For the past few years, holiday cheer has been in short supply for electronics retail chains.
Just two years ago, around this same time, we saw the bankruptcy and closure of CompUSA. Last year it was Circuit City spiraling toward extinction right before the crucial holiday shopping period.
Though both brands have been since revived, mainly as online discount destinations, their time as serious competitors with physical stores is over. Looking back, it's clear their demise was brought about by a languishing consumer economy, but also by the unrelenting competition from uber-discounters like Wal-Mart and the convenience of Amazon.com.
Will the discount retailer drive other competitors out of business this holiday?
(Credit: Wal-Mart)Wal-Mart, a giant among brick-and-mortar and online retailers, has been able to repeatedly deal crushing blows to rivals with its hard-to-beat pricing, particularly at what's seen as a crucial time of year for retailers, between Thanksgiving and Christmas. Though the overall economy is in nowhere near the terrible shape it was a year ago, will Wal-Mart be able to drive even more brick-and-mortar electronics retailers into the ground?
The traditional start of the holiday shopping season is the day after Thanksgiving, known as "Black Friday," when retailers attempt to get into the black on their yearly balance sheets. With fewer brick and mortar retailers that deal solely in electronics this year, Wal-Mart has already begun another sustained attack on pricing this holiday.
Though Walmart.com has about half the number of unique visitors to its site than Amazon during any given month, according to Compete.com, the company hopes its name will continue to attract people pinching pennies while looking for gifts this year.
"Everyone expected that consumers would be going to Wal-Mart in stores or Walmart.com because people migrate to value when the economy gets difficult," Raul Vasquez, CEO of Walmart.com, says. "We've had a higher percentage of people buy products than even a year ago. We do feel very good about the holiday."
With an average of 10 million to 15 million visitors per week to its site during the holiday shopping period, and 10 million on Thanksgiving Day alone, according to internal counts, Walmart.com is taking advantage early. The online destination for the world's largest retailer is specifically ratcheting up the pressure on its electronics competitors, even weeks before Black Friday. For the last few weeks, for example, it's begun offering 97-cent shipping fees on all gadgets except iPods, as well as discounted bundles of what are expected to be the most popular gift items this year: things like the Nintendo Wii--anticipated to be one of the top sellers by retail trend analyst site Retrevo--plus games and two controllers, digital cameras and cases, as well as Netbooks and USB drives.
But Wal-Mart's chief competitors are following suit. Best Buy, Wal-Mart's only real remaining national brick-and-mortar rival in consumer electronics, did better than Circuit City, but still barely survived the bleak holiday period a year ago. Amidst what former CEO Brad Anderson called "the most challenging consumer environment our company has ever faced," Best Buy saw its earnings drop 77 percent and was forced to offer thousands of buyouts.
Though things are looking slightly better this time around, Best Buy is having to slash prices early, too. Starting two Sundays ago, the retailer began offering some deeply discounted flat-screen TV prices. And beginning the day after Thanksgiving, the regular Black Friday bonanza should proceed as usual. Though Black Friday sales can be counted on to pad the quarterly profits, just how much will be an important indicator of the health of brick-and-mortar electronics retail.
Early starts
To take full advantage of consumers' seeming powerlessness to resist great deals, most retailers have looked beyond Black Friday--the day itself--to get people in the door or poking around on their Web sites.
"Black Friday is one of our top sales days," said Walmart.com's Vasquez. "Thanksgiving is a big day, the day after, and then usually one of the Mondays in December...It's a bit of a cage match between those."
Amazon.com, in great financial shape going into this holiday, also looks at the entire month-long period as a potential for big sales.
"The whole week (of Thanksgiving), starting Monday is a really big week," said Amazon spokesman Craig Berman. That's when Amazon started rolling out its most attractive holiday pricing on electronics. Every day this week there will be timed sales, with new items discounted between 10 percent and 60 percent. From hard drives, watches, digital picture frames to notebook PCs, limited numbers of items will be discounted for four-hour periods, or until the stock is gone.
