Rise of the tech monsters

[Clitheroekid]

A fascinating look at how the traditional top brands have, since the millennium, been toppled by the new kids on the block.

Some brands, such as Ford and GE, which once dominated the world, have now vanished off the list completely, and the rise in Apple's value as a brand is astonishing - and I suspect mostly due to the iPhone.

https://www.youtube.com/watch?v=BQovQUga0VE

[scotia]

A fascinating look at how the traditional top brands have, since the millennium, been toppled by the new kids on the block.
Some brands, such as Ford and GE, which once dominated the world, have now vanished off the list completely, and the rise in Apple's value as a brand is astonishing - and I suspect mostly due to the iPhone.
https://www.youtube.com/watch?v=BQovQUga0VE

Agreed - fascinating. But the technology sector is littered with the corpses of one time high flyers. Which of the current top companies will not keep up with as yet unforeseen disruptive technologies? I suppose the huge advantage that the big boys have (especially Apple) is that they can afford to buy up any new enterprise that shows promise, as well as funding lots of bright kids (research staff) playing about with apparently daft ideas.

[UncleEbenezer]

Agreed - fascinating. But the technology sector is littered with the corpses of one time high flyers. Which of the current top companies will not keep up with as yet unforeseen disruptive technologies? I suppose the huge advantage that the big boys have (especially Apple) is that they can afford to buy up any new enterprise that shows promise, as well as funding lots of bright kids (research staff) playing about with apparently daft ideas.

Apple is in a bubble. Its great achievement is to turn consumer electronics into high fashion, so it could charge high prices while everyone else sold commodity products and competed on price. Today's products look more like today's successors to the Japanese giants like Sony and Panasonic than they are to anything else from Silicon Valley, which puts them outside my expertise. There's a bear case which goes something like
It's a bubble that could pop rapidly if a product (or perhaps more to the point the story) flops - as happened for example to Nokia when they drifted into irrelevance. And the increasing restrictions, along with an app store model that is frankly abusive of third-parties looking to sell (or even provide free stuff) to apple's users, mean it's on what should be borrowed time with the world's antitrust regulators.

But what really prompts me to reply to you is the comment on R&D effort. I've seen that before: for example, twenty years ago commentators thought Intel had an R&D budget that would ensure no rival could touch them. That proved wrong, and indeed ARM was my most successful ever investment, twenty-bagging for me in seven or eight years. ARM may have had far less R&D resource, but nurtured a community of collaborators that collectively grew into a market many times the size of Intel's, while the latter remained more-or-less static.

Tech giants routinely have to reinvent themselves or sink. IBM and Microsoft are examples of companies who've done that with some success - albeit not without pain (and loss of their respective top spots). Both of those revived their fortunes when they realised that merely being biggest and having huge R&D efforts wasn't enough to sustain them, and they turned around and embraced Open Source communities to pool their development work much more widely. Others have been less successful, and have been forgotten, or get consumed by rivals at vulture prices, including my one-time employer Sun Microsystems borged by Oracle. Micro Focus (MCRO) is a company few have heard of, but owns the remains of many once-great names like Borland, Novell, and Autonomy, and has been a great (if volatile) investment over the years.

[stewamax]

The speed of change at Microsoft has been astonishing for such a large business. It is over simplistic to say “focus on business; focus on the cloud; collaborate” but that is what Satya Nadella has relentlessly pushed. His predecessor Steve Ballmer had the “gung-ho, we are the greatest, beat the drum brashly American style” credo that almost killed IBM under a succession of lame-duck CEOs from 1981 onward after Frank Cary retired. Ballmer certainly protected the revenues from Office (Word etc) but then spent much of it going down blind alleys trying to compete with Google's Android, Apple's IOS and so on. Shades of IBM, continuing to push OS/2 in the face of MSFT's NT.

[Watis]

Apple is in a bubble. Its great achievement is to turn consumer electronics into high fashion, so it could charge high prices while everyone else sold commodity products and competed on price. <snip>

I agree with your comment, Uncle, and I'm not an Apple fanboy myself.

But I do recognise what Apple have done in making products that focus on providing a good UX.

To support my case, here is the story behind the prototype Android phone - abandoned once the iPhone was released!

Watis