A reader asked for my opinions on mobile-phone stocks, so I thought I’d give everyone a quick run-down of my opinions on the big names in the space:

Apple (AAPL) – BUY

What can I say? I’m an Apple shareholder and a huge fan of their products. I fully expect the iPhone to resume taking market share, particularly if the company releases a new model this summer as they have every year since 2007. Plus, the company is still taking market share in PC’s with no sign of a slowdown. I’m not particularly bullish on the iPad, but even I can’t complain about potential icing on this cake.

Motorola (MOT) – SELL

Yes, the Droid is awesome, but the market is now being flooded with Google (GOOG) Android powered phones and that means too much competition. Verizon (VZ) is now offering two-for-one deals on the Droid and Devour, and Motorola doesn’t have any other strong models that can pick up the slack.

Nokia (NOK) – HOLD

I was tempted to slap a sell on Nokia, but the fact remains that they just had a decent quarter and that means it could scrape back some  market share from the likes of Apple and the Android lot.

Microsoft (MSFT) – SELL

Microsoft has made some positive strides in their mobile-phone unit, but it’s just not enough to make any kind of meaningful financial impact on the company. Apple’s market-share gains in PC’s won’t be reversed, and we’re also moving towards a world of cheap, or even free software, and that aint good for Mister Softeee.

Research-In-Motion (RIMM) – HOLD

RIM still has a stranglehold on corporate IT departments for mobile email, but I worry that its position in consumer smartphones will be eroded by the iPhone, and flood of Android and Windows Phone 7 models that are going to hit the market later this year. So color me as on-the-fence.

———–

disclosure: long Apple (AAPL)

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Are you planning on buying Halo Reach?

If so, check out Amazon. It’s offering a $20 gift card with the Xbox 360 title, bringing the effective price down to $39.99. Sweet deal on a brand-new game!

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3. Is Bing Killing Google?

Okay, okay. That title was a bit theatrical.

But Microsoft’s (MSFT) Bing engine did squeeze out a market share gain from December to January, moving up to 11.3% from 10.7%. The almighty Google (GOOG) had a slight decline to 65.4%.

So is this latest Comscore (SCOR) data something to jump up and down about?

No. Here’s why.

Bing is great for searching images, videos, and most of all shopping. Image and video searches don’t convert well in terms of advertising. The important searches are for products and services, which do fall under the shopping category and which do benefit from holiday seasonality.

Bing’s shopping category strength can’t go on forever. Bing attracts shoppers because of Bing Cash Back, which rebates money back to shoppers to connect to shopping sites via Bing. And Bing gets some damn good deals. You’ll see leading web retailers like Sears (SHLD) and Dell (DELL) offering 10% or 15% or even 20% cash back on certain items, which make for a hell of a deal.

This buying of market share just can’t go on forever because it’s just plain expensive, even if retailers share some of the kickbacks to consumers. For example, I’d like to buy this one particularly $1,400 camera lens. Most likely, I’ll pull the trigger on it when the right Bing cash back deal is offered so I can save $100 or even $200 on it. That doesn’t make me a loyal customer – just a temporary opportunist.

So there’s no reason to get excited about Microsoft making some small gains over the holiday time period. If Bing gets up to 15% or 20% by 2011 – then Google will have some very legitimate worries.

Don’t get me wrong, Bing has brought some much-needed competition to the search game, but they’ve got to find organic ways to take market share away from Google if they want to reach new heights in the search game.

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iPhone game developer Ethan Nicholas just did something shocking: wrote some nice things about the embattled Apple iPad in a TechCrunch guest post.

Mr. Nicholas calls the iPad “a computer for people who don’t like computers.” In fact, he feels so strongly about the iPad’s supposedly-easy usability that he plans on buying one for his mother.

I usually stay out of other people’s family affairs, but for the sake of Ms. Nicholas, I feel compelled to speak up.

The argument that the iPad is “a computer for people who don’t like computers” does not hold water. People who don’t like computers are the last folks who should be playing with a first-generation tablet PC that’s missing features even computer-haters are accustomed to using, like a memory-card reader and a USB port.

