US consumers have responded to the global economic crisis by curtailing their expenditures, paying down debt, and saving more—all logical responses to a recession. Yet most consumers have acted by choice, not necessity, according to McKinsey. Spending, saving, and debt averages are not at abnormal levels today but rather returning to long-term trends.
It was the behavior of US consumers during the past two decades, our research shows, that was the aberration. The return to traditional spending patterns will cause companies to adjust to a fundamentally altered playing field.
In a McKinsey survey conducted in March 2009, 90 percent of the US respondents said that their households had reduced spending as a result of the recession—33 percent of them “significantly” so. The survey, which included 600 households in three consumer segments comprising around 40 percent of all US homes, found that 45 percent of those who reduced spending did so by necessity, 55 percent by choice.
Technorati Tags: Consumer-spending
“Smart” computing will drive the next period of growth in the information technology industry, according to Forrester Research.
IBM, Oracle, Microsoft are current IT vendors best positioned to win in next-gen technology, but GE and Siemens will become bigger factors, analyst Andrew Bartels says in a presentation on Forrester’s IT 2009-2016 Long-Term Forecast. Bartels describes smart computing as “Flexible, adaptable, responsive, and extended IT systems that incorporate awareness (location, status, condition) and analytics to make IT more intelligent to solve new business problems.”
After a tough 2009, Bartels expects tech investment to lead the economic recovery in the US by 2011, with a CAGR of 2.7% from 2008-2016.
Highlights of the report:
- New smart computing technology will drive a new period of rapid growth in tech investment.
- Old technology continues to be in demand, but purchases grow at trend rate.
- Solutions based on smart computing technology will address critical business issues.
- Sales directly to business, not to IT.
- Investment in new technology driven by strategic rationales, not cost/benefit calculations, with multimillion-dollar deals.
- Highly vertical solutions will capture more of the growth, although not the largest share of sales.
- Asset-intensive industries like government, healthcare, utilities, education, and professional services will be the biggest buyers.
Technorati Tags: Healthcare, higher-education, IBM, information-technology, Microsoft, MSFT, Oracle, professional services, Siemens, smart computing, subprime-mortgage, utilities
The percentage of sales from biotechnology products (bioengineered vaccines + biologics), within the world’s top 100 drugs, is set to increase from 28% in 2008 to 50% by 2014, according to a new report from EvaluatePharma. In the broader market, sales from biotechnology products are expected to capture 23% of the world pharmaceutical market by 2014, versus its current share of 17% in 2008, EvaluatePharma says in its World Preview 2014 (free with registration). The total value of biotechnology sales is set to grow 56% between 2008 and 2014 from $108bn to $169bn.
Highlights of the report:
- Worldwide Prescription Drug Sales total $707bn in 2014; 2.9% (CAGR) over 2009 – 2014
- Global Prescription Drug Sales Flat in 2009
- Over $182bn of Sales at Risk from Patent Expirations in 2011-14
- Pfizer (NYSE: PFE) Maintains Top Spot in 2014 via Wyeth Acquisition
- Novartis (NYSE: NVS) Moves up to Second Place as Merck+Schering Plough (NYSE: MRK) Drops to Third
- Biotech Products Set to Overtake Small Molecule within Top 100 Drugs by 2014
- Global Pharmaceutical R&D Spend to Grow by 2.4% (CAGR) to $142bn by 2014
- Vaccines Set to Record Highest Growth of Major Therapy Categories to 2014
- Sales Potential of 2008 New Drugs (NMEs) Down 14% vs. 2007 Cohort of NMEs
See Alacra StreetPulse for Latest Analyst Comments on Pfizer, Novartis and Merck.
Technorati Tags: Abbott Laboratories, agrochemicals, Amgen, big pharma, biotechnology, GlaxoSmithKline, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer Inc., pharma, Pharmaceuticals, Sanofi-Aventis
Forrester Research says Apple’s iPhone strategy will help Apple further its world domination plan.
