Ged Carroll

Category: business | 商業 | 상업 | ビジネス

My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.

At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.

I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.

Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.

I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.

Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.

  • Palm | HP portable devices

    I decided to jot down some thoughts on the demise of the Palm | HP portable devices business. I am not going to say whether it was the right or wrong thing to do mainly because other people have been doing that already.

    HP and the mobile device

    HP was arguably the original modern mobile computing device manufacturer, coming out with the HP-35 scientific calculator back in 1972. The company had a long history of being a pioneer in mobile computing; so the move away from mobile devices is actually putting an ending to a long line of devices.

    Compaq had a set of handheld computers in the mid-1990s called Aero. These ran DOS and Windows 3.1, being the predecessors of devices like the ASUS eeePC netbook.

    HP developed a number of PDA devices in the early and mid-1990s including the 95LX, 200LX, 100LX and the OmniGo 700LX which allowed a Nokia 2110 to piggyback on the PDA with a specially molded section on the back of the case.

    The Jornada series of devices was a range of Microsoft Windows-powered PDAs were launched in 1998 and had a number of achievements including the first Windows Pocket PC colour touchscreen device and a UK-only GSM smartphone. The Jornada brand was phased out following the merger with Compaq.

    The iPAQ succeeded Compaq’s Aero line in 2000 and the HP Jornada line after Compaq had been acquired. The last iteration of the iPAQ range was in 2010.

    The Palm range of devices were first launched in 1996, the operating system was tweaked and prodded over the next decade to power various different devices including the iconic Palm III, V and Treo range of smartphones. Ultimately it eventually came up with the webOS after repeatedly fumbling its future.

    This is a long and rich history of engineering innovation for which the Touchpad and Pre don’t stake up as worthy successors.

    Things I never got when the Palm acquisition was first announced

    I wrote up some bullet points of things that I didn’t fully understand when HP originally announced the Palm acquisition:

    • Is HP overpaying for the company? There isn’t that many people interested in Palm and analysts had set a target share price of zero. Is this price as much about emotion as assets?
    • Why is the Palm WebOS going to live up to HP’s faith in it?
    • Much was made of Palm’s cloud services technology in the webcast, but how many extra servers or services will it actually sell for HP?
    • SKUs. I was alarmed at the amount of proposed device variants HP was envisaging in the future on the call with possible support in differing form-factors for Microsoft Windows, Windows Phone, Android and WebOS in personal devices

    With the benefit of hindsight:

    • Unless HP manages to parlay Palm’s intellectual property assets into a patent war chest either through an auction or successful legal action, it is unlikely to make its money back on the Palm acquisition and its Palm | HP portable devices. There isn’t likely to be licensing revenues from other manufacturers that would make up Palm acquisition. Whilst, the current uncertainty around Android may make manufacturers open to looking at an alternative operating system; but why take on webOS when both Palm and HP couldn’t make it work properly? It’s not like both these brands didn’t have a good reputation and heritage in building mobile computing devices, also in order to license the operating system HP would have to maintain and continue to develop it. What would that road-map look like and why would HP continue to develop consumer-facing software given its renewed focus on the enterprise
    • I never did find out how webOS was going to live up to HP’s leap of faith in the operating system because it evidently didn’t pan out, hence HP withdrawing it’s Touchpad and Pre devices

    The value of the Touchpad and its implications for the webOS

    Many of the eulogies for the Touchpad and the Pre point out that webOS was good software held back by Palm | HP portable devices hardware chops. This was the same criticism leveled at the original Palm Pre; so it begs the question why didn’t new owner HP try and deal with the performance issues second time around? I suspect that the leadership of Palm knew that the original Pre sucked, which why it was kept out of journalist hands for so much of the launch period.

    Given the resources of a large company like HP, I would have thought that the former Palm engineering team and their new HP would not have wanted to continue making poor performing products; and instead would have looked to draw a line under everything with a superior device.

    Yet when you look at the price that the remaining Touchpad devices are flying off the shelves in the US: 99 USD, this tells you a lot about the perceived value of the product.

    The 99 USD price point is some 220 USD below the tear-down price of the HP Touchpad. The tear-down price is a conservative estimate of the total cost of a Touchpad to HP. Now you can allow for the fact that the product has some discount priced in because HP was withdrawing from the market, but even Nokia isn’t taking that kind of bath with its Symbian handsets.