(Credit:
Screenshot by David Martin/CNET)
The Monday after Thanksgiving, often called "Cyber Monday," is traditionally a day when e-tailers chop prices and make a big holiday discount push, but Amazon has found it also does well even as Christmas approaches. Thanks to procrastinating gift givers, even on days without a focus on lowered prices, Amazon fares well. "Historically, our busiest days happens in mid-December, close to one week out from the free SuperSaver Shipping deadline," said Berman.
Smartphone shopping
Ultimately, they're all angling for even the slightest edge to get consumers online or in stores, no matter what day it is. One of the ways they're doing that is by embracing a new trend popular with many consumers. This year, almost all major electronics retailers have a mobile applications that enables shopping or doing price comparisons directly from a smartphone.
Amazon has apps for both the iPhone and BlackBerry that are mini versions of the site, allowing shopping, price comparison, order tracking, and more. Best Buy, Target, eBay, and others (see here for a full list) have gotten on the iPhone app bandwagon too with similar mobile sites, though it's not yet clear if they're boosting business. Wal-Mart has an iPhone app too, specifically for gadget shoppers. It lets users take a photo of a wall at home, input how far away the couch is, and the app will recommend what size TV to buy and the manufacturers that sell it.
Walmart.com says it is already seeing results. Without divulging specific numbers, TV sales growth this year has been "in the very high double digits," according to Vasquez. "It's outpacing our site growth."
The new Roku Channel Store now has 13 free content channels.
(Credit: Roku)Aiming to expand beyond movies and baseball, set-top box maker Roku is adding 10 new content channels ranging from social networking to music and podcasts.
Roku, which makes a small, wireless device that can stream content from the Web direct to any TV screen, is expanding from 3 channels to 13, as expected. Channels for Blip.tv, Facebook Photos, Flickr, FrameChannel, Mediafly, MobileTribe, Motionbox, Pandora, Revision3, and TWiT will join the current lineup of Netflix, Amazon Video On Demand, and, more recently, MLB.TV. All of them will be available in the newly christened Roku Channel Store.... Read more
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Dell reported its third-quarter earnings results Thursday, showing a small improvement over the last quarter, but revenue was down 15 percent over the last year, and profits fell 54 percent.
The company reported revenue of $12.9 billion, within analysts' expectations between $12.8 billion and $13.5 billion. Earnings were 17 cents per share, when excluding 6 cents of pretax expenses and amortization. That's 54 percent off the 37 cents Dell recorded a year ago.
Besides its acquisition of Perot Systems last month, there weren't too many positive signs in the recently completed quarter. Shipments were also down 5 percent across its businesses.
Chief Financial Officer Brian Gladden pointed to built-up inventory and weak pre-order demand for Windows 7 machines as something that negatively affected the company's quarterly results.
"We saw some weakness in orders in some of the weeks preceding Windows 7... our inventories were in place and people were waiting to see how the launch went," he said on a conference call with reporters Thursday. "After the (October 22) launch we saw a surge in orders. We believe that affected our October revenue a bit, but we'll ship that through in the fourth quarter."
Gladden did try to point out more positive signs for the company during the quarter, noting, "We significantly improved over the 23 percent (quarterly revenue) decline from earlier this year."
He said Dell has been focusing as much as possible on decreasing its costs and building back its enterprise business. The company was hit particularly hard by the economic downturn of the past year due to its heavy investment in business customers, but things are beginning to look up now, according to Gladden.
"These results are showing some encouraging signs for us, especially in large enterprise and SMB (small and medium businesses)," he said.
Founder and CEO Michael Dell said he expects companies to begin to order new PCs as part of the so-called "refresh" cycle starting early next year.
"With an aging install base ... an accumulation of new technologies with hardware, software, virtualized clients...IT managers know they can't extend these assets forever," Dell said. "I think it will be a refresh that occurs over perhaps 18 months. I can't remember a time when a high percentage of (IT managers) skipped an entire operating system."
Gladden spoke more specifically about two consumer segments. On the just-announced Dell Mini3 smartphone for China and Brazil only:
"Our strategy is a carrier-centric strategy. We've had relationships with China Mobile, where we've sold a lot of 3G-enabled Netbooks." He said that both Brazil and China were large opportunities for Dell, but he avoided a question about whether that phone would be coming to the U.S. or other markets soon.
