Business Watch: Vodafone and Apple

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Vodafone supply

Vittorio Colao is leaving no stone unturned in his quest to cut costs at Vodafone. The thrifty chief executive has now turned his attention to payment terms for the company’s suppliers – that’s everything from handset makers to caterers.

Vodafone says the change will standardise its payment terms across the world but it insists it will not necessarily result in more drawn out payment periods for all suppliers.

I imagine suppliers will find out soon enough. A spokesman for Vodafone was quoted saying: “Vodafone always tries to improve operating efficiency. We are working with suppliers to ensure they are able to work through any changes.”

Let’s hope for Vodafone that they are. As The Daily Telegraph pointed out, it wouldn’t look too clever for Vodafone chairman Sir John Bond if the company causes major problems for its smaller suppliers.

Sir John was made a “business ambassador” by Prime Minister Gordon Brown to work alongside Business Secretary Lord Mandelson to improve conditions for British businesses. Old Mandy himself has been quoted as saying the longer payment terms could be “the final straw for small business in the current climate”. Quite.

Apple comebacks

He has changed the mobile phone industry with the all-conquering iPhone but Steve Jobs’ health troubles remain a constant source of speculation.

The Apple founder and chief executive was back at his desk this week after five months off during which he had a liver transplant. If you want to understand the importance that Wall Street attaches to Jobs, 54, and his role in the company’s future, you only need look at daily stock price fluctuations.

On Monday of this week the shares fell one per cent in pre-trading after reports of Jobs’ liver transplant. But then they swung back into positive territory when Apple announced it had sold over one million units of its iPhone 3G S models.

The figure proved the naysayers wrong. Some analysts had predicted sales of just half a million. The company quoted Jobs for the first time since January in one of its press releases, where he cheered: “Customers are voting, and the iPhone is winning.”

Yair Reiner, an analyst with Oppenheimer & Co, said it was an important move. “This is the first time we’ve heard from Steve Jobs since he reported he was taking medical leave,” he said. “It’s a sign Apple has its chief executive back.”

But analysts are also concerned that the company can keep hold of Tim Cook, the man who ran Apple for the five months Jobs was on sick leave.

Piper Jaffray analyst Gene Munster went so far as to say that Apple losing Cook would be a bigger deal than if Jobs stepped aside.

“Just that thought makes my stomach tighten up,” he told The Wall Street Journal.

Cook, an Apple veteran of 11 years, has been wooed in the past year by Motorola and Dell, both of which could badly do with his expertise at creating and marketing beautiful, simple, iconic hardware products that people love. Indeed, despite Jobs’ absence, Apple shares have staged a big comeback this year, outperforming the Nasdaq technology index by miles.

Full article in Mobile News issue 442 (June 29, 2009).

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