The Samsung Group announced Thursday that its yearly profit fell for the first time since 2011. The electronics giant still beat analysts’ expectations as its slowing smartphone sales were buoyed by demand for its computer chips.
Sales of Samsung’s Galaxy smartphones made up two-thirds of its profit for the last two years, but they will be eclipsed by its semiconductor business in 2015, according to analyst Lee Sei-cheol from Woori Investment & Securities. The company announced that its 2014 operating profits were expected to reach 24.9 trillion won, or $22.6 billion, down 32 percent from a year earlier.
Samsung is feeling the squeeze from Apple on the high end, especially now that the iPhone comes in two new sizes — “Extra Large” and “Waffle Iron.” (I know, I know — everybody loves the big smartphones but me.) Worse for Samsung is that they’re having the floor eaten out of their massive low-end sales by even lower-cost copycats like China’s Xiaomi. (Somewhere, Jony Ive and the ghost of Steve Jobs are doing the Happy Dance together as they watch their copycat get consumed by copycats.)
The point to remember here is that Samsung was literally — and I’m not abusing that word — literally the only Android phonemaker generating any profits worth mentioning. What Samsung’s troubles mean for Android going forward is anyone’s guess, although it took the Android market a comparatively short time, maybe even a shockingly short time, to become just as commoditized as the Windows PC market. Over the course of decades, Windows generated billions and billions for Microsoft and for PC makers before commoditization (and OS X) sucked all the profits out of the Wintel business model. Android went down that same road in just three or four years.
The key difference is that Android doesn’t have to generate profits for Google — but what happens to the OEMs who at some point are going to have to generate a profit or two?
The best tech article I’ve read in weeks is Fast Company’s behind-the-scenes report on the development of Amazon’s Fire Phone — which was thoroughly rejected by consumers and caused an embarrassing $170,000,000 write-down for the retailing giant. So what went so wrong?
The short version might be: Jeff Bezos thought he was Steve Jobs.
Bezos drove the team hard on one particular feature: Dynamic Perspective, the 3-D effects engine that is perhaps most representative of what went wrong with the Fire Phone. Dynamic Perspective presented the team with a challenge: Create a 3-D display that requires no glasses and is visible from multiple angles. The key would be facial recognition, which would allow the phone’s cameras to track a user’s gaze and adjust the 3-D effect accordingly. After a first set of leaders assigned to the project failed to deliver, their replacements went on a hiring spree. One team even set up a room that they essentially turned into a costume store, filling it with wigs, sunglasses, fake moustaches, and earrings that they donned for the cameras in order to improve facial recognition. “I want this feature,” Bezos said, telling the team he didn’t care how long it took or how much it cost. Eventually, a solution was discovered: Four cameras had to be mounted at the corners of the phone, each capable of identifying facial features, whether in total darkness or obscured by sunglasses. But adding that to the phone created a serious battery drain.
And team members simply could not imagine truly useful applications for Dynamic Perspective.
On the Fire Phone, Bezos forgot all about his laser-like focus on the customer’s needs, to pursue a feature his own design team didn’t know what to do with. Has Bezos reached that point of success where nobody can tell him No anymore? As a happy Amazon customer, I certainly hope not, although Amazon could fiddle around with more failures like the Fire Phone for years before it negatively impacted its retail operations. But here’s the bit which should have investors worried:
Bezos has said that his job is to encourage more “bold bets” and to embrace failure inside the company in pursuit of the big successes that “compensate for dozens and dozens of things that [don’t] work.” That drive and willingness to experiment has made Amazon a formidable competitor; Google chairman Eric Schmidt, for one, has said he considers Amazon to be the search giant’s most dangerous rival. For Apple, too, its ambitions with e-commerce, iCloud, and now, even devices, all run headlong into Amazon’s initiatives. But will all of Bezos’s risk-taking ultimately pay off? “They make no money!” former Microsoft CEO Steve Ballmer exclaimed in a recent TV interview. “In my world, [that’s] not a real business. I get it if you don’t make money for two or three years, but Amazon is, what, 21 years old?”
You get the feeling the profits just aren’t a part of Amazon’s business model?
UPDATE: An unfair thought just occurred to me. If you want to expand an existing business into profitable new fields, Ballmer is not the person you call on to help. But if you want to squeeze extra billions out of existing products and services, there might not be anyone better than Ballmer. Maybe Bezos should make him an offer he can’t refuse…
The e-commerce giant said Monday it’s now offering the 32-gigabyte version of its first smartphone, which went on sale just two months ago, for 99 cents with a two-year contract, down from $200. One year of Amazon’s Prime service is still included as a short-term promotion. A year of Prime, which offers free two-day shipping and streaming music and video libraries, usually costs $99.
Amazon also slashed the price of its 64GB Fire Phone to $100 with a two-year contract, down from $300.
I’m going to go out on a limb here and say that sticking a confusing UI on top of somebody else’s OS inside last year’s hardware at this year’s prices wasn’t exactly the smartest thing Jeff Bezos ever did.