On Netbooks: They're "one of the more challenging segments in terms of cost position." Gladden said they'll mostly be making deals with carriers going forward. And in general, low-end notebooks are "driving the competitive dynamics right now" in the PC industry because of rapidly dropping prices.
Dell shares were down about 6 percent to $14.93 in after-hours trading.
This post was last updated at 3 p.m. PT with comments from Michael Dell.
The Cray XT5 supercomputer.
(Credit: Image courtesy of the National Center for Computational Sciences, Oak Ridge National Laboratory)The Cray XT5 supercomputer known as "Jaguar" has finally clawed its way to the title of fastest computer in the world.
Sitting back at No. 2 on the Top500 list of supercomputers for more than a year, Jaguar overtook IBM's "Roadrunner" according to the twice-yearly list that will be unveiled Tuesday at the SC09 Conference in Portland, Ore.
Jaguar beat out the competition by showing it can process 1.75 petaflop/s, or quadrillions of floating point operations per second, according to the Top500 Linpack benchmark. IBM's Roadrunner was pushed back to No. 2 by posting a processing speed of 1.04 petaflop/s, a dip from the 1.105 petaflop/s it reached in a June 2009 test. The slower performance this time around is apparently due to a repartitioning of the system.
Every six months when the Top500 List is released the threshold to grab a place on it gets higher. The slowest supercomputer (No. 500) on November's list posted a speed of 20 teraflop/s, up from the 17.1 teraflop/s of six months ago. In other words, what is the slowest computer this time around would have been No. 336 in June.
Kraken, another Cray XT5 system, jumped up two places from its former No. 5 position by posting a processing performance speed of 832 teraflop/s. IBM's BlueGene/P, from Forschungszentrum Juelich in Germany, came in at No. 4 with 825.5 teraflop/s. At No. 5 is China's Tianhe-1, the highest ranking ever for a Chinese supercomputer.
The top 10, while still dominated by supercomputers housed in the United States, had just one newcomer. That would be Sandia National Laboratories' "Red Sky," a Sun Blade system that posted a Linpack performance of 423 teraflop/s.
Just as the last time the list was released, the Top500 list is made up mostly of Hewlett-Packard and IBM computers. HP accounted for 210 of this year's 500, and IBM 185. In terms of processors in use, Intel still enjoys the lion's share, with 80 percent. The most popular operating system is Linux, with 90 percent of the Top500.
Here's the Top 10:
Jaguar, Cray, Oak Ridge National Laboratory (1.75 petaflop/s)
Roadrunner, IBM, Los Alamos National Laboratory (1.04 petaflop/s)
Kraken XT5, Cray, National Institute for Computational Sciences (832 teraflop/s)
JUGENE, IBM, Forschungszentrum Juelich (825.5 teraflop/s)
Tianhe-1, NUDT, National SuperComputer Center in Tianjin (563.1 teraflop/s)
Pleiades, SGI, NASA Ames Research Center (544.3 teraflop/s)
BlueGeneL, IBM, Lawrence Livermore National Laboratory (478.2 teraflop/s)
BlueGene/P, IBM, Argonne National Laboratory (458.61 teraflop/s)
Ranger, Sun, Texas Advanced Computing Center (433.20 teraflop/s)
Red Sky, Sun, Sandia National Laboratories (423.9 teraflop/s)
For the full Top500 List head to the official site.
The settlement between Intel and Advanced Micro Devices isn't just a matter of business between companies.
Sure, it's a big financial deal when the biggest chipmaker in the world forks over $1.25 billion to its closest competitor. And the settlement, announced Thursday, officially puts an end to a five-year battle over licensing disputes and AMD's complaints of unfair competition.
Beyond that, there will also be an effect on the two chipmakers do business with PC makers, and how they price their chips. Still, the settlement won't likely foment major changes for consumers shopping for a new laptop or desktop.
