27 posts are filed under this symbol.

Microsoft’s Guanxi

The importance of Guanxi for companies seeking to win business in China varies depending on the sector. Trying to secure shelf space for beer? Guanxi is pretty important. Trying to win a $10MM semiconductor deal at Huawei? Not as important.

I found that merit counts more than Guanxi when selling high tech to big companies in China. Every time we thought we could win based on Guanxi, we lost.

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The Four Horsemen of Web 2.0

Cisco (CSCO), Oracle (ORCL), Sun (SUNW), and EMC (EMC) were the darlings of the internet boom and were referred to as the ‘Four Horsemen‘. Your broker was overheard in 2000 “Yes, things are in fact a bit irrational but these companies have real products, revenues, and earnings and are investment-grade leaders of the new economy.”

Your broker neglected to mention that the biblical Four Horsemen of the Apocalypse were steered by four riders – Conqueror, War, Famine and Death. I’ll leave it to my readers to pair them appropriately.

Four Horsemen

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Wintegra – Following up on a Comment

I received a good question on the Wintegra Inc. (WNTG) post I made last week. I felt the response was worth a post on it’s own. Please remember this is not investment advice, and not a negative outlook on Wintegra as a comapny, just my opinion of something that needs to be considered when attaching a multiple and valuation to the company. References to Teknovus and Passave are in context with the previous post.

From “Watcher” –

I don’t really understand your Cisco example: according to your example Cisco doubled its purchasing from Wintegra in 3 years (2003-2005): 27% of $4.5M in 2003 to 10% of $19.5M in 2005: can you explain this again (why doubling sales to Cisco is a problem)?

You ask a good question. In the interest of brevity I oversimplified my argument. Let me explain in detail.

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China – Economic Kingmaker of Microsoft

China Economic ReviewHu Jintao, China’s President, visited the US a few weeks ago. Fifty years from now, political historians will devote little attention to the visit. Economic historians will feel otherwise.

The most remarkable thing about the visit was the degree of involvement by private sector American business, and the general absence of a political agenda on the part of the federal government.
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Apple, France, and Irony

Apple Computer Inc. should have anticipated that the exclusive union of its iPod music players and online iTunes store would be challenged in France, Trade Minister Christine Lagarde said.

Anyone else find it incredibly ironic that Apple (AAPL), who lobbied tirelessly and endlessly, both domesticly and in Europe against Microsoft’s (MSFT) monopoly power, is now finding the same accusations leveled against themselves?

A copyright bill before the French parliament on downloading music and films could lead the online music store, Apple’s iTunes, to withdraw from France because it would be reluctant to opening up its proprietary system, experts say.

Apple Computer Inc. has always refused to allow its paid-for music files downloaded via iTunes to be converted into another format, which would allow them to be listened to on a music player other than its iPod.

We’re not Apple investors. I don’t own an iPod because I refuse to buy into the ‘roach-motel’ model of iTunes, where any music purchased is locked up in the iTunes universe ad infinitum. But I admire how Steve Jobs cleverly used sexy hardware and ease-of-use to convince millions of consumers to lock themselves into the Apple DRM model.

I love the hardware too, and if they had a subscription model I would jump. I think the only reason Apple has not offered a subscription model is that they want consumers to buy songs on iTunes in order to landlock them as Apple customers, eventually migrating them into other areas like Video and the digital living room. Nice Job Mr. Steve.

Now, having obtained near market share dominance of 80%, his Steveness has now encountered the same antitrust forces he helped unleash years ago in his battles with Microsoft.

(Minister Christine Lagarde) met with Charles Phillips of Oracle Corp., John Chambers of Cisco Systems, and Scott McNealy of Sun Microsystems, but not with any Apple Computer Inc. representatives.

McNealy. Oracle. Sound familiar? This was the same wrecking crew that went after Microsoft.

Comme on faict son lict, on le treuve.

Translation: “You’ve made your bed, now lie in it”. It is of 16th century French origin.

How appropriate.

Quoted article here. Link Courtesy Engadget.

PortalPlayer Preface Chipset Gaining Recognition

PortalPlayer (PLAY) continues to follow a trajectory of diversification from it’s core Apple (AAPL) iPod business. Portalplayer currently derives 90% of it’s revenue from Apple iPod and Nano hardware sales and is working on a new chip in partnership with Microsoft (MSFT) called Preface. Preface is the brain around which Microsoft Sideshow is built. We’ve written about the potential for the Preface chipset, and there are a few recent developments that reinforce our opinions here that I thought were worth sharing.

laptopplay.jpgMost people saw the Sideshow announcement as constrained to laptop lids- we continue to maintain that Sideshow (and the Preface chips designed for it) is part of a larger strategy by Microsoft to enter the Personal Media Player (PMP) market. It would appear that Microsoft is now showcasing the Sideshow technology in some of these alternative applications, and that the mainstream press is picking up on this trend.

Windows CE Pro reports:

Well, SideShow isn’t just for laptops anymore. During the Media Center Boot Camp at the Electronic House Expo here in Orlando, Fla., Todd Rutherford, Microsoft Program Manager for eHome Control, demonstrated the technology implemented in a handheld remote. Just because it is a product of Microsoft’s mobility group doesn’t mean the solution must be tethered to a laptop.

SideShow can be implemented on virtually any piece of hardware capable of connecting, whether by WiFi, Bluetooth, Zigbee, Z-Wave, Ethernet, you name it. These auxiliary devices grab “gadgets” from the PC. Gadgets are mini applications that are sent, in an encrypted format, to the remote hardware by the computer.

In short, Preface is an ultraportable hardware platform for many devices and applications.

Also, If you’re interested in Sideshow and what applications Preface can enable, and can endure 20 minutes of amateur video, check out this clip from Robert Scoble (of Scobelizer fame). Just remember, Sideshow is a generic synchronization and consumer electronics technology, not just something that fits into the lid of a laptop.

Microsoft is clearly trying to drive hardware standardization of low-end consumer electronics hardware with Sideshow, much like it has been with Windows Mobile 5.0 for high end mobile devices. It isn’t clear to me that the valueship of a hardware partnership is factored into the value of Portalplayer. Microsoft, like Apple, can be an effective kingmaker in the hardware business. Check out HTC (2498.TW), a Taiwanese company that manufactures many of the Windows Mobile Smartphones and PDAs.

Hat Tip to Engadget for the links here and here.

Microsoft Sideshow – iPod killer?

laptopplay.jpgThe secondary notebook display is another CES2006 product that failed to get widespread coverage. It’s called Microsoft Sideshow, and was exhibited at Microsoft’s (MSFT) booth under Vista. I learned today that the guts are built with Portalplayer’s (PLAY) ‘Preface‘ chipset. I thought Sideshow was pretty neat when I saw it, and once I learned more about the depth of this new platform the potential impact on Apple (AAPL) and their iPod became clear.

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