    So a fair amount of this discount must be due to the device experience provided by the webOS software. The risk versus rewards offered to users by this operating system far outweigh the intrinsic value of the hardware on which it runs. I would have to question why anyone would want to license webOS? You can find more more related content here.

    More Links

    HP | Palm deal thoughts

    HP: What Léo Apotheker’s Decisions Mean | Monday Note

    HP gave up on cool webOS devices but promises webOS PCs and printers | VentureBeat

    HP TouchPad Carries $318 Bill of Materials – Teardowns at iSuppli

  • Aspiration of flight

    Inter-city rail services increasingly define themselves in terms of comparison to airlines. Take for instance the Chinese attendants recruited for the countries new Beijing-Shanghai ‘bullet-train’ route. The 403 women inductees look like classic air stewardess material and have gone through a similar kind of polishing process. The Chinese describe these attendees as ‘high-speed sisters’ 高姐. Find out more at the Shanghaist

    In the UK, you don’t have to look far for the aspiration of flight, rows of seats where you are not facing people are called ‘airline-style seats’ on the online ticket booking service and First Great Western even have gone to the trouble of recreating the airline safety card attached to the seat and a little fold-down drinks table.

    Virgin Trains have provided an integrated points system with other aspects of their business including Virgin Travel and Virgin Atlantic – their airline. Thankfully the airline doesn’t have the kind of odours that its train toilets seem to have, even when spotless. 
    Aspirations of flight
    The problem is that the actual experience isn’t like an airline in most cases, its bumpy and lurches from side-to-side on older parts of the track. At least Virgin has its Pendolino trains that lean into a turn and smooth out the side to side movement. On occasion Virgin’s tilting trains can make the walk to the buffet car like a simulation of being under the influence. And the overall ambiance of trains in the UK, if it did meet the aspiration of flight standard is generally more Ryanair than Singapore Airlines. 

    Instead of aping airlines with an aspiration of flight, why not emphasis what the trains don’t have like laborious security checks and having to spend hours in the crap department store concessions that now pass for airside lounges in the UK? More related content can be found here. 

  • News Of The World

    I was getting ready to give my presentation at the CIPR the other evening when the news broke on Twitter about the News of The World. There was a sense (which I personally believe to be wrong) that this was going to result in a revolution that would:

    • Take down News Corporation
    • Radically change the standards of journalism

    I want to hear a revolution out there

    When Karl Marx wrote his book The Communist Manifesto, he would have anticipated that the class struggle would have gone into revolution in the United Kingdom. At that time, the country was pioneering the industrial revolution and many members of society had every reason to be dissatisfied with their lot in life. Instead his writings inspired revolutions in the mainly agrarian societies of Russia and China. Whilst, the UK provides foreigners like Marx and Engel with the freedom to express their views in a manner that wouldn’t have been tolerated in their native Germany, the country also had an effective state security mechanism in the Special Branch of the police. But writers and thinkers have speculated that there is also something ‘counter revolutionary’ in the UK psyche.

    Probably the closest we came to seeing it was the economic induced Jarrow march and the industrial disputes of the 1970s; which were as much a kick back against useless management teams in companies and a lack of investment, as they were a rising up of the proletariat.

    Social rather than political movements didn’t get much further; the summer of love brought the modern fractured nuclear family. The backlash of punk ushered in the yuppie and the ravers of 1988 that were a reaction to the grim social and cultural reality of Thatcherite Britain with a bit of weekend hedonism turned into the controlling Big Society of today. All of these events felt as if the world was going to be changed; but it didn’t in any meaningful way. The UK hasn’t had a media industry equivalent of the Arab spring.

    Most of the noise around this is happening on Twitter and in the media of the middle classes rather than the heartland of the News of The World. They don’t speak for the minicab driver, the hairdresser, the plumber or the joiner; who are more likely to be worried about the latest antics of Cheryl Cole and where are they going to find the same quality of sports reporting in another Sunday paper?

