Filed under: Technology, Apple, Amazon.com, Barnes & Noble
If spending $499 or more for an Apple (AAPL) iPad isn't in your holiday budget, how does $199 or $249 for a slightly smaller yet still full-featured gadget sound?
Barnes & Noble (BKS) threw its hat into the ring this week, unveiling the Nook Tablet, a $249 device ready to take on Amazon.com's (AMZN) ballyhooed $199 Kindle Fire. It also lowered the prices of its original Nook e-readers.
The Nook Tablet offers the same seven-inch screen as the Kindle Fire, but raises the spec sheet bar by offering twice the RAM and initial storage capacity of its Amazonian counterpart.
Both devices will hit the market next week, and it will be pretty hard to miss them as the holiday shopping season kicks off later this month. Amazon announced on Tuesday that its entire line of Kindle e-readers and tablets -- including the Kindle Fire -- will be available at Best Buy (BBY), Target (TGT), Walmart (WMT) and more top retailers. In other words, you won't necessarily need to log into Amazon.com to buy the gadget.
A Tablet By Any Other Name
If you're shopping for an Apple fanatic, the Kindle Fire or Nook Tablet probably won't work. Only the iPad can tap into Apple's iconic App Store with countless free or nearly free downloads. If you're committed to the Apple platform, instead of an iPad 2, consider saving some money by trying to find a used iPad. The major differences between the original and current Apple tablets is that the iPad 2 comes with cameras and has a faster processor.
However, you're going to be seeing plenty of Amazon and Barnes & Noble tablets handed over as Christmas and holiday presents next month. They both read e-books, of course, but their multi-touch screens and high resolution will make them great video streaming devices, too.
As long as you have WiFi connectivity, the Nook Tablet comes with pre-installed apps for Hulu Plus and Netflix (NFLX). Music fans can stream Pandora (P). The Kindle Fire dives into Amazon's rich ecosystem, and that includes access to roughly 13,000 streaming video titles at no additional cost to those that pay $79 a year to be part of the Amazon Prime free shipping program.
Androids at Heart
Both the Kindle Fire and Nook Tablet are based on the open-source Android operating system, but this doesn't mean that they will play nice with third-party downloads. Both companies want to make their devices as proprietary as possible.
However, future software updates can always change that. The beauty of today's gadgets is that they don't become obsolete just because something shinier comes out.
Besides, now that the appealing tablets can be had at price points typically reserved for handheld gaming systems or wireless phones, there are fewer excuses in not treating yourself to one this season.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, except for Netflix. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Amazon.com, Apple, and Netflix. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple.
3 Ways to Profit From the Mobile Computing Wave
By · CommentsFiled under: Technology, Investing, Netflix, Apple, Amazon.com, Cisco Systems
It's official. Step aside old-fangled computers -- mobile computing has taken over.
The switch was officially flipped in the fourth quarter of 2010. That's when smartphone and tablet computer shipments surpassed those of desktops and laptops. One hundred and one million mobile devices lit the airwaves -- an astounding 87% more than the previous quarter -- versus 92 million personal computers shipped.
The shift was inevitable: Computer shipments had been growing much more slowly. However, the surprise was that mobile became the king of the hill two years ahead of Morgan Stanley's prediction.
Pushing Aside the Desktop
It doesn't look like mobile computing will be giving up the high ground any time soon. Smartphones and tablets have become our go-to devices.
Luke Wroblewski, digital product designer and author of Mobile First, recently spoke at Motley Fool headquarters about how computer usage patterns are changing. More people are grabbing their mobile devices more often for information, even when their laptop or desktop is sitting nearby.
Although this shift has been taking root for a while, it's not too late for investors to get a stake in the mobile computing trend. Here are three ways to do just that.
1. Follow the Leader
The world is becoming more connected, not less. Smartphones and tablets are the easiest ways for people to stay in constant contact with anything they want: friends, family, their favorite sports team, the next deal on a great pair of shoes, etc.
Apple (AAPL) -- with its simple, elegant mobile devices -- is in the perfect position to be a sales leader going forward. People can't get enough of the iPhone and iPad. According to Apple's year-end results, the company sold 72.3 million iPhones and 32.2 million iPads in fiscal year 2011.
