Friday, August 23, 2013

Amazon Seeks New Wireless Connections to Its Content

The biggest challenge facing OTT content companies like Amazon and Netflix, OTT boxes like Roku, Apple TV, and Aereo, and even smart TV manufacturers like Samsung, is that they all rely on existing broadband providers.   That means that even cable cord cutters still must get their broadband service from their cable or telco provider.  We've seen that when a customer drops cable service, the price of their broadband service rises because they no longer get the discount advantage.  I continue to say that new competition in broadband service is needed to keep price points low.  Well Amazon might just be on the same page. 

"The wireless network, which was tested in Cupertino, California, used spectrum controlled by satellite communications company Globalstar Inc. (GSAT), said the people who asked not to be identified because the test was private."  How far Amazon wants to get into this space remains to be seen although it might make sense, give the capital costs, to partner with other OTT companies to create a wireless/broadband competitor to cable and the telcos.  And while Google is building a fiber based business in Kansas City, a wireless competitor that can effectively handle video streaming would be ideal.  Certainly Dish had been trying this route in trying to acquire Clearwire.  Should GSAT have the spectrum to handle such capacity, Amazon may have found a new business model and a seamless connection from consumer directly to their content. 

Microsoft Post Steve Balmer

While not earth shattering, Microsoft revealed that its CEO, Steve Ballmer, will retire in the next 12 month.  No successor has been named to succeed him in the role.  Many have believed that Microsoft has needed new leadership to compete in a more mobile marketplace.  While its Office software and operating system dominate the business world, consumers have moved to more free-based software from Google and others.  PC sales have also been declining and Microsoft has not been able to break through the tablet or smartphone world with a winning product.  Its biggest success continues to be XBox and it is looking forward to higher revenues from the release of its newest platform. 

So how will the stock market react later today to this news?  Hopefully NASDAQ opens today without a hitch and I suspect analysts will see more positives out of this long term transition.  There is plenty of time to announce a successor.  And time will tell if the next CEO can best steer Microsoft to new highs.