The abrupt decline of BlackBerry
is an example of how consumers and investors taste changes these days for
technology products. If these companies miss a trend, the market doesn't even
give time to breathe. Four years ago BlackBerry had 51% of the North American
smartphone market which currently is 3.4%. Hope BlackBerry doesn't go down the
history aisle as a Palm or a Gateway. Kodak met with the same fate as well when
its executives failed to recognize the onset of digital photography.
Instead think of businesses such
as Coca Cola, Nestle, IKEA, Nike, Walmart, Costco, McDonald's etc. where
there is no technological obsolescence. These companies are doing
exactly the same thing today what they were doing 50 years ago. The predictability
of such businesses is extremely high. How could we have known 10 years ago that
Google in 2013 will have its operating system or will be in the smartphone
business? Who knows what Apple will be in 2023? Is Tesla valuation sustainable?
Tesla stock is up 392% year on year. Tesla's profit history is very poor.
This is one of the main reasons
why great investors hardly touch technology based companies.
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