sensible, sustainable business matters

The penny finally drops for HP as it prepares to drop the PC business

2011-08-21T16:02:00.000-07:00

It was inevitable that one day HP would tire of the high-volume but low-margin PC hardware business, and now that day has edged a little closer. By shoring up software and services it is following IBM's lead, however it should be noted that IBM - who started the whole "IBM-compatible PC" market in the first place - got out of the mass market for PC hardware years ago. HP will keep making printers but I suspect the lower-value consumer printers will slowly disappear, too, as HP looks for higher margins. But brand pride's at stake as well - so who knows what will happen, or when. HP will certainly look to divest itself of any left-over low-margin hardware or software and ditch any poorer-performing niche products. Why throw more money away when you have already thrown away a lot? So expect a few HP cut-and-run announcements from here, especially in areas where it doesn't really affect the HP brand itself. A prime driver behind these decisions has to be longer-term protection of the brand.

As for PCs overall, they remain a huge if slowly-declining market. When HP leaves the gap will be closed and life will go on. Whilst competition now takes many forms (smart phones and tablets for starters) there remains a need for the traditional big box and monitor, but at low-cost and low margin. We should also expect to see further aggregation into a smaller number of PC makers catering for the mass market as well as a continued splintering into smaller, more profitable niche markets at the top end.

HP exploring PC spinoff, buying software company | thetelegraph.com.au

The purchase of Autonomy, which was founded in 1996 and makes software for companies to search and manage huge databases, fits the strategy of "building a successful software business," he said.

"Autonomy brings to HP higher value business solutions that will help customers manage the explosion of information," he said.

"Autonomy has an attractive business model, including a strong cloud based solution set, which is aligned with HP's efforts to improve our portfolio mix."

Technology analysts said HP's decision to abandon its PC unit recalls that of US computer giant IBM, which sold its PC business to China's Lenovo in 2004 for $1.25 billion.

Gartner analyst Mark Margevicius cautioned, however, that "we're not in an era when the PC is dead.

"The PC market is flat but it's still a huge business," Margevicius said.

It remains HP's largest single revenue generator, but it "just doesn't produce all that much profit," he said. "The PC market has transformed into a tactical, commoditized business.

"HP, as a vendor, has many, many things within its coffers to sell to its customers. It sells services, it sells online stuff, it's got networking stuff, it's got software," he said.

"It's got all kinds of other things that from a business point of view make far better margins and profit than does the PC business," Margevicius said.

"If the PC business was a business that generated 20 percent margins, HP's not dumping their PC business," the Gartner analyst said.

No I'm not spamming you, it's just a blog-list

2011-07-12T19:53:00.001-07:00

I've been a bit slack here with my posting but there's been a lot more activity on my other blogs... please check 'em out!

Addicted2wheels - bike racing for everyone
Offline - my take on the planet and its politics
Dopage - all the dope on the dopes who dope, allegedly
Secrets of a Sydney Past - personal photos and recollections of Sydney's history
Central Coast Imagery - my photography blog
Musical Must-knows - software and gadgets for the electronic audio artiste
My Alfa Blog - as in rust-free Italians
My PC Help Blog - as in fixing hardware and software

The Chinese Volvo deal rolls forward as EU approves sale from Ford to Geely

2010-07-06T19:50:00.001-07:00

It makes as much sense as a Ford-owned Swedish car maker in my book, so bring it on. Ford has sold off just about everything interesting in the past few years in a so-far successful bid to turn a buck. There can't be much left to sell off now so they'd better come up with some new, attractive and more modern cars soon...

China's Geely Wins Approval To Buy Volvo

BRUSSELS (AP) -- European Union regulators on Tuesday approved Chinese carmaker Geely to buy Sweden's iconic Volvo Cars.

The European Commission said it sees no antitrust problems with Zhejiang Geely Holding Co.'s $1.8 billion acquisition of Volvo Cars from Ford Motor Co. because the takeover won't give either company the power to damage rivals.

Geely sells hardly any cars in Europe and Volvo only has "very limited" operations as a car parts supplier, it said.

Geely's acquisition of Volvo from Ford Motor Co. has been heralded as a breakthrough deal for China's auto industry, giving one of its most ambitious automakers a well-known, prestigious global brand and access to top-tier technology.

Revenge of the beige box? Business replacement cycle kicks off PC market, delaying 'death by iPad' I guess

2010-07-06T18:52:00.000-07:00

Let's not forget the widely-reported death of the PC market due to the iPad and other smart tablet devices. Of course these Gartner figures do not include iPads - they are a separate category. In any case it would be good to see a breakdown of sales.... by netbook, laptop and tablet as well as traditional beige box.