In a new report, Forrester analyst Charles Golvin says Apple’s (NASDAQ: APPL) decision to differentiate its new version via not only its new features, such as video capture and editing, but also its performance is an unusual one for the phone industry.
Forrester believes that Apple’s new iPhone 3GS, its upcoming iPhone OS 3.0 release, the enormous appeal of the platform to developers, and — more importantly in today’s economic climate — the concomitant price drop of the current iPhone 3G to $99 will maintain Apple’s astounding momentum.
Forrester believes that Apple’s latest move will maintain the iPhone’s staggering momentum because:
- The new iPhone is differentiated.
- The existing iPhone’s appeal has expanded.
- Developers’ energy will continue to focus on the iPhone rather than other platforms.
- The new iPhone is even more appealing to enterprises.
Some other analysts are not as positive, according to ComputerWorld.
The problem with the iPhone 3G S is “that you don’t have a console to enforce corporate policies across an entire group of workers,” said Kevin Burden, an analyst at ABI Research.
The iPhone 3G S also doesn’t allow processing in the background, which would let IT administrators run management tools coveted by large enterprises such as financial firms bound by strict federal regulations. - Ken Dulaney, an analyst at Gartner Inc
The iPhone does have traction in a few large businesses, such as Kraft Foods and Oracle Corp., but the financial services industry has been hard to attract, ComputerWorld says. Bank of America, for example, prefers to stay with Research In Motion ’s BlackBerry Enterprise Server because it includes centralized management tools.
For mor analyst commentary on Apple see Alacra StreetPulse.
Technorati Tags: AAPL, Apple, BlackBerry, iPhone, Research in Motion, smartphone
A new report from Pike Research forecasts that, despite significant challenges, the combined biodiesel and ethanol markets will reach $247 billion in sales by 2020, up from just $76 billion in 2010.
The widespread excitement surrounding the biofuels market opportunity has been tempered somewhat by its many challenges, which include limited availability of inexpensive feedstocks, ethical questions of food versus fuel, petroleum price volatility, global recession, and overcapacity of production, Pike Research says.
In the near term, the biofuels market looks like a train wreck. - Pike Reserch managing director Clint Wheelock.
“The economics of ethanol and biodiesel are not yet competitive with petro fuels, and governments have pulled back some of their support. However, in the 10 to 15 year timeframe, the outlook remains very positive. The long-term commitment of national governments to foster robust biofuels markets remains solid, and technological advances and economies of scale will dramatically improve the economics of biofuels versus petroleum.”
Pike Research anticipates three key waves of next generation biodiesel over the next several years.
- Fuels based on waste greases will hit the market first in 2010.
- Jatropha-based fuels will begin having a significant impact on the market in 2014.
- Algae-based biodiesel will achieve commercial availability in 2012 and will have a deeper effect on the market beginning in 2016.
An Executive Summary of the report Biofuels Markets and Technologies is available for free download on the firm’s website. The report also includes profiles of key players and comprehensive forecasts that quantify the potential for biodiesel and ethanol by country and region.
Technorati Tags: algae, biodiesel, Biofuels, ethanol, Jatropha, waste greases
Is Nintendo running out of ideas? Besides the Wii MotionPlus, an attachment that allows players to check their pulse, Nintendo did not introduce a new gaming device at this year’s 3E convention.Meanwhile, Microsoft and Sony unveiled motion control devices that will compete with the Wii. Analysts wonder whether Microsoft and Sony are closing in on their competition.
Nintendo is the company we turn to for major innovations in the video gaming space, but all they have given us are rehashes and remakes for years now. - Silicon Alley Insider’s Sachin Agarwal
UBS analyst Yuhki Nakayasu notes, “We do not think Nintendo will find it easy to maintain the competitive edge established with the NDS/Wii unless (a) new portable game hardware is brought out and (b) genres for the Wii are expanded. “
Mia Nagasaka, an analyst with Barclays Capital says, “We believe Nintendo’s presentation generally matched the market’s subdued expectations, although investors should note that it could be slightly negative for the share price. We think the unveiling of the “Wii Vitality Sensor” will not impact the share price because the minimal details given make it difficult to assess its attractiveness.”
