Netflix’s stock just hit an all-time high of $313 a share.
This wouldn’t be so remarkable except for what happened two years ago.
Two years ago, after a remarkable multi-year run on the strength of a new video streaming business, Netflix stock blew through $300 a share for the first time.
Netflix, everyone was convinced, had discovered the Next Big Thing.
Netflix was on its way to becoming The Next HBO.
Netflix was going to disrupt and revolutionize the television business and make anyone who bet on it fabulously rich.
But then Netflix made a significant mistake.
Netflix announced that it was going to split itself into two different companies. One company would contain Netflix’s original DVDs-by-mail business. The other company would be the streaming business. Netflix was going to split into two companies, it explained, because the DVDs-by-mail business was a dying business, and the future was the streaming business.
Well, the market hated that idea.
Despite the fact that absolutely nothing at Netflix’s businesses had changed, the market destroyed Netflix’s stock price. The stock crashed by 75% in three months, to $65 a share. The company, some people said, was obviously going out of business.
Why did Netflix make this mistake?
Because Netflix is run by humans.
Extraordinarily talented, brilliant humans, but humans. And humans occasionally make mistakes.
But did the market conclude that the extraordinarily talented, brilliant humans who ran Netflix had just made a relatively rare mistake?
The market concluded that the humans who ran Netflix were so unfathomably stupid that Netflix was obviously screwed.
That Netflix founder and CEO who had been lionized as a genius on the cover of all those magazines, for example?
Obvio usly an idiot.
Netflix was a terrible company, the market agreed. No price was too low for the company’s stock.
But now, a mere two years later, Netflix is up 400% from the low and setting a new all-time high.
Did Netflix pull off some magic recovery?
Did Netflix introduce some revolutionary new product that no one saw coming?
Netflix just did its thing–the same thing it was doing when the market threw up in disgust and pulverized Netflix’s stock price.
Netflix just kept investing in its streaming business.
And, just as many long-term Netflix investors had hoped, the streaming business has turned out to be a pretty good thing.
So, what’s the moral of the Netflix story?
The same moral as the story of Amazon, Facebook, Google, and many other excellent companies:
Ignore Wall Street.
Wall Street is so hyperactive and bi-polar, and so obsessed with meaningless short-term results, that Wall Street causes countless pretty good managers and companies to worry about all the wrong things.
Want to create the most possible value for shareholders?
Then start by creating the most possible value for your customers.
Put your customers first, and, over the long haul, your stock price will take care of itself.
Well done, Netflix!
Android Extends Market Share Lead In Europe (Kantar Worldpanel ComTech)
Android grabbed a 70% market share of smartphone sales that took place during the three months ending May 31, in Europe’s five largest markets, up from 61% of sales in the same period a year prior. It also has a commanding lead in China, the world’s largest smartphone market. Because Kantar only counts China’s richer urban areas, this data may actually be understating its lead there. Read >
There are some caveats on this one which we’ll get to, but Apple had a really good holiday quarter compared to its rivals.
comScore reports Apple had 37.8 percent of the U.S. smartphone market for the three months ending in January. Samsung, meanwhile, had 21.4 percent of the market. Apple’s market share was up 3.5 percent compared to the three months ending in October. Samsung was up 1.9 percent.
As for the iOS versus Android market share battle, Apple was 37.8 percent versus 52.3 percent for Android. Apple was up 3.5 percent, while Android was actually down 1.5 percent.
This is good news for Apple, but as we said there are caveats:
Apple does very well in the U.S. It does not do as well elsewhere in the world.
The holiday period was when Apple really launched the iPhone 5. Samsung, meanwhile, was selling the Galaxy S III, an older smartphone model. It only makes sense for Apple to! experie nce a bump in this period.
We’ll see how Apple holds up over the next three to six months as the hype of the iPhone 5 dies off and the hype for the Galaxy S IV cranks into gear.
All that said, considering the Samsung buzz, you would have thought it was killing Apple. These numbers show that Apple can still hold its own.
The bigger picture for Apple and Samsung on all of this is that the U.S. market, and other developed markets, is not going to generate the same growth, and thus profits in the near term aren’t going to be as robust.
When Google receives government requests for personal data, does it spit in the G-Man’s face or invite him in for tea and crumpets? The search giant’s transparency report reveals that, 88 percent of the time, the US will be able to rifle through your emails while eating baked goods. The States tops the chart, demanding Mountain View release information on 14,791 users in the last three months — with 3,152 requested with a search warrant, 10,390 with a subpoena and 1,249 from processes including EDPA court orders. The list of the top five nosiest countries is rounded out by India, France, Germany and the UK. Tour the report and you may notice that, breaking with tradition, content takedowns are no longer mentioned — Google is planning to break out that data as a separate filing in the future.
Apple says it sold three million iPad Minis and fourth generation iPads from Friday to Sunday. For some context on how impressive those sales are we’ve charted them against shipments from other tablet makers in the third quarter, using data from IDC. As you can see, only Samsung had better sales in three months than Apple had in three days.
App downloads have accelerated since the beginning of the year. Approximately 10 billion apps were downloaded last year, up from ~7 billion in 2010. With ~10 billion apps downloaded through the first six months of 2012, downloads will more than double this year.
ComScore’s three-month report on mobile subscribers (ending in November) is out.
Apple did see its smartphone market share grow a bit, from 27.3% to 28.7% in the last three months. But Google’s Android platform is still crushing it with 46.9% of the smartphone market in the U.S.
Here’s the chart:
When it comes to hardware manufacturers, Samsung now has more than a quarter of the market in all mobile phones, including non-smartphones. Apple made a nice jump in the last three months, with the iPhone now accounting for 11.2% of the mobile phones in the U.S.
Here’s the manufacturer breakdown:
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Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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