Investing legend Roger McNamee, managing director and co-founder of Elevation Partners was interviewed on CNBC this morning and explained why he is bullish on the tech sector. He goes on to say Apple is winning and tell us why. He continues by saying companies are trading down from Windows to tablets and saving thousands per year on support. This will free up $100B worth of revenue per year in this category.
Moreover, there is a titanic clash for Internet control – will it be app stores or HTML5? Which wins? My readers know I have brought this question up as as well. This is an important issue.
Moreover, he explains the success of indexed search has resulted in pollution (spammers, etc) and as a result users are switching to Wikipedia, Yelp and others.
McNamee went on to say there is a global shift to HTML5 which is putting the focus on content development. He sees this as a mega-cycle like the internet cycle which can last up to 15 years.
How do you play this from an investing perspective? Roger believes Microsoft is fine as it has a monopoly on Exchange. He does believe the Microsoft ecosystem – companies like Intel and Dell will see brutal times ahead. He believes Google will do OK – but you should short Google and buy Apple if you want to play the future of tech.
His company has a huge position in Facebook and Yelp – and he went on to say social is a contained group of companies – meaning its growth is not an industry-wide phenomenon.
He is not excited about the Android market because there is no central control, no anti-virus and a history of apps which have done things like steal credit card numbers. He says Android is like the Wild West. He also posits the question – what if Apple doesn’t get 10-15% market-share in tablets but instead 60-70%? He explains then Apple will be the largest hardware company out there by a mile.
I must say the points regarding Apple are very good and it is not a given that Apple will lose the share analysts predict. Moreover, I agree that HTML5 presents a major opportunity and listening to this interview made me feel good that TMC is launching an HTML5 development event in New York later this year called Devcon5.