Kamis, 24 Januari 2013

A Tale of Two Companies -- Netflix & Apple (and Their Quarterly Earnings)

It is the best of times -- and the worst of times -- for two digital media giants (well, one of the two towers over the other and all others, but they are both "giants" nonetheless in terms of mind-share in the tech world).

Good times for Netflix.

For Apple, not so much.

Both just reported quarterly earnings -- and Netflix surprised the Street (on the positive side), causing the company's shares to skyrocket 34% to $138 in after-hours trading!  (Still well below previous highs of about $300 -- but, 34% is 34%).

Apple didn't exactly surprise -- but, it did "miss" Street expectations, sending its shares down significantly.  Apple shares now trade around $500 (where not so long ago they traded at about $700). Many Apple investors -- including me -- are getting a bit nervous about how the massive ship (which now counts over $130 billion in cash assets) will steer itself into continued high growth amid the mounting competition in all product categories.

I have one answer.  The long-rumored iTV -- which, if done right, could open up the whole world of your living room to Apple.

But, doing it "right" isn't easy.  As I have written several times before, ultimately, it is about the content available on the iTV (and how compelling the overall hardware/software/content execution is from a U/X perspective).  And, not only does the critical content not come cheap, it may not come at all to Apple (due to the wariness of significant interests who would not welcome the Apple challenge).

Given that downright sobering reality, Apple must "think different" about how to solve this dilemma.

I previously offered a solution -- buy Dish Networks (you can read my full analysis here).

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