Big Jump In PC Market Sales - Channel News

Recovery has sparked the PC market in Australia, with 2010 shipments expected to reach more than 5.3 million, up 13.5 per cent over 2009, according to market research firm Gartner.

That compares with the 0.3 per cent growth rate experienced in 2009, Gartner says in its latest market update.

And for a change the business sector is expected to account for most of the growth, as enterprises begin ordering replacements for ageing PCs after having held off purchases for the past 18 months.

PayPal co-founder Musk persists in funding and floating loss-making EV startup

2010-07-06T18:45:00.001-07:00

Can't fault a man for trying, is what some may say here. If you've got the cash and a big idea, why not? And EVs will be big one day. Only problems may be (a) that day if still a ways off and (b) starting with a sports car may grab headlines but not wider sales. OTOH Musk reckons it's a profitable business, if you discount the "high growth mode" expenses.

At some point a rethink of that growth may be in order.

Elon Musk On What's Next For Tesla - Forbes.com

The company is just over six years old and it's in high growth mode, which explains its heavy losses: $261 million in losses just since 2007. Musk has poured nearly all of the fortune he made when eBay ( EBAY - news - people ) bought PayPal (Musk was a PayPal cofounder) into his battery-operated cars. According to his divorce filing, Musk is officially broke as a result.

"I think an important point to consider is that if Tesla was just to sell sports cars and do power train work [for other] companies, we would be profitable," explains Musk. "The reason that we're unprofitable is that we're in very high-growth mode. We're eventually going to grow by 3,000% or 4,000%."

Here's a market opportunity - autosensing thermoreflective glass. As long as making it doesn't use more energy than it saves

2010-06-22T17:52:00.001-07:00

The idea is good - as temperature rises the glass darkens. It's hardly new, there are similar but different methods to do this, but it may be a cheaper and more scalable way. As long as the processes involved in making it don't overwhelm the savings.

RavenWindow automatically changes transparency with temperature

The key element in the window is a layer of thermoreflective material between the internal and external layers of glass. When the temperature of that material exceeds the threshold, it becomes reflective, bouncing off at least 90% of the incoming solar energy.

Tablets to eat Netbooks - well it's a good theory and we'll soon know

2010-06-21T17:06:00.001-07:00

Apple is last to market with a Tablet PC but it leverages the iPod/iPhone sheen so well that it appears a game-changer. So much so that the previous Tablet makers will have to revamp and match or beat the iPad. And then of course the imitators will also jump on the bandwagon. Add all of this up and it's a big number - so where do all of these buyers come from?

We could guess that they are virgin buyers who would never have bought a similar product. That may be 20% of the sales, or perhaps more?

There could also be buyers who were umming and ahhing about a Kindle-like reader but have been seduced up market. Another 20%?

We could also assume that they were people about to update from something else, perhaps something more powerful but over-powered for their needs. That's not uncommon as most people are realising that even "standard" PCs really do far more than they truly need. Let's say that's 20% as well.

Well that's maybe 60% accounted for already. Indeed if anecdotal evidence is anything to go by (and it usually isn't) it's probably way higher than that as a lot of sales are going to Apple-freaks who would never buy anything else anyway, let alone something as dull and practical as a typical Netbook.

So of the 40% left - or less, perhaps far less - we may be looking at potential Netbook users who just decided that slick and funky beats practical and cheap. But if they only buy what they need at the price point they want to buy at then the iPad and other tablets will not get those sales - not yet, anyway. Still, it does mean that there are some sales coming out of somewhere, doesn't it? But perhaps not from where we imagine. Time will tell.

PC Netbook Market Set To Crash Say Experts - Channel News

In a recent report DisplaySearch said that during the first quarter, Apple shipped 700,000 iPads, comprising about 6.5 percent of the 10.15 million units shipped in the netbook/slate notebook sub-category. In addition, Apple has reported shipping 2 million iPads during just the first two months of the second quarter, which DisplaySearch estimates will give Apple about 30 percent of the market for that period.

DisplaySearch said that as additional non-Apple slates are rolled out later this year, the traditional clamshell netbook could continue to lose share.

"Strategic" HRM - the personnel office looks to make a return on investment. Or does it?

2010-06-21T03:22:00.001-07:00

It's just logical - why wouldn't you have an HR department to look after the most important resource of any business, its people?

Well when times get tough that logic goes out the window and HR is asked to eat itself. Downsizing becomes easier than just doing the right thing and the shrinking HR department is called upon to make the redundancies "easier". So much for caring, sharing and loyalty.

