The HTML5 Disruption Guide for Equity Investors

February 24, 2012

In my last post I spoke why developers like HTML5.

Today I want to share some quick thoughts about which companies are stand to benefit from HTML5’s predicted disruption to the mobile industry, and which ones aren’t:

Native OS Owners: LOOSE
because it bypasses their control points like the app store approval and rev share arrangements:

Microsoft
Apple
Google (Android)

Web Search: WIN
because Web search is the main discoverability mechanism of (HTML5 and all other) web sites, not the app store. Note, that Google can crawl into an HTNL5 app (but not a native app) and highly optimize discoverability!

Google (Search business)
Microsoft (Bing)

Handset manufacturers: LOOSE (but not equally)
because they are commoditized and become deliverer of exchangeable boxes:

Apple*
HTC
LG
Sony
Fujitsu
Panasonic

*don’t believe me? Just make a side by side comparison of the Facebook app on the iphone vs the, say, Samsung Galaxy. It looks exactly the same, except that you may suddenly start to like the larger screen size of the Samsung and not care so much over their Android bloatware… Content differentiation has disappeared and hardware features become more predominant. iphone is good at them, but not necessarily the best!

Low Cost Handset Manufacturers: WIN
All those who do well in low cost (through scale and/or supply chain management) could see a relative gain of market share over the other OEMs:

Nokia
Samsung
Mediatek

Content owners: WIN
Of course, with a commoditized hardware and delivery platform, the premium through differentiation moves to content owners:

Facebook
Google (services)
(Simple) Games (Zynga etc.)
News (CNN, FT, NYT)**
Video (Youtube, ESPN, CNN, Netflix, Hulu)

** You may argue that news outlets are the big losers of anything related to the Internet. However, they already so disrupted that the spread of HTML5 on mobile may actually give them a lift from their miserable position now. Just look at some of the earliest and most aggressive adopters of HTML5: The Financial Time and The Economist.

Network Operators: WIN
Not being a slave to Apple any more will feel a win to every operator. They have much more leverage again and are no longer being chocked by the native OS owners — a war they even participated in and lost big time in the end (think Limo, WAC, imode, ophone, etc.):

Verizon
Vodafone
Telefonica
Deutsche Telekom
China Mobile
DoCoMo