The Future of Consumer Electronics

AntiFreeze writes "There is an interesting article from the Economist about the future of consumer electronics. The article seems to tie together a lot of loose strings generated on slashdot, specifically from the Playstation and Deep Blue article. The most important claim it makes is that consumer electronics are not being made in a monopolistic industy, and the fears of people like Eurodef (expressed here) are probably not as large as they seem at first evaluation." This is a really worthwhile article discussing convergence and the difference betweent he traditional consumer electronics and computing companies. Worth a read.

Comments

counting chickens before they...

[deran9ed]

but are cellular phones a necessity? Ten years ago we would have laughed at the idea of phones being a necessity.

In theory we all would love to think they're neccessities and they sure have simplified things in major ways, but remember the world was fine without them. I carry the whole bit, cell, palm, laptop, motorola x1000 typewriting pager and so much other stuff sometimes I have to stop and ask, "Why do I need this for?". Its mostly a gimmick we tell ourselves is a need because we're in the techie field, but the bottom line is millions survive and do just fine without something as common as a cellular phone.

Palm hopes that the future will hold a similar fate for digital wireless, and they are probably right. We won't *need* to check our email and stock quotes while waiting on a table at a restaurant, but we will come to expect the capability, and many will become somewhat dependant on it.

Don't get me wrong on my post I am not against signifying anything is the next best thing, but I do think in both now and yesterday as history does tend to repeat itself. Take a look at NASDAQ and the pounding its taking, now take 1000 investors and sell them wireless. Have them dump billions into it only to have some new technology come out next month. Its counting chickens before they hatch my friend ;)

Re:A conservative twist?

[cpt kangarooski]

Sure but do we want an open market?

Polices that prohibit dumping toxic waste into wells interfere with open markets. Yet everyone I know seems to prefer such policies, and damn the market.

It is a great mistake to act in accordance with the rules of some economic system. We permit capitalism, because we can exploit the efficiencies that it's capable of, in the same manner that we have domesticated dogs to serve us, or grow crops to feed us. If any of those behaves in a manner that is threatening to people (tricky to see wrt plants, but possible - kudzu, for instance) we put them down.

I certainly don't know of a better system to harness than capitalism. There may not even be one, though I rather hope that there is. But when capitalistic entities like companies do things that are not socially acceptable, it is of greater import that society win. I am not a capitalist, I am a capitalist-keeper. It's useful to me, but that's the only reason why it's worth keeping around.

If it's decided, for instance, that having a minimum wage that people can subsist on is essential, then that's yet another ground rule that capitalists had better work within. Adopt such ideas widely enough, and unlimited capitalism doesn't look so healthy.

Most people aren't, I suspect, capitalists, for they want the benefits without paying any of the price. Yet sadly, when they organize in groups, and work for businesses, they seem to leave their personal desires and consciences at home; doesn't matter. Whether they want to foist it off or not, they're responsible for what they do. I just wish they'd realize it.

Technology overflow.

[EvlPenguin]

The market for consumer electronics has come into the PC market because they saw opportuniny for profit. While there's nothing wrong with this, it creates a trend of making all these useless devices which end up sitting on store shelves contributing to the technology overflow.

Specificly, there is the trend of putting a microproccessor in every appliance in your house so your refrigerator can talk to your stove who can talk to your toaster who can talk to your washing machine. It doesn't have to be something as extreme as this; for example there's a banner on top of this very page for a digital camera is also an mp3 player. Why would I want to stick headphones in a camera? Why would I want to carry around a camera if I just wanted to listen to music? Besides the sheer novelty of the device, it's practicality is limited (especially when you consider the price). It'll sell, but not enough to keep a company afloat. While it may not matter to a big company who's already established in another market, it would matter to a smaller company trying to enter the market, because they would lose their investment in R&D and manufacturing.

In the eternal search for the next Big Thing, there's bound to be a lot of useless toys along the way.

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Re:Price dumping?

[homebru]

Microsoft expects to lose money on its XBox hardware

And as soon as someone hacks the box to run Linux, we should help MS sell a LOT of boxes.

Re:The Future of Products

[silicon_synapse]

But as long as other products are available, people will stay away from some of the copy protection "features." As the article says: Any fans of Sony's Walkman who try the digital version will be sorely disappointed. Because Sony is also a music publisher, it has saddled its MP3 players with fiendishly complicated anti-piracy software that makes them hard to use. These are signs of a consumer-electronics firm that does not fully understand the culture of computing. If competitors can contract the same factories Sony uses AND put out an easier to use product, Sony is going to have to try awfully hard or buy a lot of laws to dominate. It'll probably all come down to marketing. With the internet allowing such cheap promotion, smaller companies have a good chance of succeeding.


