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And In The Spirit Of The Season, Let's See Who Is And Isn't Cashing In
Electronics | Dec 4, 06
So Black Friday, Cyber Monday and the whole media-hyped if not invented "official" start of the holiday shopping derby is behind us. I think we'd all agree it's time to pause and reflect on what this time of year is really all about: sales volume, market share and, of course, margins.
In the music player wars, I'm sure everyone was just as shocked as I was to find that the Zune has failed to knock the iPod off its throne ("The Zune: Microsoft's Little Brown Lump Of DRM-Enforcing Digital Joy" and "The Universal Zune Tax"). At least for the moment, Redmond is said to have succeeded in becoming the leading iPod alternative; this at the expense of SanDisk, which already faced issues versus Apple ("New iPods: More Memory, Smaller Size, And A Tough Day For SanDisk"). The very fact that there is an interest out there in players of questionable competitiveness vis a vis the iPod, even with Apple's lock-in advantages in compatibility (iPod ports in cars, speaker docks etc.) and distribution (iTunes) indicates that if someone out there would make a player with a cool design and superior features, they really could give Cupertino a run for its money. But the whole "share expiring rights to your music with friends just long enough to shill for us" thing may not be the killer app to knock those white earbuds off the heads of America's youth.
Over in game-land, looks like Sony should have found a way to bang out a few more PS3s ("But If We Made Too Many PlayStations, They Wouldn't Be As Cool"). What they did build sold well, but apparently so did the year-old Microsoft Xbox 360 and the new Nintendo Wii. Sony's limited production to date necessarily limits its holiday sales. The silver lining here is that Sony is said to be taking a significant loss on each PS3 sold, owing to the expensive Cell and Blu-ray technology packed into the device (by contrast, Microsoft's Xbox is reportedly profitable). But Sony's truncated sales aren't just about video games; they represent a missed opportunity to gain a greater foothold for its Blu-ray high def standard just as the battle with Toshiba's HD-DVD technology heats up, and as Microsoft unveils an HD module for the Xbox based on the latter ("So Xbox Has An 1080p HD-DVD – Blu-ray's Still A Cooler Name (You Can Tell By The Dropped Vowel"). Meanwhile, the far less expensive Wii has proved to be a commercial success and a critical hit, with its vibrating motion-sensitive controller winning over reviewers at the Wall Street Journal. New York Magazine dubbed the Nintendo console "funky", in contrast to what it called the "clunky" PS3. Earlier rumored Wii supply problems do not appear to be acute. So if you can make that gamer on your list happy for hundreds of dollars less, why not go with the Wii? Sony may find itself caught between Microsoft's high-def rock and Nintendo's low cost and very slick hard place, and without enough production to put up a full fight.
Speaking of high def, it appears the flat screen market is heating up. lCD demand is so strong that Sony announced plans to boost LCD production by 60%, partially in conjunction with Samsung, the current leader in television sales. But plasma is hardly out of the game; indeed, Panasonic seems to have hit a sweet spot with the 42'' TH42PX60U, currently the most popular flat screen on PriceSCAN.com and available for somewhat north of a grand. So far, neither technology seems to be able to displace the other, and perhaps the war will go on until some other screen type (LED?) replaces both. For the time being, however, it looks like a joyous holiday season for everyone in the biz.



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