Thomas Cole, "The Consummation of Empire", 1835-1836
(source: thevelvetrocket.com)
Pride, when
permitted full sway, is the great undying cankerworm which gnaws the very
vitals of a man's worldly possessions, let them be small or great, hundreds
or millions. - P.T. Barnum
If one looks only at headlines from a smartphone twitter feed, it would appear that High
Technology was having a banner year. The NASDAQ popped up to a new record level; Google stock recently exploded to the upside by more than 16% in a single day to hit its own all time high; and trendsetter Apple continues rolling out new smartphones, tablets and now smart watches. With VC and Wall Street money continuing to cascade into the coffers of Web 2.0 companies in the Bay Area and the city of San Francisco surpassing even Manhattan as the most expensive rental market in America, how could anyone say that "Tech" exuberance was in any way "irrational"? Yet only amateurs in finance surf waves. Surfers, after all, inevitably wipe out, get dragged across the reef and, on occasion, become shark bait.
https://www.youtube.com/watch?v=DPtlwoQDb-E
We've all experienced first hand how the Seven Seas of High Technology are subject to
sudden squalls and dangerous currents. Winds can abruptly leap up to tear the strongest canvas, and there are indeed monsters lurking in the deep. To navigate this ocean and cut along the crests with billowing sail while others flounder and wreck, we need to read those winds and waves shrewdly, employ sextant and compass with skill and climb to the crow's nest to keep a weather eye on the horizon. 
USS Constitution (source: captainsclerk.info)
This editorial series will once again study 17 companies in the
semiconductor, system and
software markets for High Technology. They all
provide a mix of hardware, software and
services as part of their offerings.
Together, these firms also serve a vast spectrum of end user
markets - the three C's of
Consumer, Communications and Computing, Mobile
Computing (which includes
smartphones, tablets and wearables), Datacenters
(including servers, storage and LAN),
ISM (Industrial, Scientific &
Medical), Automotive and Military/Aerospace. They are all
considered to be
either market share leaders or aggressive innovators (and sometimes both)
in
their sectors. Without question, each and every one of them can legitimately
claim to be
a bellweather of High Tech's current circumstances and a
harbinger of things to come.
We'll be looking at trends embedded in 8 1/2 years of
quarterly revenue data as well as
individual major announcements and
strategic initiatives. The companies are
grouped into categories so that we can make some apples to apples comparisons as well. Combined with an assortment of macroeconomic data, this treatise will also provide short, medium and long term projections for each firm and for the industry as a whole.
Please note: I don't own a single stock - not in these
companies or any other. The deep
hatred and suspicion of equities which my
grandparents learned from the Great Depression
was absorbed into my very
bones from when I was just a tot. Furthermore, nobody is paying
me for these
opinions - they're all my own, with no outside interests involved whatsoever.
Let's start off at the system level and look at some of the "ship of the line" companies in
the industry.
The Big Iron
 USS Missouri (source: Wikipedia)
The firms in this grouping are IBM, HP and Cisco. At the top
of the technology value chain,
these three venerable battle wagons are
indicators of the vigor of infrastructure spending for
high technology
worldwide. In a broader sense, they collectively measure the relative health
of the entire global economy.
The servers, workstations, mainframes, supercomputers,
routers, gateways, printers and
associated software & services offered by
these firms are pervasive. Every categorizable market segment heavily depends
on the offerings of these companies. One can even indirectly assess the
strength of the mobile computing market thru growth in backhaul connections
to carrier and LAN networks and, finally, to server farms - all sectors that depend on products from the Big Iron.
Below is a chart of quarterly revenues stretching back to
2008. Revenue in $B is on the Y
axis, calendar quarters on the X axis. The
raw data is quite revealing on both an individual
and group basis.
 IBM
Fires that shook
me once, but now to silent ashes fall'n away.
