An article in today’s Infoworld was quite bearish on Microsoft in light of recent trends, and they dumped a lot of the blame on Microsoft CEO Steve Balmer. Citing the flagging results turned in for the first fiscal quarter of 2013, the article rightly points out that while the overall revenue decrease of 22%ii was bad enough, the Windows Division’s 33% nosedive compared to last year’s same period was nothing short of disastrous.
With recent quarterly results released by all the major players in technology, some trends are emerging that are hard to ignore, although some company’s executives might like to. The move away from PCs towards smaller, mobile devices is a trend that is not going away. In fact it is a bigger and bigger reality as time marches on.
With some of the old-school stalwart companies like Intel, Microsoft and AMD turning in disappointing results for the third quarter, one doesn’t need to look far to see where that flagging revenue has gone. As these companies struggle, companies that are embracing all things mobile are picking up momentum.
Samsung has had strong gains, boasting a nearly doubling of their operating income for the third quarter, raking in $7.3 billion for the period. Its strength in mobile is evident in its sale of chips as well as mobile devices, including smart phones and it hopes sales of Google Chrome Books will have an impact in coming quarters.
Add gains by Verizon to the picture and the trend becomes even clearer. Verizon Communications piled another 1.5 million new devices onto contract plans in the third quarter, outpacing analysts expectations by 66%. That’s news to Verizon stockholders’ ears, as stock prices rise and fall as companies fight to meet analysts’ projections. AT&T and Sprint didn’t fare as well as Verizon, with both companies faring poorly compared to Verizon, but they have other factors in play aside from general trends into mobile. As the biggest U.S. wireless carrier Verizon still acts as somewhat of a proxy for overall industry trends when viewing the big picture.
Then there is Facebook, who says they are gaining footing in their advertising on mobile devices. The rumors of a Facebook phone have heated up again and they are testing the idea of their own mobile advertising network, even though many have been underwhelmed with their success in mobile advertising to date. Facebook is expected to only garner less than 3% of the mobile advertising market revenue in 2012, but it’s the potential they bring to the table with their gargantuan user base.
With PC chip makers flagging, Samsung and Verizon on the move, and Facebook doing a bit more than sticking their toe in the mobile advertising pool, the trends are starting to become a little clear every day. As smart phones get smarter and continue to be imbued with more and more horsepower, people are doing a lot more than they used to on their phones, leaving their PCs with less importance in their overall technology lives. Things change every day in the technology sector, so stay tuned.
