans, SOCIAL ANIMALS. Lets try to socialize the way we were meant to be and not be driven by a single app and take decisions accordingly. Or else anytime you can #deletefacebook.