Demand for Apple's and others' devices will remain strong over the next decade, too. Sure, there's plenty of competition for smartphones, but the iPhone does what people want, and it does it well. And the iPad shows all the same signs of becoming the market's monster to beat.
2. Go Upstreaming
Today, global mobile traffic is pretty evenly split between Web browsing and watching videos. Cisco (CSCO) predicts that's going to change drastically by 2015 as video traffic explodes over the next five years. Cisco expects video to be 66% of global mobile traffic to be video, versus 22% for browsing.
Today, Netflix (NFLX) is typically the first company that comes to mind when someone says the word "streaming." Originally a video reseller, Netflix figured out a way to make little red envelopes flow efficiently through the postal service, bringing DVDs to homes everywhere. The company wants to do the same thing with streaming, pushing movies bits through the Internet tubes -- and people will use their phones and tablets to watch.
The battle won't be easy. Streaming video has lower barriers to entry than shipping DVDs. And there's always a risk that the fees for mobile data usage that carriers charge could go through the roof if demand for video clogs their networks. But Netflix is best-positioned to take advantage of the gotta-have-my-video trend.
3. Shop the Future
When a consumer purchases a $300,000 diamond engagement ring using Blue Nile's (NILE) mobile app (yup, this seriously did happen), you know that people have become comfortable trading their real-world wobbly shopping carts for a swifter and smoother virtual one. That's what Amazon.com (AMZN) is banking on as it introduces the Kindle Fire, the company's tablet computer, to the masses.
We know digital books will continue to fly off the virtual shelves. The Kindle has proven that. But Amazon.com customers are getting more comfortable placing other orders on their mobile devices, too -- more than $1 billion worth of orders. That's a lot of purchases and no time wasted in the checkout line.
The number of desktops and laptops being used today still exceeds the number of mobile devices in use, but that's going to change at some point, too. The mobile wave continues to build. Investors can get on board with device sellers like Apple, content producers like Netflix, or retailers like Amazon.com. In his presentation at The Motley Fool, Luke said, "There's a growth curve, and someone will ride it." Let's make sure we're one of those riders.
David Meier is an associate advisor for Motley Fool's Million Dollar Portfolio. He owns shares of Apple and you can follow him on Twitter here. The Motley Fool owns shares of Cisco Systems and Apple. The Fool owns shares of and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Blue Nile, Amazon.com, Netflix, Cisco Systems, and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple.
Internet Insecurity: The 25 Worst Passwords of 2011
By · CommentsFiled under: Technology, Crime
You've got locks on your doors and maybe even an alarm system guarding your home. But all that stands between criminals and your bank account information is the word "password." Sound familiar? "Password," "123456" and, weirdly, "monkey" are among the 25 worst passwords of the year, according to SplashData, a private company that sells security services and password software. SplashData compiled its list -- released Monday -- from files containing millions of stolen passwords posted online by hackers. And despite all the fancy technology available to hackers, when it comes to breaking and entering, they'll still go for the low-hanging fruit, starting with easy passwords like these.
Here's a tip for creating a more secure password: Make it eight characters or more, and use multiple types of characters -- upper- and lower-case letters, numbers and symbols. (For more tips, read DailyFinance's article on how to create safe, memorable passwords.)
25 Worst Passwords of the Year
1. password
2. 123456
3. 12345678
4. qwerty
5. abc123
6. monkey
7. 1234567
8. letmein
9. trustno1
10. dragon
11. baseball
12. 111111
13. iloveyou
14. master
15. sunshine
16. ashley
17. bailey
18. passwOrd
19. shadow
20. 123123
21. 654321
22. superman
23. qazwsx
24. michael
25. football
Can You Make Better Soda at Home Than Coke or Pepsi?
By · CommentsFiled under: Technology, Retail, Food
There's a cola war brewing, and it has nothing to do with Coca-Cola (KO) or PepsiCo (PEP).The battle for brewing home-based pop is heating up now that bottled water magnate Primo Water (PRMW) is introducing its Flavorstation appliance to compete with SodaStream's (SODA) fast-growing system.
How easy is it to make carbonated beverages at home? Is it cheaper? Isn't soda bad for you?
You're probably going to like all three answers, but let's start at the beginning.
Birth of a Carbonated Movement
SodaStream is an Israeli company that has spent the past few years growing through Western Europe. Its market penetration in Sweden, for example, is now up to 25% of the Scandinavian country's households.
