Li Mu's seemingly arrogant statement made Jobs lose the courage to continue to reprimand him.
The business world was like a battlefield. Sometimes it was about strategy, sometimes it was about tactics, sometimes it was about technology, sometimes it was about luck, but sometimes it was a bloody battle of attrition.
The only purpose of a war of attrition was to exhaust the opponent until they couldn't move anymore, or until they died.
Under the premise of a war of attrition, tactics and strategy were not very useful. Everyone was purely fighting with their lives. It was like the Battle of Stalingrad during World War II. After the battle began, both sides had to continuously pour in troops until the other side ran out of troops, or they ran out of troops.
In this mode of war, Apple was obviously no match for Makino Technology. Li Mu could lose tens of millions of dollars on Mango-ME2, but even if Apple lost ten million dollars in the iPod business, it would be enough to make him suffer. This war of attrition was about to begin, but Apple had already given up.
After hanging up the phone with Li Mu, Jobs was wide awake in the wee hours of the morning.
He couldn't imagine what would happen to Apple's stock price after dawn. After all, no matter how powerful YYtunes was, it could only temporarily impact the iTunes online music store business. This business was still in the incubation period for Apple, so the impact was not too big.
However, the iPod business was the mainstay of Apple's current revenue. Almost all departments relied on the profits generated by it to survive. Now that Makino Technology officially announced the price of Mango-ME2, coupled with the extremely cost-effective MX858-MANGO, the iPod suddenly lost all competitiveness in the eyes of consumers.
Before Apple's godhood was erected, the iPod had almost no halo buff to speak of. Once Makino Technology showed its blade, the iPod would bleed.
So, in Jobs' eyes, Apple's stock price was bound to crash today.
How to explain to the board and investors after the stock price crash became Jobs' biggest concern.
…
At 9: 29 am Eastern Time, the trading window of the US stock market was about to open.
In the past two hours, all the pre-market analysis of the financial programs emphasized the release of the Mango-ME2 by Makino Technology over the weekend and the incredible pricing. At the same time, they also reminded investors that Apple's stock was extremely pessimistic today.
The entire market was condemning Apple, and no financial media was optimistic that Apple could survive this crisis. Some media even said that even if Apple placed its hopes on the US government, it would be difficult to get rid of this bad influence. After all, Mango-ME2 had instantly shaken the potential iPod user base, and it would not be officially launched in a short time. Even if Apple sued Makino Technology, it would be completely impossible.
If he wanted to get help from the US government in a lawsuit, he had to wait until Mango-ME2 was launched in the US, or if it was ready to be launched. Otherwise, if he sued a Hua Xia company in the US for releasing a product in Hua Xia, the US government would not be able to help him even if he wanted to.
That was the worst part of it all.
If Mango-ME2 was officially launched in the US in a month, Apple's stock price would plummet during this month. Unless Apple could find a breakthrough in other business lines, it would be a pipe dream to rely on a lawsuit against Makino Technology to recover the stock price.
In the two hours of pre-market analysis, Apple was repeatedly condemned by the major media, which had a great impact on the psychology of the individual investors in the market.
At this moment, all investors and the media were closely watching the fluctuations of Apple's stock price. This was because Apple suffered a major blow from Hua Xia's Makino Technology over the weekend. This blow would have a huge impact on Apple's current iPod sales, and it would greatly affect Apple's future performance. Therefore, investors were very optimistic about Apple.
At 9: 30 am, the selling price of Apple's stock fell from 7.36 US dollars to 6.33 US dollars, a drop of an astonishing 14%!
As soon as the stock price came out, the entire market was shocked. A drop of 14% was the first time since Apple was listed in the last century!
However, in the US stock market, this was not a real crash, because in the US stock market, there was no limit set. A stock could even lose 90% of its market value in a day, directly falling into a state of eternal damnation.
Even Jobs did not expect the stock price to plummet so sharply. He knew that the stock price would be greatly impacted, but he did not expect the impact to be this big!
There was only one reason why the stock price plummeted beyond expectations. The market and investors were even more pessimistic about the future of Apple!
And this was just the beginning.
The stock price of 6.33 US dollars was still falling like a rolling car. The stock price could not stop the downward trend.
In order to enhance investor confidence and stabilize the stock price, Apple issued an emergency announcement. The announcement said that Apple would start the research and development of a new generation of iPod, and would cooperate with Fengda Group, the manufacturer of the iPod headphones, to jointly develop headphones with better sound quality. This would enhance the performance of the new generation of iPod in terms of sound quality. At the same time, the price of the iPod 3 would be lowered.
At the same time, Apple also announced that it would lower the price of the iPod 3 worldwide by 10%. Users who bought the iPod 3 within 15 days could bring the purchase certificate to the store to receive a 10% refund.
