Be it Smartwatches or Smart Speakers, It's Never Been Easier To Make Gadgets. But Only the Big Players Have the Muscle To Survive. (theguardian.com)

Why would you go with the smaller brand, faced with those offerings from tech's behemoths? Or, at the previous displays, why not just buy the cheaper models? Charles Arthur, writing for The Guardian: That's the challenge for many consumer electronics firms. Not how to make things, or how to distribute them and get them in front of potential buyers. It's how to make a profit. Out of Fitbit, GoPro, Parrot and Sonos -- each operating in different parts of the consumer electronics business -- only the latter made an operating profit in the last financial quarter, and all four have made a cumulative operating loss so far this year. Making a profit in hardware has always been difficult. By contrast, in software, all the significant costs are in development; reproduction and distribution are trivial -- a digital copy is perfect, and the internet will transport 0s and 1s anywhere, effectively for free. If your product is free and ad-supported, you don't even need anti-piracy measures; you want people to copy it and use it. Software companies typically have gross margins of around 80%, and operating profits of 40% or so.

In hardware, though, the world now seems full of companies living by the Amazon founder Jeff Bezos's mantra that "your [profit] margin is my opportunity". Indeed, Amazon is one of the reasons why long-term profit is more elusive: it provides a means for small startups to distribute products without formal warehousing arrangements, and compete with bigger businesses at lower cost. That, together with the rise of a gigantic electronic manufacturing capability in the southern Chinese city of Shenzhen, about an hour's drive north of Hong Kong, has made the modern hardware business one where only those with huge reserves of capital and brand recognition can hope to thrive.

Comments

To Much

[zippo01]

As I get older the shiny tech edge gets not only less attractive but off putting. I don't want/need light bulbs with WiFi, I don't want my thermostat connected to the internet. Why does anyone need a washer, dry or refrigerator connected to anything but power and water? Why not get cameras all over the house, so people all over the world can watch you and your family. This extends to everything. Hey, buy a car only highly specialized and expensive people can work on! Rebuy all the media you already own, because we have a new format that isn't any better, just different! Hey we no longer have a working web page, download our app that has less functionality but might spy on you, it'll be a big surprise. Its just more to worry about, more to deal with, and I'm an electrical controls engineer! I would imagine most new tech is only used to a small fraction of its capability, because most people don't care or want to put the effort in. The move complex/connected something is, the less reliable, and harder to understand the ramifications and risks of owner ship..

Re:Baloney

[hawguy]

Here is the interesting thing. If you convert Euros to dollars and liters to US gallons, Californians are paying more for diesel and gas (petrol) than the French are, and the citizens of the state are asking for still higher fuel taxes.

It's less interesting if you post the actual facts instead of making "facts" up, Mr Trump:

Gas price in San Francisco: $3.39

At 3.78 liters in a gallon, that's $0.89/liter.

At today's exchange rate, a Euro is worth $1.13, so $0.89 is 0.78 EUR

In France, the December price is 1.42 EUR. There are only a few counties where gas is cheaper than what californian's pay: . Russia, Belarus, and Azerbaijan.

Or, to convert in the other direction the French are paying $6.06/gallon for gas.