Despite its long overseas track record, SodaStream waited until last year to make an aggressive entry into the U.S. market. It landed a willing partner in Bed Bath & Beyond (BBBY), which not only agreed to feature the system and its soda flavors prominently in its home goods superstores but also became an important participant in SodaStream's CO2 cylinder exchange program.
CO2 cylinder what? SodaStream's starter kits retail for $100 and up for fancier models. The starter systems include the maker itself -- a compact manual appliance that doesn't require batteries or electricity -- a carbonator cylinder that fizzes up flat water, and a sample of various soft drink flavors.
The lightweight CO2 cylinders are good for roughly 60 liters of sparkling water. They typically retail for about $30, but you pay just $15 if you're exchanging a used carbonator. Dozens of varieties of syrups are available for roughly $6 each, and they're good for the equivalent of 33 cans of soda.
Making a soda is easy. Twist on a reusable bottle with a liter of water, tap the carbonation button that activates the CO2 cylinder until you hear a few buzzes, and you have seltzer. Then it's just a matter of pouring in the flavor of your choice, or just enjoying the sparkling water on its own or with a few drops of all-natural fruit essences.
Flavorstation works the same way, and its entry-level model starts at a compelling price point of $80. The rub with Flavorstation is that it's brand new. Home improvement chain Lowe's (LOW) is the only retailer currently stocking the Flavorstation, though you can order one directly from the company.
The Economy of Home Brews
Fresh soda does have taste advantages. CNBC's Jim Cramer challenged skeptical cohort Herb Greenberg to a blind taste test in May. SodaStream beat out name brand canned soft drinks all four times.
Obviously it costs more once you begin pouring in syrups, and that math breaks down to $0.25 a can. It's not the same kind of bargain, especially when compared to cheap supermarket brands. Buyers also have to factor in the initial purchase, though it does include a $30 carbonator and enough syrups and essences for several initial liters.
However, it's at this point where the other advantages of home-based beverages begin to make sense. There's no lugging cans or bottles from the store and storage allocations.
Eco-minded soda sippers will also appreciate the environmental benefits. A carbonator is good for the equivalent of 170 cans of soda. Between the greenhouse gas emissions during the production process and the landfills brimming with the vast majority of cans and bottles that don't get recycled, home pop is kind to one's carbon footprint.
To Your Health
There's no denying that soft drinks -- specifically non-diet sodas -- aren't good for you. The sugary and often caffeinated kicks may provide a near-term boost, but nutritionists generally prefer that folks scale back their soda consumption. Switching to fresh home-based sodas will help.
An eight-ounce serving of regular Coke or Pepsi is loaded with 100 calories, 27 grams of carbs, and 27 grams of sugar. The same-sized serving of SodaStream's cola is just a 34 calorie beverage with 9 grams of carbs and 9 grams of sugar. In other words, SodaStream's cola syrup is just a third as bad as brand name soda.
Flavorstation's nutritional information isn't as kind. An 8-ounce cola serving packs 55 calories, 14 grams of carbs, and 14 grams of sugar, but it's just roughly half as bad for you as Coke or Pepsi.
Pop Goes the Boom
During this week's quarterly earnings call, CEO Dan Birnbaum pointed out that there are now 400,000 active users of SodaStream's beverage makers in the United States.
He's not overly concerned by Flavorstation's threat, pointing out that the company has achieved 80% market share in European countries where it faces competition. SodaStream also continues to expand its retail distribution. Target (TGT) and Staples (SPLS) became the latest outlets to begin stocking SodaStream systems and flavors, and Staples also participates in the carbonator exchange program.
You don't need to recall Sweden's 25% market penetration to realize that this isn't a fad. Revenue grew 39% in SodaStream's latest quarter, and adjusted earnings more than doubled. The growth is there. The unit economics, convenience, environmental benefits, and nutritional advantages are there.
Choosing between SodaStream and Flavorstation is open for debate, but don't be surprised if you find yourself gifting -- or being gifted -- a home beverage system this holiday season.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of PepsiCo and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Staples, Bed Bath & Beyond, Lowe's, Coca-Cola, PepsiCo, and SodaStream International. Motley Fool newsletter services have also recommended writing covered calls in Lowe's and recommended creating a diagonal call position in PepsiCo.
