'Consumer Products' Archive
Last week’s introduction of the T-Mobile G1 smart phone was the first rollout of a wireless phone designed with the open-source Android mobile device software tools created by Google. T-Mobile USA will make the G1 available October 22, and the phone will be marketed worldwide by T-Mobile International.
The G1 is made by a Taiwanese company, HTC Corp., and is built around an applications processor chipset designed by QUALCOMM. This is the first consumer product to emerge from Google’s formation of the Open Handset Alliance last year. It won’t be the last.
What the search giant has done is something that could ultimately loosen the stranglehold that wireless communications carriers have on American consumers. For years, AT&T Mobility, Sprint, Verizon Wireless, and the like were the gatekeepers for the US mobile phone market — deciding which handsets would be sold and at what prices, dictating service plans, and keeping monthly bills high. The wireless handset makers (principally LG Electronics, Motorola, Nokia, Samsung Electronics, and Sony Ericsson) and consumers were completely at their mercy.
The Apple iPhone helped crack the wall of wireless communications. While it initially went with just one carrier in the US, AT&T, Apple broke the rules by selling the iPhone in its own retail stores, and at prices it determined. The new iPhone 3G backslides a bit on the price-setting issue, with AT&T getting more power on that point as it locks iPhone buyers into two-year service contracts.
The Open Handset Alliance helps break the grip of the wireless carriers. Android-based mobile phones will go the iPhone one better by offering an open-source applications “store” that won’t be under the control of one company (not Google, nor any other), as Apple’s App Store is. Where it’s leading is the day when you can buy a wireless phone anywhere you like, such as Best Buy or Wal-Mart, and then pick which wireless carrier you want to use. It won’t be a “take it or leave it” proposition, which is what you get from the wireless carriers these days, and that will be a better day for consumers — not only in the US, but around the world, in time.
Hostile takeovers have never been common in the high-tech industry, but they’ve become more frequent since Oracle was able to roll up PeopleSoft in 2005.
The semiconductor business now is witnessing two hostile takeover bids. You may have seen that Samsung Electronics is targeting SanDisk; more on the other one below.
As others have noted, hostile takeovers in technology are uncommon because so much of the business is dependent on the human talent, which can vote with its feet at any time. You can buy a company and possess its physical assets, such as office buildings and wafer fabrication facilities, but your chip design engineers are free agents who can pick up and leave for greener pastures, along with any executives and middle managers without employment contracts. In the US, most employment is “at will” and can be terminated by the employer or the employee whenever they choose.
This year has seen a couple of unsolicited acquisition bids flame out for various reasons. Microsoft was unable to come to terms with Yahoo!, even after increasing its offer. Electronic Arts this month finally gave up on pursuing Take-Two Interactive Software. Elsewhere, United Technologies officially still has an offer out there to buy Diebold, but UTC chairman George David recently told analysts that his company is less likely to purchase the ATM maker, a prospect Diebold rejected.
Samsung Electronics hasn’t previously pursued a hostile takeover of an American company; it rarely makes any acquisitions, period. The memory chip giant, which also provides a variety of consumer electronics products and home appliances, was in talks for more than three months on a possible combination with SanDisk, which makes portable data storage drives, music/video players, and other products based on flash memory devices. The two companies were also wrapped up in negotiations over patent licensing that have dragged on for more than a year.
Samsung’s cash offer to buy SanDisk, worth nearly $6B, sounds like a lot of money, but SanDisk would have commanded a much bigger price in 2006 and 2007, or even four months ago. In rejecting Samsung’s bid, SanDisk suggested that Samsung’s acquisition offer is just a negotiating ploy in the licensing talks.
Toshiba may emerge as SanDisk’s white knight in this drama. The electronics behemoth enjoys a close manufacturing partnership with SanDisk (the companies share production of flash memories from four wafer fabs in Japan, and they plan to build a fifth fab together), and Toshiba Semiconductor is the world’s second largest supplier of NAND flash memory, the chips that store data in MP3 players, wireless phones, and other popular electronics products. (Samsung is number one in that market.)
Seagate Technology is also being mentioned as another potential savior, possibly because the combination of SanDisk with Samsung or Toshiba could set off antitrust alarms around the world, but CEO Bill Watkins said he wasn’t interested in buying SanDisk.
