The incessant march of technology brings not only improved convenience but also often-scary invasion of privacy. “Big Brother” can now track your in-store habits, urge you on with stuff he already knew about you, and bill you without a checkout line. According to research conducted by the University of Pennsylvania’s Joseph Turow, the same sort of surveillance of consumers that occurs when they shop (or do anything) online is now occurring when they shop in bricks-and-mortar stores.
And Amazon, not content to sell only books and other inorganic items, is trying to expand into the giant groceries business. While some categories of products can be sold online in the same manner of non-grocery items, fresh produce and other items for which consumers want to get up close and personal with them cry out for nearby stores. One of Amazon’s innovations is to embed products with tracking devices that charge customers via their smart phones, thus eliminating the annoying wait in checkout lines and the cost of cashiers. Not all the bugs have been worked out yet, but when they are, stores like Trader Joe’s better watch out.
Will Apple topple from its perch as the world’s most valuable company? The stock market didn’t reflect Apple’s declining smartphone sales far enough ahead, which led to a drop in share price when year-over-year Q1 iPhone sales declined nearly 15%. And while the overall market grew about 4%, leader Samsung stayed flat, and a handful of Chinese companies rose ominously. Apple’s reliance on the iPhone for growth has become a weakness.
But there is another important consequence. If you look at total market capitalization (total shares times share price), Apple is declining rapidly and Amazon is rising rapidly. For the last 3 calendar quarters, the top 5 companies in the world have included only Apple, Alphabet, Microsoft, Amazon, Berkshire Hathaway, and Exxon Mobil, and the top 3 were only Apple, Alphabet, and Microsoft. But Apple’s market cap(italization) in 1Q2015 was more than double ANY other company, while in 1Q2016 there were 7 other companies with market caps over half of Apple’s. But In 1Q2015 Amazon was not in the top 10. It was #10 in 3Q2015, and #4 in 1Q2016 (getting profitable helped a lot). And Amazon is not dependent on one product line.