Friday, October 19, 2012

The Tech Giants Stumble


This article states that these companies have failed technology transitions.  But my experience indicates that they are just in the line of all the companies that have failed margin transitions.

When a company starts up, it decides on a certain margin for its products.  The whole structure of the company follows that.  For example, pre-PC DEC and IBM had something like a 200% margin.  They died when Microsoft and generic PC's went to 100%.  That's because at 200% you have all these schmoozing salesmen, and big wasteful R&D.

So Dell came in a certain margin, and died when the margin went lower.  Likewise, Google has enjoyed a huge margin with desktop ads.  They threw money everywhere!  Like many, I live off their give-aways, and never buy the stuff that pays for it.

Now the margin gets cut again with mobile, since nobody goes shopping on their phone.  I don't even shop on my Nexus 7 tablet!

This blog lives off the Google margin, I wonder what will happen....

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