Two things, and they will help us understand how corporate and national business friendships are structured.

The first one, at the national level, is between U.S. and China. European Union is also there. Simply, some countries are troubled by China’s success because as it does well, it takes away a piece of the cake which U.S. and EU have enjoyed for decades. That is typical, everyone wants to win and stay winning..

 But that is not the end of the story. Tensions over China’s industrial might now threaten the architecture of the global economy. America’s trade representative this week called China an “unprecedented” threat that cannot be tamed by existing trade rules. The European Union, worried by a spate of Chinese acquisitions, is drafting stricter rules on foreign investment. And, all the while, China’s strategy for modernising its economy is adding further strain.

The Western World sees it that China is winning with unfair advantage: it restricts and protects some of its markets while it can compete unfettered in other territories. .There is truth in that. But there is also a fact that China is indeed doing well at home, innovating across many industrial sectors. As I have noted in the past, China is winning at home and now has a clear global ambition, not just in infrastructure construction, but also in technology.

Uber lost to Didi Chuxing in China. Facebook’s WhatsApp is a tech generation behind the innovation of WeChat. DJI is peerless in civilian drone making. Alibaba pioneered a new sector in digital commerce. Baidu has a vision to become the operating system of the autonomous vehicles through Apollo. Chinese companies are ferocious in battles and they are winning, at home. Apple is brutalized, in China

China has always protected its markets. But the problem now is that it seems to be capable of serving the available markets where foreign companies can participate. Had it just ended in protecting its markets and then cannot serve the openly available ones very well, no one will care that much. If WhatsApp had beaten WeChat, Uber crushed Didi Chuxing and DJI lost its hold on drone making, China will be a good global technology player. But today, it is not because it is winning. As it exerts its influence in payments through Alibaba and Ant Financials, it is changing the global order. Many will accuse it of “unfair advantage”. China expects that.

Secondly, Google is showing that it does not like to lose. Simply, companies like to have competitive advantages. For all the nice talks about ecosystem and community friendships, when firms see that you are about to crush them, you will see the other side. Google is showing it to Amazon. Amazon will do it to another firm that comes against it. That is the way it is, provided that you can modify your Terms of Use to exclude a mortal threat. It is part of the game. You simply do not want to surrender. I am yet to get documents created in Windows and Mac to work seamlessly when shared with partners. They can make it work, but they will not because everyone wants to hold its domain.

Google pulled the video service from the smart speaker this afternoon, a move Amazon doesn’t seem too happy about. Echo Show owners weren’t given any advance warning previous to the removal. […]

Google made a change today around 3 pm. YouTube used to be available to our shared customers on Echo Show. As of this afternoon, Google has chosen to no longer make YouTube available on Echo Show, without explanation and without notification to customers. There is no technical reason for that decision, which is disappointing and hurts both of our customers.

This is what it is: until we start winning in Africa, we cannot be seen as threats. But when we begin to win, threats will come. China is experiencing it. Amazon is getting it from all angles. China and Amazon are winning. Bombardier joins them as Boeing sues to ensure U.S. government punishes it. If bombardier is not winning, it will be a friendly competitor to Boeing. That does not mean that Boeing does not have a point. It does, but things change when there is a major threat. Boeing has used low interest funds from US EXIM Bank to finance sales. Airbus had complained for that. No one is happy when losing.

The day has been dominated by the ructions following the US decision to slap 219% tariffs on Bombardier, the result of a dispute with rival Boeing.

For Nigeria, we need to have some wins. The action of Google against Amazon does not seem like what you expect from it. But Google wants to survive and cannot arm its opponent. It is not about Google. It is just the way these companies play.

All Together

Whether it is Yaba, Kaduna or Aba, I am hoping that our moment will come. It will be glorious a day U.S. or China will say that Nigeria is not being fair in its business competitiveness. That shows that we have arrived. It will take time but I do know it will come. Imagine Google blocking API access from a Nigerian company that it sees a as serious threat. That will be glorious.

How do we make it happen? This is my suggestion. Give local and foreign partners 5-10 years and after the period maintain that government will not patronize any solution that does not have major local contents. So, the government must buy local. That will motivate foreign firms to invest locally and also empower local investors to expand knowing that the market is there. The government needs to give time and stick with that plan so that local capabilities can emerge. When we do that for 15 years, knowing that all levels of our governments are customers, you will see top grade Nigerian companies emerge. Then the foreign firms will have design centers and not just sales offices, to serve Nigerian markets. Nigeria can then be accused of being unfair in its business competition. That will be nice, because it means, we are beginning to win. Industrializing Nigeria can only come when the best customer can buy from Nigeria. That best customer in our tilted public sector-driven economy is Government.

First Bank of Nigeria is an eminent banking institution. It has top-rate managers and arguably one of the finest companies in Nigeria. But recently, First Bank is making statements that confound any careful observer. The latest one is its plan to add 16 million customers in the next three years, by broadening its digital marketing. Since 1894 (note “8”), the bank has added only 14 million customers till date. Then in three years, it will magically add 16 million new customers. The bank is not clear on how it will execute such an audacious target that may risk making the managers look weak in a scenario they fail..

First Bank of Nigeria Ltd , one of Nigeria’s pioneer financial institutions, has said it is currently broadening its digital marketing initiatives in a bid to add 16 million customers to the present 14 million customers.

