28
Nov

A bump on the road to consumer tech heaven worth a mention

Anyone with a keen interest in consumer computer technology should quickly learn to study, carefully, the gap between what a manufacturer claims about a product and what is actually experienced. The point of the exercise is to develop a sober view about the likely performance of products they may introduce in the future, and, subsequently to at least save some time, if not some money.

Here’s a case in point:

  1. Solid State Drives (SSDs) and PCs with a Redundant Array of Independent Disks (RAID) managed by Intel Matrix Storage Manager

Consumer Grade SSDs and PC Software RAIDs don’t mix

We own a Dell T1500 Workstation, with 2 80 GB Samsung Drives in a RAID 0 configuration. The holidays are approaching. We thought we’d give ourselves a present and swap out the 2 Samsung Drives in this computer for a pair of Crucial (consumer brand for Micron) 500GB SSDs. This swap looked great on paper. We checked with Microsoft to ensure we wouldn’t experience problems backing up the current RAID architecture and restoring it to a RAID 1 (which would give us a Disaster Recovery option should one of the drives fail). We also checked with Dell (actually we downloaded their version of the PC Doctor diagnostic tool) and determined the BIOS for the T1500 was absolutely current.

But once we put our cash on the line and paid over $420 for the pair of Crucial SSDs, and physically received them, we learned the configuration wasn’t going to work. Crucial support let us know the consumer grade SSDs don’t get along well with the Intel Matrix Storage Manager at all, regardless of whether the SSDs are configured as a RAID or not.

Readers thinking of making a similar effort to “upgrade” older computers are advised to think otherwise. The only option, for the record, is to purchase the commercial grade version of these SSDs, which carry the Micron brand. But we can’t claim to have verified the accuracy of this option. The fact is we can’t reach Micron to confirm our assumption (in 2014 pre-sales support for a commodity product like SSDs is, apparently, not available from Micron).

Does all of the above give this writer cause for concern? Certainly. So we are thinking very carefully about how we will proceed on the renovation we have in mind, and may just end up purchasing a pair of old fashioned spindle driven WD hard disks (1 TB each) and simply configure them into the RAID we are after.

What’s the bottom line impact on the manufacturer vis a vis the consumer market? It would be better for the manufacturer’s marketing communication content to speak to the kind of configuration we had in mind, so consumers, like us, would have saved the time and thought otherwise before paying for the SSDs.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

14
Nov

Any meaningful feature gap between high end and low end smartphones has been obliterated

Consumer markets for smartphones no longer present any gap, whatsoever, between high end and low end entrants as regard high value features. With this gap obliterated, industry players will do well to implement product marketing strategies with a proven effectiveness in pure commodity markets or else risk extinction. This means product marketers should emphasize methods of lowering the cost of manufacture, and secondary markets to prop up revenue expectations while closely scrutinizing new model planning.

Here’s a case in point. We just purchased, outright, an LG Optimus L90 Smartphone from our wireless data provider, T-Mobile. Our total cost to acquire this device amounted to a one-time charge of $99.99. We should also note we maintain 2 Nokia Lumia 925s, which we purchased from T-Mobile at a cost of approximately $600.00, each. We are still paying, monthly, for each of the Lumias and will likely continue to do so for at least another few months.

But with an Android KitKat O/S, and a very extensive set of app options, we can’t find anything we’ve given away by opting to purchase the LG-D415 instead of a new Lumia, or even an iPhone 6. Sure the Lumia and the iPhone 6 offer many more powerful features than our LG Optimus L90, but we have no need for them. In this writer’s opinion, when features reach a usefulness plateau as they have in the smartphone market, consumers have zero incentive to migrate up the ladder to more expensive versions of the same commodity.

Leading manufacturers of smartphones are already exhibiting a set of strategic moves befitting general agreement about the nature of the market as, in late 2014, entirely commodity driven. Accordingly, Apple is talking about producing a gold version of its iPhone 6, which is already available for custom monogramming. This move makes sense for a manufacturer with a leading product whose principal attractiveness is its position as a status symbol for a highly concentrated set of consumers habituated on only buying the leading product in the category.

At the low end manufacturers like Samsung are feeling the pain as competitors with a substantially lower cost of manufacturing, for example, Xiaomi, seize market share. For this segment of the market, app stores look to be an oasis in a profit desert. No wonder Microsoft is racing to win a place on the radar of app developers as its best hope to capitalize on the smartphone market.