Is Apple Stock Still a Buy at Today’s Prices?
By · CommentsFiled under: Company News, Technology, Investing, Apple, Stock Picks
No one likes being late to a party, especially one where the first ones there get the best party favors. The Apple (AAPL) party started long ago, but does that mean it's too late to join the festivities?For the past decade, Apple's stock has trounced those of longtime software archenemy Microsoft (MSFT), traditional PC hardware vendors like Dell (DELL) and Hewlett-Packard (HPQ), and smartphone players like Research In Motion (RIMM).
Apple grew large enough to briefly claim the title of most valuable company in the world by market cap, although Apple and ExxonMobil (XOM) pass the crown back and forth. Even at its size, top-line revenue grew by 66% last fiscal year, while bottom-line profit jumped an astonishing 85%. It's mind-boggling that one of the already-biggest companies in the world is still putting up growth rates like that.
Am I Too Late?
As great as the past 10 years have been, how do the next 10 years look? Apple has lost its iconic co-founder, and iPhone growth has made iOS Apple's dominant operating system, overshadowing Mac computers and OS X.
Does Cupertino have more tricks up its iSleeve to maintain its growth momentum? Or is Apple's recent surprise earnings miss a sign that the company's best days are behind it? More importantly, is the stock still a buy at current prices?
Even More iPhones
Last year's iPhone revenue put up an 87% jump to $47.1 billion, yet CEO Tim Cook pegged Apple's worldwide mobile phone market share at just 5%, leaving plenty of room for future growth in Apple's most important product category.
Last quarter's "miss" was largely due to the fact that the media had sensationalized the pending "iPhone 5," causing buyers to delay their purchases. And purchase they did, as 4 million iPhone 4S units were sold over launch weekend. Average selling prices have been rising for years, most recently $650, and the 4S promises to continue that trend.
Even More iPads
The iPad is incredibly young in contrast, having been around for roughly a year and half. The tablet revolution is real this time around, with the iPad leading the way. It shows the same promising signs the iPhone did a couple years ago, with last year's iPad revenue soaring 311% to $20.4 billion.
Even as the tablet world is being stormed by a slew of Google (GOOG) Android competitors, including worthy opponents like Amazon.com (AMZN), the whole pie is growing so quickly and Apple has little to worry about with the iPad counting as three of every four tablets currently sold.
Enterprise Time
Businesses have long been dominated by Windows, which means there's plenty of market share up for grabs. Even Forrester Research, a longtime opponent of enterprise Macs, has changed its tune and now recommends a sweeping sea change. Forrester provides consulting services for IT professionals, so its stamp of approval should go a long way.
Mac sales were especially strong last quarter, but that segment could be further propelled by enterprise adoption, displacing aged PCs running Windows XP. Even the iPhone is being deployed and tested with 93% of Fortune 500 companies.
Key to China
For the Chinese, an iPhone is as much a status symbol as it is a versatile telecommunications tool. China is vast frontier of possible penetration, and despite only having six official retail stores -- not including the fake ones -- Apple's China sales over the past 12 months have increased sixfold.
Once Apple inevitably brings on China Mobile (CHL), which is the world's largest wireless carrier by subscribers in the world's largest mobile phone market, we will see a whole new era of growth. China Mobile is larger than rival and official iPhone carrier China Unicom (CHU), and currently has 633.5 million mobile subscribers, of which 43.2 million use 3G -- while the whole country has 952 million mobile users. 3G penetration in the country is a tiny 4%. So far, China Mobile has roughly 10 million iPhones running unlocked on its network. The carrier is Apple's key to China.
A Real Apple TV
Despite the challenges current TV manufacturers face, Apple is the only company with the weight and willpower to redefine the broken industry. It's expected to have a TV set in the works, and Apple's brand has an uncanny ability to command premium pricing without consumers even thinking twice.
Margins would be lower due to the economics of the industry, but Apple should be able to keep its ink black. The TV industry is a $100 billion market for Apple to tap, and it would be silly to pass up.
Is It Worth It?
