Wednesday, April 13, 2011

Apple (AAPL) (GOOG) (MMI) (RIMM) (MSFT) and Commoditization Challenge

With just about everyone saying and believing content is king, when applying that to the mobile sector, that's also true. But for companies like Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), Motorola Mobility Holdings Inc. (NYSE:MMI), Research in Motion (NASDAQ:RIMM), HTC, Microsoft (NASDAQ:MSFT) and Nokia (NYSE:NOK), the key form of content is delivered via apps, and that is very quickly becoming a commodity element of the business.

That means there will have to be another way to differentiate, as boasts of hundreds of thousands or more of apps is largely irrelevant, as pretty much the majority of mobile customers use the same apps.

It's like years ago when thousands of fonts were offered to consumers and they used only about four or five of them.

The problem with digital content is every bit of it can be offered by anybody, and the sector itself will eventually become a commodity business, like Netflix (NASDAQ:NFLX) will soon find out.

Unless there are deals made which are exclusive to a company, there's little to suggest there will be a way the different players in the industry can differentiate.

Others in the industry see services as the next point of attack for companies to use, and it will probably work in the short term, but that will eventually be copied by everyone as well.

It'll take years of course, but eventually the entirety of the mobile business will become a commodity business, and it may go back to the best platform and network as the deciding factor in choosing a phone.

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