[opendtv] Re: McAdams On: TV Everywhere, Why Aereo Wins the PR War...

From: Craig Birkmaier <craig@xxxxxxxxx>
To: opendtv@xxxxxxxxxxxxx
Date: Mon, 15 Jul 2013 09:50:18 -0400

On Jul 14, 2013, at 11:35 AM, Bob Miller <robmxa@xxxxxxxxx> wrote:

> The new Apple is Nokia with the introduction of the Lumia 1020 all a reporter
> needs is a 1020 to take, crop, edit and send images that rival the best
> cameras. And soon they will have a tablet, laptop and phablet to do the same
> with the same 41 MP capacity.

Are we really supposed to take this seriously?

Or is this just an opportunity to stir the pudding?

I saw a few things this morning that may help to put Bob's comments into proper
perspective.

http://www.patentlyapple.com/patently-apple/2013/07/thoughts-on-apple-and-google-talks-new-camera-trends.html

Will Apple Join the Higher-end Camera-Phone Trend

People are increasingly using either a DSLR camera or a smartphone to capture
life's little moments. Small, cheap digital cameras are being replaced by the
phones in everyone's pockets. This weekNokia introduced the Lumina 1020 with a
camera grip. The new camera offers super high resolution pictures at 38
megapixels that you'll be able to edit on your phone.

Stephen Elop, Nokia's chief executive, claimed "We want to take people on a
journey from capturing pictures to recording and sharing their lives."

Samsung introduced their design winning Galaxy 4S Zoom a few weeks earlier
which combines an advanced camera with a zoom lens and smartphone.

There are times like the summer in general, on holidays specifically and at
concerts most definitely where a more powerful camera would be appreciated.
Many people today own multiple iPods and multiple cameras, so it's not going to
be a strain or a big leap for consumers to consider having another iPod or
iPhone with a super camera.

I love taking pictures and videos in the Rockies, but it's a little awkward at
times. An iPod or iPhone with a larger display and camera grip would put my DSL
to rest finally, especially with a zoom lens that is sorely lacking on today's
iOS based cameras.

Would Apple be copying others already on the market today with such devices?
Not at all. Apple has been on record since 2009 concerning a possible
standalone camera and have been working on various aspects of such a camera
ever since. One notable feature is an electro-mechanical shutter control
associated with "dedicated high-end digital cameras," according to one of
Apple's granted patents.

With Apple's Aperture software already in place, a higher end hybrid
camera-iDevice is certainly not out of the question down the road. The question
becomes: would you like to see Apple enter the higher end camera market?

-----

It takes more than a dense CMOS image sensor to capture high quality stills and
video. The lens is a very significant factor, which it appears is now gaining
some attention, at least from Samsung (the Lumia 1020 has a fixed lens with
digital zoom into all those pixels).

But this story begs a very important question. Perhaps Deborah can follow up on
this if she is following this thread.

Why is it that the traditional video equipment manufacturers that sell to
broadcasters, are not developing products that integrate improved features for
professional videographers with smartphone technology?

More than a decade ago, I predicted that future HD acquisition products would
grow out of the professional still image market - i.e. DSLRs with high quality
lenses and dense CMOS sensors would evolve to capture both high resolution
stills and HD video (and beyond). One need only look at Canon's success with
the EOS 5D in the professional videography market to see that this prediction
was on the mark.

In addition to the camera, the concept of "broadcasting in the cloud" will ALSO
require a range of software that can be used to efficiently produce a finished
news story, commercial, or local program. Where is Nokia today in terms of this
kind of "infrastructure?" And how does this compare with Apple today?

The only plausible answer lies in the relationship between Nokia and Microsoft.
If there are tablets, phablets, and laptops in Nokia's future, it will likely
be as the hardware manufacturing subsidiary of Microsoft.