The price chart comparison above makes you wonder: is Apple still worth its lofty price?
|
Company
|
Revenue Growth (5-Year Average)
|
EPS Growth (5-Year Average)
|
Price / Sales
|
Forward P/E
|
|
Apple
|
41.2%
|
64.9%
|
3.3
|
9.9
|
|
Microsoft
|
9.6%
|
17.5%
|
3.2
|
8.7
|
|
Dell
|
1.9%
|
(1.6%)
|
0.5
|
7.8
|
|
Hewlett-Packard
|
7.8%
|
35.1%
|
0.5
|
5.9
|
|
Research In Motion
|
57.4%
|
57.5%
|
0.5
|
3.9
|
Looking forward, Apple's valuation looks downright cheap when comparing its growth with other tech players. Forward P/E is calculated based on consensus estimates of projected earnings and except for last quarter, Apple typically demolishes quarterly expectations, making its valuation even more compelling.
While RIM's historical growth figures also appear attractive on the surface, its future prospects look dimmer every day. Besides, RIM's shareholders speak for themselves, and they'll tell you first hand: They're not a happy bunch.
The next decade's prospects look just as good, if not better, than the last. The company has perfected its supply chain, and its most important product categories have gained unstoppable momentum. There are numerous opportunities that haven't been fully tapped yet, and once they are that momentum will steamroll through new markets.
Apple is still a buy -- worth every penny, and then some.
Motley Fool contributor Evan Niu owns shares of Apple and Amazon.com, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Apple, Microsoft, China Mobile, and Google. Motley Fool newsletter services have recommended buying shares of Microsoft, Dell, Google, China Mobile, Apple, and Amazon.com; and creating a bull call spread position in Apple and Microsoft.
For TV Buyers, ‘Tis Really the Season
By · CommentsFiled under: Technology, Retail, Saving Money
If you're in the market for a new TV, you'd be wise to scoop up one of the sweet deals out there for the rest of 2011. Television manufacturers and retailers are eager to unload inventory due to sluggish sales. Among other issues, they over-projected demand for 3-D TVs, which could spell price drops of 30% to 40% from last year, James Wilcox, senior editor of electronics for Consumer Reports, tells DailyFinance.
"TV sales to date have been lackluster, so there's inventory in the channel. Manufacturers and retailers want to get rid of that, as new models are coming out next year," he says.
The business has been a victim of the tepid economy, as shoppers have postponed purchases of big-ticket items. A weak housing market has also stalled business.
The industry is also moving through a lull in the product cycle. Many consumers upgraded to flat-panel TVs in the past few years, and from standard-definition TVs to high-definition units over the last decade. Having made those shifts, they haven't had another compelling reason to purchase new models, experts say.
So, for the remainder of the year, shoppers can expect to find Black Friday-style deals on big-screen units, as well as Internet connected "smart" TVs, and 3-D TVs.
While the discounts on TVs will intensify over Black Friday weekend, prices could fall even further if sales are slow during the blockbuster selling period, Wilcox says.
"Consumers will be able to save $500 to $1,000 on TVs over the next few weeks" at stores such as Walmart (WMT), Best Buy (BBY),Target (TGT), H.H. Gregg (HGG) and Amazon.com (AMZN), says Shawn DuBravac, chief economist with the Consumer Electronics Association.
Big Deals on Bigger Sets, Feature Rich TVs
Expect to see steep discounts on larger units ranging from 42 inches to 60 inches, which are increasingly becoming mainstream.
In particular, 42-inch and 55-inch sets will be "the sweet spot" this year, DuBravac says. "We'll see 42-inch sets for under $500, and 55-inch sets for $1,000."
That means we should expect Internet-connected TVs, which have been selling briskly, to hit a new lows of under $1,000, Wilcox says.
Or even lower. Best Buy's Insignia Connected TV, a house brand, is retailing for $499 for a 32-inch model, and $699 for a 42-inch unit, the spokesperson says.
Like Best Buy, stores will be heavily promoting their house brands this year. "You'll see secondary and tertiary brands at extremely low prices," Wilcox says.
They'll also be pushing cheaper 3-D TVs.
In 2010, "the industry expected to sell about 3.5 million 3-D TVs. But based on estimates I've seen, they sold only about 1 million in the U.S. last year," Wilcox says. Now, shoppers will find basic, 3-D units for as little as $300, he says.
Black Friday Bargains
Over Black Friday weekend, limited-supply doorbusters could include a 60-inch LCD TV from Sharp for about $900, "a couple of hundred dollars cheaper than it had been previously," Wilcox says.
