China (over) Produces $45 Tablets - Commodity Deflation!!

Looks like a job for Light Bulb Repair-Man

Last weekend I wrote about Apple founder Steve Wozniak's take on the "Samsung vs. Apple" patent battle.  Yesterday we looked at the billionaire Asian Titans, Lees, Lins, Lis and Gous, who took reuse and spun good enough gray market and refurb items into the dominant modern industry of our times.

Are display devices becoming like light bulbs?

Today, I ran across an article by Jay Goldberg in VentureBeat about his latest trip to Shenzshen, China.



Android tablets are selling in Shenzhen at $45 each, brand new.

"Hardware is dead".

This was a 7-inch tablet, Wi-Fi only with all the attributes of a good tablet. Capacitive touchscreen. Snappy processor. Front facing camera. 4GB of internal memory and an expandable memory slot.

I later found out that these devices are now all over the supply chain in Shenzhen. At volume, say 20,000 units, you can get them for $35 apiece. My device ran full Android 4.0 Ice Cream Sandwich and had access to the full Google API, including Gmail, Maps, YouTube and Google Play (not quite sure how that works either).

Once my heart started beating again, the first thing I thought was, “I thought the screen alone would cost more than $45.” My next thought was, “This is really bad news for anyone who makes computing hardware.”

The title is misleading. The hardware isn't dead.  In the industry, it's called "commoditization", where yesterday's unique must-have hardware becomes mass produced, and competition renders it the price of an ear of corn.  Apples may truly become apples.   Even as Apple and Samsung fight over the patent on the tablet and touch phone, the fact that the critical component - the small touch screen - was not owned / invented by either, has taken over reality.

This is not a small deflation.

Yes, it is still aggravating that OEMs seem to manufacture devices NOT to be upgradeable or repairable.  But if they are producing them at 10 percent the cost of a year ago, that may undermine the tinkerer blessing.

Just When I was Starting to Hate Apple

 'Photographer Credit: Nichollas Harrison' - thanks

I am not a Troll

Steve Wozinak Speaks to Bloomberg about Smart Phone Patent Wars.

“I hate it,” Wozniak said when asked about the patent fights between Apple and Samsung. “I don’t think the decision of California will hold. And I don’t agree with it -- very small things I don’t really call that innovative.

“I wish everybody would just agree to exchange all the patents and everybody can build the best forms they want to use everybody’s technologies.”

Steve Wozniak, the engineer-geek who co-created Apple Computer with Steve Jobs, was ever the good cop.   Yes, Jobs was a visionary, yes he was an orphan, yes he climbed up from the bottom, and yes he got blindsided by IBM when richie rich kid Bill Gates' Parents (who were on IBM's Board of Directors) got Gates a personal meeting to pitch Windows... Perhaps those tender moments influenced Jobs, perhaps he grew up tough.

But Steve Jobs also sued 14 year old bloggers, parked in handicapped spots, and (my beef) took credit infamously and greedily for other peoples ideas.  See Wired News articles... (but beware of flame-baiting your blog)...

My position in this industry was built by reading Digitimes, a Taipei-based tech journal which I started subscribing to about 10 years ago.  It was mainly about displays, displays, displays then.  I was able to predict and ride the sales of CRTs when the demand curve was outpacing the LCD supply curve, due to increasing demand projected in emerging markets, I was able to find Taiwanese-owned contract manufacturers, and I became who I am by riding Taiwanese coat-tails.  And here's the truth - Windows and IBM released their hardware, the PC clones, rather than open-source their software (as Google has now done) and the deal worked.  The Asian Tigers engineered and tinkered and produced PC Clones into a massive industry.  And the biggest thing you wanted to clone, 50% of the cost of a computer, was the CRT monitor.

Apple had to outsource their displays, they had nowhere near the market share to produce their own, not even close, in the 1990s.  And they outsourced them to Japan (Sony Trinitron), and did not develop the ties with Proview, BenQ, Wistron and Foxconn which others in the industry developed.  Apple tried to keep control, when Windows and IBM were PC-cloning, and tries to keep control as Google is Androiding.  But eventually, they had to come work to discover the IPhone prototype.

The Taiwanese became to display devices what Japan had become to automobiles.  In fact, it drove Beijing nuts that Taiwan was becoming outsource-in-chief to Japanese manufacturing, drove the Communist Party so nuts that they tried to corner the entire CRT manufacturing market, buying out all the furnaces and dumping subsidies into the manufacture... in 1999.   (Newbies).