You could argue that if the Amazon Fire Phone under-indexes, it probably isn’t by much; you could multiply the number by 25%, based on the average of the Samsung and HTC figures. That takes you up to about 33,000 devices.
Therefore even allowing for margins of error, it seems unlikely – based on Chitika’s data and the ComScore data – that there were more than about 35,000 Fire Phones in use after those 20 days.
Amazon had not responded to a request for comment on the calculation by the time of publication.
Although I can’t say I’m surprised. The phone is phugly, and by nearly every account, the user interface is an unusable and clumsy mess. And it’s priced the same as an iPhone or a top-tier Android device, when clearly it’s neither.
Still, it’s comforting to know that not even Amazon’s marketing muscle — and I say this as a happy and devoted customer of theirs — isn’t enough to push people into buying overpriced craptaculence.
Similar to Amazon’s strategy in many of its businesses, the company aims to compete on price in the mobile payment arena. For customers who sign up for the service by Oct. 31, Amazon will take as its fee 1.75 percent of each payment processed, or each “swipe” of the card, a special rate that will last until Jan. 1, 2016. For people who sign up after Oct. 31, Amazon will take a service fee of 2.5 percent of each payment processed.
The first $10 in transaction fees will be credited back to the customer, essentially paying for the card reader.
That’s below most of its competitors’ rates. Square takes a fee of 2.75 percent of each transaction. PayPal Here takes 2.7 percent of each transaction and Intuit’s GoPayment rates start at 1.75 percent per transaction if businesses pay a $19.95 monthly rate or 2.4 percent of each transaction without a monthly payment.
That’s a helluva good deal from Amazon for small retailers, made possible by the company’s huge cash flow.
image via Wired.com
Amazon bringing free music streaming to Prime customers, but there is a catch:
The company will expand its Prime membership offerings by adding a stockpile of old and newish music for subscribers to stream on demand. The Prime music service, which is scheduled to launch this June or July, will not include recent releases but instead restrict its catalog to songs and albums that are 6 months old and older, five music industry sources familiar with the company’s plans confirmed to BuzzFeed.
Fogies like myself are Amazon’s most-likely Prime customers, and also the customers least interested in the latest music — so the catch is far from a deal-breaker. But when you consider that Prime customers already pony up $99 a year (up from $79), Amazon’s new service makes it harder to justify the $500 million Apple paid for Beats Music as part of the Beats acquisition.
image via shutterstock / Alexander Raths
60 Minutes previewed the future last night. Amazon is planning to use drone aircraft to enable 30-minute delivery of many products that we order online.
Charlie Rose: This is?
Jeff Bezos:…is…these are octocopters.
Charlie Rose: Yeah?
Jeff Bezos: These are effectively drones but there’s no reason that they can’t be used as delivery vehicles. Take a look up here so I can show you how it works.
Charlie Rose: All right. We’re talking about delivery here?
Jeff Bezos: We’re talking about delivery. There’s an item going into the vehicle. I know this looks like science fiction. It’s not.
Charlie Rose: Wow!
Jeff Bezos: This is early. This is still…years away. It drops the package.
Charlie Rose: And there’s the package.
Jeff Bezos: You come and get your package. And we can do half hour delivery.
Charlie Rose: Half hour delivery?
Jeff Bezos: Half hour delivery/and we can carry objects, we think, up to five pounds, which covers 86 percent of the items that we deliver.
Charlie Rose: And what is the range between the fulfillment center and where you can do this within…
Jeff Bezos: These…this…this…these gener…
Charlie Rose: 30 minutes?
Jeff Bezos: These generations of vehicles, it could be a 10-mile radius from a fulfillment center. So, in urban areas, you could actually cover very significant portions of the population. And so, it won’t work for everything; you know, we’re not gonna deliver kayaks or table saws this way. These are electric motors, so this is all electric; it’s very green, it’s better than driving trucks around. This is…this is all an R&D project.
Charlie Rose: With drones, there’s somebody sitting somewhere in front of a screen.
Jeff Bezos: Not these; these are autonomous. So you give ‘em instructions of which GPS coordinates to go to, and they take off and they fly to those GPS coordinates.
Charlie Rose: What’s the hardest challenge in making this happen?
Jeff Bezos: The hard part here is putting in all the redundancy, all the reliability, all the systems you need to say, ‘Look, this thing can’t land on somebody’s head while they’re walking around their neighborhood’…
Charlie Rose doesn’t know what a drone is? Sheesh.
This idea seems cool until you think it through for a bit. Amazon’s drones will be eyesores in the air and electromagnets for lawyers when one of them goes haywire and crashes in someone’s yard or in the middle of a street or, heaven forbid, kills a guy. Human nature can be a nasty thing. Lawfare is strangling innovation in America. Watch octocopter-chasing lawyers have a heyday over Amazon’s drones and its fat wallet. Watch the newspaper Amazon owns defend whatever the company does. And watch environmentalists slow this whole thing down in court.
