Everybody loves a little competition. If I had my way, RIM would still be making competitive devices and Windows Phone 7 would be more developed. I have used Blackberry, Android and iOS extensively and after a few months with each end up wanting something different. My second cell phone was a Nokia 3310 and back then, Nokia was the real deal. Can the Lumia 900 rekindle their past as king of the mobile phones?
The once dominant Nokia has had some successes as of late. For example, The Lumia 900 is at the top of the Amazon best seller list above the Nexus and Razr Maxx. Hopefully this will bring more attention to the WP7 platform from developers, hardware manufacturers and most importantly, consumers.
Competition is a good thing, it drives innovation and keeps prices more competitive. As much as Google and Apple have dominated the market, I think there’s a chance for other platforms in the future. If Microsoft can launch it’s tablet OS successfully and attract developers, they may have a fair fight in the mobile battle. Gartner recently predicted that Microsoft will fail with their tablet OS (at least for consumers), but we’ll see. Let’s not forget that Windows Mobile was one of the most advanced mobile platforms before iOS and Android came along, the future is hard to predict with technology as we know.
I’m not sure this Lumia will solve all of Nokia’s problems but it’s certainly a key milestone for them as well as the WP7 platform as a whole. In the meantime, if you’re due for an upgrade, on AT&T and want to try something new, you can go pick one up for free.
Oh Facebook, how you’ve changed since the beginning…The biggest internet-company IPO is coming up. For the last several weeks, Facebook has begun preparing for it’s inevitable initial public offering estimated to take place in early May. Facebook has begun to cease trading of private shares on private exchanges. They are also preparing a roadshow to attract institutional investors for pension plans, mutual funds & hedge funds.
The recent development here is the ‘Book’s acquisition of Instagram for $1 billion in cash and stock. Many wonder how on earth the social photo app can be worth so much, but beneath it all there are 2 reasons why. The obvious first is their upcoming IPO. The second is that Facebook wants to become more dominant in terms of photo sharing and mobile markets overall. Instagram has a massive userbase. In terms of investing, Forbes says:
…investors may have been wondering, Why are we buying into a massive IPO for an Internet company with no clear (or massively successful) mobile strategy? Even if Instagram is not ultimately successful within Facebook, for big buyers in the IPO, it now looks like Facebook has a legitimate property in the space with tons of growth. This doesn’t mean Facebook bought Instagram just to appease these institutional investors. But it was a factor.
Via LA Times & Forbes
I read an interesting article in Businessweek today about a new high-speed fiber cable network that is being laid down along the Canadian shelf in the Atlantic ocean to connect mainframe financial networks in London & New York. The current top-speed transatlantic network is Global Crossing’s AC-1 which clocks 65 milliseconds round-trip – the new cable known as ‘Project Express’ (and funded by Hibernia Atlantic) will provide round-trip speeds of as little as 59.6ms. Of course your average internet user won’t notice this difference but high-frequency computer trading strategies require absolutely minimal latency and additional milliseconds can cost millions during a trading session. Ultimately, this may be interesting at a technical level but there will only be a few select individuals who are able to use this network as Hibernia Atlantic will charge a fortune to access it. This quote was interesting in regards to how these super-networks are viewed in the industry:
Some trading firms question whether these high-speed networks are worth the expense. “Nobody’s making extra money because of them; they’re a net expense on the industry,” says Manoj Narang, founder and CEO of Tradeworx, a firm that also operates a high-speed trading platform that handles more than 3 percent of the U.S. stock market’s daily volume. Narang says the only firms that can afford access to the faster cables are already among the fastest trading firms. “All they’ve done is impose a gigantic tax on the industry and catalyze a new arms race.”
Amazon.com is planning to open a retail store in Seattle in the new few months, the blog Good E-Reader reports, citing “sources close to the situation.”
Well this is interesting. It looks as though Amazon might be looking into competing in the retail space – you know, with actual stores you can visit? With a growing portfolio of e-reader and tablet devices as well as exclusive titles and publishing deals, Amazon could be primed to create a retail store front similar to Apple’s wildly successful retail outlets. This is certainly ironic – as soon as Amazon pushed Borders and ma & pop bookstores out of business, they are now looking to compete in the same space. A portion of this can be attributed to Amazon-exclusive publishing titles, which retailers Barnes & Noble and Books-A-Million will not carry in their stores.
