Narrative: Hardware is Hard
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Narrative: Hardware is Hard (Jan 24, 2017)
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Roku Said to be Preparing 2017 IPO (Jul 13, 2017)
The Verge seems to have secured the first of two exclusive looks at Android founder Andy Rubin’s new phone, from his company Essential (Recode’s Code Conference will have an interview with Rubin tonight where I’d expect him to share more). So far, there’s nothing about the software, beyond the assumption that it’ll run Android. So the focus is entirely on the hardware design, including the materials, connectors, and a theoretical ecosystem of modular add-ons (for now, there’s just one: a 360° camera). The reporting on this is all a little breathless – Andy Rubin has quite a reputation and anything he launches will be accorded a fair measure of respect. But the pitch here feels so much like almost every other new entrant in the market, a mix of straw man arguments about the current state of the market, grandiose claims about how all that will change, ambitions to build an ecosystem without any evidence that any other player is interested, and nothing at all about distribution, which continues to be the key question in the US smartphone market. We’ll hopefully know a little more by tonight, but I’m extremely skeptical that this phone will do any better than any other recent attempt to change the smartphone market. In the meantime, that won’t stop this project from getting tons of positive media attention in the run-up to an actual launch sometime later this year. It’s worth noting that beyond the phone there are some other bits and pieces too, including a smart home OS and speaker with a screen, but again the details are so short and claims so grand that I’m inclined to ignore them until we actually know something specific about them.
via The Verge
Samsung Surface Competitor Gets Poor Reviews (May 26, 2017)
Sony results for the March quarter were out this morning, and they were a pretty mixed bag (this was also the end of its fiscal year, so some of the reporting you’ll see today relates to those year-end numbers, but I’ll focus on the quarter). The mobile business, which has has its share of ups and downs over the last few years, had another tough quarter, with a year on year drop in shipments and a drop back into the red following three quarters of profits. The music business did well but for reasons that have very little to do with music – the biggest boost in revenue came from a mobile game, while recorded music revenues were actually down as the twin declines in physical and downloads more than offset streaming growth for the third straight quarter. This is a problem I’m afraid will start to afflict all three major music labels in the near future. Sony Pictures had a down quarter and year, and had taken a big write down in the December quarter which affected full year results too. But the drop in revenues year on year was mostly in TV productions rather than motion pictures, which held up better. In gaming, Sony saw decent Playstation 4 shipments in the quarter, up a little year on year, and likely continues to lead Microsoft’s Xbox line by some margin as it has throughout this cycle.
via Sony (PDF)
GoPro beat its revenue guidance for Q1 and grew year on year for the second straight quarter, though it’s still a shadow of its former self, with revenues less than two thirds of what they were two years ago in the quarter, and even less than the equivalent quarter three years ago. Meanwhile, it still hasn’t reduced costs nearly enough to get back to profitability, as its cost of sales was nearly 70% of revenue and its operating expenses accounted for about the same amount, leaving it with a -40% operating margin. That’s actually a slight improvement on a couple of quarters last year, but was much worse than Q4, The fundamental challenge facing GoPro is still that it’s essentially a one-trick pony in a market that has a fairly low ceiling at a time when smartphones and other product categories are beginning to be more meaningful competitors. It’s expanded into drones, but that’s an even more niche category than action cameras, and all its efforts at diversifying into content have failed. It may be able to bring costs down enough over the course of the year to get back to profitability but a return to sustained high growth still seems like a distant prospect.