Choice
AMD processors are readily available from most PC makers, the major exception being Apple. If you really wanted one before the settlement came along, it's not like you couldn't get an AMD-based machine in stores or online. Intel now has agreed basically to not punish PC makers that choose to put AMD chipsets in some of their machines, but that doesn't mean Hewlett-Packard, Dell, Acer, Apple, and others will suddenly want to use AMD's latest chip in their flagship products. AMD will probably continue to be used as the "value" option for PC makers looking to offer cheaper notebooks.
PC prices are already pretty low thanks to the Netbook movement brought on by Intel, Acer, and others.
(Credit: Acer)That said, there is room for AMD to increase its share in processors used in laptops. The company has made improvements in that area recently, particularly in the ultrathin category, according to observers. So if you're paying attention, you might see more from AMD when shopping for a new laptop.
Prices
My colleague Brooke Crothers made an excellent observation last week, that Intel, while accused of dampening competition with AMD, has actually kept prices very low for consumers buying laptops. Thanks to the Netbook movement, which Intel spurred with its Atom chip starting in late 2007, the average price of the small, lightly featured Netbooks is now below $500. While not everyone is in the market for a Netbook, all shoppers have ended up benefiting. In order to recoup some of the lost profit due to the popularity of Netbooks, the industry--led by AMD and its consumer-ultra-low-voltage chips--has now focused on selling ultrathin laptops, which typically cost somewhere between $500 and $900.
Though one might assume that Intel and AMD hitting reset on their competition and going head to head would bring prices down, that's not likely. If anything, prices may actually go up a bit, said Gartner analyst Martin Reynolds.
"This [settlement] potentially means that products cost a little more to manufacture because we don't have this irrational competition between the two," he said. "[PC makers] won't be able to pit the two against each other as much."
Speed to market
What matter to consumers most are price and capability. What matters to Intel and AMD is getting faster, cheaper processors that enable better battery life in laptops into as many new computers as possible. The speed of this cycle is very important. The faster the two companies come out with new products, the more often people will go shopping for new laptops.
AMD's product road map has severely suffered in comparison to Intel's over the last several years. Intel whips out new products on a regular yearly schedule. A quick infusion of $1.25 billion from Intel should do a lot to help AMD fund new product design in order to better keep up. Again, there won't be a significant change immediately, but over time we may see their speed to market pick up, Gartner's Reynolds noted.
Besides money, the end of the legal squabbling also means that AMD is freed up from focusing on the lawsuits and what Intel has done wrong, and can help the company focus on the task at hand: making good products at reasonable prices. So if not directly, the settlement will at least indirectly benefit those looking for laptops and desktops at their local retailer or online.
Of course the vast majority of shoppers, outside of those tuned into technology, probably won't pay much mind to whether there's Intel or AMD inside the laptop as long as it meets their expectations, said analyst Michael Gartenberg.
The buying decision is actually very simple usually, he said. "Does it even matter anymore? It's about who's delivering the cool machines at the price that I want."
In a move that should please developers, Apple has added the ability to track an iPhone application's progress through the review process.
As Wired first noted, Apple's Dev Center site now includes status updates for apps wending their way through the reviews queue. Apps are now noted as "waiting for review," "in review," or "ready for sale," along with a time stamp.
It's a small concession by Apple, but an important one in keeping developers in the loop. Some iPhone app makers have complained vociferously about the often frustrating process in which applications are submitted and ultimately approved for or rejected from appearing for sale in the App Store.
Though the store has accepted app submissions for more than a year, it wasn't until August that Apple made its first public comments on the inner workings of its reviews process. At that time, the company tried to assure developers that 96 percent of all applications submitted were approved within 14 days. But with the 100,000 applications currently available in the App Store (Apple is receiving something like 8,500 new and updated submissions every day), many app makers felt lost in the shuffle with too little information.
On the heels of announcing its acquisition of 3Com, Hewlett-Packard also gave a sneak peek at its fourth-quarter earnings.