Cold upon the
dead volcano sleeps the gleam of dying day. - Lord Alfred Tennyson
IBM is a Titan amongst technology enterprises and actually
played a significant role in
shaping the history of the 20th century. Big
Blue employees have garnered more science
awards (including Nobel prizes) and
patents than any company in history. The company
invented DRAM, the
relational database, the PC, floppy and hard disk storage devices,
SOI
(silicon-on-insulator) and copper interconnect for semiconductor chips, along
with a
multitude of other technological marvels.
On the surface, IBM appears to be continuing along this path,
recently announcing the first
ever functioning 7nm microchip:
Yet the very fact that IBM would make such an announcement
subtly indicates what a
disaster the current executive team has made of this
once amazing firm.
Big Blue sold off its microelectronics operations to Global
Foundries earlier this year. "Sold Off" is in reality a malapropism,
as the company cut a check to GF for $1.5B to take the division off their
hands. Yet despite the divestiture of a group whose chips were a key differentiator in the performance of the company's servers, workstations,
minis, mainframes and supercomputers (a differentiation stemming from the way
the microelectronics group developed & characterized its silicon and
designed its chips, achieving higher performance, lower power, lower cost
and, above all, greatly superior data integrity from its microelectronics technology than the rest of the industry thought was even possible), IBM
continues to perform basic research in semiconductors. The results of this
R&D effort have at this point found use as a promotional vehicle.
In recent years, IBM has also publicly committed itself to
becoming a leader in Cloud
services. The choice was more than a little odd,
as Big Blue has never competed
successfully in price-sensitive markets.
However, Cloud computing has been a hot topic for
the past few years and IBM
has been using its presence in the segment as a promotional
device.
Finally, in March of this year, IBM announced an IoT
initiative with a $3B budget and a
2,000 person staff. A part of those
resources will be focused on software work to align its
Cloud services for
analytics and datamining/data science with IoT-oriented applications
and
clients. What the rest of the enormous budget will be spent on is left a
little vague. As
a market, the IoT is also considered to be extremely price
sensitive, raising questions
regarding exactly what it is that IBM could
successfully do in the sector. Nonetheless,
the announcement served to help
launch.....yup, you guessed it: a promotional campaign.
Contrast all of the above with IBM's revenue history, which
has been falling continually since Q4 2011 along a steepening declination.
During this period, Big Blue has also heavily
leveraged itself thru stock
buyback programs, giving its executives an opportunity to
unload options at
temporary highs and having their equity portfolios replenished after the
stock price settles back down.
At first one might understandably conclude that Big Blue's executive
management was
simply stupid, lacking even a basic understanding of the
company's technology base and
how it is integral to IBM's brilliant
century-long track record. But on further consideration,
it becomes apparent
that they know exactly what they're doing. Gini Rometty and her team
are
gutting IBM and cashing in on the remains.
Hardware engineering supremacy from chip, to board/blade, to
system and finally to cluster
is what made IBM invincible in High Performance
Computing. With its key customers in
the Finance and Insurance markets, the
quest for absolute perfection in hardware design
to eliminate any possible
sources of computational errors (an obsession bordering on
mental pathology
that also infected the company's software developers) ensured that nobody else in the industry - not Sun Microsystems, Dell, Unisys, DEC or any other
high
performance computing provider - could seriously challenge Big Blue's
hegemony in
datacenters and server rooms.
IBM's mania with lossless data processing left its rivals
shaking their heads at "ridiculously
over-engineered" chips and
servers. An IBM software engineer accusing another of writing
"lossy" code could be construed as an invitation to a fistfight.
Yet the Rometty gang deliberately rejected this illustrious
legacy, ratcheting back investments in chip technology and server hardware
& software development for the sake of flashy & sexy public
announcements and completely unsuitable new business ventures while heavily
investing in stock buybacks, clearly unconcerned with the accelerating negative trend in earnings. The evidence of their gross negligence is
incontestable - simply put, you don't drop 1/3 of your quarterly revenue in
three years if you're doing things right.
