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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (14878)	1/11/2000 12:16:00 AM
From: Rickus123	Read Replies (1) \| Respond to of 54805

Mike (and others), I'm popping back out of lurk mode to float a theory about Gemstar's imminent tornado, or possible lack thereof. (Disclaimer: I have a small position in GMST) For the purposes of this post, I refer to Guide+ as the EPG, the software that allows quick access to program guide information. I refer to IPG as the functionality that allows a viewer to 'cross the line' from the TV to the internet for purposes of surfing, shopping,... There seems to be a consensus that GMST is in an excellent position to become a gorilla, if and when there is evidence of a tornado forming around their product. In fact, this is how I cast my vote in your thread survey last month. But I'm beginning to wonder how exactly the tornado will form, with respect to their EPG, anyway. In part, this is due to my inability to get a good feeling for the true value in the discontinuity of the innovation. Let me explain: As I see it, the EPG is discontinuous in the way it replaces existing program guides (Newspaper listings, the weekly TV Guide,...) But let's face it -- as cool as their EPG is, few folks are going to throw down $300+ for a new TV just to get Guide+. It will increasingly become something that consumers will look for and demand in new TV purchases. And for some of us, the lack of Guide+ in our existing TV may hasten our decision to buy a new one. But I have a hard time seeing a tornado forming when consumers are essentially gaining access to Gemstar's discontinuous innovation through a technology which is neither discontinuous nor an innovation -- the TV. Cable settop boxes are similar. Once again, access to Gemstar's discontinuous innovation comes through an existing technology -- the settop box. While recent legislation has been passed to allow users to buy their own settop boxes from vendors (other than their cable provider), I don't see consumers rushing out to do such in numbers required to create a tornado. Perhaps satellite dishes are the best bet for tornado watches, but this still means that Gemstar's EPG relies on another technology for its success. Granted that eventually, if things go according to Gemstar's plans, these three technologies should all be inundated with Gemstar technology. I'll eventually get a new TV, and probably a new settop box. And I might opt for a satellite dish one day. It just seems to me that any tornados that form will be around the technologies that provide access to Guide+, instead of around Guide+ itself. Of course, the IPG is a totally different ballgame. I see a revenue stream coming from the IPG based on a couple of discontinuous innovations layered on top of each other: online shopping accessible through some flavor of web-TV. And Gemstar is positioned to be sitting at the tollgate. Am I right in my analysis that Gemstar's tornado -- around the IPG -- will have to wait on, among other things, a significant presence for their EPG, which may not go through tornado-like growth? Sorry for the length of the post -- that could mean I should come out of lurk mode either more or less often. <g> I welcome any comments you or any others have on this (Gemstar, that is, not my lurk rate). --Rick