Maybe $400 heaters and $85,000 TVs will get consumers spending again
It was a confusing week to be a consumer electronics reporter. At the start, I was convinced that no one wants to spend on anything besides an iPad and by the end, I learned that there are people out there buying $85,000 TVs.
On Tuesday, Best Buy’s shares tanked on disappointing earnings. Our headline shouted “tech shoppers turn thrifty,” and explained how nobody will buy a new flat-screen TV once they have bought their first one.
But if U.S. consumers won’t shell out for new flat screens, maybe they will buy high-end fans and heaters. That’s what James Dyson told me on Wednesday at the launch of the inventor’s latest gadget– a heater that costs $400, the Dyson Hot.
Dyson’s privately held UK-based company has 2,700 employees and saw its profit soar 26 percent this year, on the strengh of items like its cordless vacuum cleaner and swanky “air multiplier” fans that lack blades and cost much more than the competition.
Dyson told Reuters that Best Buy, his company’s largest distrubutor in the U.S., would probably rebound when spending comes back. “People will always want to buy technology,” he said.
I realized that consumers this holiday may still want to splurge on items like the Dyson Hot, which have features that are hard to find in other brands. For example, the new heater makes it impossible to burn yourself on it, with ceramic stones inside the device providing the heat, and unlike other space heaters, there’s no burning smell wafting off the device.
The spell of the pricy $400 heater had barely worn off the next day when I strolled into Bang & Olufsen’s Soho showroom. The Bang & Olufsen showroom is to Best Buy what a modern art museum is to a run-down Radio Shack.
Sony: Our tablets are coming… eventually
Sony teased out a few more details about its new Android tablets — codenamed S1 and S2 — and let reporters briefly handle prototypes.
AT&T will be the exclusive U.S. carrier for the S2, a double-screened device that bears a close resemblance to Nintendo’s DS handheld gaming device. Sony showed off how users could turn it into a book.
Executives stressed that the tablets can connect to other Sony products, such as Blu-Ray players, TVs and PlayStation content, something Apple can’t offer. Like the Sony Ericsson Experia Play AKA, “the PlayStation phone,” the Adobe-Flash enabled tablets will come pre-loaded with the retro game“Crash Bandicoot”.
Sony once again vowed to take the No. 2 tablet spot behind Apple despite still not revealing when its new tablets would come out or how much they would cost. That news could be more than a month away but the tablets should be released this year, the company said.
Why would a customer choose a Sony tablet over an iPad? Phil Molyneux, Sony Electronics president and COO, said customers looking for a faster, smaller device that can fit in your pocket will turn to Sony’s dual-screen S2 tablet.
“You can’t do that with other devices unless you have bigger pockets,” he said.
Jawbone maker branches out with Jambox speaker
Aliph, one of the most successful venture capital-backed consumer electronics start-ups in the U.S., has carved out a lucrative niche for itself making the high-end Jawbone mobile phone headset. But the company is launching a new product that will take it in a new direction, just in time for the holiday shopping season.
The company on Thursday unveiled the $199 Jambox, a Bluetooth wireless portable speaker which does double duty as a speaker phone. Aliph hopes it will become a must-have accessory for owners of iPhones, iPads and billions of other Bluetooth-enabled devices.
“This is the first step into a whole new world beyond headsets,” said Aliph CEO and founder Hosain Rahman.
Rahman thinks the 6-inch, 12-ounce Jambox will be the answer to a modern-day dilemma familiar to iPhone afficionados: how to stream audio from the device without the hassle of a dock, wherever you are. It will play audio from at least 33 feet away, and up to 100 in some cases. As with the Jawbone, Rahman said the quality of Jambox’s sound is what will set it apart from competitors. The Jambox will be available in Apple stores starting Nov. 16. It will also be available at Best Buy.
San Francisco-based Aliph is backed by more than $40 million in funding from heavyweights Khosla Ventures, Sequoia Capital and others including entreprenuer Marc Andreessen. The company, which has more than 100 employees, won’t comment on its finances, although Andreessen told Reuters last year that “they’re doing more than $100 million in revenue.” And Aliph’s profile has been rising quickly in the enterprise market, after the company struck a partnership with networking giant Cisco earlier this year.
CES: Panasonic hopes to sell 1 million 3D TVs in first year
You may only have just heard about 3D TV, but Panasonic is already expecting it to be a hit with consumers. Yoshi Yamada, CEO of Panasonic’s North America unit, told us the Japanese gadget maker hopes to sell 1 million units — or more — and they won’t even hit the stores until the spring.
It’s not clear yet how much more the 3D TVs will cost than big screen LCDs that many people just bought to replace their old tube TVs.
And we can’t resist mentioning — again — the giant 152-inch LCD TV television that Panasonic is showing off here at the Consumer Electronics Show. Big is back, in emphatic fashion.
The company trotted out what it called the world’s biggest television, and it’s a breath-taking, 8-million pixel plasma beauty that had onlookers gawking and some of the more covetous offering hundreds of thousands to take it home.
But it’s not for sale, even if you could afford it. Panasonic’s Steven Simpson tells us the intention wasn’t to spur tech envy, but to demonstrate the ability to produce a massive, single sheet of what is called “motherglass” — from which multiple displays can be cut. The panel on display translates into twelve 42-inch plasma displays. There are 10 in existence, Simpson said, adding that Panasonic’s largest production-line TV, a model for commercial use, comes in at just 103-inches.
