Scott, please read my last post ........ admittedly a difficult and complex discussion.
Oswald Spengler, please do not infer that I subscribe to his sometimes extreme beliefs the theory of cyclical history is an interesting thing to think about.
I warned you.
http://fatuma.net/text/Spengler_Man-Technics.pdf
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Artists everywhere are all part of the same community. What affects the Kashmiri (for example) indirectly affects me, and other people like me.
I am sorry radiosmuck, but you have lost me completely.
Big day tomorrow ...... time for sleep.
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Bad example, in which the CEM is only inflating the Apple stock holders (virtual) pockets, while competition is stiffed by the same corporation marketing engine. Do you have any idea what is the production cost of an iPhone in China? Triple that price to cover manufacturing in the US, and there will still be 300% profit margin. Which, of course, it is much worse than a 1000% profit margin.
Impressive activity. Apparently a topic many have opinions about.
Nigel, you and I had young years where electronic components and products were designed and manufactured in Europa. A great time for young engineers. Then, the component manufacturers figured out that the components could be made cheaper out east while the good profits would remain in Europe because nobody would have confidence in an Asian brand. Wrong! Then, the manufacturers of electronic products figured out that their products could be made cheaper out east in particular because the components were already made out there. The good profits would remain in Europe because the Asians could not handle sale of such products and establish a credible brand. Wrong!
Today in Europe, you can survive on design and manufacturing of small scale production for local customers. My origin is from a country that in the past lived very well on niche products. A bit like Switzerland. Today there are many players on such niche markets because they are pushed to small scale production as main stream production has left for the east.
Larger scale production, in particular of standardized items, is a no-go unless you have huge capital behind you.
There are believers among our members. Those who believe in capitalism and the free market - don't worry, the market forces will regulate the situation and solve our problems? Those who believe in democracy - don't worry the politicians and their administrations will solve our problems? Those who believe in institutions - don't worry, that patent system and copyright system will solve our problems?
I may have overlooked if anyone has noticed an important difference in the western world culture compared to Asian tradition. Short term profit against long term strategical thinking. Western decisions are often dictated by the next election or the next presentation of economical results to the stock-market. This is what decides the bonuses for management and another round for politicians. This was why electronic production left Europe some 15-30 years ago.
Japan decided for a dominating position in optics and motorcycles. A persistent effort knocked out most competition in Germany and England. I know many in the US do not see Japanese motorcycles as real motorcycles but that aside.
Asia took over ship building (large ships) over some decades. Perhaps with subsidies, but in the end Asia had a dominance.
Korea decided to go for the flat screen technology and today Korea, Japan and China are dominating. I recall ordinary batteries being manufactured in Europe, how many do not come from China today?
One states that communism implies stealing. My impression is that "communism" was a structure for agrarian production in Russia after the revolution. Is that what we electronic engineers fear today?
Copying is an intelligent human approach in particular when it concerns survival. Building on already existing successful solutions. I know it leaves a bad taste when we see a direct copy of an industrial product but we have copyright systems and patent systems to handle that? For the Anglo-Saxon world among other, how many films and shows are close copies of other entertainment products with success? In the car industry, how many makes had to copy ideas from other makes in order to gain reliability?
Yes, today there is much copying in a fierce market but there has always been.
Today it is possible with a modern household just made up of items of Chinese origin. Is it all that bad for Europe? No, there are other important products we may supply. Food. As far as I have heard, parts of Asia have problems feeding the huge population. Soon (almost) clean water may be a big problem many places in the world. But, European electronics industry is down for generations unless a political intervention is implemented.
The western domination seems in retreat at present and to a large extent due to mechanisms we should have foreseen. Nigel luckily lived in good times but the next generations in Europe have to think about other occupation than electronics.
Nigel, you and I had young years where electronic components and products were designed and manufactured in Europa. A great time for young engineers. Then, the component manufacturers figured out that the components could be made cheaper out east while the good profits would remain in Europe because nobody would have confidence in an Asian brand. Wrong! Then, the manufacturers of electronic products figured out that their products could be made cheaper out east in particular because the components were already made out there. The good profits would remain in Europe because the Asians could not handle sale of such products and establish a credible brand. Wrong!
Today in Europe, you can survive on design and manufacturing of small scale production for local customers. My origin is from a country that in the past lived very well on niche products. A bit like Switzerland. Today there are many players on such niche markets because they are pushed to small scale production as main stream production has left for the east.
Larger scale production, in particular of standardized items, is a no-go unless you have huge capital behind you.
There are believers among our members. Those who believe in capitalism and the free market - don't worry, the market forces will regulate the situation and solve our problems? Those who believe in democracy - don't worry the politicians and their administrations will solve our problems? Those who believe in institutions - don't worry, that patent system and copyright system will solve our problems?
I may have overlooked if anyone has noticed an important difference in the western world culture compared to Asian tradition. Short term profit against long term strategical thinking. Western decisions are often dictated by the next election or the next presentation of economical results to the stock-market. This is what decides the bonuses for management and another round for politicians. This was why electronic production left Europe some 15-30 years ago.
Japan decided for a dominating position in optics and motorcycles. A persistent effort knocked out most competition in Germany and England. I know many in the US do not see Japanese motorcycles as real motorcycles but that aside.
Asia took over ship building (large ships) over some decades. Perhaps with subsidies, but in the end Asia had a dominance.
