Economic news is largely lacking today but the markets appear to be headed for another downturn, driven perhaps again by speculative short selling ahead of earnings season. Monetary and economic data worldwide isn’t suggesting any problem at this point, but it does seem to me that the stock market is trending a bit ahead of the baseline economic story. Our model, which is still dabbling with stock pricing, suggests that markets are overpriced about 2% at the moment.
In tech, tablets are again in the news as RIM prepares their launch of the Playbook, a tablet that diverges from the iPad mold in that it’s based on 7-inch form factor, and from the Android craze because it’s based on RIM’s QNX operating system. I’m not really too hopeful about Playbook, frankly. It’s not form factor or OS that’s the problem as much as the need for RIM to straddle a very high fence with its tablet. You can’t win in the tablet space, or even play well, without a strong consumer value proposition. RIM can’t hope to get any near-term traction with Playbook without tapping the Blackberry base. How do you do both, particularly at a relatively late date at the dance? Seven-inchers would be cheaper by nature (they’ve generally proven to be) but RIM has waited until the pricing on 10-inch tablets seems to be coming down. Given that the iPad has set the 7-inch form factor as the consumer standard, that means an uphill sell.
To add to the problems, Playbook is getting almost universally bad reviews, with the problems attributed to haste and hurry. Well, gosh, RIM, what were you thinking here? The instant the iPhone hit the market, every handset player had to realize that the whole wireless device market was a new game defined by a new player. Even before the iPad hit, RIM should have realized that Apple was going to continue to be a game-changer, and the instant it first appeared RIM knew it had to respond. So hurrying to get something out? Not unless they waited a year before starting. The simple truth is that you can’t launch something whose sole goal is to compete with something else. You have to have an affirmative goal to support a doctrine of affirmative buyer choice or you get fuzzy on both your value proposition and your differentiators, which is what RIM has done.
While we don’t typically cover management changes and executive hires, I do think it’s significant that Juniper has announced a new VP (from Cisco) in a new position. Nawaf Bitar has been brought in as SVP and GM of Emerging Technologies, which Juniper describes as focusing on the intersection of software and systems. The reason this is interesting to me is that Juniper has demonstrated excellent engineering and, in Junos Space and Junos overall, insight in the creation of a software layer in networking. They’ve under-exploited their assets, though, and thus risked being preempted by a player with less reality but more sex appeal. With the service provider market finally demonstrating some service-layer deployments (Verizon’s DMS most recently) it’s clear that Juniper’s rivals won’t be quiet for long.
Juniper’s number one rival isn’t Cisco, it’s Alcatel-Lucent, and that company is now said to be exploring the sell-off of its enterprise communications business. But Cisco’s not out of the story; they might well be essentially doing the same thing in a different way. There are strong signs that Cisco wants to push its own unified communications and collaboration stuff through service provider channels rather than directly to the enterprise. The UC space has been troubled essentially from its moment of birth, one of those “it-will-be-next-year” kind of markets. The problem is that what’s driving UC is the commoditization of voice by IP, and you don’t get very far asking enterprises to capitalize a declining space. UC-as-a-service has been the inevitable winner, but of course PBX incumbents never wanted to hear that. They hear it now.