neutrino23

Will Microsoft Get Squeezed by Chrome OS?

This is an interesting argument. I don't think many end users will soon give up windows for chrome. Rather, any place you see a PC used for a single task is a candidate for Chrome. Some examples: PCs used in libraries to search card catalogs, PCs used in airports to print boarding passes, PCs used in hotel business centers to print boarding passes and do simple document editing, PCs used in industry for single tasks such as data entry and various kinds of interactions with customers by phone.

The argument about the middle being difficult to sell is quite true. I've seen a number of products suffer this way. When you do find a customer with enough budget and interest to buy your product they are susceptible to a higher end product luring them upscale with features and discounts or you lose your customer downscale to simpler products encouraging the customer to save their money. This is deeply frustrating.

Regarding the hoards of flying executives creating powerpoints, they are perfect candidates for this kind of product though their egos wouldn't let them buy it. All they ever run is Outlook, Word, Excel and PPT, and, of course, solitaire.

Microsofts big, long term problem is that the charge for their product. Just as they killed Netscape by giving away IE for free other companies will kill eventually cause pain for MS by giving away the OS. Google wins by providing a platform that gets more ad hits. If the OS is cheap for them to maintain that is a win for them. Other companies will join in as the economics changes in favor of this. Someday you'll get a piece of junk mail which will be a PC printed on a piece of plastic with an OLED display. To use this free PC you'll have to first watch some short advertisement or there will be advertising printed on the package. That PC will not be running windows or OS X but Chrome or Linux.

Why Research in Motion Is a Takeover Target

I don't see RIM taking off. They'll probably maintain their position or slowly lose share while remaining profitable. They just don't have the software or technology to keep up with expansion outside of their core business (email).

I don't see RIMM as a take over target. Sure, they will have a steady cash stream, but it is a long shot that they will grow rapidly.

I think Palm is a better take over target than RIMM. It takes much less cash and you get a better OS. The downside is that there are fewer customers so again, it is a risk as to whether they will grow rapidly.

How Apple's Market Share Will Propel Stock to $500, Part 2

I can't do the arithmetic to say that AAPL might reach a particular target, but I can see that Apple is a very unusual company. They have no debt, a huge amount of cash, no legacy technology holding them back, they own their own technology and designs. They now have this fantastic machine for developing new tech products. They are not limited to PCs, iPods and iPhones. Any consumer product that involves software is a potential target for Apple expansion. This will be fantastic to watch.

The Problem with iPhone Killers

I don't much care for the religion analogy as it obscures rather than illuminates. The whole business of iPhone killers (or BB killers or what have you) is driven by the tech pundits looking for splashy headlines. I think the business people are just looking for profits and survival. As such Apple seems to be looking for a secure market position, they are not trying to dominate the market.

The tech blogs focus too much on superficial features of phones and extrapolate market penetration based on that. Market share is earned by a mix of characteristics, one of them being the product itself. In addition you need to consider company reputation, product reputation, customer support, retail outlets, advertising, and many other things.

For a newcomer to become a hit is not an overnight process. Share grows over time and now the competitive situation is much tougher. When Apple introduced the iPhone there was no Apps store and no other phone similar to the iPhone. Newcomers don't have that benefit. Apple and others will not sit idly by and let another company gain share without a response.

My take is that Apple will continue to see strong growth. Apple has a great mix of reputation, 200+ retail outlets that also provide support and now they have a huge installed base. Keeping a customer is cheaper and easier than getting a new customer. Apple also has the power to add more extrinsic value to their phones. iTunes Music Store and the Apps Store are examples. Expect more ventures like this next year (my opinion).

RIMM will do OK but continue their slow loss of market share.

Android phones will replace Nokia as the provider of low cost phones. Probably in a few years the numbers of Android phones will exceed the number of iPhones. iPhones will capture the lions share of the profit and will continue to be the feature leaders.

WM will malinger but not die as MS will keep shoveling money at it. Perhaps they will find a way to give it away and make money elsewhere such as in selling office for mobile phones?

Symbian OS will fade away year by year. It might not be bad, but there is just no reason for it to live. Why switch to something that is maybe almost as good as Android and a distant second to OS X?

Why Android Is Gaining Ground on Apple

Android will have its place but it does not compete directly with the iPhone. My guess is that a couple years down the line Android phones will largely supplant Nokia phones in the low end, low margin market. RIM will survive but lose share. The iPhone will own the high end, high margin business. Watch for Nokia to drop Symbian OS and adopt Android on some phones.

I think the Android world will be too chaotic to develop much in the way of a useful App Store.