Meanwhile, Apple offers the entire range of devices Bob speaks about, and a
range of software applications from consumer to professional that are being
used by broadcasters, video professionals and professional photographers today
- iPhoto, iMovie, Aperture and Final Cut Pro.

The other story from this morning says volumes about this relationship and
Nokia's future. This paragraph is particularly telling:

Again, Nokia posted a disappointing $196 million loss during its latest fiscal
quarter. Be advised that Microsoft has continued to pay $250 million to Nokia
each quarter in "platform support payments." According to a recent regulatory
filing, Nokia now owes a net $650 million in royalty payments to Microsoft. At
the moment, Nokia is effectively a parasite suckling at the underbelly of
Microsoft. At any moment, Microsoft could walk away from this deal, allow the
parasite to die, and reclaim assets later on as the first creditor in line.
Business is business.

And this morning Microsoft announced a fire sale on Surface RT tablets,
reducing the price from $499 to $349.

So it looks like Bob is either stirring the pudding, or is underwater with a
Nokia investment…

Regards
Craig

Here is the entire Nokia.Microsoft story:

http://seekingalpha.com/article/1548112-memo-to-microsoft-walk-away-from-nokia?source=marketwatch

Memo To Microsoft: Walk Away From Nokia

Jul 14 2013, 21:44

On February 11, 2011, Microsoft and Nokia announced broad plans for a strategic
partnership. In effect, terms of the agreement intimated that Microsoft would
ante up Windows software and marketing cash in exchange for exclusive access to
Nokia hardware. On the surface, pun intended, this strategic partnership was
brought forth in order to build out an integrated ecosystem rivaling that
ofApple's iOS and Google's Android. After literally reading between the lines,
however, the original strategic partnership agreement does seem to be one of
the first happenings in a chain of coincidental events to ultimately deliver
Nokia into the hands of Microsoft as an acquirer.

Stephen Elop, Nokia CEO, is a former Microsoft man. Last month, in June 2013,
The Wall Street Journal and "people familiar with the matter" reported that
Microsoft was in "advanced talks" to purchase Nokia's handset business, but the
pending deal collapsed over price. The breakdown in these discussions may serve
as further evidence that the Microsoft-Nokia alliance has been an abject
failure. Going forward, Microsoft may consider quietly walking away from Nokia
and abandoning the smart phone business altogether. As always, Microsoft
shareholders are best served when Redmond executives focus on their core
competency of licensing software to personal computer manufacturers.

I am a Mac. I am a PC.

Apple's timeless Get a Mac campaign airing between 2006 and 2009 still defines
today's consumer electronics space. Apple personifies itself as a chic, yet
eager to please hipster. Alternatively, Microsoft is a corporate drone and near
relic that demands help simply to stay out of his own way. Juxtaposed against
these advertisements, the blockbuster iPod, iPhone, and iPad releases burnished
a halo effect at Apple at the same time that Nokia and Microsoft were
effectively mocked as has-been operatives. As recently as calendar Q1 2012,
Nokia was hailed as the world's largest handset maker, in terms of units sold.
Today, the Nokia-Microsoft alliance is actually battling for survival against
the likes of both fellow fallen star BlackBerry and the Google Android and
Apple iOS duopoly.

On June 28, 2013, research firm comScore released its report presenting May
2013 U.S. smart phone market subscriber share. The comScore data averages
information for the three-month period spanning between February 2013 and May
2013. The Google Android-Apple iOS operating system duopoly is consolidating
power -- as evidenced by a 1% increase in share -- to control a staggering 92%
of the total U.S. smart phone market. On the handset side of the ledger, Apple
and Samsung are the leading original equipment makers, with respective 39% and
23% shares of this market. Certainly, Microsoft's eleventh-hour turn to abandon
Nokia at the negotiating table is largely due in part to failure of the Windows
phone to gain and maintain traction within the smart phone market.