Meanwhile, there’s another hostile bid going on in the semiconductor industry that’s getting a lot less attention in the blogosphere and the mainstream media. Vishay Intertechnology wants to buy International Rectifier (IR) for almost $2B. Who? What? These two companies, while decidedly obscure to consumers, make electronic components that likely are in any electronics you own. They are big suppliers of passive electronic devices, which regulate electrical power, store electricity, and perform other important electronic system functions in cars, computers, phones, and many other products.
Vishay made its bid for IR shortly after TDK agreed to buy EPCOS, the world’s second largest manufacturer of passive electronic components. TDK may be famous for blank cassette tapes and computer disks (all of which are actually marketed by Imation now), but its sales are dominated by electronic materials and components, and Vishay doesn’t want to get left in the dust by the EPCOS-TDK combination and their mutual competitor, Murata Manufacturing.
No one can accurately predict how these bids will unfold, so stay tuned.
Maybe you saw it over the weekend. Fresh on the heels of its “Mojave Experiment” marketing ploy for Windows Vista, Microsoft just started running its first TV commercial featuring Jerry Seinfeld and Bill Gates.
The commercial is decidedly Seinfeld-esque, to say the least. Like the Seinfeld show, some people will find it rich in popular culture-based humor and non sequiturs, while others will find it confusing and not funny.
Many wonder how this commercial promotes Windows or Vista. In truth, it really doesn’t. As this blog post notes, the 90-second spot is meant to introduce a series of commercials starring Gates and Seinfeld, and I’m sure they’ll get around to mentioning Vista at some point.
Meanwhile, there was a spate of news stories marking the 10th anniversary of Google’s incorporation. All the search giant has to do is to get older, and the media’s all over it! BTW, Microsoft is nearly 33 years old (not much younger than when a certain stand-up comedian launched a TV series called The Seinfeld Chronicles).
Google got a lot of attention last week for launching Google Chrome, its open-source Web browser. Chrome will compete with not only Microsoft’s Internet Explorer, Apple’s Safari, and the Opera browser, but also Firefox, Mozilla’s open-source browser that has benefited from a lot of financial and technical support from Google. The search behemoth just renewed its development agreement with Mozilla for another three years, so Chrome may not crush Firefox in the near future.
Chrome is intended as a key piece of infrastructure for Google’s Web-based tools, such as Google Docs, Gears, and Gmail.
I wouldn’t put all my chips on Chrome to overtake Internet Explorer or even Firefox in the next few years. Not everything Google touches turns to Internet gold. Google Video wasn’t a world-beater, so the company went out and bought YouTube.
Funny how Google doesn’t run any TV commercials — all it has to do is to inadvertently spill the news of the new browser, and the media goes wild in promoting the (free) product. Of course, there was a lot of savvy marketing and PR work behind that “accidental” launch. The kind of thing you’d expect from a brash 10-year-old.
It’s an exotic herb. It grows in South America, Central America, Mexico, and Asia. Native peoples from these regions have used it as a nostrum for centuries to treat all manner of conditions. Its scientific name, Stevia rebaudiana, is impressive, and it’s been the subject of scientific investigation for years. Sounds like a cure for cancer or a drug to treat dementia, maybe a possible drug to prevent aids? Nope, it’s nothing as humanitarian as that. Stevia, you see, is easy to cultivate, the extract made from its leaves is 300 times sweeter than refined sugar, and it contains no calories.
No war on cancer here. It’s Coke and Pepsi. They’re at it again. You see, soda sales are down. Ah, but obesity rates are up. What each of the two giant beverage companies want and need is a block-buster diet soda. Enter Coke, which, with the help of agricultural wizard Cargill, has refined the heck out of stevia, to eliminate its licorice-like aftertaste, and come up with Truvia, the uber sweetener.
Not far behind, Pepsi and its ingredient buddy, Merisant, have been test-tubing themselves and now have their own tincture of stevia, which they call PureVia. Yep, our two ever-warring beverage makers are looking for the Holy Grail, a No-Cal Soda Sale.
However, there is a third party involved in this no-love-lost triangle — that regulation-wielding hussy, the FDA, which forbids the use of stevia in food products. (Little Miss FDA is not as pure as the driven snow in this triangle; the agency does allow stevia to be sold as a food supplement. That is, it can be and is sold in powdered and liquid form and is usually available at natural and health food outlets and pharmacies.)
Coke and Pepsi have sponsored their own tests, which, as could be expected, found no harmful effects from the use of their versions of stevia. The companies are waiting for the FDA to allow its use in foods.
Past studies have suggested that stevia might interfere with reproduction, as well as possibly being mutagenic and/or carcinogenic. A just-released independent study, conducted at the University of California (which has no ties to any stevia product) suggests that the sweetener might cause chromosomal damage and DNA breakage.