Oh well, that's business and the game we are playing. If HR can't show a return on investment then its place at the corporate table will inevitably be questioned. Some larger companies resist these baser urges but most succumb, only to rebuild (at great expense) when the cycle turns upwards again.

Human resource management - Wikipedia, the free encyclopedia

Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business.[1] The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations.[1] In simple words, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

An alternative or complementary finance analysis tool - > IRR

2010-06-21T03:15:00.001-07:00

An alternative to NPV is IRR - but be wary, it's not always as usefully revealing and can lead you astray.

Internal rate of return - Wikipedia, the free encyclopedia

The internal rate of return (IRR) is a rate of return used in capital budgeting to measure and compare the profitability of investments. It is also called the discounted cash flow rate of return (DCFROR) or simply the rate of return (ROR).[1] In the context of savings and loans the IRR is also called the effective interest rate. The term internal refers to the fact that its calculation does not incorporate environmental factors (e.g., the interest rate or inflation).

Internal rate of return - Wikipedia, the free encyclopedia

Because the internal rate of return is a rate quantity, it is an indicator of the efficiency, quality, or yield of an investment. This is in contrast with the net present value, which is an indicator of the value or magnitude of an investment.

An investment is considered acceptable if its internal rate of return is greater than an established minimum acceptable rate of return or cost of capital. In a scenario where an investment is considered by a firm that has equity holders, this minimum rate is the cost of capital of the investment (which may be determined by the risk-adjusted cost of capital of alternative investments). This ensures that the investment is supported by equity holders since, in general, an investment whose IRR exceeds its cost of capital adds value for the company (i.e., it is profitable).

Internal Rate Of Return (IRR)

The discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally speaking, the higher a project's internal rate of return, the more desirable it is to undertake the project. As such, IRR can be used to rank several prospective projects a firm is considering. Assuming all other factors are equal among the various projects, the project with the highest IRR would probably be considered the best and undertaken first.

IRR is sometimes referred to as "economic rate of return (ERR)".

It gets bandied about by Telstra and the mining lobby but what is it - > NPV

2010-06-21T03:10:00.001-07:00

NPV has been bandied about in Australia quite a lot lately. It's been raised by both sides in the Resources Super Profit Tax debate and today by Telstra when putting a value on the sale of the copper and hybrid coax network to the NBN. In both instances the term has been misued to some degree, either by providing misleading information (the mining lobby) or insufficent detail (Telstra). So, just what is NPV?

Net present value - Wikipedia, the free encyclopedia

In finance, the net present value (NPV) or net present worth (NPW)[1] of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows. In the case when all future cash flows are incoming (such as coupons and principal of a bond) and the only outflow of cash is the purchase price, the NPV is simply the PV of future cash flows minus the purchase price (which is its own PV). NPV is a central tool in discounted cash flow (DCF) analysis, and is a standard method for using the time value of money to appraise long-term projects. Used for capital budgeting, and widely throughout economics, finance, and accounting, it measures the excess or shortfall of cash flows, in present value terms, once financing charges are met.

The NPV of a sequence of cash flows takes as input the cash flows and a discount rate or discount curve and outputting a price; the converse process in DCF analysis, taking as input a sequence of cash flows and a price and inferring as output a discount rate (the discount rate which would yield the given price as NPV) is called the yield, and is more widely used in bond trading.

Net Present Value (NPV)

What Does Net Present Value - NPV Mean?
The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.

NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.

How to calculate net present value (NPV) | eHow.com

Before I show you how to calculate the net present value or NPV, let me briefly explain what it is. Simply put, it's a way to decide whether or not to invest in a project by looking at the projected cash inflows and outflows.

MBA resouces - basic finance concepts

2010-06-21T02:59:00.001-07:00

Doesn't look like it's been updated in a while but still an excellent site...

TeachMeFinance.com

TeachMeFinance.com

Contents

TeachMeFinance.com teaches you basic finance concepts.

* Time Value of Money - Present Value, Future Value
* Annuities - The Present Value of an Annuity
* Perpetuities - The Present Value of a Perpetuity
* Kinds of Interest Rates - Nominal Rate, Periodic Rate, Effective Annual Rate (EAR)
* Future Value of an Uneven Cash flow
* Probability Distribution - Expected Rate of Return (ERR)
* Standard Deviation
* CAPM - Beta
* Security Market Line
* Bond Valuation - Par Value, Coupon Payments, Indenture, Present Value of a Bond
* Stock Valuation - Preferred Stock, Common Stock, The Constant Growth Formula
* Cost of Capital- Cost of Retained Earnings, Cost of Common Stock, Cost of Prefered Stock, Cost of Bonds

Business Management 101 - Recommended Case Study Sources

2010-06-21T02:52:00.001-07:00

Business Studies | Case Study | Teacher & Student Resource

The following case studies show all the business studies theory you need to know in practice. By studying real life business case studies, you will see how business and marketing work and therefore learn quicker.

