Tech giants rush to catch up in the mobile world
Intel made its fortune from personal computer chips and Microsoft from the software that goes inside. However, things are changing for these tech titans due to a force majeure: the rise of mobile devices.
These and other tech companies are struggling to reinvent their business models, now that the old model - a customer sitting at a fixed desk - is no longer applicable.
“Companies are being forced to redesign their thinking, saying: 'What is it that our customers are doing through the mobile channel that is so different from what we are offering them through our traditional web channel?'”, said Charles S. Golvin, an analyst at technology research firm Forrester Research.
Industry giants remain highly profitable economic drivers. However, the global shift to mobile computing is taking its toll. Demand for Intel's computer chips - which are far more profitable than those for smartphones - is plummeting. For Microsoft, PC software sales are declining dramatically. At Google, the price advertisers pay when users click on ads has fallen in the last year. This is partly because, while mobile ads have exploded, they cost less than internet ads. However, advertisers are still looking for ways to make them more effective. Since its IPO, Facebook has lost half its value on Wall Street under pressure to make more money from mobile devices, now that six out of 10 Facebook users access the social network from their phones.
Making money now will depend on how adeptly tech companies can follow their users from their desktops to mobile phones and ultimately to the stores, movie theaters and pizza parlors where they spend their money. It will also depend on how consumers - and government regulators - react to being controlled in every move. Nielsen observed that only one in five smartphone users describes ads via phones as "acceptable."
Companies are tackling the challenges in a variety of ways. Despite the disappointment in its recent earnings report, Google claims to be on track to earn $ 8 billion from mobile advertising, apps, and multimedia content in the next year; and it already has five hundred million devices with its mobile operating system, Android. Google makes most of the money from mobile advertising. It's offering location-based ads, such as a T-Mobile campaign that sent users ads when they were near stores. However, one of Google's biggest challenges is tracking whether people make a purchase after seeing a mobile ad. Unlike online, where Google knows if someone buys a camera after searching for it, the company doesn't know if someone searches for a nearby Thai restaurant and then eats there. That is why you are trying to follow people in the physical world with services like Wallet, a purse system for making payments, and Offers, with coupons.
Facebook is trying to use what it knows about its millions of users to serve ads in the other apps they download to their phones.
As people abandon computers for smartphones, Microsoft will shortly introduce a version of its Windows software tailored for touchscreen devices and a new tablet, called the Surface.
Intel is trying to catch up by making chips for more than two dozen smartphones and tablets that will hit the market. The move to mobile has also created a new market for Intel: Its chips are in the large servers that host the cloud, where much of the mobile data is stored.
Source: The New York Times
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