The weekend could also bring to market the first 32-inch, $200 LCD TV -- something that would have cost about $350 a few years ago, Wilcox says.
On Black Friday, Best Buy will offer a 24-inch LCD TV from one if its house brands for $79, the spokesman says.
Retailers will also be offering free shipping and extended financing options through the end of December to seal the deals.
How Walmart.com Is Downloading Into Shopping Malls
By · CommentsFiled under: Company News, Technology, Apple, Wal-Mart Stores, Amazon.com, Retail
You're not going to want to hear this, Sam Walton.
Walmart (WMT) is teaching its new media appendage some old economy tricks.
A pair of Walmart.com stores have opened in Southern California shopping malls. Yes, Walmart.com.
The stores are much smaller than your typical mammoth Walmart Supercenter. One of the locations takes up a mere 1,000 square feet in mall space. However, it still manages to stock a few hot media and gadget items that promise to be brisk sellers this holiday season. Another key feature of the bite-sized shops is a fleet of laptops that customers can use to browse the virtual aisles of Walmart.com itself.
Food Fight at the Food Court
What were mall landlords thinking?
This is pretty brilliant if you're Walmart. You can open small outlets promoting your e-commerce efforts far away from your more traditional stores. Stressed-out holiday shoppers who can't seem to find what they want can walk in and take advantage of Walmart.com's massive online selection, historically low prices, and economical shipping options.
How do you think the rest of the tenants are feeling right now? Not only is the Walmart name cheapening the mall's roster, but now patrons have a place to double-check prices. Spoiler alert: Walmart.com will probably be cheaper.
The stores are temporary. They'll be gone by the end of next month. A Walmart spokesman also tells Reuters that the world's largest retailer does not plan to expand the concept beyond this two-outlet test. However, it still has to be pretty unsettling.
There are already way too many people who dislike Walmart's practices, and that's with the mammoth discounter anchoring suburban strip malls. It's certainly not going to be popular with retailers paying higher rent per square foot in more traditional malls.
Wake Me When December Ends
This two-month test is huge. What if it works? What if Walmart is able to grow its online sales in San Diego and Los Angeles without cannibalizing its physical stores in the area? What if Amazon.com (AMZN) is next? After all, now that Amazon is agreeing to collect sales tax in some states, why can't it follow suit?
There will always be disruptions in any industry. Electronics retailers who sold Apple (AAPL) merchandise in their mall shops and freestanding kiosks probably felt cheated when the tech giant began opening its own stores. This feels different, largely because it may encourage an entirely new shopping behavior.
Mall owners will simply argue that they're filling up vacant space while giving shoppers what they want. However, promoting a fast-growing online retailer seems to be weaning shoppers from the very brick-and-mortar shopping that mall owners need to survive. The last laugh will be on them.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Apple and Walmart Stores. Motley Fool newsletter services have recommended buying shares of Walmart Stores, Amazon.com, and Apple; creating a diagonal call position in Walmart Stores; and creating a bull call spread position in Apple.
Google May Be Your Next Cable Television Provider
By · CommentsFiled under: Technology, Media, Google , Apple, AT&T, Comcast, Stocks in the News
If you're fed up with escalating cable bills, fuzzy satellite television reception, and unresponsive customer service, Google (GOOG) is starting to think inside the box.The world's leading search engine may be ready to launch a broadband television service as early as next year, according to The Wall Street Journal.
Hold up, though. Before you crank call your provider -- shouting "Google me" as you let out a menacing laugh -- it's important to realize that this rumored premium service would only be offered to select homes in Kansas City at first.
It's Kansas City, after all, that was selected as the test city for the Google Fiber initiative that will bring lightning-quick Internet speeds to some neighborhoods by early 2012. Sources tell the Journal that a former cable executive that Google recently hired is making the rounds with major networks and broadcasters to gauge their interest in participating in Google's pay television offering.
Finding Some Extra Coin Between the Couch Potatoes
Television is a $150 billion industry once you factor in monthly subscriptions and advertising. Google is not only the global leader in online advertising but the top dog in digital video advertising through YouTube. There is no reason that Google can't work with magnetic cable channels to deliver both subscription revenue and more effective display ad targeting.
Consumers aren't as loyal as you may think to their existing cable and satellite television providers. Consider some of the comings and goings at the leading players during this recent quarter.