Each of the following case studies show a different aspect to business and marketing that you can use as a revision tool for your business studies.

Caseplace .org The Leading Resource for Innovative MBA Teaching Materials from the top MBA Publishers - Cases, Syllabi, and More

CasePlace.org is an online library of reading materials, multimedia content, and teaching modules that focuses on social, environmental and ethical issues in business. CasePlace.org is a project of The Aspen Institute Center for Business Education.

Cases

This database contains abstracts and ordering information for case studies written and published by the Stanford Graduate School of Business. You may search by authors name, title, keyword, etc. Most cases in this collection are distributed by Harvard Business Publishing and you will find a link to the HBP site to place your order. Please contact us for other cases.

Cases - Harvard Business for Educators

In 2005, low-cost carrier JetBlue Airways makes a move that seems antithetical to the low-cost carrier model by adding a second type of aircraft to the fleet, the Embraer 190. This decision allows the airline to service medium-sized cities and achieve higher growth rates. By 2007, in response to rising fuel costs and softening demand for air travel, President and CEO David Barger recognizes that the airline must slow its growth. Students examine the impact of the two-aircraft strategy on JetBlue's operations and consider how to make reductions in aircraft capacity across the two types of planes in the fleet.

China's Huawei on convergence, last mile and growth markets #telecoms

2010-06-10T15:23:00.001-07:00

What interests me is not just Huawei's growth in telecoms and plans for more, including the last-mile business in Australia, also but the acknowledgement that IBM is engaged to revamp and integrate their financial system (and Accenture for CRM, too).

Huawei’s Brave New World - Digits - WSJ

Mr. Zhang: In 2009, Huawei grew operating profit margin by 1.2% to 14.1%. Huawei is firmly committed to continually enhancing and managing our margins. We are working with IBM on implementing an integrated financial system across our organization, as well as working with Accenture to update our customer relationship management systems.

Dow Jones: Huawei has been expanding overseas, looking at growth opportunities. Which markets are attractive? And are you looking at any acquisition targets?

Mr. Zhang: One area that is particularly attractive is last mile connectivity for rural communities in both developed Australia and emerging markets India, Africa where Huawei has extensive experience we can share. Our strategy is to deliver customer-centric innovative systems that bring business value to our customers by being well positioned in the core competencies of mobile, fixed and IP data. We don’t exclude the possibility of acquisitions if it strengthens our competitiveness.

Let's compare Apples with, umm, Apples?

2010-05-30T16:58:00.001-07:00

OK, I can see what they are getting at - the iPad looks like a hit. Despite tablet PCs being on the market for yonks, when Apple releases a slick product with some key features (and the usual missing ones) it gets massive media attention - and somehow people feel the urge to queue. Not everyone, but well, lots do, anyway. As a product it's well designed and styled but probably needs a key long-term driver, other than pure hype. It may be that we "need" another e-reader or a bigger iPhone - and the swish iPad combines enough features of these genres to provide that enduring push. Although sheer numbers sold may also allow it to become a quasi-standard in such things as automotive electronics by simply dominating the "ecosystem" like the iPod has done. It depends upon standardised connections and incoming competitors. If someone offers easier connection coupled with similar packaging at a lower price that may shove the iPad off the ecosystem stage. But Apple would adapt it - slowly - as they do with all of their products, to mesh with the market drivers.

But exactly why are we comparing the Mac with the iPad? Just for fun? As in "Oh, here's an interesting stat. This new device is different and cheaper and is selling more!" Wow, that's an insight!

Hmm. More seriously it's a competitor, sure, and may cannibalise some Apple Mac sales. But it's complementary, really. Of course if people don't want full functionality in a computer and really just want a few key things in a portable package then, yes, it may well kill off the severely niche-borne Mac. Is that what they are looking - or hoping - for? To me that's a sad view - let's accept that the tablet is finally here and that it will settle into its niche, just like the Mac has done. And let them both live on.

Apple iPad Sales Expected to Exceed Mac Sales Internationally | John Paczkowski | Digital Daily | AllThingsD

Noting that the nine countries in which the iPad debuted today are among Apple’s strongest international markets, RBC Capital Markets analyst Mike Abramsky said he expects the company to sell more iPads than Macs internationally–600,000 to 700,000 or more in the third quarter of fiscal 2010. Abramsky figures international Mac sales will come in at around 500,000.

