The ground is shifting beneath technology titans like Intel, Google and Microsoft because of a major force: the rise of mobile devices, Claire Cain Miller and Somini Sengupta report in The New York Times on Tuesday.
These companies are all scrambling to reinvent their business models now that the old model - a stationary customer sitting at a stationary desk - no longer applies. Although they once disrupted traditional businesses, from selling books and music to booking hotels, now they themselves are being upended by the widespread adoption of smartphones and tablets.
“Companies are having to retool their thinking, saying, ‘What is it that our customers are doing through the mobile channel that is quite distinct from what we are delivering them through our traditional Web channel?' †Charles S. Golvin, an analyst who studies mobility at the technology research firm Forrester, told The Times.
He added, “It's hilarious to talk about traditional We b business like it's been going on for centuries, but it's last century.â€
The industry giants remain highly profitable drivers of the economy. Yet the world's shift to mobile computing is taking a toll, including disappointing earnings reports last week from Google, Microsoft and Intel, in large measure related to mobile revenues. Investors are in suspense over Facebook's earnings on Tuesday for much the same reason.
Demand is plummeting for Intel chips inside computers, which are much more profitable than those inside smartphones. At Microsoft, sales of the software that runs PCs and the technology that comes with them are sharply declining as people spend money on phones and tablets instead. And at Google, the price that advertisers pay when people click on ads has fallen for a year. This is because, while mobile ads are exploding, they cost less than Internet ads.
Meanwhile, since its public debut, Facebook has lost half its value on Wall Street and is under pressure to gin up mobile revenues, now that six of 10 Facebook users log in on their phones.
But making money in the new game of mobile will depend on how deftly companies can track their users from their desktop computers to the phones in their palms - and ultimately to the stores, cinemas and pizzerias where they spend their money. It will also depend on how consumers and government regulators will react to having every move monitored.
