Derek Kerton 's Techdirt Comments

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  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 02 Sep, 2011 @ 04:07pm

    Re: Re: Re: Re: Re: uh, no... HP Tablet Fire Sale Lets Us Put A Price

    Nice try. Pulling out a subsidized price. Subsidies, obviously, mask the true price of the phone. The price Apple requires for the device is not the $99 you cite, as you know.

    Why would you cite that price, when you are trying to argue the price that Apple sells for?

    http://store.apple.com/us/browse/home/shop_iphone/family/iphone?mco=MjEyNTI5NjY

    Apple iPhone 3GS unlocked is unavailable. iPhone 4 16GB unlocked is $649. iPhone 3 is totally gone, as is 2G version.

    So far, Apple does not appear to be motivated to offer a cut-rate iPhone. The unsubsidized market price is $650. Anybody honest would admit that is the high end of the market.

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 02 Sep, 2011 @ 03:58pm

    Re:

    Umm... It doesn't look like you and I are debating the same topic...or at least I think you are blurring the lines.

    The situation with HP is unique. They have announced they are done with WebOS. There will be no more production once commitments are through. They have no further R&D to do. They are not doing the fire sale through retailers, but mostly direct through twitter and HP website. They have no intention to build market share. The don't intend to make money from the next version, because there won't be one.

    Now, I did talk about Amazon in the original article, and in their very different case, they could sell a tablet at cost, and hope to make money on media and app sales. I thank you for pointing out in your prior comment what was already in the original article. However, the current device remains a Kindle, without access to the Android Marketplace, and is not sanctioned as an Android tablet by Google. A tablet that IS would be a different product, and a potential winner.

    If you want to haggle back and forth whether the HP cost/unit is $318 or 328 or 338, frankly I don't much care. You're worrying about detail, while misunderstanding the discussion. You are confusing the market exit of HP with the market entry strategy of other tablet makers. You can't act like anyone ever wrote that this is a great long-term tablet roadmap for HP, to which you could reply:

    "HP has none [roadmap]. Lose millions. Make it up in volume. Gotta laugh..."

    No, I gotta laugh. Read the first damned sentence of the article, way up top. There is no roadmap, there is no road. It's a shutdown.

  • On the post: Man Claims Apple Investigators Pretended To Be SF Police In Searching For Lost iPhone Prototype [Updated: Or Not]

    Derek Kerton ( profile ), 02 Sep, 2011 @ 03:20pm

    Re: LOL

    It's actually the real surname of Christopher Columbus. Colon even has a long weekend holiday named after him. You know it as Colon Day, October 10.

    District of Colon
    Colonialism, Colony
    Space Shuttle Colon
    Ivy League College, Colon
    Colon River
    Colon sportswear.

    All in all, highly respected.

    ...not that it would help as a kid on the playground.

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 02 Sep, 2011 @ 02:12pm

    Re: Re: Re: uh, no... HP Tablet Fire Sale Lets Us Put A Price

    You make valid points about the SG&A costs, which I don't discuss because of brevity. BoM is considered the hard costs paid to suppliers, and does not include internal SG&A attributed to this single product, which would be impossible for anyone outside HP Corp Finance to determine. For now, $318+ is what we have to work with in terms of marginal cost per unit.

    You make invalid points on:

    retailer markup - HP can sell direct, as it is with the fire sale, or as Amazon does with Kindle. But it's true that to reach a massive market, retail is important. Direct works for fire sales, but not always.

    R&D, $1.2B investment - Sunk cost. Irrelevant. they also recuperate none of this with the fire sale or shuttering the product line.