Labelled as Gen Y but nothing of the sort - how to twist and distort stats

2010-05-29T06:18:00.001-07:00

The article itself balances its comments with the obvious - that we cannot assume that what we may call "Gen Y" will retain its current preferences and habits from here to eternity. In fact we should assume the opposite - that they will indeed change their comforts and attitudes as they age. So why does the headline writer claim that "Gen Y" wants its privacy? Why bother with the generational label at all? Why not simply say "young people, ie those in this age group" express these current behaviours?

It's highly likely that what we perceive as generational change is just aging. What we think and do and how we see our selves and the world changes as we age, mature and accrue responsibility - and as we shrug off social ties we no longer need or trust and instead bind more strongly to the families we build. It's not a "Gen Y" thing at all - it's just how we are at a certain age.

Look Out Facebook: Gen Y Wants Its Privacy | BNET Technology Blog | BNET

Younger adults are more careful about their online reputations — and, as a result, more concerned about privacy — than older generations. That bodes ill for companies that trade in the details of consumers’ lives.

Market cap means little unless you want to buy a stake... or boast about what you are "worth"

2010-05-29T05:55:00.001-07:00

Apple, Microsoft and the Market Cap Myth | BNET Technology Blog | BNET

It seems that the press has found this week’s Next Big Topic: that Apple (AAPL) surpassed Microsoft in market cap. In the U.S., it’s now second only to Exxon (XOM). Microsoft CEO Steve Ballmer essentially dismissed market cap as a measure of importance.

Stats, stats, stats

2008-04-03T15:30:00.000-07:00

Can't get enough of statistics, I really can't. First of all, you have to question them. Don't give in to the allure of your first interpretation. Dig deep and dive in, and keep questioning. Chances are that if someone is using stats to prove an argument then they are using only those stats that help their case. So it follows that other stats will work against their case. Only when you see the full picture will you get a chance to make a reasoned, informed choice. Sounds simple enough but just a quick look in the media (any medium) will show you an example of biased use of stats. Whether by accident or design, it happens every day.

Interesting Wharton article on this topic here.

Environmental cues and marketing

2008-04-02T18:54:00.000-07:00

Well, yes, it does make some sense. Read this first, from Wharton: "Marketers should consider the nature of consumer environments when designing product names, packages and advertising campaigns," the researchers conclude. "A car dealership in Minnesota might consider linking itself to cold weather or mittens, whereas a restaurant in Arizona might want to consider links to the dry climate. Depending on what planet NASA decides to go to next, the Mars candy company might even want to think about introducing a new candy bar."

And then imagine what it means. Well it means that a sizable number of us are influenced by environmental cues - heck, probably all of us are influenced by these cues, surely? Anyway, some of us are influenced to actually do something, be it to subconsciously remember to eat healthily or just to favor one color over another. Well that makes sense, doesn't it, as whatever is lurking in our working memory does tend to hang around in our heads, like pop songs and certain smells and their associated feelings. Somethings just "jog" our memories and away we go...

It's not unreasonable to think that targeting colors and messages tightly around a product will help sell that product. I can remember being told many years ago when I started in the sales game (a game I left some years later) that my choice of suit and tie color would have an impact on my sales. Well I never really noticed but I can say that a sober, dark suited salesman entering a recording studio in the mid-80s was treated with undeserved respect!

Dell's continuing case study

2008-04-02T17:51:00.000-07:00

You can't ask for a better case study, really. The Kodak vs Polaroid debacle, followed by Kodak vs Digital photography, perhaps? Well Dell vs everyone is a good one, anyway, although sometimes it looks like Dell vs Dell. Here's a link for you: Dell, the world's second largest PC vendor, plans to cut costs by $3 billion as it slashes the price of materials and components going into its gadgets and reduces operating expenses, including jobs, the company said Monday. "Now this does not happen overnight," said Lynn Tyson, vice president of investor relations at Dell, on the company's investor blog. "In fact we said we believe it will take three years to achieve an annualized savings of $3 billion. This means that before you adjust for growth, we believe our costs at the end of our fiscal 2011 will be $3 billion lower than at the end of fiscal 2008." Money saved from the cost reductions will be invested back into the business and used to improve profitability, Tyson said.

Now they are saying that they will cut some labour out of the business, which is a common way to cut costs. And they will cut out a PC production line - apparently they misjudged the size and timing of the switch to notebooks, although how they could do that is beyond me. Perhaps more worrying is that they plan to "seek savings in all areas, from design, manufacturing, logistics, materials, and operating expenses", and that they "may also sell or spin off...Dell Financial Services".

