6 ms·

Hardware is dead; long live hardware. The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end model

Hardware is dead; long live hardware. The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end models, and retailers still make money on them. The free-fall in automotive prices in the 20s "killed" the automobile, except that people kept buying faster, sleeker, newer models anyway. Like so many other electronics and everyday devices, the commoditization of tablets won't "kill" the tablet. It will result in a glut of disposable, troublesome, irksome devices, but there will still be a very nice market of people willing to pay more for a better device. Go make money there, you'll be happier anyway.

diminish 14y ago
Actually Intel's ultrabook rebranding was also a clever step to make laptops expensive/more profitable again, while they were in a free spiral fall due to (Taiwan's)Acer's netbooks. That said, hardware will only be dead if US companies give up on producing hardware, and it becomes commodity produced elsewhere, similar to clothing manufactured; only Apple will remain the Prada of hardware.
- happycube 14y ago
  Add a keyboard(/trackpad?) case to one of these 7" tablets and you pretty much get the original Asus netbook concept, only faster, cheaper, and more versatile.
  - ChuckMcM 14y ago
    And if you remember the CeBIT where ASus abortively introduced an ARM based laptop you got to see the who ecosystem in action. I wish the full details of that came out but the scuttlebutt was that Microsoft threatened to cut off Asus completely if they shipped it. They were already pissed that the EeePC's had a Linux distro that was easy enough for windows users to use but couldn't really put Vista on them, their re-issue of XP to support those machines was pretty notable.
    - vidarh 14y ago
      But Asus has a whole line of what are effectively ARM based laptops: The Asus Transformer series of "tablets" + keyboard dock. Sure, they're shipped with Android, but you can install Ubuntu on them.
      - ChuckMcM 14y ago
        Yes, they do now and they run Android. But at CeBit in 2008 when they were doing a follow on to the EeePC 900 there was no Android.
  - vidarh 14y ago
    I have a NATPC009S with a $10 USB keyboard/carrying case and it works great for what it is. Not in any way an iPad (or Google Nexus) competitor of course, but at a fraction of the price it's perfect as a "won't worry if this breaks/gets lost" device thrown in my bag for casual use coupled with emergency ssh access when a server goes down.
elchief 14y ago
You mean, companies should differentiate their product and not compete on price? You crazy man.
deleted 14y ago
[deleted]
bigdubs 14y ago
So not to be that dude, but ... "The King is dead, long live the King." refers to the accession of a new monarch. It implies in the language an immediate, uninterrupted rule of the line. It should not be used when something has died, and it's just dead and there is no implied line of succession. A terrible but relevant example would be "the iPhone is dead, long live the iPhone.", implying that the 4s is dead and 5 now reigns.
- natrius 14y ago
  In my reading, his usage fits your description.
- thaumaturgy 14y ago
  Whoops; thank you. I didn't know that.
  - ghshephard 14y ago
    Don't give in so quickly - your use was fine, and in keeping with the concept of "X is Dead, Long Live X"
    - molmalo 14y ago
      But what the phrase really means is: "X is Dead, Long Live Y" with x being the diseased king, and y the rightful heir and new king. As wikipedia states [1]: The phrase is a traditional proclamation made following the accession of a new monarch And... "Given the memorable nature of the phrase (owing to epanalepsis), as well as its historic significance, the phrase crops up regularly as a headline for articles, editorials, or advertisements on themes of succession or replacement." That's why bigdubs was right. But finally... most probably the successor and new monarch could be something like what Ballmer said to The Seattle Times [2]: I think when you look forward, our core capability will be software, (but) you'll probably think of us more as a devices-and-services company. Devices+Services is the new king. Google, Amazon, Microsoft, Apple, are all going this route. [1] http://en.wikipedia.org/wiki/The_King_is_dead._Long_live_the_King http://en.wikipedia.org/wiki/The_King_is_dead._Long_live_the... [2] http://seattletimes.com/html/businesstechnology/2019168601_microsoftballmer16.html http://seattletimes.com/html/businesstechnology/2019168601_m...
ChuckMcM 14y ago
