Sep 8, 2014 by Eric Martin

Why a 13-Year-Old Strategy Makes Apple A Great Company

Apple’s share price has been on a rapid ascent, having regained nearly all the value it lost in 2013, helped in large measure by stock buy-backs. Those who feel the stock is currently over-valued should consider that the company’s P/E Ratio has, in fact, been hovering around its five-year average.

As always, the question one must ask is whether the current valuation judged by share price truly reflects the long term value of the company based on it strategic foundation and capacity to execute.

Last year, as APPL’s share price was losing luster, I wrote the following piece:

As has been widely reported, sales of Apple’s iPhone have come under assault by terrific devices from companies like Samsung running Google’s Android OS. Though market share has held up in the US, interlopers are stealing the show outside North America. To read the news, Apple’s brand is losing its luster and, along with it, the company its lofty valuation.

Even an Apple fan has to acknowledge that iOS, introduced in 2007, is showing its age. Maybe it’s a matter of familiarity making the heart go wander. Maybe it’s the customization of Android or the bold, graphic live tiles of Window Phone 8. Somehow, as easy as it is to use, the iPhone feels just a touch dated.

For many fanboys, this doesn’t matter much. Even a child relying on intuition can operate the iOS. The iPhone rarely misbehaves. Oh, and there are the 700,000+ industry-leading applications that are the lifeblood of the device’s attraction.

But what really sets Apple apart from its competitors isn’t the stunningly well-designed hardware. It’s the ecosystem that connects all Apple devices through the cloud. For some of us, our first experience with the Apple ecosystem dates back to 2001 with the purchase of the original iPod. The brilliance of that device wasn’t simply the terrific industrial design, but the software that made buying and using music easier than ever before. The strategy upon which that first Apple music player was built is over 13 years old. Yet the importance of the ecosystem that was its foundation remains one of the company’s biggest assets.

Sure, one can download music from Amazon and apps from Google. With a little effort you can even coordinate devices while getting work done using Google Docs. But somehow, it just never seems as easy—as magical—as Apple.

Add to that an installed base of hundreds of millions of iTunes users, over 200 million of whom use the service through the cloud, and you have a massive, sticky infrastructure. If you have bought in to the Apple world-view, dismantling your services and recreating them on a series of new devices is simply a lot to ask. And, you are unlikely to be able to transfer some of your content at all (playlists pose quite a challenge for some people.)

So, Apple needs a refresh. Its products are not winning the day internationally. But, Apple should not be written down—much less written off. It remains a global leader in profitability. Its brand is ranked next to Coke as the world’s most powerful. And, with hundreds of millions of credit cards having been registered with iTunes (I can even buy products at an Apple store today using that account without ever speaking with an Apple employee), it stands poised to reshape the world of digital commerce.

In short, Apple doesn’t have forever to reach a new level of innovation. But it does have plenty of time and cash to get there.

On the eve of Apple announcing a new round of products—possibly the most exciting set of devices in years including the addition of a new form-factor, the iWatch—keep in mind that Apple’s power has never rested on devices alone. Rather, it is the foundation of an ecosystem developed over a decade ago that gives the company its power…and its great future value. Tomorrow, as captivating as it will be to see sexy, shiny hardware, what will grab my attention is whether Apple manages to disrupt the dollar bill.

Eric Martin is the founder of 80amps for Enterprise and 80amps for Startups (a consultancy and incubator, respectively) and the Director of the University of Richmond’s Innovation and Entrepreneurship Program. Eric can be reached at eric@80amps.com. Follow eric on twitter @eeeemartin and Linkedin http://www.linkedin.com/pub/eric-martin/a/2bb/970/

View this article on LinkedIn here.

Boost’s Eric Martin was asked by CNN to give expert opinion on Lance Armstrong doping charges.  Read the article below:

Photos: Lance Armstrong over the years

Doping scandal costs Lance Armstrong sponsors, charity role

For years, Lance Armstrong carried a growing burden of doping accusations up increasingly steep hills, accumulating fans, wealth and respect along the way.

On Wednesday, he crashed.

In one day, the renowned cyclist and cancer survivor lost a major endorsement deal with Nike — once worth millions of dollars — and the chairmanship of the cancer charity he founded 15 years ago.

While stepping down as chairman of Livestrong was Armstrong’s idea, losing Nike’s support wasn’t.

Opinion: ‘U.S. Postal doping predates Armstrong’

Nike, which initially stood by Armstrong, dropped him Wednesday with a terse statement citing what it called “seemingly insurmountable evidence” that he participated in doping.

Hours later, brewery giant Anheuser-Busch followed suit, saying it will let Armstrong’s contract expire at the end of the year. Nike and Anheuser-Busch said they still plan to support Livestrong and its initiatives.

The American Cancer Society, which has had a long relationship with Armstrong, said only that it would continue to collaborate with Livestrong.