Mr. Nicholas also said the iPad “won’t allow her to install umpteen news and weather gadgets that start up on boot and slow her computer to a crawl. It won’t suddenly forget how to talk to a network, or get so confused by all of the software installs and uninstalls that you finally have to break down and reinstall the system from scratch.”

I agree. The iPad won’t allow itself to be bogged down with useless programs and won’t require the constant attention that say, a Windows-Vista PC requires. But home wi-fi networks aren’t perfect. They do get screwed up and require occasional resets. And need I remind anyone that AT&T is supplying the iPad’s 3G data access? The last time I checked, that network wasn’t exactly running like a Swiss watch.

Mr. Nicholas’ complaints about computers don’t apply to all PC’s – they appear to be very much Windows-centric. I know, because up until a month ago I was stuck in the dark world of impossible-to-cancel print jobs, driver disappearances, system passwords that only work some of the time, and performance-sucking security software. All of my issues were solved by picking up a lightly used early-2008 Macbook.

I recommend the same fix for Ms. Nicholas, who sounds like she’s the victim of the wrong computer – rather than computers as an entire product class.

It’s true – once you go Mac, you never go back. I’ve never met anyone that said “I shouldn’t have bought a Mac.”

Have you?

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Meet the Apple iPad!

Apple (AAPL) finally unveiled its tablet computer, and it’s actually looking a lot better better than I expected.
The iPad is simply gorgeous – but then again, we knew it would be. Yes, it’s basically a giant iPhone, but the iPad is nothing less than striking. It natively runs all iPhone apps, has a huge 9.7 inch LED-backlit screen, with all the multimedia capabilities you can imagine. It weighs a pound-and-a-half, has about ten hours of battery life, even when watching videos and using the built-in 802.11n wi-fi. It’s also just a half-inch thick.

In terms of new new stuff, there’s an app called iBooks, which does what you’d think it would: it lets you buy books through the app store. There’s also a new mobile version of iWork, for those who think doing spreadsheets on a touch screen sounds fun – I think a mobile iLife would have been a much better choice.

There will be six versions of the iPad. Apple is releasing wi-fi and 3G + wi-fi capable models with 16, 32, or 64 gigabytes of storage. $499 gets you 16 gigs and wi-fi only, while $829 64 gigs with both wi-fi and 3G data access.

So the price to get in is very attractive. However, I think six versions of the same products sounds like something Microsoft (MSFT) would do. And AT&T (T) customers should not be happy that the iPad is here to further clog up their 3G network. And there are some things missing – like a camera, a USB port, an SD card slot.

At the end of the day, a smartphone or notebook just make more sense for most people – the iPad is an impressive piece of hardware in search of a market.

But who knows? I can’t wait to see the June quarter numbers – I want to see how this baby does.

And there’s another ancillary benefit to the iPad, even if it doesn’t do huge numbers – it makes those Hewlett-Packard (HPQ) tablet computers running Windows 7 look like crap, and it’s hogging all the attention! Amazon.com (AMZN) should also be worried, because if the iPad is readable in all kinds of light, the Kindle just does not compare well, especially since the cheapest iPad is just $30 more than the high-end Kindle.

Anyway, here are the full tech specs:

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Now this is an interesting piece of news from our buddies at TechCrunch:

We believe there is a good chance there will be a Barnes & Noble bookstore built into the Apple Tablet, either as one of the showcase apps which launches with the device, powering a new book section in iTunes, or integrated directly into the Tablet’s e-reader. The two companies are thought to be working closely together, increasing the likelihood that Barnes & Noble will be part of the announcement on Wednesday. While Apple can run around cutting deals with the larger publishers, a built-in Barnes & Noble bookstore could include up to a million titles in one fell swoop, just like on B&N’s own Nook reader. Barnes & Noble already offers an eReader app for the iPhone (iTunes link) which lets you download and read electronic books on the smaller device. That app could be paving the way for an eReader or book store on the Tablet.

I definitely think there will be some rivalry between the Amazon (AMZN) Kindle and Apple’s Tablet. The Kindle does have a few advantages like its $259 price tag ($489 for the fancy one), but the Apple Tablet should kill it in terms of sheer sexiness.

