Today's 2 Top Tech Stories: More Mobile Battles, Finding Entertainment Profits in China
Following a large loss at the start of the trading day when dismal consumer confidence numbers were released, stocks managed to rebound. After a day of up and down swings, the Nasdaq closed up .55%. In today's market only one thing is for certain: What was supposed to be a sleepy August after earnings season has turned into a raucous affair. Let's get straight to the top two tech stories from the last 24 hours.
Tech News No. 1: More mobile numbers
As any smartphone fanatic can tell you, new updates on mobile market share figures have become an exciting part of following the industry. Today, comScore stepped up to the plate and released their newest smartphone market share figures for July.
Smartphone market share
Share of Smartphone Subscribers
|Total Smartphone Subscribers||100%||100%||N/A|
|Apple (NAS: AAPL)||26.0%||27%||1.0|
|Research In Motion (NAS: RIMM)||25.7%||21.7%||(4.0)|
What's the takeaway? Well, the obvious implication is that Google and Apple continue to make the smartphone market a two-horse race while Research In Motion falls further behind. However, it's also important to note the difference between different research groups and how they calculate market share.
For example, on Aug. 22, NPD issued research that showed Android controlling 52% of the smartphone market, with Apple at 29% and Research In Motion at 11%. What explains the discrepancy between NPD and comScore? Well, it's the method with which market share is calculated. In comScore's case, they're looking at the 82 million total smartphones owned in the United States to calculate total market share. In NPD's case, market share figures are for sales only in the previous quarter.
So, all things considered, NPD's data gives a better look at the trajectory of each smartphone platform. NPD shows RIM's market share at a considerably lower 11%, which reveals just how rapidly RIM is losing momentum in the United States.
Tech News No. 2: Finding entertainment profits in China
Fresh off a recent agreement with Time Warner, Chinese Internet video site Youku.com (NYS: YOKU) announced it has reached an agreement with DreamWorks (NAS: DWA) to distribute the company's massively popular Kung Fu Panda films.
Kung Fu Panda 2 made $91.5 million in China, more than double the amount it made in its second-highest grossing market (South Korea). Entertainment companies have struggled to profit from home entrainment in China due to rampant piracy, but big budget movies have been able to achieve significant levels of traction. According to researcher iSuppli, the Chinese box office grew to $884 million in the first half of the year, an 18% gain over the previous year. Local films took home half that total, while Kung Fu Panda 2 was the highest-grossing title overall.
So while the news that Youku bagged Kung Fu Panda might seem like insignificant on the surface, the film holds a higher cachet in China than investors might expect. The economics of delivering ad-support video are difficult no matter the market. It took Google years to bring YouTube to profitability. Likewise, Youku and rival Tudou (NAS: TUDO) have been awash in a sea of red ink despite the massive number of unique visitors on their sites.
That's in part due to the nature of Chinese video. While user-generated content is most popular in America, Youku -- and other video sites like it -- focus on original content that's often expensive to create. That might be tough sledding if the companies plan on going it on their own, but resource-rich rivals have been looking for more partnerships to get some skin in the game. Earlier this week SINA (NAS: SINA) announced it was investing $66 million to buy a stake in Tudou. Weeks earlier, on the eve of Tudou's IPO, reports surfaced that Baidu (NAS: BIDU) was exploring a partnership with the company.
While I'm bearish on Youku and Tudou's ability to compete against better-financed rivals like No. 3 video player Sohu.com (NAS: SOHU) on their own, it'll be interesting to see what they can do if they can gain the backing of one of China's many Internet titans.
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At the time this article was published Eric Bleeker owns no shares of companies listed above. You can follow Eric on Twitter to see all of his technology and market commentary. The Motley Fool owns shares of Apple, Research In Motion, and Google. Motley Fool newsletter services have recommended buying shares of Apple, Google, SINA, Baidu, DreamWorks Animation, and Sohu.com. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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