Big name tech companies are burning through billions of dollars as they try to scale. The promise is that they will one day look like Amazon, dominating markets and sporting massive levels of cash flow to reinvest.
Economic and market themes: 2014-10-24 Technology earnings, Chinese housing and European hopelessness
I have three areas I want to explore today: earnings reports, China and Europe. The earnings reports are mixed but generally good enough to support continued job growth and economic momentum through this fourth quarter. I also want to deep dive on tech companies. On China, the slowdown is all about housing. And in Europe, there is zero sign that political differences can be smoothed over without crisis.
As a technophile, I follow the tech space assiduously both in terms of products and trends as well as companies and strategy. Every quarter that Apple announces, I have made it a habit of commenting on their quarter, because they are the largest technology company in the world. This quarter, I thought I would add IBM and Amazon to the mix because there are important takeaways from their earnings as well. With Apple, the question is innovation and dependence on the iPhone. For IBM, the question is real earnings versus financial engineering. And for Amazon, the question I want to address here is net income versus cash flow.
It’s been a while since I did a multi-theme review as I used to do on Fridays but there are a number of threads out today that deserve mention. So I want to pack them into an economic and market theme post today. Market meltdown. First, the market meltdown from […]
Ukraine is at risk of becoming a failed state
China’s growth is due to stimulus
Japan’s macro figures worsen
Microsoft’s strategy is weak
Facebook is overvalued
Today’s post is about technology and the dynamics of market saturation. My contention over the past couple of years has been that the mobile market in developed economies was becoming saturated to the point that the economics of commoditization would come to dominate the market place. The implication for both […]
Amazon. It is a highly-valued stock in the equities market – one that many point to as proof of a burgeoning technology stock bubble in the US. But for all the controversy over valuation, it is undeniable that Amazon is a big force in the Internet. In my view, it […]
This past holiday sales season was weak for a number of retailers in the US. But, discounting was the culprit rather than poor demand by consumers. I see retail sales holding up but a shake out in retail is sure to come as the deflationary forces of internet price discovery put margin pressure on everyone.
In the wake of the NSA spying scandal, I have been moving my data away from large US vendors and increasing my computer security. Both of these issues needed to be addressed but the NSA spying scandal has made them relevant for me – and I suspect many others. This will negatively impact earnings growth, particularly at Google and Facebook, particularly for international and business revenue.
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.