Though not scheduled to officially announce earnings until November 23, HP said Wednesday it expects to report revenue of $30.8 billion for the quarter on earnings of 99 cents per share. (Excluding one-time charges, it would have earned $1.14 per share.) While revenue was down 8 percent compared to the same quarter a year ago, earnings were up from 84 cents per share in the fourth quarter of 2008.
Analysts were expecting earnings of $1.12 per share and revenue of $29.8 billion.
"Solid execution drove exceptional performance for HP this quarter, fueled by significant growth in China," HP Chairman and CEO Mark Hurd said in a statement Wednesday. "We are delivering on our strategy and are well positioned going into 2010."
The company also raised its outlook for 2010. For the first quarter, HP is estimating $29.6 to $29.9 billion in revenue, and earnings between $1.03 and $1.05 per share excluding 13 cents per share of after-tax costs and charges related to restructuring and acquisitions.
Hewlett-Packard said Wednesday it plans to acquire 3Com, maker of network switching and routing products.
The deal is valued at $2.7 billion, or $7.90 per share. HP says the purchase is intended to boost its networking business, particularly in China, where most of 3Com's business is focused.
"By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center," Dave Donatelli, executive vice president and general manager of HP's Enterprise Servers and Networking business said in a statement.
3Com President and COO Ron Sege said he hoped that combining with HP's scale and large sales organization would allow him to get his products to more of the market quicker.
"I want to be able to grow faster...now we're going to have it," he said.
In addition to focusing on different geographic regions--half of 3Com's revenues last year came from its China operations--the two companies have little overlap in terms of products, which should make the integration of the two businesses simpler, Marius Haas, HP ProCurve Networking senior vice president and general manager, said Wednesday during a Webcast.
HP CEO Mark Hurd discusses his ambition to have a full 'stack' of IT technology at a Gartner conference in October.
(Credit: Stephen Shankland/CNET)The 3Com deal is the most recent in a string of enterprise-related acquisitions HP has made in the past year, including most recently file serving software maker Ibrix. HP wants to be a leader in providing customers with an integrated stack of computing technology ranging from servers and storage at the foundation all the way up to services, Chairman and CEO Mark Hurd said at a Gartner conference in October. But to be competitive these days, a company has to fully commit to each element of the stack.
"You can't be in any one of them as a hobby," he said. "Compared to any competitor, you have to bring a combination of low cost and total cost of ownership, supported by innovation."
The 3Com buy should position HP in position to compete better with Cisco, the largest presence in the networking and routing market. In response to 3Com's acquisition by HP, Cisco released this statement: "While Cisco has a healthy respect for all of our competitors, acquisitions in our industry only validate the fact that networking is becoming the platform for all forms of communications and IT. As the leader in the networking market, Cisco is very confident in our business strategy, commitment to product innovation and ability to provide strategic business value to our customers in a highly competitive marketplace."
The 3Com deal is expected to close in the first half of 2010. HP stock barely registered the news, inching up 0.08 percent to $50 in after-hours trading Wednesday. 3Com's stock rose 5.18 percent to $5.69.
CNET News' Stephen Shankland contributed to this report.
This post was last updated at 3:40 p.m. PT with comments from 3Com and HP.
U.K. wireless carrier Orange just started selling the iPhone, and it is trumpeting first-day sales numbers for the device.
(Credit:
Apple)
The carrier signed up 30,000 people with a new iPhone contract on Tuesday, its first day selling Apple's smartphone, according to a post on Twitter from a member of Orange's marketing department.
While 30,000 isn't necessarily a lot, compared to the "hundreds of thousands" of iPhones AT&T sold in its first weekend selling the iPhone 3GS in the United States, it's not bad for being the second carrier in a much smaller country, where the iPhone 3GS has been available for four months.
Until Tuesday, wireless provider O2 was the exclusive carrier of the iPhone in the United Kingdom. Orange currently has 16 million mobile customers, compared to O2's 22 million. Incidentally, Orange's experience as the second carrier of the device in a country would seem to make a decent case for Apple releasing the iPhone to more than one carrier in many other countries, including the United States.
The numbers were far more impressive than the iPhone's debut on China Unicom's network last week. China's first crack at selling the iPhone was by most accounts disappointing, with 5,000 units sold over the first four-day period.
