I wish I had TFM with me, but I am afraid you are wrong "by definition". If there is no tornado, then the Gorilla never developed, even though the product had the characteristics of a potential Gorilla. There was to rapid market growth.
Well, MSFT is not a gorilla then. They never posted 100% YoY growth..
in my opinion, the most important thing is the ability for a company to grow at a high growth rate for a extended period of time. INTC has averaged 40% earnings growth for 15 years. That's what creates monster stocks..
btw, what standard does NTAP control? How can they be called a gorilla with only 60% marketshare?
I'm not questioning their ability to keep others from infringing on their patents. Their BTEs are indeed tremendous. I'm questioning (nay, denying) their ability to change the rules of the game at will by shifting the open architecture. Microsoft can say "fie! The browser is now part of the operating system, and all Windows OS'es we'll say will have an integrated browser. Take that, Netscape!" Intel can do likewise. GMST can do no such thing.
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It's the difference between saying "I own this bridge. If you want to cross, you have to pay be a toll", and saying "I control the car architecture. If you want to drive across that bridge, you have to buy my radio and tires along with a car".
Not all gorillas are alike. Some have more power, some are weaker. IP companies might fall into the weaker category. Just like Dell is a king, yet a company like JDSU (which is a king) seems to have higher BTEs.
For me, there are two issues that might cause some to think Gemstar can't "cause" the architecture to shift more rapidly. The first is that the number of television channels is currently insufficient to render an IPG an obvious need by the mass market. Henry Yuen has been very clear about his thinking that at the current number of channels, an IPG is a luxury. He figures 300 channels is the benchmark at which users an IPG will be "needed" and that at 500 channels it becomes an indisputable need. YOu were right when you wrote that "Gorillas born in the Tornado tend to solve a compelling need (hence the rapid adoption)." There is no compelling need right now.
I agree and we might never see a true tornado. Maybe, IPG growth will grow like 60 or 80% for the next few years, then once 500 channels becomes a reality, the IPG will have already entered so many households that growth above 100% is not possible, but i still think GMST could grow 45% for many years to come if everything works out as planed.
In fact, I think it's an understatement to say that an IPG isn't continuous enough for end users; more accurately, the real problem is that it's too discontinuous. If end users could buy an add-on that allows an IPG to be used, the product would become adopted at a much faster rate. Instead, end users have to buy a new television to be able to get an IPG. Even if people were in love with the idea of IPGs (which they aren't), buying a new TV to get one is analagous on a different monetary level of buying a new car to get a better radio.
Mike, i know a few people with digital cable/satellite and they all use the IPG. That's pretty much how they channel surf!
My brother says he LOVES the IPG. He has experienced a few outages where the IPG doesn't work and it drives him nuts..or so he tells me.
Here's a good post about IPG usage:
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