Will Windows 7 Resurrect IT Spending?

Just anecdotal, but I've visited a number of large companies and national labs on business over the last few months and not one of them has shown any enthusiasm for using W7. I think they will gradually adopt it, but it will not be a adoption rate.

Regarding some of the earlier posts, I will suggest that Apple products are not as expensive as suggested. If you are a student then in the summer season you can buy a Mac at the education discount with a $200 rebate credited towards the price of an iPod. Many would choose to get the MacBook and iPod for roughly $900 vs. an iPod at list plus a cheap PC for roughly $700, not to mention the additional expenses for anti-virus software.

Microsoft: Whistling in the Dark

MSFT has a long term problem in that the PC manufacturers mostly compete on lower prices. It gets harder and harder to justify hundreds of dollars for the OS and Office when the underlying hardware cost is only a two or three hundred dollars.

Yes, MSFT's worldwide unit share is high but I'll suggest that outside the US and Europe a high number of those units are illegal copies that provide little or no revenue to MS.

In China MSFT has cut its prices to the bone to try to compete with piracy. No revenue growth there.

Now MSFT is coming out with free, web versions of Office. Where is the future revenue stream in that? Will they try to support it with ads? How annoying will that be?

This is the danger for MSFT. They have a history of leveraging Windows to force people to use their formats. For example, they forced the use of IE in windows which forced web developers to code for IE instead of open standards. In business you have to have Office because everyone else uses it. If the world decides to change directions and switch to web based/cloud type apps that are almost free, or if they decide to go in the direction of the iPhone/BB/Android, then MSFT is starting from a position of being an also ran and outsider. They'll have a hard time using windows to force people to buy into their proprietary formats if the world decides they don't need windows. If MSFT is not forcing standards then they cannot force people to give them money.

It doesn't mean MSFT will disappear. They have a lot of momentum and there may be a core business in MSFT at much less than their current size. But if they enter a long period of slow revenue decline that will kill the stock. How do you value the stock if you expect revenue to decrease 1% or 2% or 3% a year for the foreseeable future? How do you attract bright people when their stock options are worthless?

Disclosure: Long AAPL, not an analyst, just a guy.

How Google Apps Could Cost Microsoft Up to $18 Billion in Value

As does Wilhelm, I think MS has to worry about long term trends. In business you often have to use MS Office simply because everyone else does and you need it to participate. Once enough sub-groups start using something else (Google supplied or otherwise) there will be a tipping point such that business will accommodate multiple applications. That will be bad news for MS because once they lose that lock on the customer there will be a race to the bottom as different suppliers offer other applications in this "new" market.

It's All About the Apple Ecosystem

Focusing on the ecosystem is very important when trying to understand Apple. Too often pundits focus on particular qualities of some Apple product such as number of megabytes or pixels and they miss the bigger picture. Unlike most other companies Apple is not just building widgets, it is building an ecosystem, as you describe.

Even now there are many blogs out there criticizing the new iPhone because it lacks one or another hardware feature. What they miss is that iPhone is more like a passport than a piece of hardware. Buying an iPhone gains one access to the connectivity of all the other Apple products, access to music and videos through the iTunes Store and access to the work of thousands of developers as well. All of that at your fingertips.

This is an enormous barrier to entry for almost any competitor. It is not about a physical keyboard, a removable battery or an OLED screen. Apple's strength is in this complex web of content and hardware and mindshare. The announcement that they were opening up the dock connector for accessories and Bluetooth for peer to peer communication was huge. This added another dimension to the Apple ecosystem.

I have no idea why Apple decided to only charge $29 for SL. That is a real puzzle. It will be interesting to see how that plays out.

Does Palm's Pre Have Anything on the iPhone or Storm?

What if an asteroid falls on Palm headquarters? Would that improve Nokia sales? What if three comets hit the earth simultaneously and land on Palm, RIMM and Nokia headquarters? Would that be good for Apple? What if, what if, what if. Sheesh.

By talking about Apple selling as a fad or trend you display your lack of understanding of this market. You can like Apple or not but at least understand their strengths and weaknesses properly. The same goes for RIMM and Nokia and Android.

Personally, I think Pre is in an extremely difficult position. Pre might be a good phone. The problem is it has to be an extraordinarily good phone to overcome the lead established by RIMM and Apple. If they had come out with this three years ago they would have walked away with the market. Now they are an also ran.

Yes, they can quickly get some share from the technically oriented people who follow this market, but it doesn't sound like Pre will add a must have feature not offered by RIMM or Apple. This is not a knock on Palm, it is just how it is.