Came here to say exactly that. Markets are zombies and dollars are brains. But the title is less thrilling than "Ok everyone knows how to make a tablet now, that won't be a high margin business." In this case margin being the proxy for expertise in putting together a tablet. But there actually is a story here which VentureBeat came so close too and missed, the cost of compute. Even in the 80's when I went to work for Intel people 'in the know' thought it was insane that Intel could capture 33% of the value of a PC with just the CPU + chipset. They worked really hard to make that the case, using every gimmick at their disposal, from patents to copyrights to support contracts to outright strong-arm tactics. Even today that survives in the $300 you pay for the CPU on the motherboard. Mostly it was about the software base though, you really couldn't do anyhing about it unless you were willing to bite off on the problem of the software and tools. Apple did that, but nobody else did. ARM is different, the ARM folks take their tax, but you can buy out their tax if you know you are going to sell enough chips, and the cost to make chips has gone down. Even though the cost to build chip factories has gone up (remarkably so). I'm not nearly as engaged with this problem as I once was but around the turn of the century the 'sunk' costs of doing a chip was on the order of 5 - 7 million dollars. A wafer start (with anywhere from 1 to 12 300mm wafers) is like $48K [1]. Less on the older processes, so may $1 base cost per tested good packaged die. So you if you price to cost + margin there was a huge amount of room below the Intel x86 artificial cost 'floor'. ARM software has gotten better and with Linux and then Android creating volume, additional players entered the market. And some, like All Winning have very modest margin targets on their CPUs, others like BroadCom/TI/QualComm have been playing in the smartphone market where these CPUs don't carry as much margin as general purpose compute devices do. You need look no further than the Raspberry Pi to see what that means in terms of consumer cost. Anyone can become an ARM cpu vendor, its damn difficult to become an x86 compatible processor vendor. And that is the story we're seeing play out here. From the sidelines I'm watching to see what Intel does next, they are already scrambling (see the Cedar Trail stuff) and they have a lot of smart folks who can do great stuff with manufacturing and architecture. For the first time since the Motorola 68000, they have legitimate competition. [1] http://www.xbitlabs.com/news/other/display/20110912192619_TSMC_Reportedly_Hikes_Pricing_on_28nm_Wafers_Due_to_Increased_Demand.html http://www.xbitlabs.com/news/other/display/20110912192619_TS...
- 14y ago
vibrunazo 14y ago
Have you read the whole article? The author is not disagreeing with you. He is very specifically agreeing with your point. Apple is selling more than just "hardware", they're not just selling a piece of metal and silicon. That's what the author is saying is dead. Doing what Apple does, selling hardware + software + brand, is what's still alive. So you and the author are not disagreeing. What he is saying is not that no one will ever build a tablet again. He's saying making money off the hardware alone is a bad idea. And that you need to sell more than that to make a good profit. I used to work with jewelry, you could make the same argument that selling rocks is dead. But if you put the right branding, and tell the costumer a compelling story. We could literally sell a product for a 10x~20x profit margin. And yet, selling rocks is dead. Selling jewelry isn't.
- marknutter 14y ago
  Well then he's not really saying anything then, is he? And perhaps the title should've been something a little less controversial.
  - bonch 14y ago
    > Well then he's not really saying anything then, is he? What? He's clearly saying something. Hardware-only is dead.
enraged_camel 14y ago
>>The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end models, and retailers still make money on them. Yes, but how lucrative is the market in general compared to before? How many new players do you see, and how much innovation is happening? I've always been of the opinion that commoditization is good for the consumer only in the short run (since prices drop). In the long run, it hurts the consumer because there is very little if any innovation in commoditized markets.
- sien 14y ago
  True. Other than PCI, PCIe, USB, Bluetooth, discrete 2D graphics cards, 3D accelerators, multi-core x86, DDR, SSDs, High quality LCDs and hundreds of other improvements it is worth saying has you do, Reg, 'What has commoditization ever done for us?'
  - enraged_camel 14y ago
    Incremental improvement is not innovation. Very few of what you listed made a big enough difference in the status quo that I would qualify them as innovation. I mean, lack of innovation in the computer hardware industry is a big enough problem that a software company is entering the market: http://www.technologyreview.com/view/429111/can-valve-innovate-gaming-hardware/ http://www.technologyreview.com/view/429111/can-valve-innova...
- majormajor 14y ago
  A lack of groundbreaking innovation leads to commoditization, not the other way around. A commoditized market is ripe for new innovation to set an offering apart—and if that innovation is big enough, it may just end up creating a new market. The feature phone market was pretty commoditized, but that didn't stop people from trying to figure out ways to create a new, less-commoditized, market by making phones smarter. And touch-based smartphones, too, will become increasingly commoditized until someone comes up with another revolution. Similarly, the basic functionality of a car has been commoditized for decades, but competition keeps innovation going.
zerostar07 14y ago
I don't think the author meant hardware will stop selling, but that it has been commodified to the point where there's little future for innovation.
wslh 14y ago
Yes, Bill Gates vision of one computer per home was wrong: now we have more than three computers for every family member (notebook, mobile, tablet, e-reader)!