- Comcast (CMCSK) lost 165,000 net cable subscribers.
- Dish Network (DISH) shed 111,000 satellite television accounts.
- Dish rival DIRECTV (DTV) tacked on 327,000 more customers than it lost during the quarter.
- AT&T's (T) U -verse gained 176,000 new homes.
There's Google TV, the tech giant's poorly executed foray last year into smart television platforms. Google failed to get the major broadcasters and networks on board, leaving buyers of Google TV sets blocked from access to streaming content from cable channel websites. Rolling out a premium service in Kansas City could also mean making it available to Google TV owners elsewhere.
Oh, and we can't forget about Apple (AAPL).
Cupertino on the Couch
Several analysts believe that Apple will introduce a high-def television as early as next year. It was one of the last projects that Steve Jobs was involved with at Apple.
A television based on Apple's proven iOS platform will be compelling for many reasons, but it is Apple's healthy relationship with Hollywood that has to be worrying Google. It would be easy for Apple itself to throw its hat in the pay television market, and it gives Google every incentive to get there -- and grow -- before Apple dives into the water.
Everything in the tech world is basically boiling down to Apple vs. Google. It's happening with smartphones and tablets. The battle may as well break out in your living room, too.
One Can Only Dream
Wouldn't it be great if a pay television service actually let you pay for only the channels you want to watch instead of billing you for all of them in a package that has no reason or rhyme? Folks who watch Fox News may never click over to MSNBC -- and vice versa. Empty nesters may have no need for Nickelodeon. Somewhere out there, I'm sure, there's a guy who's never watched ESPN.
Cable pricing is out of whack, and that is largely the byproduct of channels that demand high rates for networks that few people are actually watching. If QVC went away, how many people would actually notice?
Every television viewer is different, and Google has a real opportunity here to roll out a service that has the viewer's best interest at heart -- and not the content creator's.
There will be resistance, of course, but Google has probably learned a lot since last year's Google TV gaffe.
There's a golden opportunity out there for Big G. All Google has to decide now is whether it really wants to be a television star.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Apple.
Filed under: Technology, Investing, Netflix, Apple, Stock Picks, Amazon.com
Shares of Netflix (NFLX) are down nearly 50% year to date for a variety of reasons.First, there's a pending separation with Liberty Starz (LSTZA) that will end the "Starz Play" feature inside Netflix come February. Roughly 8% of movie and TV content could go away.
Second, there's the substantial price increase on those who have both DVD and streaming service. The bump is widely cited as the reason why more than 800,000 customers fled Netflix last quarter.
Third, Hastings first unveiled and then retracted a plan to separate the streaming and DVD-by-mail operations into two distinct business units with two websites and logins. Customers long used to managing an entire queue of DVD and digital rentals in one place would be forced to adopt new habits via a service Hastings called Qwikster. "Incredulous" may be the best word for describing the response.
My own tracking of how investors see Hastings reveals a fervent belief that he's no longer The Guy for the business he founded. "What he did was stupid. Hubris on this level is truly worthy of a firing," wrote one commenter to a story I published asking whether Hastings was still fit to be CEO.
What if the skeptics are right? What options does that leave investors who are otherwise convinced by a study that shows 61% of viewers ages 12 to 65 watch at least one hour of online video per week. That's up 50% from 2009, according to entertainment researcher Interpret.
Here's a closer look at three companies that could profit from a Netflix meltdown even as traditional TV and online video streaming merge.
1. DISH Network (DISH)
You'd think that most cable operators would benefit from the decline of Netflix, but data say otherwise. According to Interpret, 77% of those who use the Web for TV also pay for premium TV service. Count our family among that group. We're paying both Comcast (CMCSA) and Netflix for programming access.
Why single out DISH if most cable companies don't experience any sort of Netflix effect? The satellite TV specialist also controls the remaining assets of defunct video rentals specialist Blockbuster. Having premium streaming and live programming under one roof could prove compelling to those used to the pervasiveness of Netflix's service.
2. Amazon.com (AMZN)
Mobility is one of Netflix's key advantages. From iPhones to Android handsets to the iPad, Netflix streaming is available just about anywhere. Amazon isn't there yet. So far, only the new Kindle Fire will stream video from the e-tailer's massive library. But that doesn't mean investors should dismiss Amazon. CEO Jeff Bezos and his team have brokered numerous partnerships to bring "Amazon Instant Video" to high-definition televisions, digital video recorders, Blu-ray players, and set-top boxes for connecting to cable services.
