Mobile revolution, economy trip up tech giants

Fri Oct 19, 2012 1:17am EDT
 
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By Poornima Gupta

SAN FRANCISCO (Reuters) - Mobile may be the future for technology, but even with the worldwide proliferation of high-powered devices like smartphones and tablets, some companies are struggling to maintain consistent revenue streams.

Earnings disappointments this week from Intel Corp, Microsoft Corp, Google Inc and AMD underscore how Silicon Valley, both the old guard and new, is struggling to profit from consumers' waning love affair with the stalwart PC and infatuation with mobile -- the most significant tectonic shift in the industry since the advent of the Internet.

That bodes ill for companies reporting next week that are highly leveraged to mobile advertising and services -- most famously Facebook Inc, which raised a tumult by warning about over-inflated expectations of its mobile business just before its seminal IPO.

Amazon and Apple Inc are expected to fare better, analysts say. Apple, which reports Thursday, is struggling with capacity constraints and supply hiccups -- but analysts contend that's a good problem to have because it's spurred by raging mobile hardware demand.

Amazon and eBay Inc, meanwhile, are succeeding in reaching consumers through mobile devices, particularly Amazon with its cut-rate Kindle Fire tablets. About 800,000 shoppers made their first-ever eBay purchase through a mobile device.

But others are struggling.

"Companies are realizing that it is not easy to find a formula that works with mobile," Gartner analyst Carolina Milanesi said. "Mobile is not proving to be as straightforward as people thought."

Signs that some of the most innovative of today's Silicon Valley titans are struggling with how to make money off mobile users come at a bad time for an industry already struggling with a worsening macroeconomic environment.   Continued...

 
A woman walks past an Intel logo at the 2012 Computex in Taipei June 5, 2012. REUTERS/Yi-ting Chung