And it would be smart of Barnes & Noble to jump on board. The Nook is cool but it doesn’t have the buzz of the Kindle and will be overshadowed by the Tablet. Not to mention that there are an awful lot of e-book readers, or e-book capable devices, coming in to crowd the market.

Amazon does make a Kindle app for the iPhone, and they should do the same for the Tablet. I’m skill a bit skeptical about the Tablet’s success, but a Kindle app’s not going to affect that. Therefore, Amazon should just jump on board, because the Tablet just might take off. They could even throw in some free e-books to those who order the Apple Tablet from Amazon.com.

We’re living in a funny world. I’d rate Microsoft (MSFT), Apple (AAPL), Google (GOOG), and Amazon.com (AMZN) as the four big tech giants of this age. They’re four completely different companies that have found bizarre ways to compete with each other in certain business areas, and cooperate in others.

It’s the foggiest fog of war in business today.

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You have to do something pretty crazy to inspire a techno-bromance between the head Steve’s at Apple (AAPL) and Microsoft (MSFT).

Bloomberg is reporting that the tech heavyweights are in talks to have Microsoft’s Bing replace Google (GOOG) as the default search engine on the iPhone, and I believe it. There had to be a reason Microsoft released a Bing app for the iPhone, and with the benefit of 20/20 hindsight, it looks like it was a test drive.

So I thought long and hard this morning about what Google may have done to tick everybody off, and there’s only one conclusion:

They give away too much stuff for free.

This wasn’t a problem in the past because Google’s best free applications – like Search, Analytics, and Docs – didn’t step directly on the toes of Microsoft’s and Apple’s core businesses.

The success of the Android smartphone operating system changed that. As of this past November, Android-powered smartphones had 27% U.S. market share, according to AdMob. That number that will surely go higher with the release of Nexus One, as well as the countless other Android phones being planned by mobile-phone makers.

The ramifications are simple. Microsoft’s Windows Mobile is dead in the water. Android is the new ‘commodity’ smartphone OS. And it’s pretty damn good. And oh yeah, it’s free! What phone company wants to pay Microsoft for a lousy product, with the word Windows in it no less, when they can get a better one for free?

Google’s Chrome OS, which is coming to a netbook near you, is another problem for Microsoft. PC sales skyrocketed in the fourth quarter of 2009, with netbooks contributing a sizeable portion of the growth. Microsoft surely can’t be happy about Chrome-powered netbooks, which will take share in the booming low-end market.

On the Apple side, the best Android-powered phones are finally providing the iPhone with some competition. Yes, the iPhone is still the best phone on the market. Forget nonsense like screen resolution, LED flashes, and processor speeds – the iPhone touchscreen and user interface are the most user-friendly to regular people, and that’s what puts dollars in the cash register.

However, the equation shifts when you factor in AT&T’s (T) cruddy network. For many people, a Motorola (MOT) Droid running on Verizon’s (VZ) more-reliable network may offer a better user experience, just because of the reliability factor.

Thus, Google is dangerously close to damaging the iPhone franchise. And that’s a major problem when you consider that iPod revenues fell 12% last year. The iPhone was the perfect cannibal for the iPod because of carrier subsidies. It’s great business for Apple to get $500 or $600 for a phone that the public pays a couple hundred bucks for.

I’m still ranking Apple as King of the Hill in smartphones, but it’s paranoid for good reason.

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Minyanville just posted my latest article on today’s Microsoft (MSFT) Xbox 360 Price Cut.

Here’s a quick taste:

In the wake of Sony’s (SNE) PS3 price cut, Microsoft (MSFT) just slashed the price of its top-of-the-line Xbox 360 console by $100 to $299. It sounds like good news, but it’s just not what the industry needs.

Before, Microsoft sold three versions of the Xbox 360 console — Arcade at $199, Pro at $299, and Elite at $399. More money got you goodies like a hard drive and cooler accessories. Now, the Pro will be phased out at $249, while the Elite slides into the $299 slot.

