Back again

Was sidelined last week with the flu. As a result, I had to content myself with expelling bile in the traditional way, rather than printing it on my blog.

Here's some highlights from what I missed last week:

TWICE: Circuit City Restructures Amid Flat Panel Profit Woes
Circuit City got fleeced so badly by the Christmas pricing bloodbath that they've shaken up their management team, and are consolidating their stores, which is code for jettisoning loser locations that they probably would have axed eventually anyway.

TWICE: Traditional PDAs Down, BlackBerry Sales Up
In my opinion, the PDA category died when the Blackberry and units like the Palm Treo arrived four years ago, this is just the body cooling off.

CE Pro: Apple's Steve Jobs calls for and end to Digital Rights Management, RIAA tells him to mind his own knitting
I'll link to it later, but last week I read a great essay from a technologist who described DRM as "the world's longest suicide note."

Bloomberg.com's Mark Gilbert reworks the "you have two cows" joke to poke fun at the finance world reported on Dealbreaker.com

Currency Market
You have two cows. China has 1 trillion cows. Guess who sets the price of milk?

Bond Market
You have two cows. One is Brazilian, one is Australian. They yield 25 quarts of milk per day. That's half as much as three years ago, when you traded your less-lactiferous German and U.S. cows for them. You are thinking of swapping for a pair of Namibian cows. They only have three legs but, hey, they produce 26 quarts per day.

Pension-Fund Management
You have two cows. How boring is that? You pay a month's supply of milk to a consultant, who advises you to sell one cow and buy two aardvarks instead. The aardvarks die. The consultant charges you four months of your (now reduced) milk supply and advises you to sell half of your remaining cow and buy a wombat. The wombat dies. The consultant charges eight months of milk for a copy of his new report, ``Two-Cow Strategies for Alleviating the Impending Pensions Crisis.''

And below is the funniest video on YouTube last week:

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Back in the saddle

I'm finally back, after a full dance card of work and family commitments.

Let's catch up:

Home Depot's Bob Nardelli suddenly resigned yesterday, throwing retail watchers and analysts into a tizzy. HD isn't doing too poorly, and the reasons for Nardelli's departure are unclear, although it's hard to feel too bad for a guy getting a US$210 million severance package.

Pioneering canadian retailer John Forzani has retired as chairman of the $1.3 billion dollar sporting goods empire that he created. He is 59. Through agressive expansion and aquisition, Forzani created a retail giant, with 14 banners and ubiquitous market presence. Now that, like Alexander, there is nothing left to conquor, he appears to be giving up the reins, and there is idle gossip that Forzani Group Ltd is a potential takeover target for either a large american retailer, or an agressive Private Equity group.

A disturbing trend I noticed in Christmas advertising was starting Boxing Day sales the week before Christmas. Chief amongst the offenders where struggling retailers like HBC, whose pre-Christmas Boxing Day ads whiffed of desperation, but even strong performers like Best Buy/Future Shop got in the game also. If we push the official start of the holiday shopping season back from Hallowe'en to Labour Day, then we can start the Boxing Week sales right after Canadian Thanksgiving!

Always contrarian in their outlook, Long or Short Capital.com's analysts have determined that nerdiness in a CEO has serious downside. This comes at a time when nerds are enjoying greater public popularity than ever.

There's been an amazing amount of whining and hand wringing in the Old Media about wealth: from executive compensation to Wall Street bonuses, and so on. Most of it reeks of jealosy, so I'll offer journalists and aldermen a helpful tip: if you want to make more money, do something that generates more revenue and profit than you already do.

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A fast and furious roundup

TWICE: CE Retailers Plumbed Pricing Depths On Black Friday
New York – Rational pricing took a holiday this past weekend.
While Thanksgiving promotions have become a national tradition, with no category more competitive than consumer electronics, the breadth and depth of CE discounting was jaw dropping on Black Friday, even by industry standards.
No brand, whether tertiary or tier one, was immune, although Panasonic, through its 42W-inch HD plasma display, was perhaps the most prominent example. The TV, a highly-rated benchmark product, hit a low of $1,000 on Friday morning at Best Buy, down $1,500 from a minimum advertised price (MAP) of $2,500 just a few months ago.
The intensity of the discounting could be traced back to Wal-Mart, which publicly targeted electronics as a promotional battleground this holiday season and was the first to break MAP on the Panasonic plasma. Looking to avoid the fate of the top toy chains, which succumbed to similar tactics by Wal-Mart two years ago, Best Buy took the gloves off by pressuring vendors to drop MAP over Thanksgiving weekend, dealers told TWICE.

