Tuesday, September 08, 2009

Exciting Times! Read Your Snoogle!

Sony Corporation is the grand old name of transistorized sound machines.  Sony did not invent the transistor or the transistor radio, however, Sony was an early licensee of the transistor and the first to sell transistor radios at a profit. From 1955, until recent years, Sony was the sound machine leader.  The Sony Walkman was the portable music device of choice, until Apple took a dominating lead in both Internet enabled phones and music sales.  Sony still has almost double the revenues of Apple, but Apple's growth rate has been huge.  Since the top of the Internet 1.0 bubble, shares in SNE have fallen in price by 80%; shares in Apple have climbed 520%!

IBM is the grand old name of computers, but Microsoft has held a virtual PC software monopoly for almost 30 years.  Apple could have been in Microsoft's shoes, but, while Apple has always made great products, it has failed to share the wealth with enough partners to make its software the primary choice. Most consumers of computers are not willing to pay the extra price to own an Apple. The exception has been the iPhone.  

Microsoft fought a good fight, but, for various reasons, it has not been able to transfer its dominate role in PC's to mobile computers (smart phones).  Many a company made money by partnering with Microsoft in the PC business, including Dell and Intel.  The Microsoft partners in the mobile market have not done well either. By all accounts, Windows 7.0 is a major improvement. Sales of PCs will climb when this latest version comes installed, but Microsoft recently moved toward the mobile standards being set by others.  

Google started from a long way back, but is making a big move in the mobile computing arena. If Apple is to the right of Microsoft in working with partners, Google is far to the left (Apple and Google have worked for common benefits against Microsoft). Google has shown no inclination to build  a competing machine for the Zune or the iPhone.  Instead, Google offers free software to any company that will build competitive machines.

Hardly a day goes by without another hardware company announcing plans to make machines that run off Google software.  Sony is perhaps the most important hardware manufacturer to make deals with Google.

I enjoy using Google Reader to fetch the news.  Google Reader is constantly working for me, loading-up with blogs and news feeds that I have not read.  It is ironic that the search market leader allows me to spend my time reading rather than searching.  I would love for my Google Reader to be mobile.  Sony to the rescue!

Sony has announced several new electronic reading pads. The one coming to market soon will offer mobile Internet access to at least 1 million free books, scanned for free by Google, and lots more. One of Sony's assets is its movie portfolio. Google has plans to offer movies via its YouTube service.  YouTube and iTunes are direct competitors but, heretofore, YouTube was for desk tops.   Tomorrow, Apple is likely to announce a new, more powerful, iPod and it may finally be ready to announce iPads, larger versions of the iPod, but it is the Sony-Google Book, Movie and Internet Reader that I am looking forward to having.  My name for the product is Snoogle.

No Recession in Electronic Land!

Over the past two years, AT+T has spent 38 billion dollars trying to keep up with mobile Internet traffic growth. AT+T and Verizon are both spending at the rate of 20 billion dollars per year on infrastructure and they are still falling behind.  We are on the leading edge of an investment boom like none other.  Apple and Amazon have each shown the path to this Internet Boom.  Year over year traffic growth is in the 300% range. In the second quarter alone, streaming video grew by 70%! Production of low power consumption OLED screens are projected to grow by 800% over the next 4 years!  Despite the gloom and doom you are hearing from your friends, neighbors and the media, consumers have piles of money and they are ready to spend them.  

A lot of "stuff is happening".  Growth in playing games over the Internet is another phenomenon. Tomorrow, the Hasbro - Google Street Edition of Monopoly will begin.  A year from tomorrow, I will be surprised if less than 50 million people are playing this game and I will not be surprised if 200 million people are playing!  A few days from now, Motorola is expected to announce more than one new Google device and on the last day of the month, the Google Wave will "go live" to the first 100,000 people (outside the developers sand box).

By offering software free, Google is paving a profit path for top manufacturers of electronic products.  Folk the typical smart phone has more computing power than the computers that NASA used to send man to the moon!  This computing power can be bought for less than $200 when attached to a 2-year wireless service agreement.  85,000 software applications,  that would have once been priced at an arm and a leg, are now available, many of them free or for 99 cents. Today, about 4 billion people own cell phones and only a few million own smart phones (my guess is less than 100 million). In 10 years, my guess is that about 5 billion people will own smart phones (or other mobile computers)!  Since each the total price of these phones, including service fee subsidy, averages about $500, the 500 billion phones will amount to about 2.5 trillion dollars of investment.  The infrastructure needed to support those phones will be at least as much.  A few trillion here and a few trillion there adds to serious money.  

The other day, when Google's logo showed a spaceship making off with an O, I thought about the close relationship between Sony and Google.  The name Sony is partly derived from the word sonny.  I wondered if a spaceship made off with the extra N. I seriously doubt that there is a merger of Sony and Google in the cards, however, a Sony Reader with a Google Reader Feed, a YouTube Feed and a Google Book Feed, running Google Chrome OS would be at least half Google.  A good name for it might be "The Snoogle Reader".    


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