Wednesday, July 31, 2002

Perspectives on the GDP report GDP for last quarter came out today at 1.1%, half the expected 2.2% and much lower than the first quarter's revised 5.0%. a few thoughts: But "looking forward, it's already in the cards for the third quarter that you're going to see a re-acceleration of growth. And the reason is consumption was up sharply in June and the retail sales look strong for July." Mickey Levy Chief economist, Bank of America in New York The weaknesses primarily came from the estimates for inventories and net exports. The June data were not available for these series and are subject to revisions when the actual numbers are available. Fortunately, consumer spending and capital expenditures, the main thrusts of economic growth, grew as expected. Undoubtedly, the stock market has had a dampening effect on consumer and business spending, but the overall trajectory of economic growth should not change materially. Sung Won Sohn Chief economist, Wells Fargo Co. The second-quarter number of 1.1% is a little misleading because we lost 1.8% on trade. Without that, you would've been at 2.9%, which would've been pretty darn good for the quarter." "The loss on trade was that 24% jump in imports, which may be because of fear of a longshoremen's strike. ... The argument was that people were bringing stuff in ahead of time because they were a little scared they wouldn't be able to get anything later." David Wyss Chief economist, Standard & Poor's in New York     5:54:22 PM     Wireless Data Gets a Business Model The AT&T announcement today is interesting. I've been finding Sprint's advertising -- positioning their business information service through mobile data as a way of keeping the customer contact part of your company up to date -- compelling. It's the enterprise version of the consumer 'last mile' equation in broadband: Getting actionable data into the hands of folks at the front line (customer contact) of business. Combine that with the business intelligence research I've been doing, and you start finding ways for corporations to put key information in the right hands at the right time, you may just have a real driver for both mobile data and the back end infrastructure to support (and, of course, secure) it. Add to that this wonderful quote: "Carriers are growing increasingly receptive to Microsoft, he said, as the cash-strapped companies learn that building their own software services is proving to be very expensive." As a smart friend put it, 'if it were easy someone smarter would have done it three years ago'. Or, how do you say "OS' are really hard" in Swedish? MS/INTC mobile platform initiative is doing an end run around the MOT/NOK/ERIC handset oligopoly. Carriers want cheaper phones to improve margins, and ways to make very high margin mobile data access compelling to consumers. Much industry chatter has focused on MSFT 'failure' to enlist either the big handset licencors or manufacturers (with exception of Samsung) to adopt MSFT/INTC platform. But global electronics manufacturing (SCI, FLEX, etc) would love new products to snap together -- MSFT/INTC wireless reference platform provides that, obviating the MOT/NOK/ERIC play. Color, big screens, compelling mobile data services (more on consumer side) and sensible pricing are the drivers from consumer side. W/high margins, sensible pricing from at least one of the super-competitive carriers will happen (Sprint is very smart now, AT&T very very bad pricing model), and be quickly followed by the others. Imagine, a segment where MSFT is providing innovation, true competition and driving prices lower for all players.     2:11:46 PM     A little cynical about those end of day rallies Judging by the ramp in the last hour, I guess it's fair to say that month-end statements will look a bit better than they would have at 3:00 pm. Of course, that would matter only if investors were actually opening and reading their statements. 1:16:44 PM

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