Armstrong walked away as chairman of the Livestrong cancer charity “to spare the foundation any negative effects as a result of controversy surrounding my cycling career,” according to a statement posted to the group’s website.

He will remain on the charity’s board of directors, but he will turn over the reins to founding chairman Jeff Garvey.

LIVESTRONG supporter: ‘Conflicted’ about my wristband

The move comes a week after the U.S. Anti-Doping Agency detailed what it called “overwhelming” evidenceof Armstrong’s involvement as a professional cyclist in “the most sophisticated, professionalized and successful doping program.”

The seven-time Tour de France winner has consistently denied the claims, and legions of fans and corporate supporters had backed him — until now.

Armstrong founded the Livestrong charity in 1997 after his own successful treatment for testicular cancer that had spread to his brain and lungs. He came back from the disease seemingly stronger than ever, winning the first of his seven Tour de France titles less than three years after he was diagnosed in 1996.

His success inspired cancer patients worldwide, spreading his reach far beyond the insular world of cycling and cementing his place in celebrity culture. He became rich, dated a rock star and appeared in movies. The bright yellow “LIVESTRONG” wristbands distributed by his charity became a potent symbol for perseverance in the face of adversity.

People should look to that legacy in assessing Armstrong, Livestrong’s president said.

Read more: Evidence of Armstrong doping ‘overwhelming,’ agency says

“Lance’s devotion to serving others whose lives were irrevocably changed by cancer, as his was, is unsurpassable,” Doug Ulman said in a statement issued after Wednesday’s announcement. “We are incredibly proud of his record as an advocate and philanthropist and are deeply grateful that Lance and his family will continue to be actively involved with the Foundation’s advocacy and service work.”

But a long chain of accusations has trailed Armstrong.

In 2002, a 21-month investigation into allegations that Armstrong’s team used banned substances during the 2000 Tour de France closed after finding no evidence of illegal drug use.

He later sued the author of a book that accused him of having used performance-enhancing drugs and the International Cycling Union cleared him of 1999 doping allegations in a 2006 report.

In 2010, former teammate Floyd Landis accused him of doping. Federal prosecutors also looked into the allegations but closed their case in Feburary without pressing charges.

That’s when USADA began its investigation.

In its report, released last week, the anti-doping agency made public testimony from Armstrong’s teammates and others who said Armstrong was among team members who used banned performance-enhancing substances and tried to hide it from testing officials.

The report is part of USADA’s request to international cycling officials to strip Armstrong of his seven Tour de France titles. The International Olympic Committee is also reviewing the evidence and could consider revoking Armstrong’s bronze medal from the 2000 Sydney games. Armstrong is already banned from competing in events sanctioned by U.S. Olympic governing bodies.

Armstrong has said he never has failed a drug test and has consistently denied participating in any banned practices. Armstrong’s lawyer, Tim Herman, called the report last week a “one-sided hatchet job” and a “government-funded witch hunt.” He did not return a call on Wednesday.

Opinion: With Armstrong’s disgrace, will anything change?

So far, Armstrong’s woes haven’t affected the charity’s ability to raise money, according to Livestrong spokeswoman Katherine McClane. Donations to the charity have actually boomed since August, when Armstrong announced he was ending his legal fight to stop USADA’s investigation, she said last week.

That’s because, according to McClane, the charity’s main audience — cancer patients and their families — isn’t troubled by Armstrong’s woes.

“The last thing that’s going to enter your mind is news from the cycling world,” McClain said Wednesday.

According to Livestrong, Armstrong has helped raise nearly $500 million, including $6.5 million of his own, for cancer research, treatment and support in his role as Livestrong founder and has helped “dispel the stigma and misconceptions about the disease.”

Read more: Highlights of the Armstrong report

Livestrong will need to find a new way to present itself to the world without Armstrong as its face, said Eric Martin, a partner with Boost Partners, a Richmond, Virginia, strategic consulting firm.

How? Focus on “real-world heroes who have faced down cancer while loving a sport more than the spotlight,” Martin said.

“At this point, what they need to do is re-establish the authenticity of their cause and the way to do that, in my opinion, is to reconnect with what people really admire in their heroes,” Martin said.

Howard Bragman, an expert in crisis communications and vice chairman of Reputation.com, an online reputation management company in Los Angeles, said the future of Livestrong is uncertain.

“I personally hope that Livestrong is stronger than Lance Armstrong because they have done — and continue to do — amazing work for people with cancer,” he told CNN in a telephone interview.

But he said he had little doubt that the impact on Armstrong would be devasating. “It doesn’t get any worse than this, OK?” he told CNN in a telephone interview. “Imagine losing the prestige of all your Tour de France titles, millions in endorsements, stepping down from the organization he loves and founded, that’s been his public mission — and, possibly the worst thing of all, which is public humiliation.”