Monday, June 19, 2006
I was not much of an athlete growing up in England but I do remember that every street, alley, park or playground was an excuse for a game of football. With discarded sweaters as goals, teams of diverse numbers & ages would form merely for the fun of the game. On my travels I've seen similar pick up games all across the World except in the US where the Soccer Mom, Coach & YMCA League seem to be the only outlet. Parreira's point is that without these thousands of hours of unconscious refinements of skill the USA can never hope to compete with the soccer powerhouses. Of course England ain't been looking too great recently either!
However, the dubious appointment of former fast food executive Len Roberts and then the subsequent resume gaffs from his successor have brought this once highly regarded chain to its knees. Floundering between the big box electronics retailers and discount chains the stock performance clearly shows that the once proud Radio Shack has completely lost its direction. Unsuccessfully flirting with various third party manufacturers including RCA, Compaq, Blockbuster & Apple has only served to confuse the brand further.
A visit to your typical store will show a mish-mash of cellular phones, home entertainment equipment, computer peripherals, toys & electronic parts & accessories. Of course batteries are still a mainstay but the traditional selection of cables, parts and innovative problem solvers have been largely eliminated. Days were you could pretty much fix any electronic equipment with parts bought right at your local Shack. I remember finding an IC for an Otari 24 track recorder right there on the shelf. Nowadays you’re lucky to find an antenna cable let alone a replacement transistor.
Now the company’s reasoning behind these changes is that the homebrew electronics fan has largely disappeared and if you’re talking about the guy with the breadboard & smoking soldering iron then that reasoning is largely true. However he has been replaced by a much larger group, the home computer builders & PC hot rodders. Here is where Radio Shack has completely missed the boat. These individuals are into building the biggest, baddest home computers with clocked chips & neon lit cases; their retail source for parts? Not Radio Shack who helped usher in home computing and had a vast wealth of electronics knowledge but Frys Electronics, the abandoned grocery store retailer turned mass marketer. While Radio Shack are going toe to toe with Wal-Mart, Best Buy & a million corner store phone retailers Frys are selling high ticket microprocessors, hard drives and cases to the new generation of home experimenters. To add insult to injury some Frys are actually located in old Incredible Universe locations, themselves another failed Radio Shack project.
The Company’s current solution seems to be mainly cost cutting, plans are to close 700 stores worldwide in 2006, however, the investment community remain to be convinced and I’m right with them, Radio Shack just doesn’t have a product to sell anymore.
My advice? Get back to what made you great in the first place. Firstly, a neighborhood store that actually stocks the things you need to get that Best Buy HD TV to connect to your home stereo. Put together a high-tech parts selection with the kind of stuff the current generation of home experimenters want. People are editing videos and cutting CDs in their front rooms, you used to sell decent pro-am audio equipment, expand the line to offer the kind of hardware home creators need. And most importantly, staff the stores with people who know & understand the technology, “You’ve Got Questions, We’ve Got Blank Stares” is getting old.
Tuesday, June 13, 2006
All of which helps drive Apple's bottom line. Looking at the numbers the Cupertino folks make about 50% on every iPod sold and are set to hit the 50 million mark this year. Sites like Allofmp3, PirateBay and the traditional P2P networks help drive those sales. Even barely tech-savvy consumers know that there is an almost endless supply of cheap or free media to fill those hard drives. Apple's stock price has almost doubled in the past 12 months due in large part to this wide availability.
What about iTunes though? Don't the P2Ps & pirates eat into legitimate sales for Apple? Undoubtedly yes, but at an estimated profit of 4 cents per download it takes a lot of music sales to cover the profit in one Nano. Either way Apple gets their cake & eats it.
Monday, June 12, 2006
When will they learn? After tepid support for the War On Terrorism now various EU members are starting to grumble about the Digital Rights Management flags inserted in various downloadable media such as Apple's iTunes.
Naturally the French went first, claiming that Apple's restricting of iTunes music to no other portable than it's own iPod was against the interests of French consumers & that the music should be made available in a cross platform format. Now the Norweigans are getting into the fray, giving Apple until June 21 to comply with a similar order. The Swedes are close behind and to complicate matters further the EU is hearing complaints against regional pricing differences between iTunes downloads in violation of EU policies. Now to be fair to Apple they have largely been singled out because they are the largest supplier of downloaded music in Europe which represents over 20% of iTunes total music sales. And let's face it, no one has held a gun to a European head insisting they buy music from Apple.
However it seems that the Euros are increasingly dissatisfied with DRM imposed by US legislation and the real battle ground may be shaping up to be Allofmp3.com. I'll let the Wikipedia entry explain the site more thoroughly, however, according to their FAQ, they are completely legal under Russian law. Of course the RIAA is up in arms, claiming that Allofmp3 have no such rights and their downloads (about $1.75 for an entire album) are completely illegal. What must be doubly troubling to them is that the site is highly professional (no porn pop-ups or the like) and gives the customer download choices in both file format & quality. I'm just not sure how much jurisdiction the Recording Industry Association of America can claim in the Russian Federation or anywhere else? Therefore they are petitioning the US Trade Department to apply pressure on countries (Russia and China particularly) openly ignoring copyright violations.
These WTO tactics can probably have some effect on the piracy of hard goods such as designer handbags, watches & the like but digital music? To operate a site such as Allofmp3.com you only need 3 things, electricity, a server and an internet connection. I predict an endless game of international Whack-A-Mole with the RIAA fruitlessly chasing pirates around the globe.
But it's hard to find much sympathy for the RIAA, perhaps if they would leave hamming teenagers and low res pop videos on YouTube alone and concentrate on the real issues they might see some support. Right now, as Dicken's said "if that is the law then the law, sir, is an ass."