hi arun gera,
interesting points...
1. This crises has shown that cell phones are an extension of our bodies.
while there may be an incremental positive to equipment providers here, i think it is more a knee-jerk reaction on the part of consumers than any long-term trend. e.g., Wal-Mart sold 88,000 American flags the other day, compared to 6800 flags last year (and i just heard on the radio that WMT sold 450,000 flags since Tues!). obviously, this is a short-term thing, as are the hoarding of bottled water, canned goods, gasoline, etc.
i doubt the incremental gains in cellphone users will be more than a blip on the screen in terms of worldwide subscribers. the US already has 50% penetration, which figure is presumably much higher among regular airplane travelers, the presumed target market for panic buyers. assuming a wildly bullish 2-million-subscriber net incremental gain in the US, this would amount to less than 0.5% of all phones sold worldwide. and i suspect the gain will be much less, on the order of a couple hundred thousand. such a number will cause local shops to run through inventories quickly, and may lead to a few news blurbs, but it does not alter the basic picture IMHO.
the critical need for cellphone equipment makers is to accelerate 2.5G and 3G deployments and upgrades en masse, which activities are unlikely to be spurred by the 911 disaster.
2. That companies face the risk of huge losses of important paper documentation. So you will see greater digitization of paper-based way of doing business.
this trend has been underway for the past decade. presumably large corporations have already implemented digitization where it is cost-effective, so an argument that the scope of implementation will expand suggests less-cost-effective uses. this may happen, but it gets back to my argument of the rising "cost of doing business" in the aggregate, and i do not see it as a positive.
the other examples you give (e.g., more secure voice, computer, etc.) are again an incremental cost for users whose main purpose--security--is not productive.
just as an example, the 20 to 30 billion in insurance claims could possibly wipe out some of the smaller reinsurers IMHO. what will be left will be a few supercat giants, like Berkshire Hathaway, and they are likely to raise their premiums. so supercat insurance and reinsurance costs are likely to go up. this may benefit these insurers, but not their customers. again, just a higher "cost of doing business".
higher costs without attendant productivity gains point to lower ROIC, and thus i may need to ratchet downward my expectations for future equity returns (again).
what i would say in general is that, while it is easy to point to a few beneficiaries as security costs rise (financial security via insurers, physical security via security/defense/etc., informational security via IT implementations), it is important to look at the much larger group of security "customers", and to notice how their costs rise without pass-through to higher profits. |