Testing on humans being unethical, FDA guidelines advise potential food additives be tested on two rodent species, usually rats and mice. So far, tests have only been conducted on rats. And while a safe, natural, non-caloric sweetener would be a good thing for our expanding waistlines (as well as for Coke and Pepsi coffers), the FDA should not allow stevia, in any of its iterations, to enter the food chain until further studies establish that it is safe.
Wanna be one of the guys? Belly up to the bar? Patronize your local pub? Coors is courting the ladies. Yep, despite women’s sadly inadequate belching talents and less rabid devotion to football (American-style, or soccer, if you live on the other side of the Atlantic) as their gender counterparts, Coors, among others, is aiming at the ladies.
Coors is not the first brewer to hit upon this supposedly obvious idea to ramp up sales — after all, women are half the population. Interbrew (the Belgian brewery that merged with Brazil’s AmBev in 2004 to become InBev) tried a cherry-flavored concoction called Kreik. Launched in 2004, it was a disaster. Then there are all the craft brewers, whose seasonal beers are often made using the literal fruits of the harvest, who encourage the ladies to tip a few. UK-based Diageo is pushing its Guinness Red by advertising it as (listen up, women) tasting sweeter and smelling less strong than its traditional Guinness.
Trouble is, brewers never quite know how to market the stuff. Do they go with the line that women want to join men in their appreciation of the foam-laden amber liquid (but then, why make separate products?); or do they, as they are trying this time around, offer a “special brew just for you,” which runs the risk of making the companies look like they’re patronizing women? After all, today’s women are the daughters and granddaughters of Rosie, the Riveter, in the workforce in ever greater numbers; they make up more than half the enrollment in medical and law schools; they buy their own automobiles and houses; they even play professional football. Who says women need frilly (dare I say it?) paper-parasol-embellished beers?
Let us digress a moment to speak to women and beer. A few telling facts: 4,000 years ago, the master brewers in Mesopotamia were women. They had a beer goddess. In ancient Babylon, the brewers were designated as priestesses. Zip up a little closer in time to today and we see that until the end of the 1700s, nearly every cottage in the English countryside brewed its own beer. The brewers? The women of the cottages (thus, the term “ale wives”). Eventually, the best of these cottage/home brewery operations became “public houses” or pubs. When traveling through her realm, Queen Elizabeth I sent couriers ahead to taste the local ale. If it wasn’t up to Lizzie’s standards, a shipment of a more pleasing-to-the royal-pallet libation was sent out to her from London.
But let us step out of the Wayback Machine and return to 2008. Beer sales in the UK are sagging (they fell 4.5 % in the second quarter). In the US, they have increased some of late (up 1.9% in the first half as compared to the first half of last year). But 1.9% isn’t enough to make brewers dance atop their oasts.
Coors has just this year created an operation (code-named Eve) devoted exclusively to the development of beer brands and marketing techniques that appeal to women. Not quite ready with an actual product yet, Coors has begun encouraging pub owners to push its new-to-the-UK-market Blue Moon product “with touches like serving it with an orange slice to accentuate its fruity taste.” Some pubs are coating the orange slices with brown sugar. (It’s enough to rouse the envy of Martha Stewart, these chi-chi touches.)
Back in the good old USA, MillerCoors (a joint venture between UK-based SABMiller and Molson Coors), has come up with MGD 64, the lowest calorie beer ever made for the US market, at 64 calories per 12-ounce serving. (By comparison its standard Miller Genuine Draft has 143 calories per 12-ounce serving.) And we all know, don’t we ladies, that beer is more fattening. (Remember low-carb beer?)
To further its push to females, MGD 64 is being promoted in Seattle and Portland via a clothes-hanger campaign. Dry cleaners in those cities will distribute hangers with an attached message that touts the beer’s 64 calories as “a perfect fit” in order to “exclusively reach adult female consumers in the privacy of their homes.” Why Seattle and Portland women are the lucky recipients of these ad-festooned hangers is not clear. Suffice it to say, it (and the whole clothes-hanger idea) was some enthusiastic marketing decision.
If the coat hangers — I’m not even going near the Mommie Dearest associations — and Coors’ Eve unit (described as “designed to create a world where women love beer as much as they love shoes”) are examples of modern, enlightened, and revenue-enhancing thought, then the boys in the executive suites have no clue beer-wise, regarding a salable answer to Freud’s question, “What do women want?”
Freud, by the way, had no decent answers either.