Credit Writedowns

Google’s big developer conference began yesterday and we heard a lot of news about what Google has planned over the coming months. However, the big highlights centered around the Android platform. As I have indicated over the past 4 years, I believe Android will continue to take share and the announcements from Google I/O only further this view. However, more than that, with 75% of new handset sales going to Android, now there is the real threat that Android could become the Windows of mobile.

Gartner’s latest market share results are in and they show Google’s Android operating system gaining significant market share in Q1 2013 to nearly 75%. That is a jump of almost 20% in just one year.

The mobile emphasis is insidious because I almost don’t notice that mobile is an angle n nearly every story I see. And when I write mobile, I don’t mean smartphones – or ‘handheld computers – as Newt Gingrich calls them in the hilarious link below. What I mean is mobile-based computing – and that’s mostly about adopting cloud-based content delivery systems, whether you’re talking about Google, Verizon, Vodafone or Microsoft.

I keep going on and on about how mobile is where the technology industry is moving. So clearly the access/telecom end of that is going to be important. The T-mobile move to unbundle the handset subsidy from the telecom monthly fee is a bold move forced onto the company by its lack of scale and resulting subscriber losses. Nevertheless, I think this is going to usher in a new period of margin erosion in both the hardware and access markets.

Microsoft is getting a bit of black eye in the press due to its about face on the Ambitious Windows 8 platform change. While the unit numbers match up well against Windows 7, there has already been quite a bit of noise about how steep the learning curve is for the operating system. Apparently, Microsoft agrees and is doing a major re-vamp. SOme people are calling it the biggest consumer product about face since New Coke. Could be. The question is whether Microsoft is making the right moves and whether this will keep the stock from floundering. I think these are the right moves and I will explain a bit why below.

I have a few threads on tech that I am going to breakup into multiple posts here. The first two threads are on Adobe’s move into a cloud computing-only based software model and on Nokia’s dogged pursuit of the windows mobile platform, now going down market into the bargain basement bin. Both of these are important signposts on where the technology industry is headed and how future business will be conducted everywhere.

Today’s daily commentary is going to be on technology. Over the past few years, I have been writing here at Credit Writedowns that we are in the midst of a massive platform shift in technology toward a mobile-centric world. As Michael Whalen put it in2010, the future of technology is streaming content to any deviice, anywhere and at any time. This platform shift to mobile is built on the back of cheap and high-powered mobile bandwidth, something that was not ubiquitous just a few years ago. It makes video streaming, cloud storage and all manner of Internet-centric business models possible and it is what is driving the move to a mobile world.

Amazon, Apple, and Samsung, three of the biggest names in the technology space, have reported this week. In all three cases, there were gaps in the earnings reports and the earnings outlooks. For me, however, Samsung’s report was the best and Apple’s was the worst. And this is meaningful for investors in US markets.

I just want to follow up on my comments from Tuesday on consolidation and convergence in the TMT arena. There has been another slew of reports out in tech world showing that all of the big players are jumping into each other’s turf in a quest to ‘gatekeep’ the content that we view and use.

What I am seeing is a second great wave of consolidation in the industry. And by that I mean that every large company is getting into the traditional space of every other large company. Let’s go down a sample list of some of the changes that are afoot.

While I was on my Easter break, I came up with what I think is a good format to both reward paying subscribers of Credit Writedowns Pro with good content and post outside the paywall at the same time. I have been toying with various ways to start this post and haven’t really fixed on the right way to approach it. So I will just write and see what comes out on the other side.

I have been meaning to write a blurb about Amazon ever since I saw a great article on the benefits of Amazon’s low-price strategy a month or so ago. But a recent article in the Wall Street Journal about huge price cuts on Amazon’s top-of-the-line tablet has finally galvanized me into action. Here are my thoughts.