The cover story of current edition of Forbes magazine, written by Scott Woolley, is entitled “The $10 Phone Bill.” Such a scenario was discussed in the halls of the most recent CTIA, and Forbes teases “AT&T and Verizon’s worst nightmare is starting to happen.”
This in depth article about today’s North America wireless phone industry presents an insightful look at the challenges the major telcos face, the evolution of the industry to 4G and the acceptance of VoIP calls from mobile phones, and the opportunities for emerging players.
Just as interesting as the main article, a call-out article also by Woolley presents a Moore’s Law inspired analysis of Hi-Def Phone Calls. My favorite sentence: “Eventually the U.S. will catch up to Moldova, as the cost of better-sounding voice call becomes too cheap to ignore.”
iDidn’t, but you might have
In case the special effects laiden and action packed commercial of Stealth Bombers firing objects at unsuspecting farmers, school children, fishermen, hikers and motorists escaped your view, Verizon launched Droid, its first Android phone. This a much anticipated smartphone launch for Verizon, which has been losing market share to AT&T since that carrier’s debut of the iPhone in 2007. I am still curious why Verizon chose Air Force bombers firing pods into the US heartland as the visual for its launch of a smartphone. See for yourself, this commercial has erie Big Brother imagery.
By the way, on Twitter. Silicon Florist editor Rick Turoczy called to our attention that given all the hype about Droid coming to Verizon, who the owner of the website Droid.com turns out to be.
In case you miss it
On Friday last week it was reported that the board of the Internet Corporation for Assigned Names and Numbers (ICANN) unanimously adopted a new policy that will allow domain names in non-Latin based alphabets. This move clears the way for website addresses to be written in Arabic, Chinese, Hebrew, Hindy, Japanese and other languages.
Five months ago we introduced the MoPR 500, an “index” of mobility industry stocks. We selected companies across a broad swath of the mobility industry, and “buying” one share of each, we assembled a list of stocks we could purchase for $500; hence the MoPR 500. We were inspired to create this index by forecasts of the stock market’s impending doom. Certainly a lot of what was forecasted as played out. But five months later, how are our mobility stocks doing?
We began at the close of market October 3, 2008 with an index value of $500.49. At Friday’s market close (March 6, 2009) the MoPR 500 was valued at $358.82, a loss of 28.31 percent.
For some context, at the close of the market on October 3, the Dow Jones Industrial Average (DJIA) was valued at $10,325.38. On March 6 the DJIA was valued at $6,626.94, or a loss of 35.82 percent. As we watched the ups and mostly downs of the market these past five months, we observed that our mobility index usually though modestly outperformed the DJIA.
Of our 27 mobility stocks, 26 went down in value. Standing alone was Broadcom (NASDAQ: BCRM). On October 3, a share of Broadcom was worth $16.63, and last Friday it closed at $16.97. Only a 2.04 percent gain, but in this volatile market, who wouldn’t take that? For the most part, Broadcom has traded consistently over $16 per share over the past five months. Perhaps part of the stock’s appeal is that Broadcom recently introduced multimedia chipset technology for mobile phones.
The next four best performing stocks in the top of the of MoPR 500 are:
Sybase (NYSE: SY), purchased for $28.76 and trading last at $26.48 for a loss of 7.93 percent.
Syniverse (NYSE: SVR), purchased for $16.11 and trading last at $14.14 for a loss of 12.23 percent.
Verizon (NYSE: VZ), purchased for $31.24 and trading last at $27.28 for a loss of 12.68 percent.
Neustar (NYSE: NSR), purchased for $18.83 and trading last at $15.63 for a loss of 16.99 percent.
It’s sad when three of the best five performers have double digit losses, but these losses are about half the average loss for the index and about a third of the loss of the DJIA.
Four of the five worst performing stocks comprising the bottom of the MoPR 500 cost about $3.00 per share. At such a low initial value, every cent lost makes the stock drop more percentage-wise. The sole exception was Clearwire, purchased for $9.92 per share. Clearwire is in the midst of a much-watched consumer WiMax service roll out.
The five worst performing stocks of the MoPR 500 are:
Powerwave (NASDAQ: PWAV), purchased for $3.32 and trading last at $0.25 for a loss of 92.50 percent.
Nortel Networks (NYSE: NT), purchased for $2.08 and trading last at $0.32 for a loss of 84.62 percent.
UTStarcom (NASDAQ: UTSI), purchased for $2.88 and trading last at $0.70 for a loss of 75.69 percent.
Clearwire (NASDAQ: CLWR), purchased for $9.92 and trading last at $2.82 for a loss of 71.57 percent.
Alcatel Lucent (NYSE: ALU), purchased for $3.54 and trading last at $1.16 for a loss of 67.23 percent.
These last few weeks have certainly been crazy on the stock market. The only stock that seemed to do well the last two weeks was Campbell Soup (NYSE: CPB). It made us wonder how mobility stocks would fare as compared to the rest of the market. So we’re trying an experiment.
We looked at some representative companies across the wide mobility spectrum — from wireless to Wi-Fi, from mobile entertainment to network infrastructure — and we put together a portfolio buying a single shares of as many of these mobility stocks as we could purchase for $500. So yes, the “500″ in the name means dollars, not the number of stocks in our index.
On October 3, 2008 the “MoPR 500 Stock Index” was valued at $500.49. How’s it doing today? See how our mobility stock index is performing by visiting the MoPR 500 Index page here on TheMoPRBlog. You can get detailed information about all the stocks her at our MoPR 500 index pages on Herdstreet and Stockalicious.
The cover story of current edition of Forbes magazine, written by Scott Woolley, is entitled “The $10 Phone Bill.” Such a scenario was discussed in the halls of the most recent CTIA, and Forbes teases “AT&T and Verizon’s worst nightmare is starting to happen.”