I recall having this discussion with a broker promoting the stock of a company pushing a technology to compete with hard disk drives. My point was that it would have to be hugely faster/cheaper/bigger than hard drives in order to gain a foothold. Just like magnetic bubble memory before that. Bubble memory was interesting but could never develop fast enough to catch up to hard drives so they ran out of development money before the hard drive developers ran out of money. Apple has almost $30B in reserves. If they decide there is something missing from the iPhone that is needed to keep market share you better believe it will appear very quickly.

I think Palm will make a short term splash then disappear from the headlines. Apple/RIMM will capture most of the headlines. What is Palm going to do? Build up several hundred stores in malls across the US where trained technicians can help people with questions? Build a huge on line music and video store like iTMS? Get thousands of developers to write tens of thousands of apps for the Pre? Develop a simple way for developers to get paid for developing apps? Find a way for the Pre to synchronize with your iTunes collection on your computer? Somehow get the whole country talking about Palm so that when they think touchscreen phone they think Pre and not iPhone?

Perhaps I don't know enough about Pre (mea culpa), but I think they should have gone after a specific niche rather than the general market or in addition to the general market. For example, they might have worked out a scheme to develop the digital hospital. EMTs in the ambulance could forward diagnostic information to the hospital. Doctors and nurses and other techs would receive this on their phones. Each would begin the necessary preparations and would send updates about their progress to the others. Once the patient arrives information about medications, treatments and diet would skip from phone to phone so everyone is always up to date. For all I know something like this exists. But if Palm did something like this, perhaps in another field, they'd have a secure toe-hold from which to expand. As it is they seem very exposed to intense competition.

Fast Money Recap - Is This Apple Rumor True? (4/28/09)

The iPhone is really a new category of communication device. That is why sales were so strong in the March quarter in spite of the bad economy over all. This is a sea change. The next version of the iPhone coming in June looks to be a large step up from the current version. Apple is riding a future wave.

Apple Beats Again: It's Hard to Argue with the Facts

I don't see how a netbook would help. Why would replacing a $1,500 product with a $500 or $400 product help the bottom line?

Unless the economy completely goes off the cliff this will be another very good year for Apple. New iPhones and iPod touch in June. Snow Leopard coming some time this summer. Intel will release significant upgrades to their line of laptop CPUs this fall so the laptop line will see a significant bump.

An interesting thing is that the pool of iPhone and Touch users continues to grow providing a larger and larger market for the App Store. In turn, as the App Store grows it attracts more people to the iPhone and Touch.

Can Apple Remain the Unique Innovator It Was, Without Steve Jobs?

It is really hard to quantify the effect Steve has on Apple. My take is that he brings discipline (being able to say no to distractions) and he keeps the company focused on the product, not on the bottom line. A couple of years ago Apple replaced their best selling iPod mini with the iPod nano. If there had been a timid CEO in place or if accountants and lawyers ran the place that never would have happened. They would have run that cash cow into the ground before starting on a new product. Before that Steve, on the strength of his personality, pulled the customer base over from PowerPCs to Intel CPUs. Apple has great financial and business people, but they don't manage Apple by watching the stock price. That would be death for Apple.

My take is that Apple is about excellent personal and industrial design. Fitting the product to the use. That makes it hard for pundits to evaluate Apple products. Time and again some will look at an Apple product and count the gigabytes and megabytes and clock cycles and pixels and give the product low marks. Yet the customers love them.

One other point is the interconnectedness of Apple products. It adds value to an accessory to have it connect to the computers to and to the online stores. Yes, the iPhone is tied to your Mac, but those are golden handcuffs. The iPhone and iPod are better, more useful products because they can connect to your Mac.

So when someday Steve does retire from Apple the danger for Apple is not a lack of creativity or engineering or design talent but having the discipline and courage to stick to their path.

Microsoft vs. Google: Battle of Epic Proportions

"Microsoft reigns supreme with its Zune music player"?

Does MS still sell the Zune? Isn't it dead?

With a King's Ransom in Cash, Why Still No Buying Spree in the Tech Space?

Last year Apple bought P.A. Semi. That probably was a good indicator of their thinking. They didn't buy them simply to get bigger or because they were cheap they bought them because they wanted the talent and IP.

Going forward I'd expect more of the same. They'll buy a company if they identify it as owning some IP that they think will help them accelerate the main business.

Certainly price would be important if they were to look at trying to ingest Adobe. However, if they want to acquire a smaller company owning critical IP what difference does it make if the price is $50M or $100M if the end result is they can increase sales by 10% (about $4B/year now)?