Mobile technology is no longer the coming thing; it's here and everyone better learn to adapt.
From the growth of tablet computers to the collapse of the PC industry to the rapid rise of smartphones, mobile tech is here. Firms that can manage the switch will thrive and those that can't will find themselves dying off. It's that important a shift. This is akin to the switch from typewriters to PCs or from vinyl to CDs. It's an enormous change in the way customers are behaving.
Which is why this is becoming a critical time for technology investors. No one wants to be caught leaning the wrong way, do they? More importantly, investors don't want their money to be leaning left when the world goes right. Balancing that sort of risk is tricky, at best.
Anticipating the market
More and more, it appears that what Steve Jobs did best was that he saw the trend early. Apple (AAPL) has nothing to fear from a switch to mobile technology. Even the drying up of the PC market won't hurt too much as they've sort of defined the smartphone and tablet market. The company has sold tens of millions of both devices in just a few years and I think that'll continue.
The recent drop in the share price is mystifying to me. Apple remains a great company to invest in. It has still got the early mover advantage and for media-inspired reasons, has dropped like a rock in share value.
Another firm that's been more than ready to respond to the mobile switch is Google. While this quarter's earnings were surprising – profit beat estimates by $0.90 while revenue slightly underperformed – the way its mobile ad revenue climbed is the real story. A steady growth in mobile income shows that Google made the right moves at the right time.
Not ahead of the curve
It's not CEO Marissa Mayer's fault that Yahoo! (YHOO) is playing catch-up ball regarding mobile technology. Yahoo!'s playing all forms of catch-up ball. Still, the company is now committing that way. Few days back, Yahoo! announced that it would shutter dozens of older services to focus on about a dozen or so mobile technologies. Devoting that sort of resource base to the new mobile world shows that some of the growth over the last year – 57.83% in twelve months – is justified. That, combined with 65.66% net margin, shows that Yahoo! is on its way back in a big way.
Another firm showing a bit of trouble adapting is Microsoft (MSFT). Long reliant on Windows and Office as primary sales drivers, the shift away from PCs is troubling Microsoft. That's a strong reason the company is pushing the Windows Phone and the Surface tablet...and the new, just announced line of mini tablets due out in a month or two.
The firm will likely come through it well enough. Microsoft is a good and well managed company that, even with these challenges, saw profit rise in the previous quarter. The shares are up around 20% so far this year. Moreover, a quarterly net margin of 29.55% suggests that it's a worthwhile investment.
One firm that is beginning to look desperate in figuring out the mobile trend is Facebook. I swear, I'm willing to be convinced that Facebook's endless stream of enhancements and upgrades will pay off, but I'm yet to see any of them that seem to really get it done. The P/E of 1742.04 just indicates to me that even the current share price is far overvalued for performance, and a net margin of 1.04% doesn't really inspire confidence in a firm without a solid footing.
Keep on moving
Mobile's the thing. There's room for a lot of companies to succeed and grow using mobile technologies. But there's also a strong chance that some big companies will fall behind due to the switch. The best will be nimble and light on their feet in an environment that's continually changing. The worst will fail and end up bought and sold. Keep an eye peeled and make sure you can tell the difference.