May 4, 2012
7 Gadgets Retrofitted for the Future
 Imagine if the phrase “Everything old is new again” applied to technology — that consumers suddenly grew bored with intuitive design and began to hunger for, say, the touch of a bulky button or the sound of a dial-up modem. Well, as it turns out, gadget manufacturers have found a niche market in tech nostalgia. 56K Modem Simulators Maybe it’s just me but the screeches, pops, and hisses of the Internet connecting of yore isn’t the stuff of wistful memories. They’re the tech equivalent of nails scraping on a chalkboard. I don’t fondly recall the carpal-tunnel-inducing exercise of clicking the “Connect” button over and over while competing with other users for server space on what was then called America Online (AOL). Of course, once you actually made it onto the World Wide Web, you barely had time to type in (more)…
April 30, 2012
Facebook: Just an Overpriced Combination of Google and Zynga
 If Facebook (FB) launches with a $100 billion valuation, Mark Zuckerberg, with a controlling stake of the company, is personally worth $50 billion to the platform. That’s the only takeaway one can have after looking through Facebook’s latest IPO registration statement, which showed continued decelerating growth in the company’s two revenue drivers, advertising and payments. The law of large numbers appears to have caught up to Facebook early, as sequential and year-over-year growth have dropped significantly in the past two quarters. When Facebook was growing revenues over 100% per year, it was okay to give the company the benefit of the doubt and throw a fat multiple on what it was taking in. Now that such hypergrowth has stopped, at least for the time being, it seems fair to compare its revenues to its peers. Facebook can be thought of (more)…
April 27, 2012
Apple to Bears: Drop Dead!
 Yesterday morning, heading into Apple’s (AAPL) fiscal second-quarter earnings report, I opined that things were starting to look dicey for the most important company in the world, relative to last quarter, which had a seemingly non-stop stream of positive anecdotes and news items. (See: Apple: Earnings Are Coming, and Things Are Looking a Lot Dicier This Time Around.) As it turned out, Apple didn’t skip a beat. It walked right up to the mouth of the bear, stuck a shotgun in, and pulled the trigger. Apple’s numbers were incredible. Beautiful. Stupendous. Monumental. Super-duper. Killer. Awesome. You get the point. For the second quarter, Apple reported a profit of $12.26 per share, smashing the consensus estimate of $10.06 per share by a whopping 22%. Sales were also very strong at $39.2 billion, easily surpassing Wall Street’s expectations for $36.8 billion. iPad (more)…
April 23, 2012
Copper Set for a Bounce
 Although copper hit a three-month low last week, the price of the red metal may be set to move higher heading into the second half of the year and looking ahead to 2013, say commentators. Copper for April delivery ended last week at just over $3.62 per pound on the Comex division of the New York Mercantile Exchange, representing its lowest level since January. On Wednesday, copper was trading at a similar level, representing a gain of just over 5% year-to-date. Peter Ghilchik, multi-commodity manager with CRU in London, which is hosting the World Copper Conference this week in Chile as part of CESCO week, says that weaker demand from China in the first half of this year has certainly been slightly reflected in copper prices. However, he says CRU expects that sluggish growth in the first half of 2012 will be reversed in (more)…
April 20, 2012
Cybersecurity Investing Amid Growing Tech, IT Security Risks
 Earlier this month, Americans were alarmed to learn that hackers had stolen nearly 1.5 million credit card numbers from Global Payments (GPN), an Atlanta, Georgia-based payment processor and former Visa (V) partner. Such stories have appeared in the news with increasing frequency, and it’s not just large corporations being targeted by cyber criminals. In fact, small organizations, such as physicians’ offices, saw the greatest number of data breaches last year. In a separate investigation, Verizon’s (VZ) annual Data Break Investigations Report examined 855 account breaches from around the globe and found that criminals compromised 174 million records in 2011. For investors, these stories point to an obvious trend: Cybersecurity stocks, already hot, are likely to continue gaining heat. Global spending on cybersecurity products and services is expected to exceed $71 billion by 2014, according to Gartner (IT), an information technology (more)…
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April 13, 2012
Did Facebook Poach Instagram Away From Google?