For a company that started out with a claimed innovative means of assembling PCs "to order" via super-cheap phone and on-line distribution, it's worrying that incremental review of operational costs is not embedded into the company ethos. After all, that's where they started. Pulling together reasonable quality components from competing suppliers in a just-in-time assembly process that met the individual needs of consumers, without the added overheads that the big players had built in. Oh dear. Maybe they became fat and lazy too?

Well if if needs to be knifed, so be it. As long as quality is maintained, at least where it is now, I mean. Any less and the compromises will peek through just a bit too clearly. But hiving off the finance arm? Is this a reflection of recent loss of focus on core competence? Or are they bleeding so badly that they need to convert assets to cash, pronto?

All very interesting to watch as this case study unfolds.

Lacking subsidies, or lacking a competitive niche?

2008-03-31T20:04:00.000-07:00

The Aussie car makers, and there used to be plenty of 'em, once made small cars, and small engines. Leyland and its predecessors, for example, made useful if unreliable small fours. GM locally made a version of the Opel Kadett, and similarly adapted another Opel to make the bigger Holden Camira, and exported its 4 cylinder engine to places like - gasp - Korea. Aussie factories made Ford Escorts (or more correctly assembled them, badly) and even Volkswagen Golfs. They assembled Volvos and Nissans, and even plugged Holden engines into small Nissan Pulsars. Chrysler had a go as well with the small-ish Centura before selling out to Mitsubishi who sold up a storm with the 4-cylinder Sigma. There were Mazda-sourced and Ford assembled Lasers. And they too sold well. Completely-knocked-down kits were a common way into the small-four market game, but there were examples of more elaborately transformed vehicles as well. It has been done, and done pretty well.

But for reasons of pragmatism or shortsightedness, coupled with lowering trade barriers and/or the strengthening of the Aussie dollar against the strong car-maker's currencies, making imports increasingly cheap, it all changed. The old guard died off, leaving just old hands Ford and Holden on one side with the blow-ins Toyota and Mitsubishi on the other. Now Mitsubishi has quit as well. Just 3 makers left standing, all making the same sort of big, fat, dull cars. Everything else - everything decent - is imported.

Now you could say that big "family" cars have become the Aussie car maker's core competency. But these dinosaurs don't even sell to families, these are corporate fleet sales vehicles, selling on the back of a flawed tax system that subsidises excess. On the other hand they export small numbers to the car-mad US, South Africa and the who-cares-about-fuel-efficiency Middle East; and fewer still to rich Europeans looking for a powerful car without a BMW or Merc badge. But this is all small beer. Currency fluctuations would kill these markets in an instant, and a big rise in fuel cost would do the same. Or a rise in shipping costs for that matter. After all, you have to ship these dinosaurs all the way from Australia to anywhere else. It's a big distance and an added burden to an already-struggling camel.

But the remaining factories employ thousands of people. They may be building doomed rubbish, or at best a dwindling niche vehicle, but they remain employees, voters and human beings. Nevertheless we can't just dump the truth on 'em, we have to play political games.

So, that's the background. Then you read stuff like this: AUSTRALIAN-based car manufacturers have fewer subsidies and less protection than others overseas and face more difficulties exporting to Asia, two new papers will reveal today. And you think, 'same old, same old'. Let's prop up a basket case - not fix it, mind, just prop it up - and all will be well for a few more months. But no, Victorian Premier Steve Bracks said this, instead: But it would be wrong, he said, to assume his final report would call for more assistance to the industry. Hmmm. If not "more" then does that mean existing subsidies stay?

Well he went on to explain that "The review is likely to lead to an overhaul of how the government allocates its billions of dollars of assistance to the car industry", or words to that effect. To translate that a bit, what is being proposed is that leaner, lighter, more efficient big cars are what we want, and that calling the subsidies "investments in green technology" will make them less of a subsidy and more like good government in action. Oh joy.

OK, so yes, we have accidentally or on purpose found ourselves building only big cars, and yes, you can call that a niche. And yes, plenty of other places make great small cars and we are unlikely to make progress trying to beat Korea, China and India at that game. But plenty of countries make far better big cars, too. In fact we make pretty poor big cars. They are dull and unenlightened beasts that don't sell well now. No amount of dressing up subsidies as 'technological investments in the future' will remove the urgency from the world's shift to smaller vehicles. And not only are we are thousands of kilometres away from key markets, we just don't make cars very well. Our economy has moved into "services" big time and old style manufacturing is just not what Australia does well. So let's (for once) admit it, cut our losses and find real jobs for these people, before they feel the pain of our indecision. These workers deserve better than being strung along endlessly with forlorn hopes that cannot possible pass the barest of reality checks.

