There have been a number of noteworthy developments in the technology space recently. They will likely have a material impact on the companies in the sector and the markets they serve.
Nintendo Announces Wii 2
Nintendo has announced that it plans to launch a new Wii in 2012. Following several years of strong popularity, Wii sales declined by five million units (to 15 million) last year, and Nintendo’s operating profit fell considerably. Nintendo has faced stiffer competition in recent times. This has been the result of the introduction of motion-sensor controllers for the Xbox 360 and the PlayStation 3, and the growing popularity of these consoles. Details about the new console have been scarce, with the company explaining that it would rather let gamers experience it for themselves at the Electronic Entertainment Expo (the yearly trade show for computer and video games). It appears that the new offering will feature much improved graphics, to rival those of Xbox 360 or the PlayStation 3. This may well spur Microsoft (MSFT - Free Microsoft Stock Report) and Sony (SNE) to launch their own next-generation consoles, though it appears that Nintendo would have a year or two of a head start.
Sony’s New Tablet Offering
Sony has announced plans to introduce two tablet computers. One tablet (dubbed “S1”) will be optimized for rich media entertainment, and the other (“S2”) designed for mobile communications and entertainment. Each will run Google’s (GOOG) Android operating system. These two offerings are expected to become available in the fall of 2011. Sony is looking to position the tablets as broadbased entertainment devices that can access its network of music, video, eBooks, and video games. The company is the latest competitor to take aim at the considerable market share of Apple’s (AAPL) iPad. However, the field is crowded, with many companies fighting for second place. Sony will need to find ways to differentiate its tablet offerings from a wide variety of other models. Assuming it can accomplish this, the tablet space could prove well worth the fight. The global tablet market is expected to grow at a breakneck pace through 2015.
PlayStation Network Outage
Sony’s PlayStation Network went offline April 20th. The company has stated that it took the network down, following the discovery of an external intrusion. Sony is investigating the breach, and also strengthening its network infrastructure. The company’s most recent statement indicates that it believes personal information was stolen. The total cost of the breach remains uncertain at this juncture. The integrity of the PlayStation network is very important for Sony, and for game developers, too, given the increasing popularity of online gaming. The network allows online play between consoles for over 70 million users, and also allows gamers to purchase titles. The outage has given Microsoft’s Xbox 360 a temporary advantage in the online gaming space, as its network has not been compromised.
Amazon’s Cloud Woes
The April 21st failure of the Amazon (AMZN) Web Services cloud-computing infrastructure illustrates the potential pitfalls of this initiative. Major service providers and Web sites who relied on Amazon’s service were unprepared for a breakdown, which caused their sites to either crash or run very slowly. Companies affected included tech start-ups such as Foursquare, Quora, and Reddit. Sections of The New York Times Web site also experienced problems. Within a few days, Amazon had announced that nearly all of the issues responsible for the outage were resolved. Recent problems are unlikely to stop the push towards cloud computing. Still, for companies depending on the cloud, this setback illustrates the need for redundancy, either from one’s own systems or another cloud service. For Amazon, identifying the causes of the disruption, and reducing future risks remains a priority.
Yahoo Acquires IntoNow
Yahoo (YHOO) has recently announced the acquisition of IntoNow. Launched in January of 2011, IntoNow has built a platform and companion application based on the real-time indexing of television that enhances the connection between audiences, TV content, and advertisers. This addition will allow Yahoo! to provide enhanced media experiences and video programming, and boost its social engagement across its network, allowing users to engage with friends about their favorite television programs. Financial terms of the deal were not disclosed.
The Identity Ecosystem
The Obama Administration is looking to reduce online fraud and identity theft with an Internet identity ecosystem. Its aim is to enhance trust and security for individuals and organizations conducting sensitive transactions online. The ecosystem would allow users who opt to participate to get a trusted credential from a public agency or private secure provider that can be used to access and conduct transactions with online businesses without having to give confidential information to each business. This could serve to streamline the authentication process, and may eliminate the need for users to remember different passwords for each Web site they visit. Though initial efforts have come from the federal government, it will take significant investment from the private sector to make such a system a reality. A number of technology companies would likely act as trusted credential providers, and offer related services, too. Microsoft’s Windows Live ID service is a single sign-on service that allows users to log into a number of Web sites using one account. This service, or ones similar, would likely increase in popularity in tandem with greater interest in online security. Other companies who would probably benefit from such a push include CA Inc (CA), a provider of enterprise information technology, and Wave Systems (WAVX), a provider of digital security offerings for e-commerce.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.