    Next, I suggest that Moore's law will help non iPads. You say it will make them lacking because iPad will have moved on to quad core or the future best-of-breed. However, note that almost nobody pays $1.5k+ for a PC laptop anymore - although $1.5k+ laptops are still available. Turns out that, at a certain point, a quad core i7 laptop is not distinguishably different to the user over than an i3. Intel knows this, which is why they are now focused on changing the features of each generation as well as the clock speed. Are you the kind of guy who will rush out to get a 20MP camera, because you just aren't satisfied with the 3' X 5' poster prints your 10MP is giving you? My point is that, in two years or so, a cheap Android tablet ($200 retail) will give very satisfactory performance to the mass market. Like netbooks ate into laptop sales, these low-end tablets will eat into high-end sales. Will Apple lower their price to match? Perhaps, but their past strategy on the laptop PC side (and smartphone side...so far) does not suggest so. They will protect their margins and own the high end and let the others compete for the commodity market on the low-margin end.

    My analysis left gaps because it was brief. But you haven't pointed out anything incorrect in it. Yours, also brief, made errors like not ignoring sunk cost.

  • On the post: Are Any Of The Patents Google Got With Motorola Mobility Any Good?

    Derek Kerton ( profile ), 01 Sep, 2011 @ 10:10pm

    Re: Re: it's a smokescreen

    There was about $3 in short-term cash assets, too.

    You're right. All in all, the parts of the deal add up to more than $12.5B. It was a good deal.

    But, the STRATEGIC value is the patents. That's the motivator.

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 01 Sep, 2011 @ 09:46pm

    Re: uh, no... HP Tablet Fire Sale Lets Us Put A Price

    Brilliant observation...on the first half of the article.

    However, the high volume of units being sold on eBay creates a liquid market, which tells us that the true market price (on eBay) is around $250.

    So let's be sure to read into this at least as much as it deserves.

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 01 Sep, 2011 @ 07:25pm

    Re: Touchpads

    "critics shouldn't compare them to iPads which are much more expensive. That's like comparing economy cars to luxury cars, don't make sense"

    Disagree. There are few comparisons that are more apples to apples than the TouchPad (or Samsung Tab 10.1, or RIM PlayBook, or Motorola Xoom) vs. the iPad.

    Similar form factors, similar hardware, same target market, similar functions. The other OEMs are all basically chasing (and copying) Apple's success. How are these things not suitable for comparison?

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 01 Sep, 2011 @ 07:21pm

    Re:

    "If they're doing another production run on a product they were going to ditch, wouldn't that tell you..."

    No. That tells me they had components in the supply chain, manufacturing contracts, and minimum commitments. They will empty the supply chain, and be done.

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 01 Sep, 2011 @ 04:43pm

    Re: Re:

    Sidenote on what I just wrote about their TV ads focusing on the Apps.

    Isn't it evident that Apple realizes why they can charge such a $200-250 premium for their products, based on what aspect they choose to promote on the telly?

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 01 Sep, 2011 @ 04:41pm

    Re:

    "Apple hated 3rd party developers for soooo many years"

    Yeah. And Apple was AGAINST the idea of an App Store and downloadable apps for the first year of the iPhone. But they learned their lesson, and were able to turn on a dime. That's clever enough. And then their ads immediately began to focus on the apps, not on the phone. Take a look, it's pretty interesting to realize that the phone is not the star of the TV ads, but the app functionality IS.

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 01 Sep, 2011 @ 04:38pm

    Re: $250-300

    Yeah. You gotta wonder why they didn't just decide to price the units at cost, $318, and see if they couldn't seed the market that way. Maybe it works, maybe not. But at least you get a shot vs. just killing it.

    But WebOS is dead now. HP euthanized it. They can't undo that. It's like Ben Bernanke saying the economy is @#$@. He can't come back the next day and say something to restore confidence.

  • On the post: HP Tablet Fire Sale Lets Us Put A Price On The Value Of A Strong Development Community

    Derek Kerton ( profile ), 01 Sep, 2011 @ 04:35pm

    Re: I'm not sure you understand...

    For once, I'll say that this isn't a topic where economics offers the answer. It's more marketing.

