Tuesday, January 11, 2011
Some Logitech feedback and China macro
The first comment (made fairly consistently) is that the core assumption (peripherals are dying) is wrong. My response: cables are not dead either. My laptop is still connected to my kindle (for charging) via a USB Micro. So what - I now have a box full of cables in the attic and another one at work. I can't imagine myself buying another one for a while.
You can buy a USB Micro cable (buy it now) on Ebay for USD1.50. A USB Cable at Radioshack is $9.95. Selling them for 6 times cost is very fat margin - it was the raison d'etre of Radioshack - a place you went when you needed a cable now. Lots of stores. One close to you. Even small declines in the demand for cables changed the economics of Radioshack.
In five years time we will need mice like we need USB cables. (Irregularly - and you will already have a drawer full of the critters.) The decline of Radioshack will be mirrored in the peripheral makers unless they can find something else to do.
The second set of comments - more concerning from a short's perspective - is that they are finding something else to do. The best stories are about music - people selling high end speakers to go with their computer. Some of this stuff is pretty groovy. Logitech make the (hands down) best ear-buds in the world: Ultimate Ears. That is never going to be a mega-hit product because there are not many people who are up to getting their ears cast by an audiologist for form-fitting (screw in) ear-buds at $1000 a pair. But top-end products like that allow you to develop technology for a mass market.
My guess is that memory on mobile devices (especially phones) gets cheaper and more plentiful we will use phones at much higher sound-quality than the iPods of yore. Improved sound quality will drive demand for higher-end headphones. Maybe not Ultimate Ears - but at least a product that sells for more then a hundred dollars.
I was surprised how few people commented on the Chinese macro angle. To me that was the most important observation.
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