In a week dominated by Apple and Microsoft’s major releases, the news that Samsung’s Display division will soon be cutting all its ties with Apple kind of slipped under the radar.
Samsung announcing that it will no longer be making displays for the iPhone, iPad, or any other device is big news, although the numbers indicate that both parties have been heading this way for some time.
Samsung, which has seen its profit margins plummet around these displays, has been making fewer and fewer displays for Apple over the last few quarters.
Ultimately, both companies are having fantastic fiscal years, so the news isn’t perilous. But if the revenue display manufacturers are realizing is becoming more and more commoditized—much like it has become in the big-screen TV category—it’s going to be harder for display manufacturers to turn a profit.
This bears watching.
Apple vs. Microsoft, round 12
Meanwhile, the eternal battle between Apple and Microsoft continued this week.
Even if the Ballmer announcement bored me to tears, it seems clear that Microsoft has a winner (or at least a great start) on its hands with the Surface tablet and with other Windows 8 devices.
However, it also seems equally clear that Microsoft is going to take some dings on the desktop OS front. Virtually every single review of the operating system has complained about the absence of the Start button in the bottom left-hand corner of the screen.
This is going to be a problem for Microsoft, because there will be way more desktop installations of Windows 8 than tablet installations for now.
Based on its stock price, it seems that Apple also has problems to deal with. Despite the massive amount of coverage the iPad Mini received, and no matter how cool it is, I can’t shake this notion: The moment consumers have to decide which iPad to buy, there’s a chance that they might buy something else entirely.
It appears that Wall Street and Apple investors are seeing the same potential risk/exposure here. Or maybe investors are feeling like it just can’t get any better for Apple, what with all the emerging competition.
…But what about games?
As you’ve probably noticed by my occasional references, I play my fair share of video games. Console, iPad, iPhone, PC, social, and otherwise.
As you’ve probably also noticed if you watch sports or ESPN at all, we’re just about to enter one of the biggest game-buying seasons of the air.
The season starts on Tuesday, October 30 when Ubisoft releases Assassin’s Creed III then continues the following week when Microsoft releases Halo 4, and culminates on November 14 when Activision releases Call of Duty: Black Ops II.
Last year, Call of Duty Modern Warfare III sold an astonishing 37 million copies. That’s the equivalent of a Hollywood mega-blockbuster, ringing at a little over $2 billion dollars in total revenue.
But the times are about to change. Microsoft, Sony, and Nintendo will all be releasing new gaming systems over the next 18 months. Nintendo’s tablet-based WiiU system releases on 11/14.
These next 18 months will be an interesting period of time. Given the constant migration towards mobile gaming by almost all gamers, the big question is what will happen in the null period when the Xbox 360, PlayStation 3, and Nintendo Wii begin winding down, and their successors begin charging up?
At the very least, the sales figures of any new systems released will take some time to build up. But will gamers stop buying consoles, because they’re already buying and playing good-looking, sophisticated games on tablets?
One of the most interesting things about my job (I’m director of programming at Wikia, which is a collaborative content network with a large gaming audience) is that I see constant streams of data that are clear indicators of trends in the video game space.
As I look at the numbers on a daily basis. The following three trends are becoming clearer and clearer to me:
1. Mobile games are becoming increasingly complex. Wikia’s communities tend to embrace complexity, and I’m seeing big numbers around free-to-play tablet and smartphone games with lots of moving parts. Ever heard of Dragonvale? How about Zombie Jombie?
2. At the community level, the audience for mobile games is becoming as vibrant and as active as the communities forming around traditional console games. I think what we’re seeing is a broadening of what used to be called the “core” gaming market—gamers who spend many hours playing games. It’s not just teenagers and twenty-something males anymore.
3. Most AAA games have some kind of tablet and/or smartphone adjunct. Right now, these games are essentially merchandising. Over time, these games will become more complex.
With Microsoft, Sony, and Nintendo all embracing second screen devices—specifically the tablet form-factor—and with tablet devices rapidly approaching the power and performance of high-end PCs and console gaming systems, it seems clear that the gaming industry is heading for a sea change.
The big winner here will be smaller, nimbler game developers with popular, existing brands on iOS and Windows.
This week’s winner: Comcast
Also buried in the avalanche of Windows 8 and iPad Mini coverage was the news that Internet cable provider Comcast blew past its projected earnings in Q3 2012, more than doubling its third-quarter income in comparison to last year.
Mobile devices and tablets played a key role in this revenue growth. Big chunks of the revenue were attributed to Comcast selling of wireless spectrum to Verizon Wireless and to the windfall in advertising revenue NBC realized from broadcasting the 2012 Summer Olympics.
Online TV and surging high-speed Internet subscribers also factored into the company’s profits. The golden truth for Comcast is that, even as high-speed penetration reaches a saturation point, consumers demand for fast connections for all their devices will continue to create revenue opportunities.
This week’s loser: Apple
See my comments above. The stock price is down, Apple’s tablet market share slipped from 64% to 57% for the year, and Android tablet sales have risen from 29% to 41% of all tablets. It kind of takes the luster off of the fact that Apple has already put 100 million tablets into the channel.
Maybe the 4th generation iPad, which sports a much faster processor, is a sign of greater things to come in the 10-inch package.
Close runner-up here is Microsoft. The company received good buzz around its Windows 8 announcement, but the initial phase of its advertising campaign feels generic and forgettable. Branding Windows 8 as a hip, cool experience, feels out of sync with what it really is: an indispensable tool.
Despite my pessimism, I want to be clear: This is still a growth market, and both Microsoft and Apple appear primed for excellent 4th quarters…in terms of tablet sales.
I’m not so sure Microsoft is going to do that well around the desktop version of the OS.
TabTimes hits Windows 8
One final note: Earlier this week, TabTimes announced the release of a Windows 8 version of its app. This new releases sports the Metro interface, supports Snap view multi-tasking, and delivers your favorite TabTimes coverage in snappy fashion.
The release also puts TabTimes in good company—the New York Times, Wall Street Journal, USA Today, and ABC News also announced Windows 8 apps in the same time frame.
You can find your way to the Windows 8 version of TabTimes right here.