diminish 14y ago

Actually Intel's ultrabook rebranding was also a clever step to make laptops expensive/more profitable again, while they were in a free spiral fall due to (Taiwan's)Acer's netbooks. That said, hardware will only be dead if US companies give up on producing hardware, and it becomes commodity produced elsewhere, similar to clothing manufactured; only Apple will remain the Prada of hardware.

happycube 14y ago
Add a keyboard(/trackpad?) case to one of these 7" tablets and you pretty much get the original Asus netbook concept, only faster, cheaper, and more versatile.
- ChuckMcM 14y ago
  And if you remember the CeBIT where ASus abortively introduced an ARM based laptop you got to see the who ecosystem in action. I wish the full details of that came out but the scuttlebutt was that Microsoft threatened to cut off Asus completely if they shipped it. They were already pissed that the EeePC's had a Linux distro that was easy enough for windows users to use but couldn't really put Vista on them, their re-issue of XP to support those machines was pretty notable.
  - vidarh 14y ago
    But Asus has a whole line of what are effectively ARM based laptops: The Asus Transformer series of "tablets" + keyboard dock. Sure, they're shipped with Android, but you can install Ubuntu on them.
    - ChuckMcM 14y ago
      Yes, they do now and they run Android. But at CeBit in 2008 when they were doing a follow on to the EeePC 900 there was no Android.
- vidarh 14y ago
  I have a NATPC009S with a $10 USB keyboard/carrying case and it works great for what it is. Not in any way an iPad (or Google Nexus) competitor of course, but at a fraction of the price it's perfect as a "won't worry if this breaks/gets lost" device thrown in my bag for casual use coupled with emergency ssh access when a server goes down.

elchief 14y ago

You mean, companies should differentiate their product and not compete on price? You crazy man.

deleted 14y ago

[deleted]

bigdubs 14y ago

So not to be that dude, but ... "The King is dead, long live the King." refers to the accession of a new monarch. It implies in the language an immediate, uninterrupted rule of the line. It should not be used when something has died, and it's just dead and there is no implied line of succession. A terrible but relevant example would be "the iPhone is dead, long live the iPhone.", implying that the 4s is dead and 5 now reigns.

natrius 14y ago
In my reading, his usage fits your description.
thaumaturgy 14y ago
Whoops; thank you. I didn't know that.
- ghshephard 14y ago
  Don't give in so quickly - your use was fine, and in keeping with the concept of "X is Dead, Long Live X"
  - molmalo 14y ago
    But what the phrase really means is: "X is Dead, Long Live Y" with x being the diseased king, and y the rightful heir and new king. As wikipedia states [1]: The phrase is a traditional proclamation made following the accession of a new monarch And... "Given the memorable nature of the phrase (owing to epanalepsis), as well as its historic significance, the phrase crops up regularly as a headline for articles, editorials, or advertisements on themes of succession or replacement." That's why bigdubs was right. But finally... most probably the successor and new monarch could be something like what Ballmer said to The Seattle Times [2]: I think when you look forward, our core capability will be software, (but) you'll probably think of us more as a devices-and-services company. Devices+Services is the new king. Google, Amazon, Microsoft, Apple, are all going this route. [1] http://en.wikipedia.org/wiki/The_King_is_dead._Long_live_the_King http://en.wikipedia.org/wiki/The_King_is_dead._Long_live_the... [2] http://seattletimes.com/html/businesstechnology/2019168601_microsoftballmer16.html http://seattletimes.com/html/businesstechnology/2019168601_m...