Oh look, retailers who don't understand how to add value drop their pants to buy business from consumers who are so barraged by marketing messages that they don't even know what to purchase anymore. Chiseling away the value of a product that can sell on its own benefits by flogging it on price is a death spiral, and the CE industry will come to regret it, even more than they already do. If you look at the mass market shoes and apparel industry, especially ladies' wear, shoppers have been so desensitized to sale prices that department and specialty stores can't get a bite, even on a collection for the new season without at least an apparent 30% markdown.

The Times: 'Dragon' sausages burnt by trade laws
A SPICY sausage known as the Welsh Dragon will have to be renamed after trading standards’ officers warned manufacturers that they could face prosecution because it does not contain dragon.
The sausages will now have to be labelled Welsh Dragon Pork Sausages to avoid any confusion among customers.

I can't tell you how much this disappoints me. Next on the Trading Standards Ministry's hit list: Spotted Dick.

Bloomberg: Nintendo Sells More Than 600,000 Wii Units in 8 Days (reported in Dealbreaker)
Somehow Nintendo forgot that the videogame market was supposed to be a two-horse race. While Sony and Microsoft focused exclusively on battering one and another, the grand dame of the industry dropped its latest offering a few weeks ago at a price well below the new PS3. And they're selling like crazy: 600,000 units in 8 days. And the company says it can churn out 250,000 per week, to meet demand. And the crazy part; it's making money on each one. Sony's much more expensive consoles are a loss leader for the company, which hopes to profit selling $80 games. Maybe it will once again become a two horse race before long.

Ah, another gold star for competent forecasting, manufacturing, logistics, and marketing. I don't know how Dealbreaker's Joe Wiesenthal concluded that the console biz was a "two-horse race," but there is a strong sentiment right now that Nintendo will be the big winner this Christmas because they understand these key principles of the gaming biz: make it fun, make it affordable, make enough of them. The fact that the Wii doesn't download movies and television, and doesn't cure cancer doesn't seem to keep gamers from parting with their cash.

CE Pro: Sony PlayStation 3 to Research Medical Maladies
PS3 owners will be able to aid Stanford University researchers in analyzing human protein structures, finding cures for disease and more.
Cure@PLAYSTATION 3 is scheduled to launch after the PS3 becomes available globally, which means at least not until March because of delays in the European launch.
The program apparently will work similarly to projects such as Cal-Berkeley's SETI@home, which used Internet-connected computers (including my old desktop before it died) to crunch massive amounts of data in the search for extra-terrestrial intelligence.

I suppose since everyting else Sony has tried this year hasn't worked out, they might as well give philanthropy a shot.

I'm done writing about Playstation3. I just can't keep up with the increasing surreality of the actual news, let alone put a snarky spin on it. If we aren't already in the Endgame for PS3, and maybe even Sony itself, then I can't imagine how this could get any weirder. I'm tired of beating this horse. Unless Playstations start transmogrifying into hungry alligators and eating their owners, I'm going to let this whole thing go.

Canadian Business: A Supercentre excursion
CB's senior correspondent Zena Olijnyk visits the new Wal-mart mega store in Stouffville, Ontario. Her article is a refreshing and interesting read because she sees the store with a shoppers eyes, as opposed to the jaded, cynical eyes of a career retail analyst. Her insight is valuable because she can see not only what Wal-mart does wrong (and nitpicking Wal-mart is a dangerous hobby, because you then risk under-estimating them), but more importantly what they are doing right. I won't spell it out, but see if you can spot the key business drivers that other merchants could learn from.

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A quick roundup of what's important

Tempest Fugit.

Wow, I just keep getting busier. So let's get down to business:

CE PRo: Microsoft announces HD movie and tv downloads via XBOX 360

Holy cow, this is huge. Who would have ever thought that XBOX would be a contender as a vehicle for video downloading? How well it works remains to be seen, but this is one small step for entertainment, to be sure.

