Monday, January 21, 2013

The Mobile Factor - Just this week!

Photo Courtesy Dominik Syka

Given the MLK holiday, I got a chance to catch-up on some detail on the events in the technology space this past week. Nothing big that I missed during the course of the week while I was 'snacking' on news throughout the day and week on my smartphone. This time around in my reading, I tried to keep an eye out for what lessons can one learn from the past or for an undercurrent in the week's happenings.

Starting with the news medium itself, this WSJ article about the impact of the digital medium for magazines particularly the tablet. Given the over-exposure of revenue to advertising (75%) in the print medium  and declining advertising revenue, publishers are looking to the mobile digital medium - the tablet - to derive more customer subscription revenue. With leverage i.e. digital subscription pricing in some instances being twice that of its discounted print subscription cousin. While digital subscriptions are in the single digit percentages today, the impact of the tablet is quite evident.

Five years ago or so, when I was choosing between a Plasma-TV and LCD-TV set, I choose Plasma. Turns out, so did Panasonic. My bet was smaller but for Panasonic the bet turned out to be expensive.  Closure of its plasma-TV factory in the midst of LCD domination is described in this WSJ article. In the race between Plasma and LCD, LCD became the mainstream technology due to broader application in other products such as, yes, mobile phones.

Or the excitement in the LBO industry around the vested interested parties generated rumors of a Dell buyout. Dell struggles are strongly correlated to the computing shift from PCs to smartphones and tablets. PC account for half of Dell's revenue but in the 4th quarter of 2012, Dell's shipments fell 20.9% and PC related revenue declined by 19%. Other lessons from history? Competitive advantages have a limited shelf life - Rivals catch-up as in this case with Dell's direct sales model and supply chain efficiency. New adjacent lines of business need to align to your core competence as in this case printers/TVs did not align with Dell's made-to-order customization competence.

Can Intel be far behind in terms of the impact of the PC shift to smartphones and tablets? This past week saw Intel's fourth quarter profit fall by 27% while investors grumbled about its capital investment plans. A deeper look at the dynamics of the chip making industry has the mobile factor in spades.

And then, Commerce. The increased use of mobile devices by consumers to comparison shop while in brick and mortar stores was a key area of discussion at the National Retail Federation Conference this past week.  EBay's revenue growth of 18% in this latest quarter was attributed significantly to enhancements the company made to the mobile shopping experience.

The mobile factor and just this week!

What's ahead? A lot but look for this.... In all this fuss about Apple growth prospects or lack thereof especially as related to the iPhone 5. I believe that an understated feature of the iPhone 5 is LTE technology and the associated speed of data download. iPhone 5 shipments and usage will correlate to increased video consumption. The video industry and associated sectors will see an impact of increased consumption in the months that follow.

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