Of course, China Unicom is dealing with factors Orange is not. Besides having to sell the iPhone without Wi-Fi connectivity, China has to contend with something U.K. and U.S. carriers largely do not: a vast market for iPhone knockoffs, or gray-market phones.
As mobile phones become more powerful and GPS information easier to get, it's getting to the point where we have to wonder if buying a standalone personal navigation device makes sense anymore.
Garmin is making both smartphones and dedicated GPS devices now.
(Credit: Antuan Goodwin/CNET)Personal nav devices were the hot gift item for the holidays just two years ago, but things have changed pretty drastically in the last year. Prices on GPS devices are dropping and while they're very reasonable, almost any smartphone sold today comes with some sort of GPS or mapping feature. So which is a better choice? Separate GPS device or smartphone with mapping software?
What's best for you will depend, like anything, on your personal needs and preferences. Some things to think about:
Mapping software on phones will soon be standard
Right now, 90 percent of handsets will have GPS features included, according to the NPD Group. That's a jump of 69 percent from a year ago. So in another year, it's likely to hit 100 percent.
Other market research firms, like iSuppli, are predicting that by 2014, there will be virtually no more market for standalone devices for GPS. While that's debatable, you might easily assume by looking at GPS device makers' recent product decisions, they're not even all that confident in the standalone device market anymore.
TeleNav, TomTom, and Navigon, companies traditionally associated with standalone devices, have decided to make their software available on smartphones. It was a big deal earlier this year when TomTom announced it would be offering its maps and voice-guided directions as an app for the iPhone. It was a big change for drivers because it added audible prompts--the iPhone otherwise is only able to provide text-based instructions through Google Maps. In addition, TomTom said it would make a car kit for the iPhone, which includes a vehicle mount and car charger. Other companies like Garmin, which makes standalone GPS devices, didn't just offer their software to smartphone makers, they decided to be a smartphone maker too.
Service providers are hedging their bets as well. Not only are they offering GPS devices that are networked (like AT&T's Garmin Nuvi 1690), they're pushing smartphones that operate on their networks with lots of mapping functionality. Glenn Lurie, president of AT&T's Emerging Devices division, disagrees that the dedicated GPS market will disappear. "It's about giving customers a choice. There's a market for both," he said.
Google Maps Navigation is free and will be available on Android 2.0 smartphones.
(Credit: Google)
Calculate the overall cost
Personal navigation devices are cheaper than ever. Right now, they retail for an average of $176, according to data from The NPD Group. While that's just an average (there are much cheaper and much more expensive models), it's also about the average price you'd pay for a smartphone with a two-year service contract. But remember all the associated costs: How much you'd pay monthly with that two- year contract for the phone, as well as any extras for a car-mounting kit (TomTom's iPhone app plus car kit is $220, for example), and for a mapping application or separate subscription service.
Google has recently added a new twist to this scenario, however. With its Android 2.0 mobile phone software, now running on the just-released Motorola Droid, Google is adding an application called Google Maps Navigation. With GPS-equipped phones, it can give turn-by-turn directions, and has voice recognition, and Google Street View. But more importantly: it's free. While it's not even close to being on every phone, Android is building momentum and will certainly will change the value proposition of smartphones as GPS devices going forward.
Decide how important it is to you to have a single device
If you'd rather not fuss with multiple gadgets in your purse or backpack, it's an easy choice: just get a phone that can give you directions. If it doesn't, there are plenty of reasons to get a GPS device.
Smartphones' screens are generally smaller to make them pocket-sized. As a trade-off, their screens don't make them ideal for in-car use as GPS devices. Also, phones with a GPS radio embedded in them will have their battery life affected. GPS devices that stay inside a car, usually have a car charger to alleviate the problem.
Of course, not everyone has a phone or even wants a phone that has mapping functionality. Or, you might be smack in the middle of a contract right now and want a GPS device sooner than a year or two. And what if you want to have a separate device that you can take hiking, or use separately while you're talking on the phone? There are arguments to be made on both sides, it just depends on what matters most to you.