Look for further consolidation in this market as manufacturers either drop out, or consumer rivals.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

3
Oct

iPhone 6 and iPhone 6 Plus consumers are not likely to maintain an insatiable appetite for these devices

On Thursday, September 25, 2014, Barrons ran an article by Tiernan Ray. This short piece, Apple: ‘Bendgate’ Irrational, Says Cantor; Apple Comments via CNBC, which was included in Ray’s Tech Trader daily feature amounted to a quote from an analyst at Cantor Fitzgerald, Brian White, along with some comments from Ray.

White’s quote speaks to the current controversy about these new smart phones, and points to what he refers to as an “insatiable appetite” for these devices on the part of Chinese consumers. No product has ever, or, in this writer’s opinion, will ever stimulate insatiable consumer appetite. Anyone with a keen interest in the fortunes of these newest smart phones from Apple should maintain a skeptical stance about the usefulness of any comments like White’s.

If readers are skeptical about the veracity of our take on White’s comment, we simply point to the fate of Apple’s stock in market activity on Thursday, September 25, 2014. The stock dropped over 3% precisely around the set of concerns White calls “irrational”. If these concerns are, in fact, “irrational”, then why the deep dive on Apple’s stock price?

In this writer’s opinion, consumer concerns about these new smart phones are not irrational. As we have published earlier in this blog, and some other people (who we consider to be astute) have also written, the price of these devices will fall out of the range of the “average” smart phone consumer by a substantial amount. So, with the very high end of the consumer market not only targeted for these products, but, even more, already rapidly consuming them, the market reaction is entirely understandable.

Folks shopping at Burberry’s expect perfection. Sure they are willing to pay for it, but, in return, they are the most demanding of consumers. So market dissatisfaction with Apple’s mistakes and, perhaps, PERCEIVED trickery (why would an affluent consumer throw away a perfectly functional iPhone, albeit a previous model, for a slick new entry, which, nevertheless is “bendable”), should be entirely acceptable.

Further, an analyst who looks at market reaction and attempts to DENY its legitimacy is an analyst whose words will likely receive a lot of careful scrutiny.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

24
Sep

Can a set of entirely positive market comments endanger the revenue stream health of a tech hardware business?

Apple’s September 9, 2014 new products debut has magnetized an almost entirely positive set of market comments. But can such a set of editorial content actually work against Apple? The lopsided set of positive, almost glowing market commentary about the iPhone 6, 6S, iWatch, and iPay reaches a pinnacle, of sorts, in a piece written by Tiernan Ray, which was published by Barrons on September 16, 2014. The title of this article is Apple: Don’t Listen to the Doomsayers. Even Ray’s decision to include a contrarian opinion expressed by Doug Kass of Seabreeze Partners in his bucket of “doomsayers”, in this writer’s opinion, exemplifies the excessive weight of positive opinion about these new products, and what they promise to bring to Apple.

So, to answer the question posed in the title of this post, we certainly hold the opinion an almost unanimously positive market reception for a set of comparatively very expensive products like these from Apple, can be dangerous to the financial health of the ISV producing them. It is simply not tenable, in this writer’s opinion, to assume Apple will be able to pay for the very high market capitalization it presently enjoys by continuing to focus on the top of the consumer market for these devices. Regardless of whether the cost of purchasing an iPhone 6S is subsidized by a carrier here in the US, or a consumer ends up paying outright to purchase one, a $199.00 street price is not reflective of the TRUE cost of acquiring the product.

The US market is trained to react positively to offers fueled with artificially low prices. Not so the rest of the world, and, especially not so in emerging markets. These other locales and communities of consumers are not likely to line up to buy either of these smart phones anytime soon. These products will only be available, at launch, in a basket of countries, and, in this writer’s opinion, for good reason. Average global consumers simply cannot afford these devices.

What is even more troubling about the editorial euphoria bubbling up around these devices and the debut, as a marketing communications piece in its own right, is the complacency expressed by what is referred to as the “mainstream media”, here in the U.S. on the question of whether average consumers here in the US will have the fortitude to make rational decisions about whether or not it makes sense to purchase one of the products.

One popular publication ran a headline something like this: “Like it or not, Wearables are Here to Stay”. Have we really reached the age of “solution without a problem” on steroids? This writer does not think so. If consumers do not need wearable tech, then they won’t buy devices in the category. Certainly, different consumer segments exhibit different needs, but all this talk will have to evolve into buying action before we can really be convinced a shift in consumer sentiment has occurred.

