We have twice before posted strong pleas for the giant tech companies—especially Alphabet/Google/YouTube, Apple, and Facebook—to stop expanding their Silicon Valley facilities rather than creating/expanding sizable operations in other cities. They’re mostly software companies, which could be located anyplace with high-speed data transmission capabilities!!! Are these companies afflicted by cases of hubris?
We wonder why all those cities who were campaigning for the Amazon HQ2 aren’t similarly campaigning for expansions of other tech giants.
We also wonder why Silicon Valley communities have not been able to either (1) extract enough money from these companies to compensate the many victims (long commutes, wasted time in traffic jams, inability to find housing, homelessness, etc., or (2) tax the companies so much that it makes it uneconomic to expand there.
In our experience, most software asks permission before it updates itself. There is usually a “Not Now” option. But since Microsoft has a monopoly for Windows-based personal computers, they do what they please, ignoring the needs and preferences of their customers. As we noted in our March 28, 2018 post, Apple’s updates can be traumatic, but at least they ask beforehand.
Apparently this nasty behavior has been around for some time, at least since the introduction of Windows 10 in July 2015. We had seen for some time warnings against “upgrading” to Windows 10, but for some reason had not experienced any of these potentially-damaging events until the last few weeks. The advice “save early and save often” applies as much or more to files one creates on a personal computer as to retirement planning!
The “Your version of Bing search is out of date” pop-up tries to force installation of Chromium (a public domain version of Google’s Chrome browser) and the Bing browser on its victims. Victims will know immediately of the attack, because it plants itself in the middle of the screen and they will either have to reboot their PCs or (unwisely) click on “OK” Apparently this nasty behavior has been around for some time, at least since December 2012. The scammers have taken advantage of the open-source nature of Chromium to use it as a means to install unwanted “adware” and other unwanted programs. Fortunately, there are ways to remove such programs.
This club is pretty exclusive today, with American members including mainly Alphabet/Google, Amazon, Apple, Facebook, IBM, Intel, Microsoft, and Netflix. They are so big that to grow significantly they have to look for other big markets (like cloud computing or self-driving cars or Hollywood-type movies) to enter, and most of those big markets are already occupied by other club members or non-member already-large specialists. What are the bloopers here? A classical one would be monopoly/oligopoly pricing and/or restraint of trade. But perhaps more important might be the opportunities lost by a failure to allocate capital to creating useful NEW-AND-DIFFERENT products and services.
Will Apple topple from its perch as the world’s most valuable company? The stock market didn’t reflect Apple’s declining smartphone sales far enough ahead, which led to a drop in share price when year-over-year Q1 iPhone sales declined nearly 15%. And while the overall market grew about 4%, leader Samsung stayed flat, and a handful of Chinese companies rose ominously. Apple’s reliance on the iPhone for growth has become a weakness.
But there is another important consequence. If you look at total market capitalization (total shares times share price), Apple is declining rapidly and Amazon is rising rapidly. For the last 3 calendar quarters, the top 5 companies in the world have included only Apple, Alphabet, Microsoft, Amazon, Berkshire Hathaway, and Exxon Mobil, and the top 3 were only Apple, Alphabet, and Microsoft. But Apple’s market cap(italization) in 1Q2015 was more than double ANY other company, while in 1Q2016 there were 7 other companies with market caps over half of Apple’s. But In 1Q2015 Amazon was not in the top 10. It was #10 in 3Q2015, and #4 in 1Q2016 (getting profitable helped a lot). And Amazon is not dependent on one product line.
The power and convenience of the Internet and the Web are so attractive that we forget there is a price we pay for using them. And generally we are willing to pay that price. But sometimes we are lazy and forget to ask the price or we don’t understand how high a price we are paying. A good example is the “free” email services such as HotMail or Gmail. When you sign up for them they warn you that Microsoft and Google, respectively, own the content of what you send. Recently a bunch of people have sued Google because they learned that Google was scanning their emails and—it is alleged–using the information not only for targeting advertising to the Gmail users but also using it for secret profiles of these users. This practice is a good example of the “Intentional Blooper” we just cited. The antidote for email users is to pay a bit to email services who guarantee not to use the information.