One potential casualty of XBOX360's newfound utility is TiVo, who has been losing traction over the past year to media centers from HP, Compaq and, well, everybody. From a CanCon perspective, TiVo has not managed to end-run the CRTC, and has yet to tap any other market than the U.S. So if they're losing ground at home, and not building market share elsewhere, what have they got?

CE Pro: Both Sony and Pioneer announce delays to their Blu-ray players.
Sony can't ship because their software doesn't work, and Pioneer can't built a unit that passes the Quality Assurance testing.

In the case of Pioneer, I think that's a shame, because their Blu-ray demo was the only one that I saw at CEDIA Expo that actually looked fantastic.

So far the "format war" touted in the industry press has amounted to nothing more than sabre rattling, given manufacturer's inability to put products in front of customers. What if they gave a war, and nobody came?

TWICE: Panasonic Q2 Net Income up 156%

TWICE: Sony Q2 Net Income down 94%

Compare and contrast: Panasonic delivered $672 million in net income on $19.1 billion in sales. Sony's $15.6 billion in sales would have still looked like a spanking in comparision, even if their net income line hadn't had $429 million dollar erased from it to pay for the recall of 9.6 million laptop batteries, leaving behind an embarrasing $14 million. That butcher's bill is what keen PR flacks like to call "one-time costs."

Lesson learned: Panasonic has a firm grasp on two key business principles: Sell more stuff, and don't try to blow up your customers.

AP: Seven tech firms head up Wireless HD consortium
LG, Matsushita (parent of Panasonic), Samsung, NEC, Sony, and Toshiba are partnering with wireless tech startup SiBEAM Inc to develup broadband wireless High Definition distribution.

Bring it on!

Bloomberg, via Dealbreaker: Kodak posts 8 straight lost Quarters in row, and is dropping factories and jobs like the proverbial hot potato. So far, the former master of the film world has completely failed to parlay their Brand into anything resembling dominance of digital recording media. Why? Maybe because they're still focused on products that print photos, rather than devices that take photos. In a world in which fewer and fewer people actually print their digital images, that could be interpreted as a bad strategy.

In other news, your humble blogger has finally learned that I've passed the accreditation exam from CEDIA that I wrote in Denver last September. I am now a CEDIA Certified Professional Designer.

What does that mean? It means you can trust me to create a quarter-million dollar+ project and carry it through from design to execution to fullfillment, with the help of our crack team of CEDIA Certified Professional Installers.

Believe me when I say that there are few firms in our market that can deliver projects of the scope we are working on.

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Takeaways and Throwaways: A Quick Roundup

I'm busy busy busy with work and personal projects, so am running a little behind, so here's a quick flyby of an update:

CE Pro: "Vista likely to ship on time, says analyst"
By "on time" they mean "better six months late than never."

Sony just can't catch a break this year,
as one thing after another has gone horribly wrong for them. This time, a report that demo Playstation3 units at the Tokyo Game Show were overheating and acting "erratically." Sony shares took a three percent dive on the news.

TWICE: JVC announces breakthrough for LCD panels:
JVC also announced a new mathematical algorithm that cleans up the sometimes blurry image delivered by LCD when displaying fast moving images. There is no schedule for placing this technology into shipping product.

This is one of those small, seemingly innocuous technical breakthroughs that ought to have a profound impact once it actually materializes in the marketplace. When it does, expect to see JVC benefit from licensing it to other companies.

MarketNews: MuchMusic has become the first Canadian broadcaster to offer music for purchase and download online.
Rather than sit on their hands and whine about New Media, the Old Media at CHUM Television have figured out how to make money doing it. First, they debuted the "all request" Much on Demand channel last year where, for a small fee, viewers could make requests via text message, and the station would air whatever videos got the most votes every hour (and hey, if the viewers voted to see the same Good Charlotte video eight times in one hour, give the people what they want!). Now, CHUM is not only a content provider via broadcast, but via retail as well. Good for them!

Starbucks wants 40,000 stores worldwide
Oh good. I was starting to worry that we didn't have enough Starbucks locations here in town.

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