Windows Phone Fail

All challengers to the Apple iOS-Google Android duopoly throne now follow a
maddeningly cyclical pattern. Prior to release, each new BlackBerry or Nokia
handset is dubbed the latest in a line of "iPhone-Galaxy killers," that will
revolutionize the smart phone market. Share prices of both stocks will rise
sharply prior to and through the phone launch. The following quarterly report,
however, will reflect disappointing sales and an earnings shortfall. Irrational
speculators will then dump stock upon digesting what has now become inevitable
news.On April 18, 2013, Nokia reported a $196 million loss for its fiscal Q1
2013. The Lumia was then an obvious disappointment and traders immediately sold
off shares to $3.17 -- and a 13% loss on the trading session.

For the first fiscal quarterly period ended March 30, 2013, Nokia reported
record sales of 5.6 million Lumia Windows phone units for the quarter. This
performance is more than double the year-over-year quarterly period in 2012,
when Nokia sold only 2 million Lumia phones. According to Tom Warren and The
Verge, Nokia has shipped roughly 20 million Lumia smart phones since the
November 2011 debut of this product. During its latest second quarterly period
ended March 30, 2013, Apple sold 37.4 million iPhone units.

By every metric, the Nokia-Microsoft partnership is a failure -- because the
Windows platform has yet to make any significant dent within the smart phone
marketplace. Going forward, Microsoft should take its proverbial chips off the
table. For Nokia shareholders, the threat of Microsoft financial backing
withdrawal would throw this company into bankruptcy. Microsoft is now
negotiating from a position of strength -- because Nokia brass refuses to adopt
the Android platform, while Redmond executives openly flirt with and engage the
likes of Samsung and Huawei Technologies as rival original equipment
manufacturers. While leading this mating dance, Microsoft deal makers may even
feint to quit while they are ahead, only to return to scoop up Nokia on the
cheap as vulture investors.

The Bottom Line

Nokia closed out its Q1 2013 with $25 billion in assets above $20 billion in
liabilities on the balance sheet. On a per share basis, $5 billion in net worth
calculates out to be a mere $1.35, when divided above 3.7 billion shares
outstanding. At $4.15, Nokia stock remains overvalued, especially after
considering that this company posts no earnings despite the fact that Microsoft
is effectively paying it to carry product. The balance sheet does include $6.8
billion in goodwill, other intangible assets, and property, plant and
equipment. In theory, these assets must be written down towards zero, if they
cannot be leveraged to turn real profits. Right now, Nokia is running on fumes,
as it has been forced to lay off workers, consolidate real estate, and sell off
securities to harvest cash flow and meet debt obligations.

The Nokia Lumia 1020 launch event is set to embody yet another maddening cycle
of frantic technology blog posts, unwarranted hype, awkward retailing, and
sales performance disappointment come earnings season. Microsoft, with its $300
billion in market capitalization now operates with nothing to lose and can play
for keeps. At any moment, Microsoft could walk away, allow Nokia to crash and
burn, and re-enter the picture as a savior of proverbial scrap. As par for the
course, Microsoft shareholders will still own a blue chip stock with minimal
growth prospects that generates massive cash flow for robust dividend payments.
Ironically, Microsoft could own Nokia for a song -- by doing nothing.

At the moment, no other technology player will step up and call Microsoft's
bluff for Nokia.

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Follow-Ups:
- [opendtv] Re: McAdams On: TV Everywhere, Why Aereo Wins the PR War...
  - From: Bob Miller

References:
- [opendtv] McAdams On: TV Everywhere, Why Aereo Wins the PR War...
  - From: Manfredi, Albert E
- [opendtv] Re: McAdams On: TV Everywhere, Why Aereo Wins the PR War...
  - From: Craig Birkmaier
- [opendtv] Re: McAdams On: TV Everywhere, Why Aereo Wins the PR War...
  - From: Bob Miller

[opendtv] Re: McAdams On: TV Everywhere, Why Aereo Wins the PR War...

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