Monday, July 21, 2014

Mobile Companies That Might Last The Decade

In the mobile market, a quarter can be a life time let alone a year.  So, why am I talking about the rest of the decade?  Frankly, a quarterly misstep or two could be enough for a company to start sliding but with all the corporate cash companies like Apple, Google, and Microsoft have, any decline could be stave off for years.

Sure that could also mean that companies have a better chance to survive any downturn or misstep and maybe innovate its way out of corporate death much like Apple did.  However, there are a couple of companies that I think are not going to disappear within the year but could very likely be gone by 2020.

I'm talking about Blackberry and Yahoo.  Blackberry and Yahoo has 2.68 and 2.78 billions of cash on hand.  Blackberry has been bleeding money while Yahoo has managed to eek out some profit.  However, each of these two companies have critical decisions to make.

The decisions each of their respective CEOs make will determine whether they can innovate or reinvent their ways out of the bottom of the mobile market and come up stronger and continue to stay relevant.

Blackberries are not selling well even as Blackberry 10 has garnered raved reviews.  The company has a perception issue and attempting to match the iPhone and the hundreds of Android phone models just won't cut it.  Furthermore, Blackberry lack the ecosystem that Apple has, which is the same issue that plagues Microsoft's Windows Phone devices.

So far, Blackberry CEO John Chen has failed to make the hard calls.  Chen was brought in to cut costs and slow the bleeding just enough to make Blackberry attractive enough to be a takeover target and has even failed miserably at that task.  There was a glimmer of hope that perhaps the Blackberry Messenger could be the key to the company's turn around when Facebook bought Whatsapp, a popular iOS/Android messaging app, for $19 billion.  However, any hope there quickly fizzled as more attractive alternatives to BBM were already on the market.

As for Yahoo, Marissa Mayer brought a lot of hope and optimism when she took over as CEO back in the middle 2012.  I think it's still early.  However, the changes Mayer made seemed more like patchwork than actually swing for the fences.  A series of acquisitions like Tumblr, while made for interesting talk around the blogger water cooler, still has not demonstrated that it'll be better than past Yahoo acquisitions by former CEOs like Geocities or Broadcast.com.  Yahoo! Launchcast is interesting and this could be where Yahoo can become a viable niche player in original video content.

Still, it'll just be a niche in a submarket.  Hardly anything to write home about.

So, Blackberry and Yahoo are facing a lot of head winds.  They'll both be fine over the next year or two but as their competitors continue to forth, they could both be squeeze out of existence.

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