Korea decided to go for the flat screen technology and today Korea, Japan and China are dominating. I recall ordinary batteries being manufactured in Europe, how many do not come from China today?
One states that communism implies stealing. My impression is that "communism" was a structure for agrarian production in Russia after the revolution. Is that what we electronic engineers fear today?
Copying is an intelligent human approach in particular when it concerns survival. Building on already existing successful solutions. I know it leaves a bad taste when we see a direct copy of an industrial product but we have copyright systems and patent systems to handle that? For the Anglo-Saxon world among other, how many films and shows are close copies of other entertainment products with success? In the car industry, how many makes had to copy ideas from other makes in order to gain reliability?
Yes, today there is much copying in a fierce market but there has always been.
Today it is possible with a modern household just made up of items of Chinese origin. Is it all that bad for Europe? No, there are other important products we may supply. Food. As far as I have heard, parts of Asia have problems feeding the huge population. Soon (almost) clean water may be a big problem many places in the world. But, European electronics industry is down for generations unless a political intervention is implemented.
The western domination seems in retreat at present and to a large extent due to mechanisms we should have foreseen. Nigel luckily lived in good times but the next generations in Europe have to think about other occupation than electronics.
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The question is can you propose a better value chain configuration than the one currently in place given all the other factors at play?
In mobile phones, the profit pool is dominated by Apple with a bit left over for Samsung. Everyone else is making peanuts by comparison - including almost every single CEM.
As of 2014 (when I left Motorola) Motorola phones, iPhones, Nokia phones, and several others were ALL made in the SAME Foxconn CEM factory.
I worked at Motorola for 41 years. I joined the phone group in the late 90's. The big 3 players were Nokia, Motorola, and Ericsson in that order. All of them are GONE today. The Motorola name may still exist, but it is owned by Lenovo, a Chinese company. Motorola sold the phone group to Google in 2012 after laying off hundreds of phone engineers in Florida where I worked.
Foxconn set up a engineering design center in Florida and hired a bunch of ex Motorola engineers. It was well understood that all they wanted was to learn the intricate details of phone design. Several of my friends went back and forth to China for a few years until Foxconn learned what they wanted, closed up shop and left. Don't think that the Chinese aren't becoming good at engineering.....they are learning from the best.
When Lenovo bought Motorola Mobility from Google at a fire sale price, they kept the phone engineering group alive in the US long enough to learn how to design phones. Those who worked there called it Lenovorola. They too are now gone.
So when my 6 year old Samsung Note 2 finally needed to be replaced, what did I buy? A new Samsung for $600, and iPhone for $650 or a Motorola for $179? I wear cheap clothes, often from Walmart, and drive and 11 year old Honda, do you think I'm going to buy a trendy phone? I got the Motorola about 18 months ago from Amazon and it does everything I need.......I guess that makes me part of the problem.
On the flip side, I have been selling Tubelab PC boards, parts, and kits for 14 years. Each year my sales shrink. 2007 was the best year. I am now at the point were Tubelab barely pays for itself and I have been contemplating pulling the plug for the last two years. There will be a couple new vacuum tube products this year. If that doesn't boost the sales, there are two choices, branch out to different markets, or kill the company. For now I am doing contract engineering in the cellular world to pay the bills.
Where have the sales gone? There are fluctuations over the years that track the global economy, and the US economy. My sales have been global since day one, with 30 to 50% international. That mix varies with the strength of the US dollar and the exchange rate.
Has "China" impacted my sales? Yes, the flood of cheap kits and finished goods had impacted the sales of tube amps in two ways. Sure, some of the low end has been eaten by cheap imports, but the poor quality and reliability of Chinese, and even some domestic tube amplifiers early on put off a lot of people from tube based equipment in general. The Chinese stuff has improved a LOT in the past 10 years, and today you can buy a decent Chinese amp for less than you can build a Tubelab amp. Of course this puts a big dent in sales. it's NOT the only one.
The market for vacuum tube HiFi stuff has always been slanted toward an older and more affluent customer base. Let's just say that more potential customers are leaving the market than joining it, and market saturation is beginning to appear. It can and will happen in ANY market, and a successful business MUST recognize it early and change with the market or DIE.
Motorola saw this early with the paging market in the 1990's. Every PERSON who wanted a pager HAD one, so I joined a Motorola "think tank" group to put pagers on or in THINGS. Great idea, and there were several successes, but the group wasn't well managed or funded, and eventually died....that's how I became a phone designer.
The AT&Ts and Verizons of the world have seen this coming with phones too. Everyone in the major developed countries who wants a cell phone has one. Churn helps sell phones, but the carriers no longer subsidize phones unless you finance the purchase through them, and most people can't afford to stay "trendy" although many try.
The phone carriers don't make money on talk or text, its all about selling data, and that market is beginning to saturate. 4G and 5G can move huge amounts of data, so the next push will be to put phones on or in THINGS (again).....The big buzzword here is IoT, the Internet of Things. Both AT&T and Verizon have marketing departments and web pages to lower the barrier for the cellular connected IoT, and that market is HUGE.
It's this kind of innovation where a small local company, like mine and yours can still play. I'm sure China can too, but for now the playing field is still level, because the game is brand new. The multi million unit sellers are for the big boys, let them fight it out. There are thousands of opportunities too small for them just waiting for some local innovation. The Motorolas of the world are too big and too slow to find them all. Find a niche, hit the ground running and don't look back over your shoulder.
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