Five Tech Brands That Probably Aren’t Going to Make It to 2013

Senior Contributor
10.19.11 5 Comments
Technology is a business that moves at warp speed. In such, it will brutally murder companies just as fast as it boosts them. In 2006, if you’d told somebody Motorola was going to sell their cellphone business to Google, they’d laugh at you. In 2010, if you’d told somebody IBM would surpass Microsoft in value, they’d smack you for being an idiot. And here we are at 2011, two scant months from the end. The year is littered with business corpses, but the Grim Reaper is just warming up for 2012. It’s going to be a bloody year for technology, and we’ve got five candidates that we think are going to hit the floor.

Let’s start with the chip shot. T-Mobile is dead meat, and it’s not because it’ll be merged with AT&T. That merger is as good as doomed, for various reasons.

No, the problem is T-Mobile is relatively tiny, with just 34 million customers. To give you an idea of how bad that is, even Sprint, which only recently recovered from a really bad string of issues, still has 50 million customers — and is set to expand that base. Meanwhile, T-Mobile can’t even get a decent Android handset.

In fact, the entire reason Deutsch Telekom, the company that owns T-Mobile, wanted to merge it with AT&T was because they thought they couldn’t compete. So, when the AT&T merger bombs, they’re probably going to sell the entire company for parts. Especially since all AT&T really wanted was T-Mobile’s 4G bandwidth; odds are pretty good in order to drop the lawsuit most of T-Mobile’s customers will go to Sprint.

Expiration Date: The wheels of (The Department of) justice grind slowly, but exceedingly fine. Expect T-Mobile to sign off by November 2012.

Might Be Saved By: If the wheels come off the merger, and nobody is willing to give Deutsch what the T-Mobile assets are actually worth, they might decide it’s worth more to stay in business and act more like Sprint.

Best Buy
The signs of Best Buy being screwed are floating all around. Foreign outlets beginning to shut down? Check. Disastrous attempts to compete with online retailers? Check. A retail philosophy that involves massive costs that is becoming increasingly outmoded as shoppers can access the internet? Check. Not learning from any of these things? Check. Circuit City’s five fans may find this story a bit familiar.

Part of the problem is that Best Buy is not where gadget-savvy shoppers go. Best Buy instead relies on suburban dads to show up looking for a blender and to leave with an HDTV, an overpriced HDMI cable, and a Blu-Ray player. And every last aspect of that is under assault.

Media is rapidly shifting to a cloud/digital download infrastructure; even DVDs are now coming with digital copies for download. With the economy, shoppers aren’t feeling the need for new TVs, and binge buying is dying off. And many people trust online retailers enough at this point to buy their gear from them, at a cheaper price than Best Buy is willing to, or can, offer.

Basically, they’re competing against more nimble and better-run competitors who have fewer costs. Also, they’re dependent on tech companies, who increasingly turn on a dime and often screw retailers. Look no further than the HP TouchPad disaster; when HP yanked the plug violently on their WebOS failure, BB got stuck with piles of an expensive doorstop it couldn’t sell. Best Buy is going to have to hope that video game business really takes off. Of course, weak demand for games killed their profits last quarter.

Expiration Date: When this happens, it’ll happen fast. The blueshirts will be unemployed by Halloween, at the latest.

Might Be Saved By: Sears dying first. Best Buy, after all, sells appliances, and Sears is arguably in a financial toilet far messier and deeper than anybody imagined. Just like Circuit City choking in 2008 gave Best Buy the market share in electronics to not follow, Sears croaking could give it enough market share in fridges to limp along for a few more years.

In the War of Tech Fruits, Apple has pretty consistently beaten BlackBerry. Still, we wouldn’t be predicting everybody’s second favorite Canadian company (and if you think it’s first, you’ve never been to Tim Horton’s) was going to die if it weren’t for, well, a massive data outage hitting it right where it hurts the most.

Here’s the thing: before that, Research In Motion had problems, and considerable ones. They haven’t been able to fight the iPhone in the consumer market, the PlayBook got thrown onto the pyre of iPad-wannabe failures within months, they had no clear vision of how to reverse any of this, and shareholders, you know, the people who actually technically own the company, were looking for pitchforks.

Then…the outage. Not only did this hit consumers, the market RIM is trying to court, it dinged its fallback, corporate customers, hard. Corporations are slow to change, but easy to spook, and with Windows Phone Mango, Android AND iOS — there are plenty of shelters for them to run to.

Expiration Date: CrackBerry users might need rehab as soon as next summer.

Might Be Saved By: Microsoft. If RIM drops in appeal enough, it might be a fairly enticing takeover target, with lots of corporate customers who could be talked into spending on “IT scaling.” Then again, ask Danger how that went. And speaking of cellphone companies…

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