High Density is an interview show where we try to articulate what it means to be great. My guests offer observations and insights into the transformation of business and society through technology.
Episode 2: Tim Bajarin
Tim recalls the beginning, middle and end of the PC industry and we discuss the causes of each.
Excluding Motorola, Google’s gross margins have dropped for six out of the last nine quarters. They peaked at 65.8% in early 2011 but have now dropped to 60.4%. Including the drag from Motorola they are down to 57%.
Gross margins include the effect of price, volume and direct costs of sales. Although sales have grown (see graph below), the pricing Google has been able to obtain (CPC) has fallen. The cause is unknown but there is a strong correlation between the growth in their mobile channel. For their part, management cites mobile as having an effect in reducing CPC though they caution that it’s one of many factors. Continue reading “What's an Android user worth?”
As Intel has improved its products, their demand has decreased. Enormous efforts put into improvements are neither valued nor absorbed. The problem is not with the processors themselves but with the systems within which they are built:
PC sales fell again last quarter and the contraction is likely to continue. We received affirmation of this as Intel cut sales and earnings forecasts and the crucial capital spending that creates supply in the longer term.[1]
At the same time, computing device sales have soared.
Even excluding Android devices which don’t register with Google’s Play Store (and excluding Windows Phone devices), mobile ARM devices are selling at 2.6 times the rate of Intel-powered devices. Put another way, since the birth of Android nearly as many iOS and Android devices have been sold as PCs.
In terms of install base, a computing category that did not exist six years ago has come to overtake one that has been around for 38 years.
The calamity for Intel has been that they have had no part to play in the new category. Perhaps that is because they had every part to play in the old category.
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Notes:
… says UBS analyst John Hodulik, as quoted by the Wall Street Journal.
No they haven’t.
According to the latest comScore survey data, 98 million Americans above the age of 13 don’t use a smartphone as their primary phone. That’s 41% of US mobile phone users.
What’s more, 2.5 million more people first started using smartphones in the three month period ending May vs. the three month period ending in April.
The switching rate to smartphones is shown below:
Horace talks about Microsofts reorganization from Divisional to Functional, and the implications on their Windows and Mobile OS roadmaps. In doing so, he and Moisés touch briefly on the subject of last episode, Scott Forstalls ouster from Apple.
Apple has hired a new VP who will report directly to Tim Cook. Paul Deneve is cited as having responsibility for “special projects” and will report directly to Tim Cook.
The previous roles as a manager in luxury brand companies has led to a great deal of speculation about what new projects Apple could be working on that might also fit this new manager’s background and title.
The most commonly cited speculation is around the iWatch or TV product lines (with some surprised that he will not be heading Retail.)
Although reading “luxury product CEO” and concluding “new luxury products” seems logical, a little knowledge about how Apple is organized dispels this notion. And a little knowledge happens to be about all we have, as Apple’s organization is one of its most closely guarded secrets. Even employees at Apple have little idea of how the company is organized. What we do know is summarized into this org chart:
Continue reading “Understanding Apple's Organizational Structure”
Horace expands on last episode’s discussion of organizational structure, as well as his recent appearance on Screen Time with Guy English. We begin speculation on the job iWatch would be hired to do, and preview the relaunch of High Density.
via 5by5 | The Critical Path #91: Apple’s Douglas MacArthur.
Last week BlackBerry announced that it had 72 million subscriber accounts. The current market capitalization is $5.4 billion and enterprise value (i.e. excluding net cash) is about $2.8 billion.
That implies a net present value of about $40 for each account. This is quite a drop from early 2010 when the value was $866.
The graph of BlackBerry subscriber accounts and EV/account is shown below:
I’ve also added a graph showing a derived value of US consumer BlackBerry users (derived from comScore’s survey data).
There are several patterns which intrigue me: Continue reading “What's a BlackBerry user worth?”
Horace Dediu and Guy English join Moisés to look at the rallying forces in the arms race for content. Does Apple have too well-entrenched a lead? How will their gaming strategy compete with traditional consoles? How and why would they make a TV set?
Horace investigates asymmetric organization structure, and how Apple’s functional vision of careers and jobs differ from most tech companies.
