On Friday I was partially correct on NOK. This morning NOK lowered their Q2 forecast citing a number of factors. The stock is (11.5%) in the pre-market. I said neutral on Friday; apparently it has lower to go. In the press release NOK is citing a number a factors including a mix shift to lower priced smartphones and pricing actions in the market by competitors as well as itself. I just struggle to see why anyone wants to bullish on the mobile device market unless you are AAPL, GOOG, HTC and QCOM. Competition is brutal and I think tablets will have a more significant impact that people think.
To compliment the NOK train wreck this morning, the Rodman & Renshaw analyst Ashok Kumar dropped coverage of RIMM citing a number of factors, but basically saying that product cycles are negative and the company is falling behind the product cycle marathon and is generally un-interesting.
Here is what we know about the mobile device market: NOK and RIMM have both preannounced negative in Q2. AAPL will release the iPhone 5 sometime this year. HTC has one of the best engineering teams in the business. Software is generally homogenized around Android and Widows Mobile. Device prices trend lower. If you cannot differentiate like AAPL, how is this a good market?
Interesting article in the WSJ describing how Activision Blizzard is planning to launch a Call of Duty online gaming service. Not a lot of surprise here, but the implications are interesting as content owners create distribution for their content whether that is games, movies, applications, etc. Service providers want to impose usage caps and force high volume users into upper service tiers and they will probably partner to create special service classes for content providers. For example, when you contract for broadband at your home, you will be able to add a monthly surcharge for a policy based connection to Netflix or the COD network or some other content. Just a random supposition on my part, but I think policy based SLAs will be a way for service providers to improve broadband margins.
* It is all about the network stupid, because it is all about compute. *
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