Amazon also offers flexibility. Members of the Prime shopping service can either rent or download top-tier flicks or choose from 12,000 titles for free, instant streaming. Revenue and profits should grow as more devices get access to the entirety of this offering.
3. Apple (AAPL)
Can a partner become a competitor? It depends on whether new Apple CEO Tim Cook commits to creating a TV ecosystem that includes everything from an all-in-one television to an upgraded iTunes Store that includes streaming as well as rentals and downloads.
There's reason to believe it will happen. Not only is Amazon taking this approach, but so is Google (GOOG), which tried and failed at marketing a digital entertainment hub called Google TV. Now reports say the company could create its own pay TV service to go along with streaming served through YouTube.
The implication? Apple can't go after the TV ecosystem and not also find some way to address streaming -- either on its own or via an extension of its partnership with Netflix. You can bet Hastings is hoping for the latter.
Do you believe in Netflix? What other companies do you believe would benefit from Netflix's troubles? Please let us know using the comments box below.
Fool contributor Tim Beyers owned shares of Apple, Google, and Netflix. The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Google, Apple, Amazon.com, Netflix, and DreamWorks Animation SKG. Motley Fool newsletter services have recommended creating a bull call spread position in Apple.
Filed under: Technology, Crime
Anyone who has ever watched The Silence of the Lambs with macabre delight knows the fascination gruesome death can provoke. But no fictional horror can produce the frisson generated by real items currently being sold on websites like SerialKillersInk.net and MurderAuction.com: artifacts, relics and artwork straight from the crime scenes and prison cells of the worlds most famous serial killers.Current listings on the websites include a handwritten confession letter from Gary Ridgway, aka the "Green River Killer," who strangled women in Washington ("Scarce!" the ad reads); a handwritten letter from Ted Kaczynski, aka the "Unabomber"; and a self-portrait by Danny Rolling, aka the "Gainesville Ripper," who mutilated the bodies of his victims and posed them in strange positions before leaving the scene of the crime.
"It is a 100% real thing," the listing for Rolling's portrait reads. The seller, a vendor from Japan with 79 five-star reviews, is asking $2,000 for the portrait.
"Every man has to have a hobby," MurderAuction.com's site banner reads.
According to a recent ABC story, there are six websites in the U.S. that cater to this macabre market. Dealers obtain items by befriending prisoners and giving them the attention they often crave, according to the network's interview with the founder of Serial Killers Ink, Eric Gein.
"You can't write Manson and say, 'Send me some artwork.' It doesn't work like that," Gein told ABC. "The relationship we have with these infamous serial killers, it takes time, it takes trust. You have to build a friendship, build a relationship just like you would with anyone else."
While it's illegal for criminals to profit from their own crimes -- whether it be through memorabilia or movie rights -- third parties can sell items as long as none of the profits go directly to inmates. Still, vendors send gifts and the occasional check.
Banned on eBay, but Still Sought After
There have always been collectors of perverse and controversial objects -- Nazi flags, crime scene debris, etc. -- the murder memorabilia market emerged in full force with the rise of the Web. In 2001, eBay banned "items deemed offensive, including true crime memorabilia," according to MurderAuction's website. In 2005, Murder Auction became the first site of its kind to launch, with a unique collection of serial killer items.
Online visibility has also brought about criticism from advocacy groups, families of victims, and media. "The media is exceptionally good at altering facts and presenting one sided accounts," SerialKillersInk's site reads. "They know that the only viable option for them is to present this hobby in a negative light."
"We do sympathize with the families of victims," the "About Us" continues. "We're sure they have a tremendous amount of pain to bare, but we make no apologies for our business. We are not breaking any laws. This is America and we have a right to make a living."
But families of victims continue to be shocked and disgusted by what they find on the websites. Pam Hobbs of West Memphis, Tenn., told her local TV station, WMC-TV earlier this week that the sale of crime scene and autopsy photos from the murder of her son on MuderAuction.com was "sick."
Asked Hobbs: "What type of sick individual would want to make a profit off of showing my dead baby?"
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