Clippers’ Owner Comments on Recent Tech Announcement…

In honor of a certain announcement out of Cupertino tomorrow, see this great video of Steve Ballmer’s commentary shortly after the introduction of the iPhone.  He mentions the  Motorola Q as being a great phone in the market place and how the Zune has taken 20%-25% of the portable listening market (the iPod market).  Both devices are historical now.  A good reminder of the difficulties in predicting the future of technology.

In Ballmer’s defense, I don’t think it would have been great PR for Microsoft to say something along the lines of, “Wow, Steve Jobs really kicked our butts on that one…”  One side note about the video: if you look closely at the video you can see that Nortel is also sponsoring this event.  Nortel filed for bankruptcy less than 2 years later.

For a little financial perspective, here are some interesting facts (all numbers in billions, unless noted):

Apple 2013 2011 2006
Revenues 170 108 19
Net Income 39 26 2
Microsoft 2013 2011 2006
Revenues 87 70 44
Net Income 22 23 13
Blackberry 2013 2011 2006
Revenues 6 20 3
Net Income -(5.8) 3.4 631m
Blackberry’s market cap peaked at $83 billion in 2008.  Current market cap for Blackberry is about $5.5B, a total loss for shareholders of a lot of money (or 93% expressed in more mathematical terms).

Understanding how difficult it is to predict the future of certain industries is one of Buffett’s greatest investment lessons.  You don’t need to be an expert in all fields, stick to what you know and wait for your pitch…(see this great post about waiting for your pitch).

More to Explore

Returns for Great vs. Bad Businesses

Munger and The Cattle Rancher

Munger’s ability to find great businesses is directly related to his ability to consistently discard bad businesses. He is excellent at inverting, and discarding the bad businesses as quickly as possible.

The Abominable No-Man and Bad Management

Some investors think a business is good, but know that management is bad.  These investors justify the investment based on the idea that the great price of the business is worth the bad management. This is akin to marrying a supermodel who is going to yell at you all day.  Whatever pleasure your eyes may derive from the marriage, your ears will endure a greater amount of pain in the long run. The pocketbooks of those partnering with bad management are likely to see a similar 50%+ decline in their net worth.

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