After a relentless six weeks, reporting season is petering out as the City joins the rest of the UK heading to the beach.
Despite the fact that it starts again in just two months’ time, amongst all the noise there are always a handful of nuggets that have wider significance. Here are five things we learned this time:
1. Facebook got away with it in mobile
Back in 2010 Facebook took the decision not to build tailored Facebook apps for iOS and Android. It is now famously “one of the biggest mistakes we’ve ever made,” according to Mark Zuckerberg. A year after finally going native, the company says 40% of its ad revenue comes from these mobile applications.
Wall Street did not know what to do. After jumping from $26 to $33 overnight it has since recovered its $38 IPO price as investors scramble to get involved. It is the kind of strategic error that can bury some companies in the fast moving world of consumer technology, but in this case Facebook have managed to get back on track.
2. O2 shows it is possible for telecoms to make money from data
Back in 2007 the telecoms thought no one wanted data, so we had all-you-can-eat packages. This spectacular miscalculation led to spiralling costs, measly allowances, Wi-Fi offloading and no revenue.
Now, it seems, after six years they have finally got the balance right. Data revenues are growing faster than the data traffic itself. 3.6% faster to be precise. It is a watershed moment and having been doghouse for years it may be time for the telecoms to come out and, indeed, be more dog.
3. For Sandisk what comes down must eventually go up
The whole consumer electronics industry is famous for its perpetually falling prices, nowhere more so than in computer storage. Five years ago for £10 you could get 16GB of flash hard drive; now the same price gets you more than 128GB.
So when the global leader Sandisk reported a 6% increase in prices it was quite a shock. It was the first time this had ever happened in the firm’s 25 year history.
4. Google is the next Google
“Ad tech” is a hot space at the moment with at least four IPOs this year. The story is simple and compelling: advertising is a dinosaur of an industry that needs to be dragged kicking and screaming into the 21st century, particularly now that tablets and smartphones are taking our attention away from TV and magazines.
Google is the original ad tech company, and on their earnings call we learned they were executing their biggest ever change to AdWords. Quietly they have moved every last advertiser onto Enhanced Campaigns that will allow them to target audiences across all devices.
They have the biggest mobile platform, the most popular browser, the busiest video site, a huge advertising exchange (DoubleClick), and geeks aplenty. If ad tech is a hot space, it is hard not to see Google making the right moves.
5. Imagine losing Apple as your customer
Imagination Technologies is another UK intellectual property business, along the lines of ARM that has been discussed in this column previously. In this case they develop designs for mobile graphics processors.
In late July we learned that Samsung will switch to ARM designs to build the graphics module in their next generation Exynos smartphone chips.
Because of the wild success of ARM, the assumption has been that intellectual property tech businesses are all great. This shows the reality is more complex and with Apple as their major customer, the City is starting to worry about what would happen if Imagination lost that business too. Having hit 600p less than a year ago, the shares have more than halved since.
Image: Håkan Dahlström