So, a $35 device can be sold at frys for $75 at 100% profit?
And you say hardware is dead?
Hardware is dead
101–110 of 155 posts
Re: Hardware is dead
#102Earlier quoted context omitted.
Came here to say exactly that. Markets are zombies and dollars are brains. But the title is less thrilling than "Ok everyone knows how to make a tablet now, that won't be a high margin business." In this case margin being the proxy for expertise in putting together a tablet. But there actually is a story here which VentureBeat came so close too and missed, the cost of compute. Even in the 80's when I went to work for…
What about AMD, should they copy ARM business model to compete with Intel in desktop market? Or maybe AMD is too similar to Intel and cannot adapt ARM licence model due to its internal costs structure? (Innovator's Dilemma)
AMD is a good example of how competing with Intel doesn't work well. They kicked Intel's ass with the AMD64 architecture but they didn't get commensurately rewarded.
Look at their lawsuit vis-a-vis Intel and their predetory approach to Dell. They accused Intel of threatening to cut off Dell if Dell put an AMD chip in their servers. At NetApp where I was arguing for Opteron rather than the turd Intel was pushing (Itanic) as a 64 bit solution I got to see all of it, the whole "We might not want to buy your products ..." or "We really only provide NDA roadmaps for our 'comitted' customers ..." etc. Not so with ARM vendors, there isn't anyone to cut your leg off. Don't like the TI part? Hello BroadCom! Can't get docs on their GPU, hello Exynos! It's competitive and its easier to play in.
Re: Hardware is dead
#103Earlier quoted context omitted.
Actually Intel's ultrabook rebranding was also a clever step to make laptops expensive/more profitable again, while they were in a free spiral fall due to (Taiwan's)Acer's netbooks. That said, hardware will only be dead if US companies give up on producing hardware, and it becomes commodity produced elsewhere, similar to clothing manufactured; only Apple will remain the Prada of hardware.
Add a keyboard(/trackpad?) case to one of these 7" tablets and you pretty much get the original Asus netbook concept, only faster, cheaper, and more versatile.
And if you remember the CeBIT where ASus abortively introduced an ARM based laptop you got to see the who ecosystem in action. I wish the full details of that came out but the scuttlebutt was that Microsoft threatened to cut off Asus completely if they shipped it. They were already pissed that the EeePC's had a Linux distro that was easy enough for windows users to use but couldn't really put Vista on them, their re-issue of XP to support those machines was pretty notable.
Re: Hardware is dead
#104Hardware is dead; long live hardware. The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end models, and retailers still make money on them. The free-fall in automotive prices in the 20s "killed" the automobile, except that people kept buying faster, sleeker, newer models anyway. Like so many other electronics and everyday devices, the commoditization of ta…
So not to be that dude, but ... "The King is dead, long live the King." refers to the accession of a new monarch. It implies in the language an immediate, uninterrupted rule of the line. It should not be used when something has died, and it's just dead and there is no implied line of succession. A terrible but relevant example would be "the iPhone is dead, long live the iPhone.", implying that the 4s is dead and 5 no…
The conclusion of the article was "Profit margins from hardware-only is dead. Long live profit margins from software bundled with hardware!" The example was the generic Android tablet vs. the iPad.
Re: Hardware is dead
#105Earlier quoted context omitted.
What about AMD, should they copy ARM business model to compete with Intel in desktop market? Or maybe AMD is too similar to Intel and cannot adapt ARM licence model due to its internal costs structure? (Innovator's Dilemma)
AMD is a good example of how competing with Intel doesn't work well. They kicked Intel's ass with the AMD64 architecture but they didn't get commensurately rewarded. Look at their lawsuit vis-a-vis Intel and their predetory approach to Dell. They accused Intel of threatening to cut off Dell if Dell put an AMD chip in their servers. At NetApp where I was arguing for Opteron rather than the turd Intel was pushing (Itan…
Tangentially, because I'm finding your comments so fascinating: it looks to me like AMD doesn't really know how to compete with Intel from a technical standpoint in the desktop and server space, but their default approach works much better in the cheap and ARM space.
For example, AMD seems to have bet a lot on their bulldozer architecture, but as far as I can tell it's been almost a total flop in the space where Intel really dominates. Even aside from the OEM space, system builders like my hardware guy look at options from Intel and options from AMD and, currently, go with Intel every time (which is a shame, I personally would like to see AMD giving Intel a rough time).
So what's your take? What happened with Bulldozer? Does AMD have the technical chops to beat Intel?