Rometty's reign has become one of plundering the enterprise
she was charged to
conscientiously foster and protect. It may be too late to
return Big Blue to its former glory, as
an enormous wealth of talent,
organizational experience and hard-won knowledge has
been frittered away. But
if this once mighty ship is to have any hope of remaining afloat, the
board
and shareholders need to take emergency action at this point and make Gini
Rometty
and her team take a long walk off a short plank.
Source: btx3.wordpress.com
Cisco
This is a momentous period for the networking communications
juggernaut. Though the
company did recover from damage to client trust and a
consequent three quarter revenue
decline triggered by the late 2013
revelation of NSA tampering with Cisco hardware
mid-shipment, the last 4
reporting periods have nevertheless seen company revenues flatten out and
stagnate.
The revenue data and the meek growth curve it reveals starkly
illustrates how Cisco
has prospered much less over the years than
macroeconomic trends would have suggested. The explosive growth of mobile
computing (both smartphones and tablets) should have had a pronounced effect
on Cisco's products - after all, literally billions of wireless devices were bought by consumers worldwide which accessed the internet thru a backhaul
connection to a basestation or access point, traverse a carrier and metro
network to a LAN and download web pages and/or streaming media from a
datacenter. That entire transmission path impacts the full gamut of Cisco's
offerings. Yet the repercussion to revenues has been mediocre.
Over the last year, Cisco has undertaken a massive internal
reorganization to finally
demolish the institutional barriers that have
allowed the firm to operate like a completely
disjointed amalgamation of
acquired companies. Over time, this should have many positive
effects
regarding quality, cost and service support for its hardware and software
products
thru standardization in design, modeling, QA&R and
manufacturing.
The company recently made another profound organizational
change - after 20 years at the
helm, CEO John Chambers has stepped down.
Will new CEO Chuck Robbins be able to drive the company's
organizational streamlining to completion and derive tangible benefits from
it? Is Cisco truly gearing up to participate in the IoT (or as they like to
promote it, the "Internet of Everything") or is it all hype? Will
Cisco software be properly tuned to support customer needs in maximizing
efficiency, throughput and utilization of installed networking plant to
reduce pressure on shrinking IT budgets for new equipment purchases, or will
the company have an open source SDN standard forcibly shoved down its throat?
Finally, will Cisco be prepared to jump into the opportunities that 5G is
likely to present - in particular regarding microcell deployment, WiFi
overlap and wireless network virtualization - or will it misread the
prevailing winds & currents and strand itself in the doldrums?
Though Cisco is now over 3 decades old, it cannot afford to
recline into a peaceful, quiet senescence as if it were a public utilities
company. Robbins does seem to understand that a tsunami of Big Data is headed
his way and that the company's wireless and wired hardware & software
will have to adapt quickly and dynamically in order for Cisco to rise above
the swell and surge thru storm-tossed waters. We'll simply have to wait and
watch further developments to gauge his success.
Source: johnlund.com
HP
When I shun
Scylla, your father, I fall into Charybdis, your mother. - Shakespeare,
"The Merchant of Venice"
Over the last 6-7 years, HP has been a tale of woe. Some of
the changes it has had to deal with include:
1. 4 CEOs
2. Layoffs that have shed 44,000 employees
3. Quarterly revenue shrinking from $33.6B in Q4 2008 to
$25.5B in Q2 2015
Earlier in the year I was becoming optimistic that Meg Whitman
might be able to keep this ship from floundering. Clearly she is taking
aggressive action to chart a course towards a viable future for the company -
the separation into Consumer (PC/laptop/printer) and Enterprise
(Server/Software/Services) firms seems to be on schedule for November and the
radical re-architecting of computer hardware HP calls "The Machine"
(heavily dependent on R-RAM and photonics) is apparently still a central
focus of their applied R&D.
Yet the revenue numbers tell a dismal tale indeed. Since Q4
2010, the revenue decline has been almost a flat line down & to the right
and in the last two quarters the trend has worsened.