Nintendo’s (ADR: NTDOY) stock price has been slipping since January of 2009 when it was priced at $48. Today it is at $33.10.
Microsoft received more favorable reviews about their motion controller than did Sony. Forrester analyst Paul Jackson, comments, “The first two games Microsoft previewed were very polished, but ‘Milo’ showed where this stuff can go above and beyond in gaming.”
Nintendo’s President’s, Satoru Iwata does not seem to be worried about Nintendo’s position in the market despite their lack of innovation. He states, “It’s too early to tell whether Microsoft and Sony’s plans pose a threat to the Wii.”
Technorati Tags: (NTDOY), E3, gaming, Microsoft, Nintendo, PS3, Sony, Wii, Wii Vitality Sensor, Xbox
With the attention-grabbing introduction of the Palm Pre this past weekend and new and lower-priced iPhones, Nokia’s N97 launch this month does not look very promising. Although Nokia aims to sell 10 million of the new smartphone, using the N95 as a benchmark, it has not been successful in picking up a US carrier.
Despite favorable consumer reviews, including from All Things D’s Walt Mossberg, who claims the phone to be, “pretty cool” and able to hold its own against the iPhone and Pre, analysts are skeptical about its commercial success.
CCS Insight analyst John Jackson is dubious about sales projections for the N97 for several reasons:
- The launch of the N97 comes at a poor time with the Palm Pre and iPhone launches
- Its non-subsidized price of $699 is deemed expensive and not competitive, $400 more than the iPhone and Pre.
- Nokia’s several hundred applications cannot compete with Apple’s extensive 40,000 applications
Most U.S. consumers view Nokia as a low end brand. Forrester analyst Charles Golvin says that the Nokia brand has something of a split personality among American consumers. “There’s a small cadre of very knowledgeable users that recognize Nokia for its very advanced phones that are very feature rich.”
Cultivating a large community of developers will be critical to the growth of smartphones. The iPhone has the most robust application platform today, with RIM and Palm also courting developers. It’s difficult to see how Nokia will attract developers in this crowded field, particularly without a U.S. carrier.
Blogger and tech entrepreneur Sramana Mitra suggests Nokia should acquire Palm. She sees the Pre as the first smartphone with potential to match the iPhone, noting “Unless Nokia works on its software, its phone will be just another touch screen device.”
According to Gartner, Nokia’s share of the global smartphone market fell to 41.2 percent at the end of Q1 2009 from 49.4 percent at the end of 2007, while RIM doubled its share to 19.9 percent. Apple’s share has shot to 10.8 percent of all smartphones, from zero two years ago.
Mitra adds, “The overall mobile market declined 15 percent while the smartphone market grew 4 percent year-on-year. No prizes for guessing where all players need to put serious emphasis”
Technorati Tags: (PALM), iPhone, mobile, N97, Nokia, pre, Pulse
Forrester Research analyst Nick Thomas paints a depressing portrait of the media industry in a new presentation on How Digital Consumption is Reinventing the Media Industry.
Key points:
- Broadband access has created a new audience for rich media content online.
- Consumer reluctance to pay for online content is deep-seated.
- Buyers will remain scarce in all content categories.
- Levels of piracy online remain high.
- Traditional content destinations are becoming less important.
- Advertising revenues have failed to grow as expected.
One slide illustrates the challenge facing content providers:
There is no “silver bullet” to replace declining revenues from physical media.
Thomas’s predictions:
- Power will shift to the platform.
- Content owners will invest in these platforms.
- Media companies will need a portfolio of new digital revenue streams.
- Companies will need to rationalize as they focus on their core strengths.
- The user experience will become more important than ever.
