Some tech rivalries are win-win
Forget iPad vs. Kindle or iPhone vs. Android. Amazon, Apple and Google are the future, and there's room for all of them to succeed.
This economy is not a Wild West town. There is room for more than one player. I am thinking of Intel (INTC) vs. Arm Holdings (ARMH) and Amazon (AMZN) vs. Apple (AAPL) and Google (GOOG) vs. Apple -- three rivalries that may very well not produce any losers at all.
It is tempting to believe -- and I know I have at times wavered on this -- that Arm Holdings, with its Apple relationship and its intellectual-property licensing model, is going to stop Intel's made-it-and-built-it strategy. I have been tempted, because Intel is linked to the personal computer and to Microsoft (MSFT) software (even though it has an Apple model for desktops), while Arm Holdings' chips use little battery power, courtesy of its decision long ago to concentrate on the smaller cellphone form factor, not the larger PC-based form factor.(Microsoft owns and publishes Top Stocks, and MSN Money site.)
But you know what? While the Intel market is slower, it is gigantic, and it is moving into smaller form factors -- witness the Ultra discussion on the conference call. Intel is cheap. It generates a monster amount of cash flow, and that dividend is going to keep going higher.
Arm Holdings has a ton of share to take and a terrific model, but it is pricey. My take: You want income and consistent growth? Intel is for you. You want high growth with all the high risk that comes with it? Go with Arm.
People were disappointed this week with Amazon. I am not. I see what Amazon has to do. It has to destroy brick-and-mortar retailers worldwide, not just in the U.S., and for that, it must hire like mad and build fulfillment houses at a blistering pace.
It also has to stay ahead of the game against Apple with the tablet, and yes, Barnes & Noble (BKS) with the Nook, and I think the Kindle Fire will do just that. With a price point below the cost of production, it will sell extremely well. Amazon is going with the razor-and-razor-blades model of Gillette, and I say "brilliant" -- that's what is needed.
So I am not concerned about short-term margins or profitability. This is one of those dips you have to accept if you own the stock.
Meanwhile, I see Apple doing everything right going forward, even as I did not like this quarter, and when it comes to numbers -- not product line -- I am a little concerned. But that's why the stock sells at a ridiculously low multiple. Many people have misread me on Apple, including the Twitterrati. I had a model for Apple. It said that the company could earn more than $45 per share in the 2012 fiscal year. It now appears that the company doesn't have that earnings power. That's what is disconcerting to me. But I am not worried about competition from Amazon.
I would normally be worried about Google and Apple, because I think Android remains a winner, and I think it can battle the iPhone in the smartphone wars. However, as with Amazon vs. Apple, there is plenty of room for both. The smartphone share-take is the biggest story globally, and Android and the iPhone have plenty of room to crush others and move to a duopoly of world domination.
In sum, there's room for all because the rest of the competition is being crushed, not these three players. They can all be bought when they go down. They are the future.
At the time of publication, Cramer was long AAPL.
dumbo actually made a call yesterday.he said not to buy the up open because it was
a "sucker's play". of course he was wrong as usual.now today he says the pullback
after the recent rally will be "cushioned by hedge fund buyers". that should mean when the pullback begins.............look out below
HOW CAN SOMONE BE SO WRONG SO OFTEN AND KEEP HIS JOB?
Future of what Jimmy boy? "courtesy of its decision long ago to concentrate on the smaller cellphone form factor", they concentrated on RISC chips therefore lower power consumption. It's all about disintermediation and globalization. If you can eliminate the distributor and seller then you can offer same product at less cost; Amazon, Apple, Ebay, Expedia, Fidelity, Netflix, Schwab, Orbtiz, Walmart, Wintel. So Microsoft will offer their software on both ARM (NVDA, QCOM, TXN) and X86 (AMD, INTC) chips for all PC forms including phones and tablets. That benefits ARM, Dell, HP, HTC, Intel, Microsoft, Nokia, Samsung and Toshiba. Wonder who it will hurt?
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All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
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