Intentions aside, the gargantuan screen has some already envisioning it in their living rooms. Simpson said several people had already quietly approached him about a purchase. “Some people would give me half a million for it,” Simpson said. “Some people have more money than brains.”
Please excuse the wobbly video. For comparison, guy on the left is 6′ 2″.
Best Buy CEO: Don’t forget the gift card
Hey Brian Dunn, CEO of gadget lover’s cathedral top electronics retailer Best Buy, what’s on your short list of five great bang-for-your-buck devices for this holiday season? (Thanks to the CNN Money reporter for asking this question at a press conference today)
DUNN: My short list?
* (First), on my personal short list — a netbook is definitely on my short list – and by the way it’s a companion device. It’s lightweight, it’s small, it’s great to take on a quick trip. * (Second) I think the HD Instinct is a very interesting smartphone. [Mediafile: That's Samsung's Instinct HD] * (Third) I love my Flip HD camcorder. That’s a great piece. * Four, I really love the Ultra Thin OLED TVs are cool. [Mediafile: Um, cool yes. Bang for Buck? At about $2,000 for an 11-inch screen, let's just leave it at cool and move on. mkay?] * The fifth one, of course, is a gift card , that I can give to the people I love, so they can get whatever it is they want.
Well played, Brian. Well Played.
Gift Card…”Yea…We’re Still Trying To Keep Up With Circuit City,We may not be here next year, but you’ll still have a nifty BUST BYE gift card.”
Cisco flipped for Pure Digital, but did VCs flip out?
Cisco’s $590 million all-stock purchase of Flip video camera maker Pure Digital last week may sound like a nice price for the venture capital-backed company, especially given the non-existent exit market right now.
But Venture Capital Journal editor Larry Aragon writes in a PEHub blog post that the $590 million number doesn’t sound that meaty when you calculate the return on investment for Pure Digital’s venture capital backers. And that’s especially true because some top-notch VC firms like Benchmark Capital and Sequoia Capital have invested in Pure Digital. (Venture Capital Journal and PEHub are part of Thomson Reuters.)
Aragon calculates that if Pure Digital’s VC investors put in about $95 million, and assuming that they own about half the company (since it’s a stock deal), “that’s a return of just over 3x their money.”
Now, Silicon Valley’s brand-name venture capital firms have long been used to returns on investment that are several multiples higher than that, usually around 10 times the investment. We know the dotcom boom days are never coming back, but a selling price that brings back only three times the money invested — that too, over a five-year period, according to Aragon — is cause for concern about how profitable the VC model really is.
Surely, the VCs might have been tempted to hold out for a better return on their investment if the public markets showed any signs of life. But with IPOs of venture capital-backed companies remaining a dream in the current environment, guess the venture capitalists decided that Cisco’s offer was one they couldn’t refuse.
Photo: Pure Digital Website
It may be 3x now, but it’s Cisco stock in a down market… Give Cisco a one or a couple more years, and you’re sure to see that at least double.
I’d trade my 401K in for cisco stock, if I could, right now!
Obama greenlights analog TV for another season
After all the excitement, endless public service announcement ads and electronics retailers salivating over anticipated high-definition TV sales, it turns out that the United States might not be switching to digital television just yet.
President-elect Barack Obama is backing a move to delay a mandatory switch to digital TV signals on Feb. 17 because viewers might not be prepared. Also, the government has run out of $40 coupons to help pay for converter boxes.
The idea that as many as 8 million homes (according to Nielsen data) might lose TV reception in a few weeks is not the kind of headache a new White House administration wants to deal with so it’s perhaps not surprising talk of a delay, possibly up to four months, is gathering support.
Traditional over-the-air broadcasters, who already have a shrinking viewer base, will probably appreciate the breathing room, says Wall Street analyst Thomas Eagan of Collins Stewart. But Eagan thinks that cable TV companies will be less pleased if the digital transition is delayed.
A delay of this length would be a slight negative for the cable operators as they stand to benefit from over-the-air viewers becoming cable subscribers with the transition. [This is because the digital transition would not affect cable subscribers, who would still be able to watch TV on their old sets. -- ed.]
Since we expect Comcast to be the biggest beneficiary of the transition (due to the high percentage of over-the-air viewers not having registered for a coupon in Comcast’s franchise areas), a delay could translate to a higher ratio of new subscribers foregone for Comcast.
It’s not all bad news for Comcast, Time Warner Cable and friends, watch out for more ads for cheaper entry level cable packages says Eagan:
Perhaps the whole country shouldn’t do it all at once. I can understand people not wanting to have to get on their rooftops in the middle of winter in New Enland to install a better antenna, but 4 months from February is June. Here in Texas it’s rather hot in June. Why not phase in digital TV by region?
There does not seem to be any shortage of the converters in stores. There are shelves of them at my local Best Buy and Circuit City. The main problem seems to be getting the $40 coupons. Congress should just authorize some more funding. Considering the $20 billion the federal treasury is getting from auctioning off the spectrum currently used by VHF TV stations, another several hundred million dollars for more coupons doesn’t seem unreasonable.