 A billion dollars is a nice round sum. It’s about 1% of what Facebook is worth, if its initial public offering goes as planned. But what exactly does Facebook get for its billion dollars with the purchase, announced Monday, of photo-sharing network Instagram? Instagram, which is only two years old, reportedly hasn’t turned a profit yet. It has 10 employees, or maybe 13, depending on which source you check. It has about 30 million active users, which is about 6% of Facebook’s user base. It was valued at about $500 million for its latest round of venture capital funding, according to Bloomberg News. Surely Facebook didn’t buy Instagram just to infuriate Instagram users, although many of them seem to be truly appalled by the news. Most other observers seem simply startled, but various thoughtful people have come up with the (more)…
April 12, 2012
Are Olive Garden’s Discount Prices Starving Darden Restaurants?
 Back in the early to mid 1990s, Olive Garden was a fast-growing restaurant concept. It was priced at the low end of casual dining concepts, perhaps above the bar and grille sub-segment, which is the traditional leader of the low end of casual dining. Looking at the Italian chains back then, there was a pretty well-developed, I felt, pecking order: Macaroni Grill was a step up in terms of food and check, and the then newer Carrabba’s chain was another step up to the top of the segment. Along the way, Macaroni Grill had some business missteps that let Olive Garden, whose parent is Darden Restaurants Inc. (DRI), become the undisputed number one national Italian chain with all of the economies of scale attendant to national advertising, name recognition, and share of advertising voice that follows. One of the things (more)…
March 30, 2012
Airline Consolidation Brings Turbulence to Elite Flight Status
 It’s fair to say the airline industry has taken a battering over the past decade. Rising fuel prices, 9/11, economic crises, constant fare wars, and the emergence of discount carriers like Southwest (LUV) and JetBlue (JBLU) have all taken a toll on the profitability of airlines both domestically and internationally. In a tough adapt-or-die environment, where airlines routinely file for bankruptcy, the industry has witnessed aggressive consolidation to cut costs and increase revenues. Delta (DAL) and Northwest merged in October 2008 to become the largest airline in the world, only to be unseated by United and Continental’s (UAL) announced merger plans in 2010. This leaves American, which filed for bankruptcy last year, and US Airways (LCC) as the only remaining legacy competitors. The implications of airline mergers are vast: Previously competing airlines can now streamline their services, potentially increasing efficiencies. (more)…
March 23, 2012
Microsoft to Rollout Windows 8 and Tablet Strategy to Challenge Apple
 Sometime in April, Microsoft (MSFT) is going to meet with its technology partners to talk about the rollout strategy for its new Windows 8 operating system. Details are TBA, but one thing is a pretty safe bet: The product had better be on the store shelves in October, the drop-dead date for the 2012 holiday shopping season. A lot of companies, Microsoft not least among them, are counting on it. Windows 8 is a radically redesigned operating system that is intended to be dual-purpose, working equally well on portable touchscreen devices and on workhorse desktop PCS that use a keyboard and mouse. The business strategy is dual-purpose as well: Microsoft and its allies are hoping that tablets running Windows 8 will be the serious challenge to the Apple (AAPL) iPad that tablets running on Google’s (GOOG) Android have failed to (more)…
March 9, 2012
Exposing the Google Android Tablet Market
 The most under-covered story in technology is the sorry state of the Google (GOOG) Android tablet market. While I’ve detailed how the Android smartphone market is more or less dominated by Samsung (see: The Samsung Bull Market Just Replaced the Android Bull Market), in the wake of Apple’s (AAPL) new iPad, it’s time to take a deeper look at the tablet market — especially since the research firm IHS-iSuppli just filled us in with key piece of Android tablet pricing data. Let’s look at two charts I recently published here on the ‘Ville detailing tablet market-share data, courtesy of Strategy Analytics. (See: With Apple iPad 3 Coming, Android Tablet Market Should Be Shaking in Its Boots.) First, we’ll look at the broader tablet market, which as we all know is dominated by Apple and Google: But now let’s break up (more)…
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