Friday, 15 March 2013 08:25

Samsung's Galaxy S4 Flagship Device Is Outed, What Does It Mean For The Industry? SoothSayer Speaks Truth To Tech! Featured

As I State Previously, Apple Is Done, Samsung Sets the Bar, and Hardware Still Looks To Be A Razor Margin Business In a Few Years If Not Less. The HTC ONE and the Galaxy S4 are the most feature packed portable devices available today. They are (presumably with the Galaxy) being offered at the same nominal prices as their predecessors were last year, yet offering dramatic upshift in technology. Can this be sustained? The tech capability ramp up has been on a tear over the last 4 years! Within a couple of years, the Chinese/SEA OEMs armed with Google's open sourced Android OS will force margins so close to zero as to have the mobile handset business make the traditional PC business look like Apple.  Until then, we get to enjoy the feature enriching, price compressing battle between vendors to gain maximum market share - benefiting consumers to the utmost. As I read the many reviews of the just announced Samsung Galaxy SIV, I still see rampant comparisons to the Apple iPhone 5 and upcoming 5S. Apple is done (What Sell Side Wall Street Doesn't Understand About Apple - It's Not The Leader Of The Post PC World!!!), unless it dramatically ups its game in terms of technical prowess, features and marketing - all activities which will compress margins, as I've been asserting for two years and running.

Following up on Deconstructing The Most Accurate Apple Analysis Ever, I am offering subscribers an updated valuation of Apple now that it has fallen to EXACTLY where I warned subscribers in October (the week of its all-time high of about $707 it would fall) to. After playing with the iPhone 5 for about a week, I told subscribers to expect the stock to bounce up against the pessimistic band of our valuation analysis. Apple last traded at $420, this is how I put it 5 months ago...

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Blackberry's new Z line has been used as a comparison as will. Although I haven't tried the device, I hear very good things about it. That's good on a device-specific level, but I'm doubtful that Blackeberry can compete in this margin compression race, putting out revolutionary products every year for less and less money. In addition, marketshare/mindshare has been more than decimated. With the advent of the Z10, et. al. Blackberry has shown it still has the chops to compete short term, its medium to long term that concerns me. Since I doubt I'm the only one that feels this way, this makes Blackberry an interesting target for a thin margin, enterprise specialist OEM that doesn't have a strong handset presence in the US. Someone like Lenovo, Asus or Acer. Lenovo and Asus would be more interesting, and an Asus acquisition of Blackberry could pose risks to competitors who are not paying attention. 

Even an enterprise software company can do damage, particularly one who's aggressive and has not ties to Android (unlike the hardware OEMs Lenovo and Asus). Aggressive + enterprise + software = Oracle! OF course, Microsoft should have bought Blackberry(RIMM) 10 years ago, but that's a different story. 

For those who don't understand why this space is so competitive and why margins are destined to dive toward zero (actually, they already are for ALL operators in this space, profits are increasing due to revenue expansion in an expanding market, margins are going in the opposite direction, even for Samsung - the market leader, see Samsung Will Be Ready To Do That Fruit Thing, Just Like Blackberry & Apple - Courtesy Of Google, #MarginCompression!)....

HTC 's One phone is also compared, and HTC has often produced competent, if not superior, hardware. The problem is they don't promote and market heavily enough, so they achieve (at best) one hit wonder status. The company has also made many errors attempting to buy brand status vs building brand status organically. In essence, they're still acting as contract manufacturers versus acting like a successful standalone OEM and marketing concern. If only....

The wild card in this space is also the company that started this competitive melee in the first place and the company that stands to benefit the most - Google. 

I also laid clear the path to Google's prominence as far back as 2010, when there was not a peep from the sell side, see Google's Q4, 2012: This Looks To Be The Leader Of The New Distributed Information Paradigm .

Now, Samsung seems to be the most innovative of the handset vendors to date, but if I'm right, they will end up having to innovate in a commodity space just like the traditional PC manufacturers (Dell, HP, etc.) have to do now. Why?  Because of point number Three...

The new PC is not even a PC anymore, its a multi-tiered, multi-function, distributed cluster of interactive, location aware, multimedia applications sharing your social activities and data through a network of servers - in short, it's the cloud!

For right now, GOOGLE IS THE CLOUD! See my video descriptions of Google's business models above.

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Last modified on Friday, 15 March 2013 10:31

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