The company is anticipating further layoffs before it
separates into two corporate entities - perhaps as many as 14,000. What is
inexplicable is why the company continues to waste cash in stock buybacks -
$660M last quarter and much more than that over the previous 18 months -
instead of investing in more R&D, new product development and capital
expenditures.
Though Whitman has a laudable track record in previous
positions and is obviously undertaking drastic measures to save HP, she has
failed to take one critical step: cleaning out the executive ranks. Instead
of fattening their compensation thru stock buyback gimmicks, Whitman needs to
realize that significant numbers of them represent 'talent' not worth
retaining and must begin tossing them overboard. Unless she finds the resolve
to do this, the separated companies will both continue to struggle, reducing
HP to a derelict hulk before long.
Source: imgbucket.com
Wintel
Montague Dawson, "The Flying Cloud" (source:
artrenewal.org)
A daring pilot in
extremity;
Pleas'd with the danger, when the waves went high He sought the storms. - John Dryden
Over the last 4 decades, Microsoft and Intel have triumphed
over competitive challenges and anti-trust attacks to maintain their throne
atop the PC world. Yet as the market for laptop and desktop personal
computers continues to shrink for the third year running, both companies seem
to be finding ways to avoid being sucked down under the waves along with it,
as the following revenue data clearly illustrates.
Microsoft
There are a couple of things in the Microsoft data that
immediately draw the eye - namely:
1. Revenues follow a consumer market pattern of spiking every
Q4.
2. If one draws a line connecting calendar quarters over the
years (Q1 to each successive Q1 and so forth), the trend is consistently
positive from Q3 2009 onwards.
What's even more amazing is that Microsoft continues to grow
despite taking a full broadside from the failure of its acquisition of
Nokia's phone business. The company has written off 95% of the $7.9B purchase
cost and is laying off 80% of the inherited employee base.
Some would conclude that this was inevitable, as a software
company has no business trying to develop and sell hardware. Yet such a
sentiment is without merit in the case of Microsoft. Surface tablet sales are
growing energetically in the face of a shrinking market and fierce competition.
Xbox sales also continue to climb vigorously.
On the software side, Bing search engine advertising revenue
is sustaining its push into Google's market share, while the Azure Cloud
service is maintaining strong growth momentum. What all of this tells us is
that Microsoft has found the formula to compete successfully in any high tech
market, whether it be a segment dominated by one or two strong players, is
highly price sensitive or is saturated and in decline. Stated differently:
under Satya Nadella, Microsoft has become a master of adding concrete and
differentiating value to its product offerings.
Bing's continuing success against Google's search engine hints
at a much broader long term strategic vision for Microsoft. Earlier this year I contrasted the efforts of the two companies in Voice
Recognition, Machine Vision and Artificial Intelligence, where Microsoft is
handily outmaneuvering Google in every respect.
Microsoft's work on the Hololens Virtual Reality headset
threatens to blow Google Glass completely out of the water. Furthermore,
liquidation of almost all of the Nokia assets is not being accompanied by a
shutdown of the Windows Phone effort. Microsoft has made it clear that it
will continue development of advanced hardware and software for smartphones.
Combined with its Surface Pro achievements, it is clear that Microsoft sees
itself as becoming a leading player in the convergence of smartphones and
tablets into a future Personal Processor that will serve as a centerpiece for
consumer interaction with the Web, the IoT and the digital universe to be.
What we are witnessing with Microsoft is a steady changing of
the guard between itself and Google. It would not surprise me in the least if
within the next decade Microsoft - once written off as an aging relic of the
dusty old PC era - switched places with Google as a harbinger and leader of
the Digital Age of the future.
Intel
Jan Porcellis, "Ships in a Storm on a Rocky Coast"
(source: commons:wikimedia.org)
I tell you naught
for your comfort,
Yea, naught for
your desire,
Save that the sky
grows darker yet
And the sea rises
higher. - G.K. Chesterton, "The Ballad of the White Horse"
While its erstwhile partner in the PC oligopoly sails towards
a bright and shiny horizon, Intel is still charting its course and struggling
against wind and wave. Despite ongoing success in datacenters and the effort
to broadly position the company as a 1st tier player in the nascent IoT
market from the chip level up to software for data analytics, earnings
continue to meander aimlessly after the Q3 2011 peak.