    News Corporation resilience

    Rupert Murdoch has experienced many ups and downs as he built News Corporation and whilst the current News Of The World scandal is no doubt upsetting it isn’t the closest his business has come to going under. In terms of the organisation as a whole, the boiler plate on News Corporation press releases says everything that needs to be said:

    News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) had total assets as of March 31, 2011 of approximately US$60 billion and total annual revenues of approximately US$33 billion. News Corporation is a diversified global media company with operations in six industry segments: cable network programming; filmed entertainment; television; direct broadcast satellite television; publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and Latin America.

    As a business it exists pretty much as they present it, it is not a paper tiger like the investment banks or Enron and the current event is considered in the wider world to be a UK issue, so there is little likelihood of contagion to his other properties worldwide in terms of lasting reputational damage.

    Regroup, rebrand

    As the News Of The World shut down, rumours swirled around about The Sun going to a seven-day production. There is a strong business case for them to do this and the current phone hacking scandal debate just provided a great catalyst. Moving to a seven-day newspaper provides a number of opportunities for News International:

    • The Sun’s brand has been stronger and it simplifies the company’s brand portfolio; money is only required to support one brand
    • It allows News International to remove duplication, particularly at senior levels within the papers, so reducing the wage bill whilst increasing profitability

    Unlike the Wapping strikes of the 1980s News Of The World journalists being laid off would have little sympathy from the public at large; I doubt even the NUJ would be likely to back them in the face of the current scandal. This provides News International with a unique opportunity to rebrand and regroup around it’s flagship Sun brand. I think that it’s no coincidence that Rebekah Brooks said that News International would seek to ensure that as many of the journalists as possible were re-employed as soon as possible.

    Confluence of interest

    The proposed media revolution exposes too many interests to chaos and the system like a knitted jumper is too intertwined: pull one thread and the entire sweater would unravel leaving something useless behind. It is in no one’s long term interest to tug on that thread.

    In 1992, with the re-election of a Conservative government backed by News International’s media The Sun ran a headline ‘It’s The Sun Wot Won It’. Tony Blair worked hard to build a relationship with Rupert Murdoch and one of the factors that was seen to help him win power was the tacit approval of the News International papers. Like the political power masters of old, News International can move a bigger block of voters than the Guardian Media Trust papers or the Trinity Mirror Group.

    Secondly, for every story that gets run, there are ten papers that don’t see the light of day. What would happen if the media was threatened?

    Ethics: the thin end of the wedge

    There is speculation that the phone hacking tactics that News of The World employees and contractors have been accused of has also been practiced at other media publications and that evidence will come to light of contagion of dishonesty. A measure of how true that is, was the desire for British journalists to work on the US equivalent of the UK red tops because of their unique no-holds barred approach.

    • What about payments for stories? Do these induce whistle-blowing for profit, or computer hacking?
    • What about dumpster-diving?
    • Or getting people drunk to then interrogate them?
    • What about the use of blackmail to persuade sources to cooperate which was one of the allegations made in the Max Moseley case?
    • How ethical is if for the government or organisations to leak stories?
    • Will journalists now need to be completely transparent about ‘sources close to the matter’? This would mean that journalists couldn’t pad their articles out with speculation, but it also means that PR teams would have to restrict access to spokespeople as briefings couldn’t be done to provide context or background without attribution

    The interface between society and the media would fall apart with the media left out in the cold about hard news stories. The social norming around these issues would be shut down and the sausage factory would be put back under wraps before lasting damage is done or the ramifications in business, politics and even the arts would ripple through every aspect of society. It is an imperfect system as it is, but one that works for most of the people most of the time.

    The media marketplace

    The Romans used to talk about ‘bread and circuses’ to keep a population happy and there is still an element of truth in that phrase today. The News of The World and their peers fill that gap. A media that falls to deliver to that need, fails to sell to a large proportion of the UK population. Whilst lip service may be paid to high standards, journalists will have to deliver what ever is required to keep the printing presses running and the website online. Despite the moral stance of O2 amongst others in pulling advertising from The News of The World; advertisers generally follow the audience in terms of their media spend. More media related commentary can be found here.