    But I stand by the fact that the "fanboi" effect on pricing is not a factor anymore. How many fanboys are there? They are the people in line the first day the iProduct is available. But they are not the ones buying it 3 months later. The Apple products (and I'm not talking about desktops) are being sold to people with NO religion, no loyalty, and no horse in the race. They just like the product.

    Fanboys account for the first few days of sales, and they would probably pay much more for "FIRST" bragging rights. In fact, iOS products on eBay always sell at a big premium in the first days.

    The Android vs. iOS web comment battles are the exclusive domain of us geeks. The mass market doesn't care, and probably isn't even aware of the epic battle of who-gives-a-shit proportions that takes place online every day.

  • On the post: Are Any Of The Patents Google Got With Motorola Mobility Any Good?

    Derek Kerton ( profile ), 01 Sep, 2011 @ 12:18pm

    Re: Re: Just more money to waste...

    Correct.

  • On the post: Are Any Of The Patents Google Got With Motorola Mobility Any Good?

    Derek Kerton ( profile ), 01 Sep, 2011 @ 12:17pm

    Re: Re: Wrong Measure

    Have you factored in the reality that there is NO other valid reason?

    - Build your own custom phones:
    Nope, Google can already do this. Remember the 3 Nexus models?Also, a pretty telling example is Apple, that does not make the iPhone. It is outsourced to Foxconn. That Apple doesn't build the iPhone makes it pretty hard to argue that Google needs to buy an OEM to make a special, customized phone.

    - Channel conflict:
    The one thing that Google certainly gets with MMI is actually a negative. They scare off their OEM partners who don't like the fact that Motorola is likely to get preferred status.

    So, go ahead and argue that it was a BAD patent purchase if you want, but there is no other reason for the MMI acquisition that holds up to even light scrutiny.

  • On the post: Are Any Of The Patents Google Got With Motorola Mobility Any Good?

    Derek Kerton ( profile ), 01 Sep, 2011 @ 12:04pm

    MAD and Inflatable Fake Tanks

    It's about quantity. Remember, this is a Mutually Assured Destruction scenario, not an actual patent lawsuit. The way to win in a "cold war" is not to have the most/best weapons, but SIMPLY TO CONVINCE THE ENEMY THAT YOU DO.

    Thus, we have military 'game theory' strategies like inflatable tanks, which look like real tanks from satellite or airborne surveillance. The message, don't attack us on this flank, because we've got tanks up the wazoo.

    For nukes, you don't actually need all the nukes. You just need a few highly visible nuclear tests, then you build missile compounds with visible terrestrial surface features. You don't really even need to dig the subterranean components. The 'bad guys' will think you've got ICBMs with nuke warheads down there, and will not launch their fake missiles because if they did, you would fake bomb the shit outta them.

    In some 17,000 patents, nobody is expected to take the time to find out if there is a "real bomb". All it takes is one, and everyone just assumes that among 17k, there probably is one that is ticking.

  • On the post: FCC Asks AT&T To Explain Discrepancy Over Claimed Need For T-Mobile vs. Internal Discussions

    Derek Kerton ( profile ), 26 Aug, 2011 @ 12:15pm

    I'm For The Deal

    The above article shows that AT&T has overstated/exaggerated/lied about one of their arguments supporting the deal.

    That's not good, but it's hardly news to me, nor was this particular claim of theirs even that credible to begin with. AT&T is making a variety of claims on the pro side of the deal, some true, some specious. The people on the con side of the deal are doing much the same. When has the beltway lobby circuit ever had a debate that was not thus?

    The reason I support the deal is because I don't like government market interference unless it is necessary (which it often is). I see a fairly competitive market, with many new competitors entering the market, and I see T-Mobile as a fading power.

    Most people look at this deal by considering the T-Mo and the market of TODAY. Today, T-Mobile is arguably the best competitor out there. They offer lower pricing, a national network, competitive phones, and relatively good customer service. They have been, and remain today very important to competition in the US marketplace.