Don’t get me wrong — cheaper products are better for consumers and two versions are much better than three. But the cost of entry into Xbox-land remains the same. Anyone who really wanted an Xbox 360 wasn’t waiting for the Elite model to come down in price — he or she would have already bought an Arcade or Pro model instead. So any positive impact on Xbox 360 sales will be temporary.

Continue reading Is Price-Cutting What the Video-Gaming Industry Needs?

Ultimately, what the industry needs is a Nintendo Wii price cut. The Wii is losing its competitive advantages as the Xbox 360 and PS3 come down in price and introduce motion-control mechanisms like Microsoft’s Project Natal.

The Wii’s been out for three years and sales are slowing – it’s time.

FYI – I took a short position in Sony (SNE) this morning. I think they’ve lost far too much ground in the video-game war, the dollar continues to weaken vs. the yen, and the PS3 price cut came way too late. This holiday season could be brutal for video-game hardware, and a Wii price cut (if it comes) would present serious problems for Sony – unlike Microsoft’s $199 Arcade offering, it offers nothing to bargain shoppers.

Full Disclosure: short SNE

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This isn’t super new, but Wedbush Morgan analyst Michael Pachter had some interesting things to say about the possibility of an Apple (AAPL) Gaming Console:

I think Apple has a deliberate strategy.  They want to see what they can do with the handhelds (iPod Touch and iPhone) first, then move into console games.  Apple TV is the device that they can turn into a console, and they have essentially the same goals as Microsoft–to turn Apple TV into an entertainment and Internet hub.

If they can get enough iPod users to download games, it’s a natural that they can ultimately convince a large number of these users to buy a game-enabled Apple TV.  I’d guess a 2012 or 2013 launch. That means that Microsoft has to get enough of a head start to hold them off, which is why I see Natal and a big hard drive for the 360 next year.

I’m not sure how Apple would proceed initially. It’s possible that they open the architecture and go for an Apple TV "App store" to allow anyone to develop games. We’d get cool stuff like World of Goo or Geometry Wars, but probably not super cool stuff like Gears of War until they bought a few developers.  Again, it’s the Apple audience they’re after, and they would be perfectly happy if everyone who owned an iPod or iPhone bought Apple TV.  The "Trojan horse" is that the device would be an Internet access hub, and that they could then sell movies and other products.  What Apple cares about is getting into the living room, and an Apple TV with games has a higher likelihood of succeeding than an Apple TV without.

I think Pachter is on the money here. While the Apple TV has been a failure in some respects, I’m sure it could be easily modified into a video-game console. There’s little chance Apple would enter a technology war with Sony (SNE) or Microsoft (MSFT), so there would be no need for sophisticated, heat-generating hardware. Any Apple gaming console would be more like the Nintendo (NTDOY.PK) Wii – simply, fun, and easy to play.

Game pricing would be a big question for me. Apple’s getting a lot of attention for selling so may iPod and iPhone apps, but many of those titles are of the 99-cent variety.

And perhaps more importantly, can Apple get exclusive gaming content? Time will tell!

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Sorry I haven’t been posting, but I had some problems with my domain-forwarding and they weren’t cleared up until last night. In the meantime, I’ve joined Minyanville.com as a contributor to their excellent site.

This is great news. I did some of my best work on TheStreet.com’s RealMoney, but I was always disappointed that so much of it was behind the subcription wall. Writing for Minyanville will allow my work to reach a much broader audience.

Now, on to the story:

NPD reported June 2009 video-game sales data yesterday and it isn’t pretty. Software sales were down 29%, while hardware fell a whopping 38%.

As expected, Sony (SNE) is the biggest loser. The PS3 is losing an awful lot of ground to the Nintendo (NTDOY.PK) and Microsoft (MSFT) Xbox 360, both of which carry much lower prices. The PS3 is also doing rather poorly relative to its PS3. I go more in-depth on Sony in this piece for Minyanville.

BTW, I’m now long Take-Two Interactive (TTWO). I started a position on Tuesday after the company announced it was delaying Bioshock 2 until next year. Read more about my rationale here. It may soon be my biggest position – I’m thinking about adding a synthetic long (short put options and long call options) position to my common stock.

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