Re: Hardware is dead
#106Confusing that he shops in Shenzen every "four to five months" but had only "heard" that tablets had gotten cheap, what he's reporting on has been going on for at least 18 months.
Re: Hardware is dead
#107Hardware is dead; long live hardware. The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end models, and retailers still make money on them. The free-fall in automotive prices in the 20s "killed" the automobile, except that people kept buying faster, sleeker, newer models anyway. Like so many other electronics and everyday devices, the commoditization of ta…
Have you read the whole article? The author is not disagreeing with you. He is very specifically agreeing with your point. Apple is selling more than just "hardware", they're not just selling a piece of metal and silicon. That's what the author is saying is dead. Doing what Apple does, selling hardware + software + brand, is what's still alive.
So you and the author are not disagreeing. What he is saying is not that no one will ever build a tablet again. He's saying making money off the hardware alone is a bad idea. And that you need to sell more than that to make a good profit.
I used to work with jewelry, you could make the same argument that selling rocks is dead. But if you put the right branding, and tell the costumer a compelling story. We could literally sell a product for a 10x~20x profit margin. And yet, selling rocks is dead. Selling jewelry isn't.
Re: Hardware is dead
#108Earlier quoted context omitted.
AMD is a good example of how competing with Intel doesn't work well. They kicked Intel's ass with the AMD64 architecture but they didn't get commensurately rewarded. Look at their lawsuit vis-a-vis Intel and their predetory approach to Dell. They accused Intel of threatening to cut off Dell if Dell put an AMD chip in their servers. At NetApp where I was arguing for Opteron rather than the turd Intel was pushing (Itan…
Tangentially, because I'm finding your comments so fascinating: it looks to me like AMD doesn't really know how to compete with Intel from a technical standpoint in the desktop and server space, but their default approach works much better in the cheap and ARM space. For example, AMD seems to have bet a lot on their bulldozer architecture, but as far as I can tell it's been almost a total flop in the space where Inte…
As an OEM stepping away from Intel is a very risky thing to do. Intel executes really really well, AMD does not. Intel lives and breathes process technology, AMD does not. Intel has discipline to walk to the end of the road, AMD does not.
Using a software example, if you notice the guys who write the gaming engine put out technically better games than the people who license the engine? I attribute that to the ability to internalize all of the benefits and weaknesses of the engine. If you license the engine you 'kinda' know what it does but because you don't have to know your knowledge never gets deep enough to do what the originator can do.
AMD competes against Intel on architecture, and they do Ok at that, but they cannot compete on process. You will notice they gained server share on Intel when Opeteron released because Intel was caught sleeping (they had targeted Itanimum 64 bits, Pentium/Xeon 32 bits, 8051 Etc for SoC/embedded. They were resisting putting 64 bits into the Pentium because it would cut into their already weak Itanium story. As long as they stayed there, AMD gained ground. They capitulated on architecture and then retook ground using process improvements (TDP mostly), meanwhile AMD didn't cement their lead, rather their CTO left and they played dancing CEOs. Boat stalls, momentum is lost.
So no, I don't think AMD can beat Intel organizationally and that will keep them from beating them technically.
EDIT: Oh look there goes AMD's CFO : http://www.theregister.co.uk/2012/09/17/siefert_leaves_amd/
Re: Hardware is dead
#109I'm pretty sure that this is the table from the end of the story. http://www.frys.com/product/6982177?site=sr:SEARCH:MAIN_RSLT... I wonder how this compares to the Nexus 7 in terms of usability/response/lag/etc.
Android 2.3, never going to get updated, crappy resolution, slow single core processor... Honestly, it's going to suck compared to a Nexus 7. Remember, Android 2.3 IS NOT a tablet operating system, the first of which was 3.0, so it's basically a 7" non-cellular Android phone.
And windows 95 was a terrible desktop operating system. But it still sold. The people who are going to buy this won't care.
Re: Hardware is dead
#110Hardware is dead; long live hardware. The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end models, and retailers still make money on them. The free-fall in automotive prices in the 20s "killed" the automobile, except that people kept buying faster, sleeker, newer models anyway. Like so many other electronics and everyday devices, the commoditization of ta…
>>The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end models, and retailers still make money on them.
Yes, but how lucrative is the market in general compared to before? How many new players do you see, and how much innovation is happening?
I've always been of the opinion that commoditization is good for the consumer only in the short run (since prices drop). In the long run, it hurts the consumer because there is very little if any innovation in commoditized markets.