According to Dr. Adesola Adedutan, FirstBank’s Managing Director/Chief Executive, said this is part of its growth strategy to get 30 million customers over the next three years, and to migrate its existing and new customers to alternative channels, namely First Online, Firstmobile, USSD and ATM cards.

He said,“We have a focus of building our customer base to 30 million in the next three years from the 14 million we currently have. That is the way forward for us and we are making significant progress already.”

First Bank is not a Nigerian political party. I hold the bank shares. I make time to know what is happening in the bank. But recently, First Bank is talking like APC and PDP. Sometimes, the bank makes statements without supporting insights. If anyone believes that First Bank will add 16 million new customers in three years when it took it more than a century for 14 million, I have a bridge to sell that person.

The bank needs to know that it may need to first buy other big banks like GTBank and UBA before it can get closer to 12 million new customers (most customers have multiple bank accounts so if you sort  and combine them, the number of unique customers will drop from a combined total). GTBank has 8.3 million customers. UBA has about 8 million customers. If you combine GTBank and UBA, you may get about 12 million unique customers. Of course, First Bank cannot buy GTBank, the reverse is more plausible. First Bank is worth around N207 billion while GTBank is worth about N1.12 trillion in the Nigerian Stock Exchange excluding its listing in Europe.  So, I do not know where these 16 million new customers will come from within three years for First Bank if big acquisition is not the path.

In short, it is nearly impossible, using today’s data, for First Bank to execute this target. The total number of unique Nigerian bank customers is less than 30 million. (It could have gone up, but not certainly more than 40 million.) Yet, a bank CEO will tell the world that it can get 30 million customers. If you subtract the 14 million customers First Bank currently has, what will remain is 16 million customers. Simply, if First Bank should succeed, on this target, it does imply that every Nigerian bank customer must have an account with it.

It is estimated that the Bank Verification Number exercise which links customers with their biometric data like facial features and fingerprints generated about 25 million unique customers in Nigeria. Those 25 million customers accounted for about 45 million bank accounts in Nigeria.

The numbers are relatively poor for a country of more than 180 million people. For the banks to get their next 30 million customers, they need to improve their games

We need to become a country that is more fact-based and common sense-driven, especially in an industry that holds the economy. Banks must speak with common sense. They are not political parties. In U.S., analysts would have challenged First Bank to show how it will get to this huge customer base. But in Nigeria, no one cares. The press just reported it and moved on.

Of course, I concede that the digital marketing can target more than 80 million Nigerian adults who are not yet in the banking sector. That is mathematically possible. Yet, I do not know how many of those 80 million people anyone can reach digitally within three years. But First Bank may have its strategy in the vault; 2021 will tell us how solid it is. But for today, I find it incredulous because the basic elements of the markets do not support such level of growth.

Apple transformed the mobile telephony consumer market by changing the basis of competition. Through the new basis of competition which elevated the industry, Blackberry and Nokia were destroyed. Apple became the industry category-king and the world’s most valued company.

Apple did that through pioneering innovations via products like iPod, iPhone and iPad. The world responded. Apple saw glory and triumphed. The stock price went through the sky. Legends were made. Steve Jobs became a demi-god with disciples from the Himalayas to the Kilimanjaro, and from the Mississippi to the Shinano.

Then Apple started incremental innovation. The bold disruption is gone. When that happens, we can return to agriculture, picking a lesson from the law of diminishing returns:

In economics, diminishing returns is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.

The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant (“ceteris paribus“), will at some point yield lower incremental per-unit returns

In most agricultural science examples in Nigerian secondary schools, fertilizer was always what was to be added while the land was always held constant. What the law means there is that there is a limit that adding more fertilizer to a piece of land can continue to improve your farm yield, In other words, after a time, despite adding more fertilizers, the yield impact will be negligible.

For Apple, adding more of incremental features on iPhone will get to a level where the impact will be negligible in the stock price. The incremental feature is the fertilizer here and wowing users is the land. The output is the stock performance. (There is a negative return in Apple stock over the last few weeks, and not just flat. When the law of diminishing returns is extended for a long period, the marginal output is always low. But again, negative return over a short time does not say a lot of things. For Apple, it is negligible). Fortune Newsletter has a good summary on this:

Shares in Apple hit an eight-week low after a report suggesting weak initial demand for the iPhone X. Fortune‘s Don Reisinger dissected that specific story skeptically, but market sentiment has clearly turned cautious since the launch of the X and iPhone 8, amid fears that they will cannibalize each other’s sales and, more specifically, that the X’s $999 price tag is too ambitious. At a little over 17 times trailing 12-month earnings, the stock has a curiously old-economy feel to it all of a sudden

But do not bet against Apple yet, it has a record of turning this diminishing return into an abundant return.

In the end, the iPhone 7 turned out to be a big seller, and Apple ordered the remaining supplies a couple of months later.

In other words, Apple’s iPhone X component strategy, as reported by Digitimes, wouldn’t be unique. It could merely be a strategy that it has followed in the past, and that Apple just wants to avoid forking out too much money for parts

We do hope for iPhone X to find success. iPhone 8 has been unable to start the carnivals for the Apple fans. Where iPhone X also fails, then you can be talking of a diminishing returns.