The voyage to calmer waters promises to be a hazardous one, as
Intel has evidently finalized its plans to lay off 3% of its 106,000 person
workforce and extend its hiring freeze (begun early this year) for an
indefinite period. The company announced that layoffs would be concentrated
in the PC group, which strongly suggests that any analysts predicting a
recovery in the second half of the year in the PC market are going to look
awfully stupid over the next two quarters.
Yet there is a silver lining - the layoffs are likely part of
a general reorganization that includes a massacre in the executive ranks:
Intel has been long criticized for having a very insular
corporate culture that has a poor track record in dealing with change. One
can see stark evidence of this with Intel executives who were carefully
groomed internally and then ventured out into leadership positions for other
semiconductor firms with almost universally disastrous results.
This insularity may have been necessary to keep the company
properly focused during the 1990's and the heyday of the PC market, but will
prove fatal to Intel should it continue in these times where comfort with
change, dynamism, risk-taking, flexibility and responsiveness will be de
rigueur for the company to prosper. The fact that the executive staff is
experiencing such a violent shakeout bodes well for Intel as a whole and
suggests that CEO Brian Krzanich - blunt and unsympathetic as he appears to
be - understands what needs to be done and has the resolve to carry it through.
A second silver lining can be found in the revenue history.
Though Intel is not growing like its historic partner Microsoft, it at least
is not taking on water and seemingly on the verge of being engulfed to slide
towards the ocean's abyss where the general PC market appears to be heading.
The company is, in fact, taking bold strides towards the
future. The Altera buyout is still on track and holds enormous potential for
Intel's prospective technology directions, as described in detail here:
Finally, the potentially revolutionary 3D Xpoint memory
technology announcement with Micron directly impacts all of Intel's market
initiatives, including the datacenter and the IoT:
Nobody really knows too many details about 3D Xpoint - whether it is a phase change memory, a variant of RRAM or something else. Both Micron and Intel are being very coy about the details. We'll find out eventually, of course. Considering the reputation of the two companies, it's very likely that this new memory technology will indeed be just as revolutionary as its initial promise suggests.
There is no shortage of incredibly smart people in the ranks of Intel. The company looks like it's doing all the right things in a long term strategic sense to remain the largest semiconductor company in the world thru the 21st century. In the short and medium term, however, Intel is evidently battening down the hatches, trimming sail and pointing its bow into the wind. For the moment I remain optimistic - but cautious.
Area 51
Certain Silicon Valley companies have had such an influence on
the direction of high technology that they become the stuff of legends. One
such fable that is whispered behind closed door conference rooms in San Jose
and Santa Clara is about a bona fide flying saucer alleged to have landed at
the notorious Area 51 Air Force facility north of Las Vegas, Nevada at the
end of the 1980's. These quietly muttered tales claim that when its crew
disembarked, they found jobs in the R&D labs of Apple and Google.
Source: cinemablend.com
Despite their diametric management styles, Apple and Google
have the same raison d'etre - to define the future of technology in order to
build a better tomorrow. They differ profoundly in their product
offering/technology mix and their revenue results, as can be seen below:
Apple
The holiday seasonality of Apple's revenues is even more
extreme than that of Microsoft. It has evolved into the kind of consumer
electronics giant that the likes of once-great Sony can now only dream of
emulating. Even mighty Samsung is merely a fast follower by comparison,
completely overshadowed and breathlessly scrambling to keep pace with Apple's
gargantuan footprints.
It was Apple who revolutionized the technology industry and
turned desktop PCs into consumer appliances thru the introduction of the
windowed GUI (though my inner nerd is still nostalgic for the old DOS command
line.) After a painful and chaotic 12 year period from 1985 to 1997, Steve
Jobs returned to the company he founded and made his previous success seem
trivial by completely changing the world we live in with the iPod, iPhone and
iPad.