    More reading

    Did Twitter kill a newspaper? Of course not – GigaOM

    Phone Hacking Scandal live updates – The Guardian

    Why did Murdoch close the News Of The World? Daily View – BBC News blog

    Message from Rebekah Brooks to all News International staff

    Statement from Rupert Murdoch, Chairman and CEO, News Corporation regarding the phone hacking allegations

  • MySpace

    This has taken longer to write than I would have liked since TalkTalk Business still has me living the analogue lifestyle at home. I wanted to put finger to keyboard because much of the coverage around MySpace acquistion focused on:

    • The difference between what News Corporation paid for the social network and what it then sold the assets for
    • The decline in MySpace as a social network, the sale was another milestone for the MySpace story to be repeated

    There was less attention paid to the Specific Media side of the story and what would they be likely to do? It’s probably easier filter this out by what they won’t do.

    • Revitalise MySpace as a social network. That dog won’t hunt: like a restaurant that is no longer fashionable or a nightclub that has lost its buzz – lightning won’t strike twice. You would be better off starting again, simply because you could get rid of a lot negative brand perceptions, rather than trying to get people to come back. This is pretty much the same fate for ideas around going back to being a music-marketing brand
    • Change the game. This is the path that Friendster is taking with its new Malaysian owners, who are keeping customers network login in details and their social graph, but positioning the site towards social gaming. Existing social network members had the opportunity to download photographs and other details from their soon to disappear profiles. MySpace could try that but it would need some social gaming content like Farmville…

    Do nothing but monetise it. I personally think that this is the most attractive option. At the time of writing this post, Demand Media has a market value of about 1.1 billion US dollars. But it has that valuation based on the growth potential in its content factory model, one which according to Business Insider isn’t making sufficient money. What MySpace allows Specific Media to do is flip the Demand Media model on its head.

    It is primarily a sale of people’s content to which advertising can be put against. Consumers generally leave MySpace profiles dormant. Drop them an email, talk about new features and at the bottom of it an opt-out option to make their blog posts public and ‘Hey presto’ instant content farm.

    What people didn’t realise about MySpace was that it wasn’t only music marketing and Tila Tequila pictures, but professional content from the likes of the CIPD and soccer mom’s photo albums. So there is a diverse range of material to be monetised. Well worth the 35 million US dollars that Specific Media has paid out for the moribund social network.

    Sure it’s cheap advertising, but it could be put against relevant content and it wouldn’t even have to split the profits with the content providers in the way Google has to. More related content can be found here.

  • Walmart

    Today some of the most successful companies out there are ones that have a key technology platform and Walmart looks like it will be joining them:

    • Retail: Amazon, eBay, Alibaba
    • Office productivity: Google, Microsoft, Zoho
    • Telecommunications: Microsoft (Live Meeting and Skype), Cisco (WebEx)
    • Consumer services: Baidu, Google, Netease
    • Entertainment: Netflix, Amazon, Apple, PPLive

    I think we’ll soon see Walmart added to this list. At the present time the average consumer view of Walmart is likely to be that of a large, malevolent, low-class retailer in the US; the weird Yanks that bought ASDA in the UK and a trusted supermarket in China.

    What these perceptions don’t tell you is that Walmart has innovation in its corporate DNA. In 1987, they set up a satellite network connecting stores with headquarters over voice and data. When I was in college Walmart was associated with the ‘beer and diapers’ urban legend precisely because the company had a reputation for pioneering and pushing supply chain management and data-mining to the edge in order to maximise returns from its stores.

    Walmart like Amazon already has a large logistics footprint; some of the moves it has been making over the past 18 months make me think that the company is going for a big platform play – building a big box retailer online. Bear with me, while I run you through a few selected highlights:

    • Vudu – purchased in February 2010 by Walmart. The company provides stream on demand content that home audiences can pay for. The technology can be integrated into a variety of consumer electronics. It’s a digital content supermarket by another name
    • Kosmix – move forward to April 2011 and Walmart buys a social media platform that organises content by topic. Lots of smarts for social commerce, product reviews, marketing insights, customer services
    • Yihaodian – Walmart buys a minority stake in an e-commerce company with logistics in the high growth coastal areas of China. Due to the nature of the Chinese marketplace, that minority stake is the same level of commitment as acquiring a US business outright. The sale of physical goods in China maybe more attractive than the digital media market because the media industry is disrupted and alternative monetisation models are already well in place
    • Walmart is also starting recruit rock-star web tech talent with a particular focus on improving the mobile experience of their online properties

    More retail sector related content can be found here.