The Problem With the PC Business
Putrid quarterly reports from Dell (DELL) and Hewlett-Packard (HPQ) bring into the spotlight fundamental problems with the PC business. Investors are asking very serious questions about these two names, as well as Microsoft (MSFT), the most important being whether they can stay relevant as the electronic device market evolves. All have massive cash balances and current earnings ranging from paltry (Dell) to flush (Microsoft), but all face existential threats from the new four horsemen of technology: Apple (AAPL), Google (GOOG), Oracle (ORCL) and, perhaps, Facebook (FB). Additionally, some face an existential threat from their own managements, especially Microsoft. Microsoft's lack of product success over the past decade indicates what a dysfunctional destroyer of capital it has become, but this Vanity Fair article on the company confirms it.
The new secret to success in technology products is an age-old concept: integration. For most of the history of computers, creating a fully useful machine that was reliable and accomplished specific tasks was the recipe for success. IBM (IBM) perfected the recipe, but the other players from their heyday, and the later successes in the mini-computer industry of the 1980s, all offered what they termed "solutions."...477 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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