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What does trends mean in financial markets?

 

Since old times change is the only static fact man knew. Every day we find something disappear and something new appear, something go up and another thing go down, in business this is called “Trend”. The definition of the word “Trend” is a general direction into which something is moving or changing. In the world of social media, if something trends it means that it’s the topic of many posts. In financial market, the word trend means a tendency to move towards a specific direction over time. [1]


 Market researchers use the trends to predict the future and how to modify the services and products to fit the demands of the consumers. They simply identify the direction their product is taking and try to modify the product to fit this direction. If a company fails to expect the correct trend and evolve to satisfy the demands of the future, surely its fate will be perishing and disappeared. An example for that is Nokia Company in the world of mobile phones, Nokia was someday the beast of the market and the dominant power, it has the biggest market share in the world of electronics and mobile phones but it failed to expect the right trend for that domain. Nokia Company kept following the old manners in manufacturing phones and neglected all the changes around it, it neglected the appearance of smart phones and new phones Android Software, so it simply perished. The CEO of Nokia Company Kari Kairamo after the receiving the shock of losing their market share said: “We did nothing wrong but somehow we failed”[3]. The following diagram shows the profits and losses of Nokia Company since the year 2006 till the year 2017.


Another example for not following the trend and predicting the future is the giant company in the industry of photography Kodak Company. Kodak camera was firstly introduced to market by George Eastman in 1888 and it kept dominating the market for decades[5] but just like Nokia, they didn’t study the trend or didn’t want to predict the future, the trend was going towards digital cameras but they kept manufacturing their camera with a microfilm implemented inside it. The idea of microfilm became too old fashioned and people didn’t want to go to a camera man in order to extract their photos for them, they instead used the digital camera which enables them to have their photos ready in seconds. As a result to that Kodak lost its market share and new companies began to be the market leader like Canon and Nikon. The following diagram shows how the revenues of Kodak dropped from the year 2005 till the year 2019.

[6]

 

If we take one of these examples in details, we will find a big change in trends and will notice how trend affected the growth of such industries or demolishing it. So if we talk about mobile phones, as we said the market leader in mobile phones was Nokia Company but it is no longer a leader because of not following the trend. So let’s talk about mobile phones in details, how they started and developed to be on the shape we know today. As it is known Telephone was invented by Alexander Graham Bell in 1876[7] and it remained in its classic form for decades, the home old phone, and it was only owned by aristocratic families. With time the telephone started to evolve and changed from its classic shape to become a mobile phone. The new form of mobiles phone as we know started to appear in 2007 and since this time mobile phones took many shapes of changes and developed to be like a mobile computer with the size of your hand.

 

Actually 2007 wasn’t the beginning of cell phones as they were developed two decades before that, they started to work in Taxis and emergency cars as a means of communication through radio waves. Then the mobiles phones shapes started to develop to take the shape of the mobile phones we know today. The prices of mobiles phones was extremely expensive at the beginning as it used to cost about 10000 dollars to own a single mobile phone but with time this price started to go down to became affordable for middle and low classes. At the beginning of mobile phones they didn’t have many features as they only had one main function which was to perform a phone call but know the phones are more developed as they do more tasks like listening to the radio or accessing the internet.

 

If we talk about the trends in mobile phones through time, we will find a big change in them through time. In the beginning many companies dominated the market of mobile phones like Motorola and Sony but after that the big share of market moved to Nokia Company and Apple Company. After that Nokia Company started to lose a big portion of its market share to other new companies like Huawei, Lenovo and OPPO. As we mentioned earlier, Nokia Company refused to accept the new trend in Mobile phones which is Android platform and preferred to stick to its software which was too heavy and old compared to the new one. As for Apple Company, this one has been the smartest company and was apple to cope with all the market trends and changes. Apple Company is currently one of the market leaders and one of the richest companies in the world. What makes Iphones or Apple’s phones more distinctive is the level of protection and privacy in these phones, they have proved to be able to protect the user’s data and information in face of any intruders and no one can hack into Iphone’s system. This makes big companies and individuals hurry to acquire new releases of Iphone.

 

The following diagram shows the number of people using smart phones currently stating that more than 2.5 billion persons use smart phones across the globe. It also states the top five companies in using smart phones and also shows the global smart phones sales revenues.

111.jpeg[8]

 

Smart phones currently contain very impressive functions as we can easily use them in organizing our lives, doing work tasks, surfing the internet, communicating with others and so many other functions but this won’t be the end, we expect more functions in smart phones. For example in the future I expect that smart phones will be able to monitor the health of its owner and tell him when to visit his doctor. Also smart phones will help engineers and doctors in their work as they will expect the right dimensions of a building or do the correct examination for a patient. Also smart phones might be used as a source of energy as scientists are currently thinking of inventing an endless battery for smart phones, a battery that doesn’t need to be recharged and can also give power to other devices.

As all the good things have a bad side, smart phones might have a dark side not all people know. Smart phones and its signals might have bad effect on health and might cause cancer. In some cases smart phones affect the pregnant women and their fetuses and might lead to some mental disorders to the babies. Also using a smart phone in early ages might lead to autism in children and make them learn to talk or interact with others around some so lately. So need to learn how to use the smart phones in correct way and raise others’ awareness about the negatives of smart phones.

In conclusion, we mainly talked about trends and how they affect the growth and downfall of companies. It’s like a living monster that if you don’t tame, it will eat you. We have probed to two examples of technology giants that got destroyed because of not listening to trends, Nokia and Kodak. We saw how they were the market leaders some day but after that they lost everything and became at the bottom of the market. We also talked about the phones and when they were invented and how they evolved from being a classic home phone to be a cell smart phone. Additionally we talked about the uses and the functions of the smart phones in our early times and how they can help us in our everyday lives. We also talked about the future of smart phones and what we expect from them in the future. Moreover we talked about the disadvantages of smartphones and how they affect our lives and the lives of children. So it’s technology that help us every day but it might be a means of destruction for us, so we have to be careful with it.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References:

·        Essay: “What’s trend?” Retrieved from: https://marketbusinessnews.com/financial-glossary/trend/

·        Link, CEO of Nokia, Retrieved from: https://www.nokia.com/about-us/what-we-do/group-leadership-team/rajeev-suri-president-and-chief-executive-officer-ceo/

·        Nokia statistics, retrieved from: https://statinvestor.com/category/2387/nokia/

·        Essay: Kodak Camera, retrieved from: https://www.britannica.com/technology/Kodak-camera

·        Kodak statistics, retrieved from: https://www.statista.com/statistics/277061/kodaks-global-revenue-since-2005/

·        Smart phones statistics, retrieved from: https://www.statista.com/chart/13037/key-facts-about-the-mobile-phone-industry/

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