The hardest part technologically probably isn’t building in redundancy. The hardest part is making sure these things don’t become magnets for thieves (other than the aforementioned lawyers). Where you have valuable product moving, you have the potential for heists. These drones could and probably will become targets, especially if they’re in operation at night. So game that out, and Amazon will end up working with the FAA to either create sky lanes through which its drones will have special permission to travel, which would be protected either from the air or the ground against theft, or they’ll have to arm the drones with countermeasures.
When Amazon merges with Google to perfect the drones’ accuracy, it’s all heading toward SkyNet.
I hate plumbing. I really, really hate it. Given the choice between doing a plumbing project or listening to a Miley Cyrus album, I would choose a root canal (at least a drill can stay on pitch). About the only thing I’m good at with plumbing is displaying copious amounts of hairy butt crack while working.
On the surface plumbing sounds relatively simple: pipes bring clean water in, and separate pipes take the poop water away. But with changing building codes and new developments in materials there is no standardized system, so you often don’t know if you’re going to be dealing with iron pipe, copper, pvc or cpvc, or new pex fittings, until you actually dig into a project.
There is a reason plumbers can charge $60+ per hour, and if you have more money than time or patience then I strongly recommend hiring one, particularly if you are dealing with a difficult issue. However, if you want to save a bunch of money and improve the look of your bathroom or kitchen, replacing a faucet is within the ability of most homeowners.
What You Need:
1. The first step in any plumbing project is to shut off the water to the area where you are working.
Most fixtures have shut off valves in the cabinet underneath. If yours are in good shape simply turn off the valves for both the cold and hot water, and move to step 4. If however, you have ancient shutoffs from the 1970s and need to replace them you will have to shut off the main water supply to the house. Most mainline shutoffs are located outside the house in an enclosed box underground. Beware if you live in the southwest like me; critters love the shade and moisture provided here, so look out for black widows, scorpions, and snakes. (Man aren’t you glad you decided to do this?) The other shut off should be located on top of the water heater.
Every year, I forget Mother’s Day until it’s too late.
Father’s Day I usually remember.
This evening I was driving my children to Little League and I said to my wife, “Is Father’s Day this Sunday?”
“Yep,” she said.
I’m sure there are people out there who are in the same boat as me. Back in the day, I’d be scrambling for a fishing lure or work shirt.
Today, though, I don’t need to go anywhere. I can buy my Dad a gift right here at the keyboard.
So, if you read this and find yourself in the same boat as me, you’re in luck, because I’m about to list off eight different gifts you can get your father for Father’s Day without leaving the keyboard.
Starting with something manly.
A Manly Book
I make bracelets with my son.
I know that doesn’t sound like a “manly” hobby, but it is.
We make them using parachute cord, or paracord. Take a length of paracord, depending on the size of your wrist, tie a few knots, and BOOM!
Now that’s manly.
However, you can’t download the paracord.
You can’t download the buckles or the flint and steel.
But you can download the ebook Manly Crafts.
I know what you’re thinking.
“Manly Crafts?” That’s an oxymoron.
Well, here’s the first manly craft in the book.
And turn it into this:
The best part, aside from the time you’ll spend with your dear old dad working on the project in this book, is that the book’s less than a dollar.
There are tons of cheap ebooks out there for Father’s Day. Get your dad a couple.
PJ Lifestyle plans to continue expanding in many directions after the election — hopefully along with the rest of the economy! Over the coming months we’ll be seeking out new voices to complement our usual team of humorists and cultural critics. (Keep an eye out for future openings for new writers and bloggers.) Today we’re looking for freelance writers with experience and skills to review products.
Gadget Gurus and Tech Thinkers.
With the holiday season approaching we’re looking for people who can highlight the must-have gadgets and gifts: laptops, phones, tablets, stereos, cameras, TVs, and all manner of electronics. Can you compare and contrast different products? Rank which is the best to worst TV, phone, or tablet? Also seeking software and video games reviewers.
We’re also interested in people who can look at the tech industry in the broader perspective, arguing not just if you should buy the new Apple or Google product, but whether either company’s new move is good or bad, and what the future holds as the two contend with Amazon.
Please email your resume, introductory letter, and urls of writing samples to PJ Lifestyle’s managing editor David Swindle: DaveSwindlePJM@gmail.com
(Reuters) – Wal-Mart Stores Inc will no longer sell Amazon.com Inc’s Kindle eReaders and tablets, severing its relationship with a major competitor and placing a bet that consumers are more interested in Apple’s iPad and other gadgets.
The world’s largest retailer, which has been trying to catch up to Amazon in online sales, said the decision was consistent with its overall merchandising strategy.
Owners of Kindle tablets such as the new Kindle Fire HD can shop on the devices for millions of items beyond digital books. This allows Amazon to compete with stores on more lines of merchandise. This spring, Target Corp stopped selling the products.
Amazon has already tested physical stores for other goods. Now, with two large chains no longer selling Kindle, speculation has grown that the dominant online retailer could open its stores where shoppers could try out and buy Kindles.
Amazon “is a little bit of a Trojan horse” when the Kindle is sold in other stores, said Sucharita Mulpuru, retail analyst at Forrester Research. “They should have made this decision to not carry the Kindle a long time ago.”
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