So you think the world isn't changing?

2008-03-26T15:02:00.000-07:00

What can we say about our world today? We are losing species and thus diversity as our human population and allied environmental impact grows day-by-day. Obvious enough, but what are we doing about it? We remain focused on economic wealth at the expense of our own futures. Well, that's probably true, although there is an altruistic side to humanity that will possibly - hopefully - one day get the better of greed.

In the meantime let's reflect on what's happening economically. An iconic powerhouse
like Ford is dumping its prestige brands one by one, raising cash for a last gasp attempt at survival, or just getting rid of failing brands. Does this say anything about the US economy, or US car companies in general, or US car company management vision? Probably a yes in all 3 boxes. From Fairfax: US automaker Ford has agreed to sell its luxury brands Jaguar and Land Rover to India's Tata Motors for more than $US2 billion ($A2.2 billion), a source familiar with the deal says.

So what does this say about India's economy, or the growth of Tata (a company that has fingers in many pies and plans to sell a super-cheap small car around the world)? I'd say India (and China) will be matching - perhaps passing - the US soon enough. 10 years, or 5? What will we make of that?

Meanwhile, again from Fairfax: Chinese cars are coming to Australia, but they won't necessarily undercut Korean cars on price. What does this say about the car market? Hello cheap small cars, goodbye to big, fat cars and luxo-barges, perhaps? Or about China's ambitions as an exporter of elaborately transformed goods? Or of Korea? What indeed do we imagine to be the effect on Japan and its car makers, or more likely, the US car makers? Anyone among the US car makers getting that sinking feeling?

Again from Drive, Fairfax's car section: If Americans take to the Commodore, it will help secure the future of Australia's favourite sedan. Sales of large cars in Australia are at a 14-year low as new-car buyers embrace imported vehicles in record numbers. What do we make of this? US-owned car maker can't adapt fast enough to survive in Australia, looks to export failing fat car to the biggest failing fat car market of them all, the US. Well "desperation" and "short-term solution" come to mind. If the US itself can't keep up with a changing market, how long will Holden survive as it tries to bolster its short-term future with poorly-targeted cars that the Aussie market doesn't want either? Are we getting that sinking feeling again?

Still, Holden sells far more fat cars in Oz than Ford, and it's better at exporting them, too. So Ford in Australia had better adapt, too, and fast. And it could be worse: Mitsubishi will build its last car in Adelaide on Thursday, ahead of the closure of its local assembly operations on Friday. If a Japanese manufacturer, admittedly one with a few problems everywhere, can't make a go of manufacturing in Australia, then what hope has anyone of making a go of it?

As it stands Australia is great at mining and shipping iron ore to Japan, China and Korea, and we buy their products in return. So it's a win-win whilst we have lots of iron ore and they build good cars and other products. But if the Aussie dollar turned around and bit us, and imported goods cost twice what they do now, where would we be? When you think about it we'd be better off as an exporter - and these dinosaurian local car makers would get some relief. And we'd be raking in even more export dollars. But gee inflation would go through the roof. Oh what a tangled web we weave.

Computing in the clouds: not just a book store

2008-03-13T14:25:00.000-07:00

Here's a business case for you. Amazon is the classic example of a new model, but which model is it? What exactly does Amazon do? You could say that Amazon is an online bookstore, which it is, but it also sells just about everything these days. So it's an online retailer, isn't it? Well yes, but wait. It has the front-end of an online retailer but the back-end is a combination of a slick short-term warehousing and despatch service with a massively capable and finely-tuned computing infrastructure. So?

OK, so our online retailer looks like this.

It offers goods at one website, sure, but also keeps track of what you buy and lets you know what other things you may like. It acts a bit like a helpful shop assistant with a fantastic memory
It takes takes your orders, tells you if it's in-stock or not and organizes despatch, all online, again like a helpful small-store guy
It also crawls other loosely affiliated websites and looks for product mentions that are within its scope; if it finds some they get hot-linked to the Amazon site. Search buttons are also provided. This is not so usual in the 'real' world, but possible. In return for doing some of Amazon's work the affiliates get a commission. Now it's not a unique method in and of itself but the way it's applied presents as an innovation. It adapts an old methodology to do new stuff in a new place
So just to recap, it sells, purchases, briefly stores and slickly despatches; and lets you (the customer) know exactly what's happening at each step.

And behind the scenes are web developers writing the code that does all the smart stuff. And hardware that hosts all of the virtual retailing and supply-chain coordination applications. And this is the start of the next Amazon idea.