Bottom line: the old adage “too much of a good thing” speaks the truth. It will be interesting to gauge results a quarter or two down the road.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

3
Jul

Are Consumers Clamoring for Smart Watches?

Anyone with an interest in computer technology targeted to consumers, who has some free time (plan on approximately 2.5 hrs), should review the Keynote, Google I/O 2014. The Keynote includes some important metrics on how global adoption of the Android O/S for mobile devices has been growing.

The keynote also includes a matter-of-fact presentation of the Android Smart Watch project, in sharp contrast to the mystery surrounding Apple’s own efforts on a similar product, and, finally, the patents Microsoft holds for this type of device.

All three of the featured presenters in the opening 50 minutes of the Keynote:

  • Sundar Pichai, Senior Vice President Android, Chrome & Apps
  • Dave Burke, Director of Engineering, Android, and
  • Avni Shah, Director of Product Management, Chrome

can be clearly seen with rather bulky devices strapped to their wrists: square boxes for Burke and Shah, and a circular disk for Pichai.

The Android smart watch effort is a component of the Wearables project. David Singleton, Director of Engineering presented on this topic in the Keynote. With the very first sentence of Singleton’s remarks: “We’re right at the beginning in a new phase of the miniaturization of technology, which means that it’s finally possible to make a powerful computer small enough to wear comfortably on your body all day long”, this writer’s skepticism was stimulated. Just who wants to wear a powerful computer on his or her body all day long? Anybody out there? Or will these devices end up consumed by the same “super geek” segment of “bleeding edge” stuff who are buying and wearing Google Glass?

Unfortunately, this writer thinks the latter will be the case. What should be of even greater concern to anyone viewing the Keynote should be an inaccuracy in Singleton’s comment. Pacemakers, digestible sensing systems for colonoscopy, etc, are all powerful computing systems (many of which are smaller than the device presented at this event). Some of these devices (pacemakers, etc) are used by their human hosts 7×24. But Singleton doesn’t mention any of these. Why?

The obvious reason ought to be these other powerful computing devices aren’t programmed to present ads online. Nor are they designed to deliver email notifications, texts, etc.

Android is betting tech consumers need to acquire more powerful methods of maintaining an “always on” condition, meaning a 7×24 hr collection system for potentially high stress activities like reading email, texts, etc.

Looming behind all of this conjecture is a notion strikingly similar to one expressed, recently, by Jeff Bezos of Amazon on the topic of another solution without a problem – the Fire Phone. Bezos extolled the good fortune implicit to Amazon’s current freedom to design whatever may come to mind, just as long as it’s unique, regardless of consumer sentiment.

This writer fears the market prospects for devices conceptualized within an implementation of this notion are pretty poor. Time will tell, will it not?

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

4
Nov

Can GE Transform 3D Printing from a Consumer Gadget Business to a Valuable Industrial Automation Component?

Last year I looked closely at several of the 3D Printing ISVs. My reason for looking into 3D Systems, and its direct competitors, was to put together an opinion on the long term profitability of this business. In my opinion, a lot of the potential for 3D Printing ISVs is at the comparatively boring high end of the application requirements curve, where custom parts for industrial automation projects can be built at substantially lower cost with a 3D Printing solution than would otherwise be the case. Airplane parts production, and the manufacture of custom parts required for new automobiles, are two types of industrial automation projects likely to benefit substantially from a technology like 3D Printing.

But in June of this year, GE announced THE FIRST IN A SERIES OF 3D PRINTING
OPEN ENGINEERING QUESTS
. This GE project is built around a contest between “entrepreneurs, companies and institutions[. All participants are asked] to offer their solutions to two additive manufacturing challenges: 3D Printing Design Quest and 3D Printing Production Quest: High Precision and Advanced Materials.”

On the day GE announced this effort, and added its endorsement of 3D Printing technology as the most likely method to deliver very high value to its manufacturing process, 3D Printing ISVs took on a much higher level of credibility. Needless to say, several publicly traded businesses increased their book value, substantially, in the aftermath of the GE announcement.

At the heart of GEs effort, of course, is to find, truly, the lowest cost method of producing custom components. Certainly 3D Printing meets this requirement, and promises an advantage to US based manufacturers that offshore competitors will not likely be able to match.

It would be nice to see the media pursue other stories about industrial applications of this technology and downplay the consumer gadget component.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved