I find it amazing how the fortunes of two tech companies can quickly change over the course of a single year.

Nintendo vs. Apple

On the one hand we have Apple Inc, who has skyrocketed from a share price of $79.95 back on October 20, 2007 to its record breaking $187.01+ share price (in overnight trading) on October 23, 2007. On the other hand we have Japan's own Nintendo who was sitting at $26.00 a share on October 20, 2007 and has since shot even higher than Apple by reaching a share price of $71.60 on October 22, 2007. How did Apple increase its share price by over 230% and Nintendo by 275%?

Apple one year chart

According to the recent Financial Report from Apple their Mac sales were up with 2.2 million units sold which accounted for nearly 50% of their income. iPod sales were up 17% while the iPhone sold 1.1 million units (1.4 million units total). What I found interesting was the news that Apple estimated 250K of those iPhones were never activated with AT&T but were instead likely used on other networks or shipped overseas. Haven't the big tech bloggers been saying only a small minority hacks their iPhone? I'm no math wiz but 18% does not seem like a small minority to me.

Apple took a big risk with the iPhone. Launching at a $599 price point and a vendor lock-in (AT&T) many people thought the device would fail. It did not. The phone sold so well that a cottage industry was born around un-locking the device. Apple responded with a firmware update that "Accidentally" bricked some hacked iPhones. They have since come to their senses and announced an SDK for the iPhone to allow 3rd party developers access to the device.

What about Nintendo? Well they do have the Wii, which is still sold out most everywhere you look. They also have the DS portable system that has passed 50 million units since it was launched a few years ago. So how did Nintendo do it?

Nintendo 5 year chart

The key with Nintendo is that a few years ago, when they saw their Game Cube losing beside the Sony PlayStation2, they decided it was time to try something new. Knowing that the PS2 and Xbox were likely to keep taking the hard core gamer market from them they decided to expand the market. While the other companies focused on titles that appealed to gamers Nintendo began creating titles that appealed to everyone else. Yes, Nintendo decided to go after the larger non-gamer market and it paid off.

If you look back at Nintendo's stock price you will see that in 2003 they were way down, trading in the single digit range. They had not dipped that low since late 1997. Yes, 2003 was a bad year for Nintendo. The Nintendo DS was released in 2004 without much fanfare and Nintendo made pains to say that it was not the new Game Boy, they were taking a risk and they knew it. Soon after the release Nintendo's stock began to rise.

Nintendo Wii Sport Bundle - With 5 Great Sports Games

As sales began to build Nintendo gained more and more confidence which resulted in the release of the Wii in late 2006. This system was put up against graphic and processing heavy weights Xbox 360 and PS3. Within a few weeks it was quickly apparent which system had one. The Wii has been out for nearly a year and Nintendo still says they can not make them fast enough!

What do these two companies have in common? They both saw huge gains by redefining a market. Nintendo opened up video games to non-gamers and Apple made owning a cell phone more than just a way to make phone calls. Neither the iPhone nor the Wii is the "best" device on the market in regards to technical specifications and features but they are the best for ease of use and fun.