    But what everyone seems to fail to consider (since they don't spend their day analyzing telecom and predicting trends) is that the independent T-Mo is at an impasse. It is out of spectrum. This is why Deutsche Telekom wants to unload it. T-Mo is doing great in a 2G and 3G market, but has NO spectrum for 4G, and NO roadmap to be competitive in 3 years. It's spectrum is completely full (unlike, say Sprint), and they did not win any more at the 700MHz auction.

    In 3 years (if no merger), Sprint, MetroPCS, Verizon, AT&T, Clear, and others will all have 4G networks, and the latest and greatest phones running on them. T-Mo will be stuck offering the best 3G phones available (like bringing a knife to a gunfight). Sprint will use its excess spectrum to be more competitive and will become the low-price national competitor. T-Mo will be low price, but also low-quality because of the lack of 4G. MetroPCS and others will grow and remain the best priced packages, but will remain regional with national roaming.

    Some of these companies will be increasingly significant:
    MetroPCS
    Clearwire
    Cox cable
    Comcast
    LightSquared
    Dish Network
    Leap / Cricket
    Wi-Fi (or some new technology)

    They have all made serious moves towards entering or expanding in the wireless market.

    So, tell me again why we need T-Mo to make the market competitive in 2013-2020?

  • On the post: FCC Asks AT&T To Explain Discrepancy Over Claimed Need For T-Mobile vs. Internal Discussions

    Derek Kerton ( profile ), 26 Aug, 2011 @ 11:59am

    Re: Re: Re: Re: Of course it will get approved..

    Nope, they are for it. And parent company Deutsche Telekom is for it. They want to cash out, since T-Mo is performing poorly, and the future prospects aren't that good.

    The question facing policymakers should not be "do we want to approve this deal?" That implies we should have government meddle in deals, "approve" of whatever we do, and distort business unnecessarily.

    The question should be "Is this deal detrimental enough to the state of competition in the industry that we should choose the strong and undesirable move of market interference in order to protect consumers?"

    A case can be made for the second question on either side of the debate. But THAT should be the question.

  • On the post: FCC Asks AT&T To Explain Discrepancy Over Claimed Need For T-Mobile vs. Internal Discussions

    Derek Kerton ( profile ), 26 Aug, 2011 @ 11:53am

    Re:

    "We need more competition in the mobile world, not less."

    It's coming:

    MetroPCS
    Clearwire
    Cox cable
    Comcast
    LightSquared
    Dish Network
    Leap / Cricket
    Wi-Fi

    The market does not need T-Mo to be competitive. Many new entrants are entering / about to enter / planning to enter. Many of the have already bought spectrum for $ billions.

  • On the post: Concord PD Hits For The Cycle: Lemonade Stand + Camera + Wiretap Law

    Derek Kerton ( profile ), 25 Aug, 2011 @ 10:13pm

    Re: Re: Re:

    You actually argued back?

    I mean, you were called out and busted about your lack of comprehension of a single, specific word...and you are stubborn enough to argue back about the definition of surreptitious without (obviously) even clicking over to a dictionary site to look it up.

    That is so weaksauce/pigheaded/lame/wrong and immediately proven so that I am impressed by how brazenly you executed it.

    Here's a link, Lazy Joe:
    http://dictionary.reference.com/browse/surreptitious

    and since you probably can't be bothered, here's on for "authorized"
    http://dictionary.reference.com/browse/authorized

    Was the camera surreptitious? The fact that the Market President and the police immediately saw it, and demanded it be shut off prove that it was not surreptitious.

  • On the post: Concord PD Hits For The Cycle: Lemonade Stand + Camera + Wiretap Law

    Derek Kerton ( profile ), 25 Aug, 2011 @ 09:50pm

    Re: Re:

    Yeah. I wish there was somebody who would go out on the streets and fight to support civil rights. You know, be fully informed of his rights, stand up to power, and win a few small battles. So we could all just sit back on our asses and enjoy summer and potato chips.

    When will someone like that be the main subject of the video and topic of this article in this blog?

    sarc off

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