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A conservative twist?

[skwang]

Not that you asked but The Economist is a British publication that leans to the right.

What I got from this article was the basic conservative message about international trade. After all, it seemed to concentrate on why Japanese electronic firms might or will be declining. While the publication may be British, this article was written for the US publication of the magazine. The message seemed to be that the American Computer companies might reduce market share from the Japanese electronic firms. I hate to generalize but conservatives (in the US) support US industries with tariffs (to "protect" them). They also emphasize the "trade gap" between the US and foreign nations in an effort to boost their position against allowing more foreign trade. And they also fight for less foreign investment in US interests.

Now I may be reading too much into this article. After all most electronic firms are Japanese and most computer companies are American. Yet I get the feeling that there is a "Made in the USA" angle to what this column is saying. Anyone else agree? Or am I reading too much into what the article is saying?

PS After I wrote this comment, I had another look at the cartoon on the top of the page. Why does the computer have an American flag on it?

hold on to your Yokohama's

[deran9ed]

After all, most American firms left the business in the 1970s not because they could not innovate but because their shareholders could not stomach the poor earnings.

I beg to differ on this note, I believe most American firms outsourced their business to foreign firms since it was much cheaper to go that route as opposed to American's spending so much and getting little in return as opposed to say that American companies turned "poor earnings". This can be seen with Zenith who for years made products in America, although not as good or as cheap as the Asian counterparts, nevertheless they still had a market.

Consumer-electronics devices are among the fastest to commoditise, as Asian firms quickly copy technology and drive prices down. The success of the Japanese can be partly explained by a capital structure that has allowed them to survive with little profit.

Not only are their structuring plans pretty well rounded, but if you take a look at academia abroad, you will notice the will of foreigners such as Japanese who try to go out and expand, look at America, we glorify glamour, and most of the students here aren't as willing to learn as foreign counterparts. (this is again my thoughts so flame on)

But here, too, digital may turn out to be different. As with the PC itself, most of the value turns out to be not in hardware but in software and related services.

Nonsense this is a very huge MS'ish based arguement, not all software demands revenue as show with the Open Source Movement. To think that computing relies on solely vendors such as Microsoft, MacIntosh, or Sun Microsystems is bogus.

Palm's strategy is eventually to make most of its money from licensing its technology, selling content and software to be used on its devices, and providing services such as wireless Internet access.

Sorry to remind so many people, but Palm is not a neccessity, furthermore for the company to rely on selling content, well take a look at Yahoo's slow fall last week. Along with that take note that wireless is too NOT a neccessity.

Anyways my rantings are over.

Britains Most Wanted

Re:Price dumping?

[frostyboy]

Applying this logic would make virtually all console/game manufacturers suspect of what you call "price dumping." Sega, Nintendo and Sony included.
It's just the way the business works, for every console sold, they expect to sell potentially dozens of games.
DC, PS, and PS2 are all being sold at a loss. As long as the platform catches on (which can be paritally assured by dumping lots of these consoles on people) they could give the consoles away and still expect wide profit margins on the games.

http://www.mitwebcam.com

Re:Internet Outlet

[AKAImBatman]

Bizarre as it may sound, that is exactly what the creators of multics envisioned. In their world, you would have only a couple of major computers (mainframes) that supplied computing power to homes like electricity. No one would ever need a real computer, all they would need is a cheap terminal or other interface to this computing power. Now we've come in a complete circle and are just beginning to achieve the original goals.

Internet Outlet

[roman_mir]

Just like the Power Outlets in our homes, Internet Outlets could become ubiquitous for every day use. You already have to connect your fridge to the power outlet, why not having another cable and plug it into the web? The gadgets that use these outlets will look less like computers and more like normal everyday electronic devices, who cares if you have an old fashion radio or an Internet radio if they broadcast the same thing. The difference is that you can order songs or programs you want to hear with a simple user interface on your radio. Your TV uses Internet or the Internet comes into your house over your TV Cable? Who cares, it is not even the point. Each house will become a 3Com hub with 8-16 or even more Internet Outlets, never mind the implementation. And then you could have Internet Terminals all over the city that could be used to check on the contents of your fridge from your work place or turn on your water heater at home because you are comming home early!
Bizare, this picture is so alive in my head, I swear I can see how all this will work! I could not see that even five years ago and yet today, this seems more than feasible to me, what abou you?