To date, Tim Cook has done a credible job of maintaining
Apple's business momentum. The revenue numbers prove Apple's intuition is as
sharp as ever. The iPhone 6 grew not from an organic expansion of the
smartphone sector, but by stealing significant market share from rivals -
especially Samsung.
The runaway success of Apple's latest smartphone line hints
that the company may be able to maintain its current position as a force
shaping the 21st century (akin to the role IBM served in helping craft the
world of the 20th.) The appeal of the iPhone 6 and its larger screen -
originally greeted by most pundits with jeers and predictions of total market
failure - strongly suggests that Apple's developers have an instinctive
understanding of the imminent convergence of tablets and smartphones into a
portable Personal Processor. Such a product would completely up-end not only
the entire mobile computing market, but the desktop space as well. If anyone
can figure out the right combination of screen sizes, ports, modular wired
and/or wireless peripherals (one of which is likely to be some sort of VR
headset), functionality and (most critically) supporting hardware &
software technology for such a product within the next 5 years, it will
almost certainly be Apple.
Something else which points to the company's greater
clairvoyance of the future of technology is Apple's approach to AI. Following
in the trail first explored by Siri, Apple is focusing on AI functionality as
a capability native to mobile platforms. Having a sentient digital assistant
lending a hand in every aspect of your life and hauling around that
electronic 'pal' on your favorite mobile platform makes perfect sense. This
is in stark contrast to research underway at Google, Microsoft and other firms,
where the focus is on developing algorithms, databases and software routines
for an AI that would reside on large server clusters - an approach which
draws comparisons with sinister electronic brains such as the HAL9000, Skynet
and other unpleasant examples from the pages of Science Fiction. Apple's
approach is instinctively more appealing and, assuming they can get it to
work, almost guaranteed to attract a much stronger following.
Yet the company's short term prospects are distinctly
worrisome. The tablet market saturated in 2014 and is markedly declining,
with iPad sales suffering more than its rivals:
Fewer consumers are willing to spend their increasingly scarce
discretionary income on tablets. Furthermore, those who do are finding that
competitive offerings - which often combine laptop and tablet functionality
at aggressive prices - simply offer much more 'bang for the buck.' Simply put
- the Apple brand name is no longer enough to compensate for the poor value
proposition of an expensive and low functionality iPad.
Some had put their hopes in Apple finding a new consumer
electronics star in its Watch offering, but as predicted, those hopes are
proving to be ill-founded. Currently it appears that the Watch does not offer
compelling value over offerings from FitBit and other wearables competitors.
It was also anticipated that even the low end version of the Watch would
simply not find mass appeal among cash-strapped consumers and that the Watch
line would find itself limited to Apple technophiles and a subsegment of
fitness-obsessed high income consumers - a prognostication that is currently
proving to be judicious.
It would be reasonable to expect that Apple's revenue will now
resume the plateauing trend it was exhibiting before the iPhone 6 release and
the subsequent Q4 2014 spike. I forecast that Apple's Q4 revenues will not
exceed $60B again and will even go into a period of modest retreat until a
converged iPad-iPhone device hits the market - and such an offering likely
won't be available in the near term.
Google
Fortune, which
has a great deal of power in other matters but especially in war, can bring
about great changes in a situation through very slight forces. - Julius
Caesar
On the engineering/technology front, Google has indisputably
earned its place in the Area 51 category alongside Apple. The company's
search engine re-architected the Internet by vastly expanding its usefulness
to non-technology based industries as well as consumers. The Android
operating system was instrumental in making smartphones ubiquitous.
The company has released an array of other products and
services that are widely popular:
- Google Docs, which is a free competitor to Microsoft Office
- Google Maps
- Google Translate
- Google Earth
- Google+, a social networking service
- Google Chrome, a free web browser with small code size and
high functionality
- Google Wallet, a mobile payment application that has been
enhanced and renamed Android Pay
- The Nexus One smartphone
- Google Glass
There is much to praise about the above hardware and software
offerings - I even use most of them. However, all of them suffer from a
common problem: collectively, they've earned only a negligible amount of
money for the company. The hardware products have all failed in the
marketplace, while Google's software products are by and large free.
Google Glass is the latest in a string of new product fiascos.
Despite a very good ergonomic design, the product proved to have the wrong
combination of functionality and aesthetics for the wearables market. Glass
was a classic case of technology hubris, a 'build it and they will come'
product development which upon release generated concerns over invasion of
privacy, suffered heat dissipation problems and provoked fashion criticisms
that were collectively severe enough to induce Google to withdraw the product
from the market. Since then, distinctly less ergonomically attractive
offerings from Toshiba, Sony and Epson have made significant progress in
developing specialized applications, establishing market niches and building
customer credibility, leaving Google in their wake with torn sails, broken
masts and ruined rigging.
Winslow Homer, "The Gulf Stream", 1899 (source:
Wikipedia)
The company has also come under severe criticism this year for
spending a fortune on R&D without any tangible results to show for it.
Even some of its research efforts appear misaligned or lagging in
technological leadership. Glass has been overshadowed by not only its direct
competitors but by Microsoft's Hololens VR headset. Even Google's AI research
- a natural extension of its search engine capabilities - is being
overshadowed by Microsoft's own AI work, as discussed earlier in this
editorial in the Microsoft section.
Google has a terrible track record for releasing new
money-making products. It is still a one-trick pony with a gigantic
advertising business based on its search engine - which, incidentally, has
been steadily losing market share to Microsoft's Bing for a while now.
Granted, the search engine and advertising business still haul in trainloads
of cash. But when one compares Google's valuation ($436B, with a P/E of 29.93
as of 8/7/15) against that of fellow Area 51 member Apple ($659B, with a P/E of
13.36 on the same day), it's clear that investors have much higher
expectations of the company than it appears capable of delivering.
Uneasy lies the
head that wears a crown. - Shakespeare, "Henry IV, Part 2"
Earlier this year, Google hired Morgan Stanley's Ruth Porat as
new CFO, with a compensation package markedly superior to that of any of
Google's founders or other executives, including the CEO. At this point, I
can only conclude that the board of directors have set the stage for a
mutiny. It's worth noting that Q2 revenues were somewhat less impressive than
they appeared at first glance:
In what appears to be a last ditch attempt at indulging their fascination for R&D while finding a way to monetize it and also keep their jobs, Google has rebranded its company as a sort of technology conglomerate called "Alphabet" - basically Google surrounded by a satellite system of quasi-startups:
http://googleblog.blogspot.com/2015/08/google-alphabet.html?utm_content=buffer21d4a&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer Another failed product launch or a downturn in quarterly revenues will likely spell the end for one or more of Google's founders and see Ruth Porat take the reins as CEO of the new Alphabet. If this reorganization fails, the company will soon be pushed out of its technology leadership position by Microsoft.
...............................................................................................
There are still 10 companies in 3 groupings to review -
Nvidia, Qualcomm, Broadcom, Mediatek, STMicro, NXP, Infineon, Altera, Lattice
and Xilinx. We'll go over them in the next installment, and then conclude
with a macro overview and forecast from our favorite lady who lives on the slopes of Mount Parnassus.
_____________________________________________________
Postscript:
Dear readers,
I had originally submitted the above editorial to "Seeking Alpha", hoping they would use it and I would
consequently get paid something for writing it. They rejected it.
As a result, I'd like to ask a special favor from you. If you get a moment, send the link for this editorial to, say,
3-5 people you know who might find this of interest just to have some light fun at the expense of the
"Seeking Alpha" editors. ;-)
Thanks, my readers, for your support. I hope you enjoy these admittedly weird blogs. :-)
|
Thursday, August 13, 2015
High Tech "State of the Union", Mid 2015 Assessment - Part 1
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