- All companies will become media companies.
Technorati Tags: content, digital-business, media and entertainment, media companies, newspapers, publishers
Expectations of a cheaper iPhone emerging this week finds analysts of mixed opinion on whether Apple, (NASDAQ: AAPL), Research in Motion (NASDAQ: RIMM) or Palm (NASDAQ: PALM) will gain the upper hand in the next round of smartphone wars.
Some believe that despite all the attention generated by Apple, RIM remains in a strong position.
According to Deutsche Bank’s Brian Modoff, “In spite of Apple’s terrific performance with its iPhone, RIM will move to the head of the pack in snatching the largest share of the industry’s operating profits with a stunning 35% projected share for 2009.”
Citi’s Jim Suva gives RIM another favorable review with a target price of $100″ However, Ashok Kumar, an analyst with Collins Stewart, feels the rumored $99 price point for the iPhone will give Apple, “an advantageous position against RIM.” He upgraded Apple from a neutral to buy position.
Kumar is the third analyst in two weeks to predict the $99 price point. His estimation, however, differs from that of Piper Jaffray’s Gene Munster who is pegging the iPhone price at $150.He believes Apple’s WorldWide Developers Conference this week could be a, “slight disappointment” to investors as he expects Apple will release a new operating system but no new phones. He said a new “family of iPhones” will probably not be released until July.
The Pre may be a cool device, but it won’t restore Palm to its former glory.- Henry Blodget
Despite positive reviews, financial blogger Henry Blodget is skeptical that the new Pre smartphone will help Palm regain its leading position in the smartphone segment. He is confident the Pre will fail. He attributes its failure to the success of the iPhone, the webOS developer platform being “too barren” and the Palm being too small of a player. However, Blodget’s colleague at Business Insider, Dan Frommer is more optimistic. He notes that most people still buy their phones from their carriers, and Sprint Nextel (NASDAQ: S) is still a big carrier. News that the Pre quickly sold out at many locations augurs well, according to Jennifer Fritzsche, an analyst at Wachovia Securities.
Mike Abramsky, an analyst with RBC Dominion Securities, expects 470,000 units of the Pre to be sold in its first 3 months. In comparison, Apple sold 3.8 million iPhones last quarter.
According to Gartner worldwide handset sales totaled 269.1 million units in the first quarter of 2009. Smartphone sales surpassed 36.4 million units, 13.5 % of the market during the first quarter of 2009, a 2.5% increase since 2008. Symbian accounted for 49.3% of worldwide smartphone operating systems (OS) market share in the first quarter of 2009, down from 56.9% share in the first quarter of 2008. RIM’s smartphone OS market share reached 19.9% in the first quarter of 2009, up from 13.3% share in the first quarter of last year. The iPhone OS accounted for 10.8% of the market, up from 5.3% market share in the first quarter of 2008.
Technorati Tags: (PALM), (RIMM), (S), AAPL, Apple, iPhone, Palm Inc., smartphone, Sprint Nextel
Credit card providers took sixth place out of 12 industries included in Forrester Research’s Customer Experience Index (CxPi), ending up with an overall “okay” rating of 68%.
The average score for credit card providers increased by one percentage point compared with last year.
USAA came out on top with an “excellent” rating of 91%, followed by two
firms with “good” ratings: American Express and Discover. At the other end of the spectrum, HSBC received a “very poor” rating, while Washington Mutual and Bank of America ended up with “poor” ratings.
Most firms meet consumers’ basic needs, Forrester says in Customer Experience Index 2008 Snapshot: Credit Card Providers When it comes to meeting needs, USAA ended with a near perfect score. American Express also ended up with an “excellent” rating, and five other firms wound up with a “good” rating. HSBC was the only credit card provider with a “poor” rating.
Technorati Tags: (AXP), (bac), (DFS), American Express, Bank-of-America, credit-cards, Discover Financial Services, HSBC, USAA, Washington-Mutual
