Corporate Strategies Course Corrections - Network Marketing Corporations Will They Change As Well!?

  Written by Bill Schmidt on Dec 3, 2008 11:11 am

Read More: Companies  |  MLM News

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Course Corrections

As the economy crumbles, companies dance to stay in place.

 Change has been the watchword lately among the major tech companies. The Thanksgiving season saw some significant rethinking of a number of corporate strategies -- all of which will be important to the consumer in one way or another.

(And, in the case of Twitter, no revenue.)

Size matters after all

Just a few months ago, netbooks -- inexpensive laptops small enough to be dwarfed by an actual lap -- were being heralded as the next big thing in portable computers. (We were exempt from this practice.) Over the summer, Intel touted its new Atom processor as versatile enough to function in any number of devices, from televisions to cars to products yet invented. Intel also developed a reference design for the netbook, which got picked up by Asian companies like Asus and MSI, followed eventually by Dell and HP. Everybody seemed to want an Atom, and netbooks, useful for everyone from students to business travelers, looked like the ubiquitous accessory of the very near future.

Now, though, Intel seems to be rethinking the potential impact of netbook computers. An Intel sales VP said that many users are finding the screen and keyboard too small to work with. "It's fine for an hour," Stu Pann, VP, sales and marketing, told an audience at the Raymond James IT Supply Chain Conference on November 18. Intel now considers netbooks an "incremental" part of the company's total market.

Nokia drops the Pinkerton act

The Finnish telecom company Nokia, which tried this year to crack the Japanese phone market, has decided to abandon its efforts after gaining little traction. The Japanese phone system works differently than the standard CDMA and GSM systems used in the rest of the world, so phones sold in Japan must be specially made for that market. Nokia's designs for Japan had included an eventual 10 per cent market share. After a concerted effort, its market share was just 0.3 per cent last year.

"In the current global economic climate, we have concluded that the continuation of our investment in Japan-specific localized products is no longer sustainable," Nokia executive vice president Timo Ihamuotila said, according to a report from Reuters.

The company foresees a significant drop in phone sales in 2009 due to the worldwide economic sag.

Those crazy kids just can't work it out

Facebook and Twitter, two companies with vast potential, scads of hype, and no profits (and, in the case of Twitter, no revenue), have broken off talks of Facebook buying Twitter for $500 million in stock and cash. The deal would have made a ton of sense if Twitter had any hope of making money someday.

The two companies occupy the same general social-networking arena, though one takes place on a computer and one on a phone. The problem is that Twitter, despite its high site traffic and generally excellent press, doesn't seem to have much of a chance of ever turning a profit. It's basically an instant-message app with no place for a revenue-generating service to attach itself. There is talk of selling advertising, which would probably turn off most users and effectively kill the service; there is talk of charging business customers for use, which would likely send most business users back to their cell phones.

The deal is said to have died because of the price. Twitter wants to make a go of somehow converting its own assumed potential into much more than $500 million in stock, especially the stock of a company that's still trying to figure things out itself. (Saul Hansell, blogging for The New York Times, called both companies "lottery tickets.")

EMG bites Apple

EMG Technology, which controls a recently issued patent for a new technology that enables mobile Web conversion, sued Apple this week, saying the iPhone's use of the technology is unlicensed. The inventors of the process received the patent in October and assigned it to EMG, which will no doubt go after other mobile Web product manufacturers if they are successful in the Apple suit. Apple had no comment broken off talks of Facebook buying Twitter for $500 million in stock and cash. The deal would have made a ton of sense if Twitter had any hope of making money someday.

The two companies occupy the same general social-networking arena, though one takes place on a computer and one on a phone. The problem is that Twitter, despite its high site traffic and generally excellent press, doesn't seem to have much of a chance of ever turning a profit. It's basically an instant-message app with no place for a revenue-generating service to attach itself. There is talk of selling advertising, which would probably turn off most users and effectively kill the service; there is talk of charging business customers for use, which would likely send most business users back to their cell phones.

The deal is said to have died because of the price. Twitter wants to make a go of somehow converting its own assumed potential into much more than $500 million in stock, especially the stock of a company that's still trying to figure things out itself. (Saul Hansell, blogging for The New York Times, called both companies "lottery tickets.")

EMG bites Apple

EMG Technology, which controls a recently issued patent for a new technology that enables mobile Web conversion, sued Apple this week, saying the iPhone's use of the technology is unlicensed. The inventors of the process received the patent in October and assigned it to EMG, which will no doubt go after other mobile Web product manufacturers if they are successful in the Apple suit. Apple had no comment.

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