With Apple now competing in the textbook publishing market, it certainly looks as though the amount of competition in this online store/retail store/publishing space is going to heat up in the coming months.
Image Via BusinessInsider
The financial and tech news sites have been buzzing about the Facebook initial public offering (IPO) over the last few days. For a private company that’s sitting on almost $4 billion in cash, what do they plan on doing with the extra $5 billion they hope to generate from the IPO? In the filing, Facebook gave a standard explanation of what it will do with cash it raises: “working capital and other general corporate expenses”. The company plans to focus on 4 key areas of improvement:
Mobile Revenue Strategy – Facebook was designed for computer browser interfaces, not mobile. With that in mind, they have not come up with a way to generate cash from its mobile applications. With people accessing the web more and more from mobile devices than computers, this is an essential challenge that FB must overcome.
Package More Data – With numbers of users growing (845 million + as of Tuesday), Facebook collects more data than ever. As this is their product, they need to find more ways to bring in content from other sites (Youtube likes etc.) and find better ways to package this data to sell to advertisers.
Streamline Advertising Strategy – Facebook is at the end of their experimentation period in terms of an advertising strategy. What they do well now is serving tons of display ads (28% of all US display ad impressions actually…) but eventually advertisers will want to know how to get leads from data on Facebook. One way they have talked about doing this is using “sponsored stories” to feed ads right into a users’ feed.
Hire Top Talent – Facebook mentioned in their IPO filing that they plan on continuing their strategy of buying smaller startups, shutting down their products/services and deploying their technicians on their own initiatives. It would be advisable for Facebook to throw in some attractive salary perks such as company equity
Image Via TechiesHome
There has been a lot of buzz recently regarding RIM’s flagship devices going the way of the Walkman or VCR – with Blackberry device sales plummeting in the US as well as repeatedly not meeting earnings estimates, RIM certainly looks to be in trouble. Recently, RIM’s board appointed a new CEO – Thorsten Heins to help clean up the mess. The new captain seems optimistic and has stated an interesting point at a press conference yesterday:
While RIM is growing in other countries, Heins conceded that its U.S. business is in need of a major revival after losing out to rivals like Apple Inc’s iPhone at U.S. service providers and corporations, where it once had a clear advantage among employees heavily dependent on its email service.
“In general I wouldn’t consider RIM as a turnaround candidate. It is a turnaround candidate in the U.S.,” he said. “We lost market share in this market quite substantially. That is something that we have to address.”
Most of the (negative) attention RIM has received lately is mostly US-centric, where we are seeing competitors such as Google and Apple’s handset sales skyrocketing. What I find interesting is in emerging markets such as Indonesia, Blackberry handset sales are actually growing quickly, even compared to it’s primary competitors. Take a look at the graphic below which shows growth in Indonesia vs. the US over the past several years. Competitor’s handsets such as the iPhone have high-end internals such as hi-res cameras, hi-res displays, dual-core processors etc. and the margins are much tighter in countries with reduced buying power. The other thing to think about is infrastructure – developing nations do not have the extensive mobile broadband networks that we do in the US and Blackberry handsets use far less data than Google or Apple-based smartphones.
In summary, I think RIM has lots of work to do to attempt to regain market share in the US but they are certainly not dead and will be around for some time. Many enterprises (specifically in the Financial/Insurance industries) are still heavily reliant on RIM’s handsets and the security that goes with them. There was also an interesting point in the Reuters article stating only 20% of US Blackberry customers are using the latest handsets, so this will certainly be a goal for them in terms of refreshing devices and making sure it’s customers are on the latest software versions.
Today marks a very important day in Apple history – the day it officially became the largest company in the world. After blowing out analyst expections for this quarter, AAPL climbed to nearly $450/share. Selling over 37 million iPhones in the last quarter, their market cap has reached $417 billion. Despite AAPL’s seemingly high per-share price, it is considered by many to still be a good buy:
Apple has “$98 billion in cash, 116 percent EPS growth, and a depressed valuation,” wrote Goldman Sachs analyst Bill Shope, who raised his 12-month forecast on the shares to $600 from $550. “Our target price continues to be based on a 15 multiple on our revised 2012 EPS estimate.
AAPL 1-Year Chart
Disclosure: I am long AAPL