Seeking Alpha


Send Message
View as an RSS Feed
Latest  |  Highest rated
  • Google (GOOG) is reportedly planning a major overhaul of its Android strategy. Instead of partnering to build a handful of devices via its Nexus line, Google will now partner with up to 5 OEMs at once on hardware sold directly to consumers. Google's objectives: create no-compromise Android gear to better compete with the iPhone (AAPL), limit OS fragmentation, prevent carriers from modifying Android devices for their own ends, and soothe partner fears related to the MMI acquisition. (earlier)  [View news story]
    The BOM for an Android and Apple phone hardware are substantially similar, but the price to the carriers differs by up to $300 per device. Consumers simply pay for the subsidy through carrier service plans that have minimum bundles of voice, text and data that greatly exceed their typical needs. The carriers play the non-Apple OEMs off to attempt to contain their total subsidization costs across their mix of Apple and non-Apple phones. The Android hardware OEM market will remain challenged because of the effective duopoly that exists in the US wireless service market. the real question is why people don't accuse Apple of price gouging. You have to give Apple credit, but it is the evil empire of the wireless age.
    May 16, 2012. 05:33 PM | Likes Like |Link to Comment
  • The Output Gap: Welcome to the Balance Sheet Recession [View article]
    Your analysis of the problem is directionally accurate, but the solution is daunting. Weak consumer spending will continue o be the anchor on the economy because the vast majority of Americans lack the skills to gain lucrative jobs that could allow them to repair their balance sheets and spend simultaneously. The cumulative effect of the educational deficiencies of secondary schools and universities is producing few workers capable of thriving in the modern work force. Too many of the jobs in the economy do not offer career paths that last a generation and produce enough wealth to offer security. Even the top 5% of the pyramid are sufficiently uncertain about the stability of their prospects to restrain their spending in this environment.

    What sectors of the US economy are able to create well paying jobs? Technology? Financial Services? Pharmaceuticals, Health Care? Energy? It is pretty difficult to point to any sector. The best technology companies continue to create productivity enhancing breakthroughs, but they require few people to scale. Look at Apple or Google; their economic power stems from being at the center of economic hubs that derive from their incredible intellectual property. Both firms employ limited numbers of the brightest people with engineering, product design and marketing skills that the vast majority of US workers lack. Few of Apple's products or Google's services require the type of labor resources that traditional US manufacturers used a generation ago. The current economy rewards those people generously but their wealth trickles into a limited number of local service and hospitality/entertainment jobs, but most of it get invested into the best new ideas from any part of the globe.
    The world is flat and US needs to adjust accordingly
    Sep 9, 2010. 10:20 PM | 10 Likes Like |Link to Comment
  • What Business Is Wall Street In? [View article]
    Mark Cuban and Mark Bachmann's observations are on point; the principal change on Wall Street is the sophistication of the trading strategies that hacker quant traders can deploy as technology combined with access to significant capital amplifies volatility across global markets. As spreads have compressed on the provision of liquidity on conventional stocks, bonds and futures to facilitate customer secondary trading and client capital underwriting, the only way Wall Street can make money for shareholders and employees is proprietary trading, customized OTC derivatives or asset management fees. Wall Street is still in the business of helping clients manage risks/raise capital and helping customers express investment views on relative value securities. It is simply using different techniques to charge customers and clients for its services. Unfortunately 98% of the participants in the markets are not as sophisticated as the insiders on Wall Street at understanding relative value because they can not integrate information as rapidly.
    Tax law changes that promote fundamental long-term buy and hold investing will shift trading strategies, but the problems with mortgages, sovereign debt and high yield securities reflect the investor chasing returns and not really understanding the securities.
    May 10, 2010. 02:36 PM | 5 Likes Like |Link to Comment