Re:new industries

[servasius_jr]

Playing devil's advocate here, I don't think the automotive analogy holds up entirely:

1.)Starting a car company is incredibly capital-intensive and will always be so, just because you're making a very large bulky object. D'you have any idea how much an industrial sheet-metal press costs for instance? Or prime real estate with good access to transportation networks like highways and railroads? Breaking into the electronics market is no where near as difficult -- most of your raw materials, i.e. individual parts made by sub-contractors, are small enough to ship by UPS. Hard still, but not nearly so difficult as trying to compete with GM from your basement.

2.)Cars and their antecedants, wagons, donkeys, whatever, fulfil a pretty basic need -- they attempt to get you and your shit from point A to point B as quickly and comfortably as technology allows -- as this need is fairly immutable, you don't see a lot of basic structural change, only improvements: you add a wagon to your donkey, then a couple thousand years later you replace the donkey with an engine, pretty soon you start making the wagon out of metal instead of wood, et cetera. Most consumer electronics don't fill any long standing need like this: it's either shit you don't really need, like networkable coffee machines; or shit you didn't know you needed until someone invented it, like the PC, GPSs, whatever. So unlike the automotive industry, the fundamental demand-side market forces are liable to change very quickly, and it's much easier to come out of left field with some new gadget which doesn't so much address a demand as create a demand.

Like empires, I think all monopolies are doomed from their very beginnings. The premise of each is that one guy gets to be god and everyone else grovels. The human will to power -- the fact that almost all of us would rather be in charge if we had the choice -- ensures they'll eventually break down. And fear of monopolies is a very American thing, just like distrusting the government.

"The Economist" pretty much rocks. I recommend it to all /.ers for good, if rather right-wing analysis of current events. All your Consumer Price Index forecasts are belong to us.

Re:Price dumping?

[Fjord]

Now that you put it that way, it really sounds like price dumping. If all the big players are doing it, it doesn't mean that there isn't a barrier of entry for a smaller vendor.

new industries

[Kris Warkentin]

Of course it's not monopolistic....it's still too new. When they first started making cars, they had 3 wheels and 6 wheels and dashboard hibachis and everything else you can imagine. The market stabilizes eventually and the big players all produce the same stuff, over and over again. That's what we're seeing in the consumer electronics market, particularily with handheld/portable/wearable computing devices. The barriers to entry are still relatively low so any Tom, Dick and Harry can get his device on the market. Once it stablizes and mass-production makes it impossible for 'garage-based' shops to put out competitive products, THEN we'll see the monopolies.

Emerging Technologies

[boinger]

But it will become more and more monopolistic. As electronics and "traditional" appliances merge more and more, various technologies will emerge. Most will, of course, die off as useless, convoluted, expensive or whatever. But those that stay will usher in new monopolies and with the current overwhelming trend of Patent-or-Copyright-anything-We-can, there isn't going to be any "open" options in many arenas. Whatever the next Big Thing is, I'm sure it'll have some corporations stamp on every iteration of it. They got close with Divx (the Circuit City one, not the new, unrelated one), but the next such thing will, I'm sure, be a little more stealthy in its implementation (by being more stealthy on the negative implications, I imagine).

Anyway, my point is - soon the frivilous "unpatentable" crap will sift itself out (One-Click, anyone?), but I'm quite sure we'll be left with the New-VHSs and the New-Refigerater-coils and the New-Heater-elements-in-Toasters and each new thing will have the stamp of whoever had the minion that thought of it. Whoever happens to get The Big One will gain more influence over the technologies emerging at that time and they'll get their stamp on more things and so on...Soon, there will be the Microsoft Of The Kitchen and the Microsoft Of Home Theatre and so on.

Who knows? Maybe they'll be the same Microsoft we have today.

Price dumping?

[Domino]

Microsoft expects to lose money on its XBox hardware, but make it back with services such as online multiplayer game networks. To me that sounds like price dumping. Ship the thing below the competitor's price to get the market share, no matter if the price covers the costs or not. That's Microsoft as we know it.

Nothing new under the sun

[imac.usr]

As it has penetrated a mass market, and as broadband connections to the home have spread, the PC has become an entertainment hub and the heart of the digital life, with the gadgets to match.

Yeah, I liked this idea the first time I heard it, about an hour into the presentation. Good to see it confirmed by the "respectable" press. :-]


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