Amazon realized that it could offer its slick despatch service to other organizations, for a fee. So another provider (of any sort, virtual or not) could use Amazon's physical presence as if it owned it, but only as much as it needed, when it needed it. This was a win-win, providing first-class despatch for anyone and taking up Amazon's slack
But wait, it doesn't end there. Amazon further realized that the computer infrastructure itself could be turned over to other people's tasks, and opened up access to anyone who wants to buy a slice of computing power, no matter how small.

Now it's not a new idea, time-sliced computing has been around for yonks. But offering it to anyone, anywhere, on an as-used basis is an innovation. IBM may have offered shared mainframe time to big business decades ago but it didn't offer it to me personally, and I couldn't have accessed it anyway. But Amazon has offered it, and made it easy to access. Coupled with the Internet and you have frictionless, anyplace scalable computing, when you want it.

So what exactly is Amazon now? An online retailer or a start-up cloud-computing market leader? Well it's certainly not just a book store.

Apple Music Event 2001-The First Ever iPod Introduction

2008-03-12T15:37:00.001-07:00

I don't necessarily think the iPod was an innovation in and of itself - but I can't argue with the successful launch, the enduring marketing spin and the market dominance. You have to respect a product that dominates the market not by technical excellence but by sleek looks and intuitive ease of use.

Is there such a thing as a good meeting?

2007-11-08T18:27:00.000-08:00

You know how a good meeting feels. It's fast, it engages, it gets to the point. You have the right people there, they have answers and all of the actions are documented. You can see how such a gathering will remove roadblocks and get the job done.

Whereas a bad meeting drags on, has poorly engaged participants - and often the wrong ones - and gets nothing done. There are plenty of questions at such a meeting but few answers. No-one talks in turn and a few people wonder what they are there for. It all gets pushed back to the next meeting, and likely as not no-one took any minutes so you repeat the exercise next time.

Worst of all both meetings cost money as well as time. So how do you fix this? It seems easy enough that you:

plan ahead, investigate the issues and lay them down in a clear way
you appoint a chair (if it's not you)
and make sure beforehand that you have invited the right people: people who know what the topics are and have a stake in the outcomes
you set time limits and stick by them
you also need to control the meeting fairly, make sure anyone with a contribution gets a go and that the group considers all sides
you make sure someone takes minutes and that actions are clearly owned and tracked to completion.

And then it still doesn't work. How about you just decide what needs to be done and either do it yourself or ask the others to do it? Well that may work, or you will miss some insight or not gain the necessary "skin in the game" and fail to "get traction". It comes back to company culture and that willingness to get stuck in - or fiddle-faddle about with bureaucracy.

Care to Google up a robotic car?

2007-11-04T13:53:00.000-08:00

You may have noticed the recent DARPA-organised robotic car competition. If you didn't you can read about it here in a Forbes article. It's certainly impressive and looked like a lot of fun. Aside from enhancing research into practical robotics, competitions between robotic cars completing 'races' in urban environments is an interesting look into a Sci-fi future of immense wonder. There must be a business model here for someone.

Just imagine: robotic sports, anyone? Google-search your way to an urban pleasure robot for hire, perhaps? Replace human-driven taxis with robots and cut down on those inane cab-driver conversations? (Unless the robots get speech chips as well of course.) Or robotic buses that eliminate the end-of-shift grumpy-driver syndrome? Or more seriously, competent robotic day-surgery in remote locations without the need for expensive, highly-trained human surgeons "on-site". It's potentially a mix of good and bad, isn't it? More programmers and robotics experts, fewer jobs for real people.

Now I'm not a Luddite, but I do wonder about whether we think these things through. Like Einstein wondering whether his work opened to door to nuclear war.

And sure enough these harmless-looking robot games have a military goal as well, with lives saved if you can send more robots into battle instead of warm bodies. The downside to robotic wars, however, are grim. Without the appropriate programming robots will not show human mercy or simple judgment, and may indeed be programmed to be exactly that - inhumane killing machines. And war with 'thinking' machines instead of people at risk may lower the barriers to war itself. So we get more war with fewer consequences - well, if you are on the winning side, anyway.

Meanwhile Google's 'first privately-owned car on the moon' competition is a bit wacky - and certainly way-out - but hints at where we may be going next in our personal transport. Despite the fun of it all it's possible that our obsession with cars will end on Earth when we run out of accessible, cheap resources; equally it's hard to see how lunar exploration and exploitation will solve our immediate problems. But that's humanity - pressing on, pushing the boundaries and fixing up the broken stuff later.