Moto Droid Off To A Good Start. But Is It Good Enough?

Peter Burrow's article, Moto Droid Off To A Good Start. But Is It Good Enough? discusses the sales of the Motorola Droid smartphone. According to the market research firm Flurry, 250,000 Droids were sold in the first week. That number is considerably more than the MyTouch 3G from HTC (60,000) but nowhere near the iPhone 3GS from Apple (1.6 million). The Droid is being billed as the only phone to current sport the new Android 2.0 OS.

The Motorola Droid's main competition is not the iPhone, but rather the fragmentation of the Android market. Apple and AT&T will have no problems keeping current users and attracting new ones to the iPhone because it is the only smartphone from Apple and its users know that there 100,000 apps in the App Store ready to be downloaded and used. Droid users are not sure if they will be able to use all 12,000 apps that are designed to run on Android-based phones. Also, customers may be unclear as to whether they are purchasing the phone from Verizon (the service provider), Google (the phones OS creator), or Motorola (the phones manufacturer). Former Motorola CEO Ed Zander believes that it is that very complexity that may keep people from purchasing the device.

One thing this article showcased was the potential issue of confusion regarding the Motorola Droid. As a future educator, I can apply this article and make an analogy to it. I need to be able to teach with clarity to avoid confusion so that the product (my students' knowledge and education) is not compromised and everybody involved sees the positive results.

Summary - Fertile Ground for Startups

The article, Fertile Ground for Startups by Spencer E. Ante discusses why the current economic climate is a good time for entrepreneurs to create their own business. Some new businesses will succeed and many more will fail. According to the Center for Venture Research, angel investors financed 24,500 new ventures, a 6% increase over the same period last year. A look back at history reveals that great companies are often built during bad times. The year 1939 and the end of the Great Depression saw the creation of Hewlett-Packard. The Silicon-Valley based technology companies were created during the recession of the 1970s. During a recession, everything needed to start a business is cheaper including labor costs, material, and office space. There is less competition because established businesses are trying to survive themselves and other start-ups are unable to raise the money needed. These tough times force entrepreneurs to begin working on their business ideas earlier enabling them to reap profits more quickly than when money comes cheap. Jim Breyer, general partner of Accel Partners, a venture capital firm that has invested in Facebook, believes that 2010 and 2011 should be good years for innovative small companies. However, recessions do present a potential problem for entrepreneurs in that harder to drum up business, take a company public, or raise money than during good times.

Summary - At General Motors, Loss Reduction Is a Good Start

David Welch's article, At General Motors, Loss Reduction Is a Good Start discusses the financial stability of the automotive manufacturer General Motors. GM CEO Frederick A. "Fritz" Henderson will be giving the first update on November 16, 199, on the company's finances since it emerged from bankruptcy. Henderson is expected to announce that GM will have had much-improved third-quarter earnings and cash flow. Unnamed sources familiar with the company's books say that the company will still be in the red but its losses will have been significantly cut. These same sources indicate that GM will show better cash flow due to lower costs and better net pricing on its cars. Joseph Phillippi, principal of AutoTrends, a New Jersey consultancy, indicates that while GM is not fully stabilized, it is stabilizing and that the company's new cars are doing well. However, it should be noted that GM's third-quarter financials could be aided by the fact that many of its manufacturing plants were shut down while the company was it bankruptcy. At Henderson's November 16 presentation, it is rumored that he will be making three different presentations. One will detail the company's third-quarter of 2008, another will detail the bankruptcy and old GM, and the last one will discuss the company's re-emergence from bankruptcy.

How Google Voice is Growing

The article, How Google Voice is Growing details the popularity of the Google Voice service. Google recently turned over records regarding Google Voice to U.S. regulators. Currently, there are 1.419 million users of the service and 570,000 of those users use it seven days a week. At the moment, Google Voice is still limiting the number of users but is slowly growing in the number of users.

Google argues that because Google Voice is not a traditional phone service provider, it should not be subject to the current regulations of the industry. To reduce costs, Google Voice blocks calls to certain numbers including those in rural areas and other high cost destinations. Due to unusually high call volume, Google has blocked access to 100+ numbers. Of those 100+ numbers, a majority of them include phone sex businesses and conference calling services. Because of these practices, AT&T has cried foul over Google's actions.

Due to the fact that the Google Voice service is still in its infancy, I am surprised by the number of individuals who want to partake in it. At the same time, not too much information is known about Google Voice as a whole. This service provided by Google could be of use to many individuals who use a cell phone and a house phone regularly. The ability to have calls from two different numbers sent to a single phone number instantaneously would make life easier for some. As the service grows, Google may be interested in charging a small monthly fee for this service. However, that may subject them to standard phone industry rules.

Summary - MBAs Confront a Savage Job Market

The article, MBAs Confront a Savage Job Market discusses the difficulties that recent college graduates are having finding a job due to the current economic recession. Hundreds of unemployed business school students had to accept the fact that they would be unemployed when they graduated in the spring. According to Business Week, 16.5% of job-seeking students from the top 30 MBA programs did not get even one offer by the time schools collected their final fall employment data three months after graduation in 2009 compared to just 5% in 2008. Industry insiders for see a similar trend occurring with business school students in 2010. Those students who were able to secure a job received smaller salaries and smaller signing bonuses than in previous years. Mark Brostoff, associate dean and director of the Weston Career Center at Olin Business School, believes that students need to "recognize the value of other career paths" and begin to seek jobs in other related sectors. With the economy still suffering, situations like this will become more and more common.

Summary - Are Investors Ready for Higher Interest Rates?

The article, Are Investors Ready for Higher Interest Rates? discusses the difficult decisons that the Federal Reserve has regarding the appropriate time to raise interest rates. The Federal Reserve stated on September 23rd, "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The Feds next meeting is from November 3-4 and it is unlikely that they will significantly change their stance on interest rates. Many investors believe that the Fed could be forced to raise interest rates as soon as early 2010. Others believe that the current low interest rates could last for months or potentially years. While the economy is still not very strong, it is gaining momentum with a better-than-expected 3rd quarter and the differences in opinions reflect the different beliefs of how soon the economy will fully recover. For the time being, the Feds are following the economy and other financial markets before any significant decisions are to be made.

Can Main Street Catch Up with Wall Street?

The article, Can Main Street Catch Up with Wall Street? details the differences of how the economy is viewed between individuals on Wall Street and your average citizen on Main Street. Many economists feel that the recession may be nearing its end because the Dow Jones is above 10,000 and earnings of major corporations exceeded expectations. Investors note that it is easier for Wall Street to recover after a recession than the job market. However, unemployment has doubled in the past year and foreclosures are expected to top 3.5 million this year, up from 2.3 million in 2008.

The author Moira Herbst states that there are two different types of indicators regarding the economy. "Leading Indicators" like stock prices and the difference between short-term and long-term borrowing costs are examples of this because they tend to signal the status of the economy. "Lagging Indicators" like unemployment and consumer credit volumes tend to recover more slowly, hence the term "lagging." The belief by those on Wall Street is that the leading indicators are soaring ahead of the lagging indicators and that is one of the reasons why they sense that the economy is on the verge of a recovery.

Herbst states in the article Can Main Street Catch Up with Wall Street? that the difference in views on the economy is rather broad. The recession has crushed the job market and those on Main Street are feeling the pinch. The hope is that companies will realize how badly their cuts have hurt the economy and begin hiring again in the near future. At the same time, investors are beginning to question if they are overvaluing the stock market because of the diminished spending power and willingness to spend of consumers. In the end we will see who is right, Wall Street or Main Street.