This was all Jobs could do for now.
The 10% reduction in the price of the iPod 3 basically cut the profit margin by nearly half. Even so, the reduced price of the iPod 3 was still not competitive with the Mango-ME2. However, at least the gap was narrowed.
Originally, Jobs did not want to refund the price difference to users who had already bought the iPod 3. Based on his consistent attitude toward users, he did not care to cater to their preferences. Instead, he pursued to lead the users' needs. Overall, he had never been thinking about the users. Instead, he was trying to win them over. At this time, to ask him to refund the price difference, in his view, was a deviation from his principles.
However, the board of directors insisted on refund the price difference because they were still skeptical about whether a 10% reduction in the price of the iPod 3 could reverse the decline. One thing they were very clear about was that if Apple announced a price reduction and did not subsidize the existing users, it would hurt the existing users. By that time, they would not be able to get new users back, and the old users would be lost as well. The future of the iPod 3 would be in jeopardy.
After the announcement, the downward trend of the stock price finally stabilized. At this time, Apple's stock price had fallen below the 6.2 US dollars mark, and the latest price was at 6.19 US dollars.
6.19 US dollars, compared to last weekend's closing price of 7.36 US dollars, it had fallen by almost 16% …
For Apple, because of Makino Technology, their stock price had fallen from 8.68 US dollars to 6.19 US dollars in three trading days. It was a drop of almost 30%. This was a life-threatening blow!
However, the emergency announcement didn't have much of an effect on the stock price.
By 3 PM, an hour before the market closed, Apple's stock price finally rose back to the 6.2 US dollars mark, and maintained at 6.22 US dollars. However, immediately after that, a research company in the United States released the latest survey data. They had published a survey on the Internet, and they had received feedback from 20,000 American netizens.
Among the results, 3% of the users had already purchased iPods; 4% of the users had originally planned to purchase iPods, and 97% of the users had given up on purchasing iPods because of the appearance of Mango-ME2. That was to say, out of 20,000 people, 800 people had originally planned to purchase iPods, but because of the release of Mango-ME2, 776 of these 800 people gave up on purchasing iPods. From the survey results, it could be seen that the impact of Mango-ME2 on the iPod was not huge, but it was devastating.
And this was not the end of it.
After Apple's announcement, they released a new survey. By the end of the survey, they had received a total of 12000 results.
Among these, 3.7% of the users had originally planned to purchase iPods, which was close to the previous 4%. However, after Apple announced a 10% price reduction for the iPod 3, 90% of the users still gave up on purchasing iPods.
This also proved that the 10% price reduction announced by Apple did not have much of an impact on the consumers. Most of the people still chose to give up.
In addition, this professional research company also sent reporters and investigators to interview random passers-by on the streets of New York City. The people interviewed were all young people between the ages of 18 to 35. In this on-site survey, more than 90% of the users who were originally interested in purchasing iPods chose to give up on purchasing iPods even after Apple announced a 10% price reduction.
The reporters interviewed these passers-by who gave up on purchasing iPods and asked them the specific reasons for giving up. The results were as follows:
The answer with the highest overlap was: Even if the iPod was reduced by 10%, there was no quality-price ratio to speak of compared to Mango-ME2. Even so, its price was still much higher than the Mango-ME2 with the same capacity, and it was even higher than the Mango-ME2 with the MX858-Mango headphones. One must know that the quality-price ratio of the MX858-Mango was very high. In terms of actual expenses, buying this version could save about 40 US dollars.
Other than that, there were many other answers with high overlap. For example:
Many people felt that the design of the Mango-ME2 was better looking, more fashionable, and cooler than the iPod;
There were also many people who felt that YYtunes was much better to use than iTunes, especially since YYtunes combined the social music function, allowing users all over the world to extend a music community based on the music they liked. Therefore, everyone was looking forward to the combined experience of YYtunes and Mango-ME2, rather than the old iTunes + iPod experience …
As soon as this news came out, Apple's stock price fell again. The little bit of confidence that the investors had just regained was also destroyed by this news.
The stock price fell again. In the blink of an eye, it had already missed the 6.2 US dollar mark, and then broke through the 6.1 US dollar mark. The entire market was in a state of panic. They did not know if Apple could hold the 6 US dollar mark before the market closed. If it fell, it would probably be another performance of a thousand miles …
Apple's shareholders and brokers were also trying their best to recover the stock price. They were all holders of a large number of Apple shares. No one wanted to lose a lot of money, so they tried their best to save the stock price. Perhaps they could attract those retail investors who had extremely low expectations to buy their shares, which would then lead to more capital inflows.
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