You might recognize Roger McNamee as the angel investor who invested heavily in Palm and came up with this ludicrous prediction back in March of 2009:
You know the beautiful thing: June 29, 2009, is the two- year anniversary of the first shipment of the iPhone. Not one of those people will still be using an iPhone a month later. Think about it – If you bought the first iPhone, you bought it because you wanted the coolest product on the market. Your two-year contract has just expired. Look around. Tell me what they’re going to buy.
Well they weren’t buying the Palm Pre, that’s for damn sure. Actually, a good percentage of them were buying the iPhone 3GS. But that’s really neither here nor there.
McNamee, who despite his misplaced Palm Pre enthusiasm is actually quite bright and one of the most successful tech investors around, recently sat down for a CNBC interview where he touched upon a wide range of issues, including Android and the future pros and cons of purchasing Google and Apple stock.
McNamee starts off with an interesting point about Windows and the future potential for tablets. McNamee postulates that we’re currently in a cycle where Windows stops growing and the availability of iPads and smartphones increase as corporations trade down from Windows to eliminate support costs. Moreover, McNamee points out that the percentage of Internet connected devices that fall under the Windows umbrella is only 50%, a shocking figure since it wasn’t that long ago that the figure was in the upper 90s. That said, there $100 billion of revenue to be gobbled up by mobile devices every year for the next few years.
And who’s leading the tablet charge? Apple of course. As Windows goes down, Apple rises.
McNamee goes on to say that there’s a titanic clash for control of the Internet between the world wide web and Apple’s app model. Google’s problem is HTML hasn’t changed in a decade while Apple is just killing the www and might sell nearly 100 million units this year.
Quite perceptively, McNamee says that Google is slowly but surely losing their influence because the success of index search has “caused pollution to go into it and people have shifted their search behavior.” As a result, whereas Google used to be 90% of all search queries, a growing number of users are turning to specific websites like Wikipedia, Twitter, Yelp, and an assortment of other specific search engines that cumulatively now occupy more tha half the market.
As for specific stock advice, McNamee is long Apple, and despite what he thinks about Microsoft, considers them a buy at current pricing because of their monopoly over email via Exchange.
With respect to the tablet space, McNamee says HP could have a compelling product provided they get it out soon enough and promote it. Android, though, isn’t on McNamee’s radar because of the numerous security issues that have plagued the relatively unsupervised Android Marketplace. McNamee said that he’s just “waiting for the day when some 16 year old kid in the eastern bloc presses a button and erases every body’s hard drive. I’m serious. “You had 64 apps removed because they were stealing credit card numbers. It’s a little bit of a wild west there.”
Lastly, while some are saying that Apple’s share of the tablet market may one day fall to 15-20%, McNamee ponders what things would look like if Apple can maintain it’s lead.
“What if Apple windes pu with 60/70% of tablet market, what if it’s like the iPod market.. we’re looking the biggest hardware company there has ever been in a mile”