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 | http://www.gilder.com/ | Issue 296.0/May 25, 2007

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HEADLINES:

-  The Week / Zoran Zooms
-  Friday Feature / Best Business Books: Anderson's Picks
-  Friday Blogger Bonus / A Future for Newspapers
-  Readings /


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The Week / Zoran Zooms

Charlie Burger, Gilder Technology Report (May 2007 excerpt): While at sea, Zoran (ZRAN) weathered a second storm in addition to its options review. The fabless designer of media chips reported a sequential freefall in hardware revenue of 30% during the December quarter. Though the fourth quarter is traditionally Zoran’s weakest as it cycles a bit ahead of the consumer market, last year’s results were off 15% from the year-ago quarter. Well, that’s not exactly the momentum we expect in a growth company. Blame was pinned on price erosion in the DVD market and delays in launches of new digital televisions. But we suspect a distracting options review had a lot to do with it. (Am I going to jail next year?)

 

It turns out no one’s going to jail or even getting a wrist slap, the company is rebounding nicely toward its former growth path, and the stock has appreciated more than 40% over the past three months, about as we had expected. Zoran continues to ascend into budding digital media markets for cameras, handsets, televisions, DVDs, and printer imaging. In particular, its COACH (camera on a chip) digital camera processors shipped in record numbers during the March quarter. Last year Zoran increased by half its already leading share of this market while the market itself grew about 13%. Based on design wins, management expects to continue building share from just over a quarter currently to nearly a third of the market by year end.

 

Zoran is answering the call for faster click-to-click time between shots, quicker ready mode when camera is turned on, and better image capture quality under poor lighting conditions. Typically in the past, these features were found only on high-end cameras. Now Zoran is helping to make them standard on low- and mid-range products at affordable prices. Expected to be in cameras by the second half of this year is the next-generation COACH 10 processor with advanced image processing and high-definition video recording. On the integration road map for future generation chips are anti-blur, auto-dynamic range adjust, and wireless connectivity.


Log on with your subscriber password at www.gildertech.com to read why Charlie believes Zoran (ZRAN) could reasonably double by 2009.

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Friday Feature / Best Business Books: Chris Anderson's Picks


Chris Anderson, editor-in-chief, Wired magazine; author, The Long Tail: Why the Future of Business Is Selling Less of More (5/13/07)
 
Microcosm: The Quantum Revolution in Economics and Technology by George Gilder (1989)

Why it's a must-read: "Gilder brings an economist's breadth of perspective to an engineer's understanding of the underlying mechanics of semiconductors and was able to really describe the importance and implications of Moore's Law [which predicts that the number of transistors on an integrated circuit will double every 18 months]. He's a very controversial character in many aspects of his life. I don't share many of his views. But when it comes to the power of technology as it becomes abundant, I don't think anyone's phrased it as well as he did."

Also on Anderson’s List:

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb (2001)

The Cluetrain Manifesto: The End of Business as Usual by Christopher Locke, Rick Levine, Doc Searls, and David Weinberger (2000)

Out of Control: The New Biology of Machines, Social Systems and the Economic World by Kevin Kelly (1995)

The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell (2000)

 

Read Complete Article:

http://www.usnews.com/usnews/biztech/articles/070513/21best.anderson.htm
 

The Gilder Telecosm Forum

If you are a Gilder Technology Report subscriber and you are not a registered member of the Gilder Telecosm Forum (www.Gildertech.com/board/) you are missing out on a supremely valuable opportunity to gain timely and actionable technology investment information.

Register today using your GTR password to gain entry into the web’s premier technology investment community: http://www.gildertech.com/board/

 

Friday Blogger Bonus / A Future for Newspapers

Andy Kessler (5/24/07, Wall Street Journal):
A Future for Newspapers

New
technology is mucking up the media, and newspapers seem to be taking the brunt of it. Craigslist and eBay took away classified ad sales, direct advertisers are allocating budgets to search engines and circulation is receding faster than Bruce Willis's hairline. Investors seem to prefer the safety of television broadcasters and cable companies, with their nice, government-mandated franchises and pipes that reach directly into homes.

 

Media, after all, is about owning a pipe -- some conduit between the creation of news or entertainment and the eyeballs that consume it. Media companies sell the owners of those eyeballs lots of things we weren't even sure we needed. The higher the ad rates, the better the business. The pipe reaches the consumer directly, keeping competition at bay. The tighter the pipe, the less the competition.

 

For broadcasters, the pipe is spectrum given or bought from the Federal Communications Commission under the guise that spectrum is scarce. For cable operators, it is often the sole cable franchise in a town. For phone companies, it's those regulated copper wires, some of which are so old they have Alexander Graham Bell's teeth marks in the insulation.

And newspapers? Where's the pipe? What conduit to readers do they control? Well, there is the guy that drives up and somehow misses your driveway every morning. Or the sidewalk newspaper dispenser where the homeless man buys one copy and steals the rest so he can peddle them on street corners. So unless you are the only paper in town (ask Warren Buffett how much he makes on monopoly papers like the Buffalo News), there is not much of a pipe to control. Instead, reputation, quality news gathering, trust and credibility maintain the franchise, something The Wall Street Journal and the New York Times enjoy on a national level and the Washington Post and others have locally.

But so what, it's all over, right? The Internet has destroyed newspapers' business model. If Google News doesn't kill them, blogs certainly will. Hmm, maybe not so fast.

Last I checked, the Star Trek Holodeck, despite a Wikipedia entry, is still fiction. No one is teleporting a newspaper to your home anytime soon. Unlike music which can be copied once and stolen a million times, newspapers live in the material world. Thankfully, as an author, it's the same for books. Even a 30-inch screen can't match the readability of what cheaply spits out of a printing press ….

 

Read Andy’s Complete Commentary:
http://www.andykessler.com/andy_kessler/2007/05/wsj_a_future_fo.html

____________________________________

Readings /


Ten Thinkers and Scientists Who Could Change the World
http://www.forbes.com/home/technology/2007/05/23/revolutionaries-innovators-science-tech-07rev_cx_ee_mn_0524rev_land.html

Resisting Vista?
http://www.usnews.com/usnews/biztech/articles/070515/15vista.alternatives.htm

New superfast wireless broadband device prototype submitted to FCC
http://arstechnica.com/news.ars/post/20070522-new-superfast-wireless-broadband-device-prototype-submitted-to-fcc.html


China’s Tech Generation Finds New Chairman
http://www.wired.com/techbiz/people/news/2007/05/chairmangates

MySpace Vs. The Do-It-Yourselfers
http://www.forbes.com/technology/2007/05/23/myspace-profile-photobucket-tech-cx_rr_0524myspace.html


Lenovo Loses One of Its Stars
http://online.wsj.com/article/SB117993573819312191.html?mod=home_whats_news_us

The Weekly GTI
http://www.gtindex.com/

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FRIDAY LETTER STAFF

Editor: Mary Collins George / mcollins@gilder.com

Research: Sandy Fleischmann / sfleischmann@gilder.com

 

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