Three classes exist in tech and related spaces.
You have a small handful that dominate, led by Apple and flanked, to a certain extent, by
and, very admirably, by the likes of
While some combinations of the four overlap and compete, each has staked out its own territories where it dominates and continues to, by and large, grow revenue and profits.
Then you have startups and perpetual startups. Thousands of new startups exist throughout Silicon Valley and elsewhere. If you follow venture capital flows and such, you can clearly see what an exciting time it is in the space.
Perpetual startups --
lead this category.
Of course, you can logically include Apple and Amazon -- dominators
perpetual startups -- in both categories.
And then you have a category that, in some respects,
It's a group of have-nots --
Research in Motion
leads the pack -- and companies already moving or at serious risk of moving in that direction.
Microsoft, in many ways, controls that segment of tech society. It's creating "a town full of losers," but it doesn't seem as if anybody has made a true play to "pull out of here to win."
For several decades, Bruce Springsteen has weaved a common theme through his writing. No matter how many challenges and/or demons the characters in his stories face from psychological, environmental and other standpoints, they seek a way out. There's always a chance at redemption, but you've gotta take it, you've "got to get out while you're young."
Companies such as
rely, to varying degrees, on Microsoft and Windows 8's success way too much.
In a search for redemption, I'm not sure how much sense it makes to hitch your carriage to Microsoft. That approach could simply leave them begging for mercy from consumers as well as Apple, Google and a smattering of others.
I entered a position in MSFT at under $30. I scaled a bit of it back above $31, as my enthusiasm over Windows 8 -- desktop and mobile -- waned. It looks like MSFT will either break below $30 and wallow or find true support above that level and retest recent highs.
I'm out, though. I would rather take profits than wait for the other shoe to drop.
I'll tell you what I see coming in 2013 -- an inventory glut. If Microsoft and its partners are as confident about Windows 8 as we're supposed to think they are (remember, Intel reportedly thinks the OS is not ready and Microsoft has angered some partners by making its own hardware), they're all producing too much product.
We know RIM, on an island all by itself, will have to blow out, write down or do both to a good chunk of inventory in 2013. I'm not sure why, with their even less inspiring devices, we should not expect to see the same from Dell, HP and Nokia. Any last ditch effort to maintain or steal enterprise business away from the still stable big dogs simply will not salvage or subsidize what will be a consumer disaster.
Things at Intel are quite sad. To see such a powerful company hinge its fate on Windows 8 and the MacBook knockoff known as an "ultrabook" or the "convertible" (
it's a tablet, no, wait, it's a laptop
) that has about zero chance of succeeding makes me want to cry.
If Intel loses Apple's business (via
) anytime soon, it will be left with Windows, a mobile business that's a little too late and a whole slew of Googlish hobbies. That's concerning.
The picture in tech as it stacks up for 2013 -- outside of the dominators, the startups and the perpetual startups -- should concern you as well. If there was ever a time for this second and third tier to attack Apple, for example, it's now. It just doesn't seem likely to take place, at least not successfully.
On Thursday, somebody in my feed tweeted the on-sale date for Microsoft's Windows 8 Surface tablet. I think it's the 26th of this month. Something tells me we're not going to see folks lining up for days and several blocks like they do for Apple products or a Springsteen concert.
Keep an eye on my article history. Next week I'll cover an often neglected angle on what has gone wrong in tech outside of Apple's greatness
At the time of publication, the author was long FB and P
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Rocco Pendola is a private investor with nearly 20 years experience in various forms of media, ranging from radio to print. His work has appeared in academic journals as well as dozens of online and offline publications. He uses his broad experience to help inform his coverage of the stock market, primarily in the technology, Internet and new media spaces. He has taken a long-term approach to investing, focusing on dividend-paying stocks, since he opened his first account as a teenager. Pendola, 37, is based in Santa Monica, Calif., where he lives with his wife and child.