ChuckMcM 14y ago

Came here to say exactly that. Markets are zombies and dollars are brains. But the title is less thrilling than "Ok everyone knows how to make a tablet now, that won't be a high margin business." In this case margin being the proxy for expertise in putting together a tablet. But there actually is a story here which VentureBeat came so close too and missed, the cost of compute. Even in the 80's when I went to work for Intel people 'in the know' thought it was insane that Intel could capture 33% of the value of a PC with just the CPU + chipset. They worked really hard to make that the case, using every gimmick at their disposal, from patents to copyrights to support contracts to outright strong-arm tactics. Even today that survives in the $300 you pay for the CPU on the motherboard. Mostly it was about the software base though, you really couldn't do anyhing about it unless you were willing to bite off on the problem of the software and tools. Apple did that, but nobody else did. ARM is different, the ARM folks take their tax, but you can buy out their tax if you know you are going to sell enough chips, and the cost to make chips has gone down. Even though the cost to build chip factories has gone up (remarkably so). I'm not nearly as engaged with this problem as I once was but around the turn of the century the 'sunk' costs of doing a chip was on the order of 5 - 7 million dollars. A wafer start (with anywhere from 1 to 12 300mm wafers) is like $48K [1]. Less on the older processes, so may $1 base cost per tested good packaged die. So you if you price to cost + margin there was a huge amount of room below the Intel x86 artificial cost 'floor'. ARM software has gotten better and with Linux and then Android creating volume, additional players entered the market. And some, like All Winning have very modest margin targets on their CPUs, others like BroadCom/TI/QualComm have been playing in the smartphone market where these CPUs don't carry as much margin as general purpose compute devices do. You need look no further than the Raspberry Pi to see what that means in terms of consumer cost. Anyone can become an ARM cpu vendor, its damn difficult to become an x86 compatible processor vendor. And that is the story we're seeing play out here. From the sidelines I'm watching to see what Intel does next, they are already scrambling (see the Cedar Trail stuff) and they have a lot of smart folks who can do great stuff with manufacturing and architecture. For the first time since the Motorola 68000, they have legitimate competition. [1] http://www.xbitlabs.com/news/other/display/20110912192619_TSMC_Reportedly_Hikes_Pricing_on_28nm_Wafers_Due_to_Increased_Demand.html http://www.xbitlabs.com/news/other/display/20110912192619_TS...

14y ago

vibrunazo 14y ago

Have you read the whole article? The author is not disagreeing with you. He is very specifically agreeing with your point. Apple is selling more than just "hardware", they're not just selling a piece of metal and silicon. That's what the author is saying is dead. Doing what Apple does, selling hardware + software + brand, is what's still alive. So you and the author are not disagreeing. What he is saying is not that no one will ever build a tablet again. He's saying making money off the hardware alone is a bad idea. And that you need to sell more than that to make a good profit. I used to work with jewelry, you could make the same argument that selling rocks is dead. But if you put the right branding, and tell the costumer a compelling story. We could literally sell a product for a 10x~20x profit margin. And yet, selling rocks is dead. Selling jewelry isn't.

marknutter 14y ago
Well then he's not really saying anything then, is he? And perhaps the title should've been something a little less controversial.
- bonch 14y ago
  > Well then he's not really saying anything then, is he? What? He's clearly saying something. Hardware-only is dead.

enraged_camel 14y ago

>>The free-fall in PC prices in the 90s "killed" the PC, except that every major PC manufacturer still sells high-end models, and retailers still make money on them. Yes, but how lucrative is the market in general compared to before? How many new players do you see, and how much innovation is happening? I've always been of the opinion that commoditization is good for the consumer only in the short run (since prices drop). In the long run, it hurts the consumer because there is very little if any innovation in commoditized markets.

sien 14y ago
True. Other than PCI, PCIe, USB, Bluetooth, discrete 2D graphics cards, 3D accelerators, multi-core x86, DDR, SSDs, High quality LCDs and hundreds of other improvements it is worth saying has you do, Reg, 'What has commoditization ever done for us?'
- enraged_camel 14y ago
  Incremental improvement is not innovation. Very few of what you listed made a big enough difference in the status quo that I would qualify them as innovation. I mean, lack of innovation in the computer hardware industry is a big enough problem that a software company is entering the market: http://www.technologyreview.com/view/429111/can-valve-innovate-gaming-hardware/ http://www.technologyreview.com/view/429111/can-valve-innova...
majormajor 14y ago
A lack of groundbreaking innovation leads to commoditization, not the other way around. A commoditized market is ripe for new innovation to set an offering apart—and if that innovation is big enough, it may just end up creating a new market. The feature phone market was pretty commoditized, but that didn't stop people from trying to figure out ways to create a new, less-commoditized, market by making phones smarter. And touch-based smartphones, too, will become increasingly commoditized until someone comes up with another revolution. Similarly, the basic functionality of a car has been commoditized for decades, but competition keeps innovation going.

zerostar07 14y ago

I don't think the author meant hardware will stop selling, but that it has been commodified to the point where there's little future for innovation.

wslh 14y ago

Yes, Bill Gates vision of one computer per home was wrong: now we have more than three computers for every family member (notebook, mobile, tablet, e-reader)!