Fogey Friday 27th July
Samsung Galaxy S III, HTC, Beats, Showrooming, Skype, Microsoft

Jul 27, 2012 No Comments by



A weekly round-up of tech drivel from the highways and byeways of our digital domain.




 In a Galaxy Far, Far Away

Apple slicer

The Samsung Galaxy S III smartphone is outselling the Apple iPhone 4s by nearly two-to-one.  In the quarter to June Samsung sold just over 50 million of the handsets which, in turn, helped them post record profits of $5.9 billion for the same period.  $5.9 billion profit in three months!!!!!  This Fogey needs to go and have a lie down.  Should you be tempted to jump on the S III bandwagon, here’s a link to Phones4U.


HTC Can’t Keep the Beats

HTC, a Taiwanese company that makes very many smartphones, paid over $300 million last year for a 51 per cent stake in Beats Corp – the company found by hip-hopper Dr Dre and producer Jimmy Iovine that makes those red/white/black headphones that all fashion-conscious young chaps and footballers seem to have permanently clamped to their skulls. The idea was that, by association, Beats would make HTC cool and ‘street’, man. It didn’t work. HTC is still a Taiwanese company that makes very many smartphones. End of story. So they’ve sold half their stake back to the good doctor and Jimmy for pretty much what they paid for it. TF bets Liverpool FC doesn’t broker such a propitious deal when it flogs Andy Carroll. Maybe they need to call the Doctor.


More on ‘Showrooming’.

In last week’s Fogey Friday we discussed ‘showrooming’ whereby a manufacturer such as Samsung takes space in a prestige retail environment (in this case the Time Warner Centre at Columbus Circle in New York City) to showcase its products but not sell anything directly. Then we discovered that the zeitgeist was way ahead of us, as usual, and that showrooming, as an idea or reality, was nothing new. Few things are genuinely new – that’s one assertion Tech Fogey can be relatively confident of making, but there are potential variations on the showrooming concept.

Ecommerce is on the up. More people are buying stuff online and getting it delivered to their homes. We could quote some impressive stats to back this up but either way, you know it’s true. Tech Fogey tries to tap into this dynamic in the Fogey 5 by aggregating product reviews to arrive at five gizmos that, by general consensus, are the best of their type. In one way or another, an awful lot of consumers are using sites like TF to find out what they should be buying.

Still rather peckish

Sometimes they buy via the site they’re on (which would be nice for Tech Fogey because it wouldn’t cost you any more, we’d make a tiny bit of money and the TF puppy, Murphy the Irish Terrier, would have enough proper puppy food to eat and wouldn’t keep snacking on our shoes), and sometimes they take the info they’ve gleaned from online research and travel to a proper shop to buy their new toy. But as we also discovered in last week’s Fogey Friday, an increasing number of shoppers who still go to bricks and mortar stores use their smartphones while they’re in the store to check prices, read reviews etc before making a purchase. What the story didn’t say was whether those purchases are made from the store the person is in, or whether, having tried a physical example of, say, a camera, the savvy shopper then uses their smartphone to buy that same device from an online retailer, possibly saving a few pounds along the way.

In the latter scenario, the bricks and mortar store has therefore become little more than a showcase/showroom for an online retailer such as Amazon which actively encourages the practice and has a Price Check app (only in the US) to facillitate it.

So here’s a thought: all those empty High Street shops – turn them into showcase stores. The downside is that you’d need trained staff to help shoppers choose and we all know from painful PC World experience how rare such helpful, knowledgeable beasts are. There might also be some tedious legal issue whereby premises are categorised as ‘retail’ only if they’re selling physical goods from the premises. But if those two objections (and we know there will surely be more) could be overcome, consider the advantages: no need for expensive storage; shoppers can use public transport or bikes, or their legs because they know they won’t subsequently have to carry anything they buy; retailers who want to compete with Amazon on price will be able to do so; manufacturers will be able to develop a genuine relationship with consumers by virtue of actual physical (as opposed to virtual) interactions. Take the model of the car showroom and shrink it. Shiny displays, staff who know their stuff and the opportunity to ‘test drive’ smartphones, cameras, TVs, DAB radios – you name it.

There’s another possibility: Tech Fogey is part of two retail programmes that earn us a 4-5 per cent commission on any goods bought via a link on our site at Amazon, John Lewis or Phones4U. Let’s say I’m Samsung. My products are sold in any number of retail outlets both online and physical. In my Samsung showcase store each product is bar-coded so that when a customer snaps that barcode with their smartphone camera it brings up a short-list of online retailers who stock that item and the prices they charge. It’s what price comparison sites and Amazon do. So Samsung sells a franchise for such a store and the franchisee makes money the same way Tech Fogey does – by virtue of having become an affiliate or associate to the online retailers that pay five per cent commission. It might not sound like much but profit margins for traditional retail are often not much more than 10 per cent and the showcase store doesn’t have many of the standard overheads that eat into those profits. Additionally, affiliate programmes pay a higher percentage commission on higher sales volumes.

You might justifiably point out that the above is what phone shops are – a ton of phones, purely for display and the retailer takes a commission if you sign a contract with whichever service provider – T-Mobile, Vodafone, Three, seems best. But that’s the point – they get their cash from the network providers, not the hardware manufacturers. And it wouldn’t work for every gadget purveyor. Samsung makes TVs, smartphones, Blu-ray players, air-conditioning units, fridges, freezers, microwaves, cameras, washing machines; they can fill a big showcase store. HTC makes smartphones and that’s it. Even though they have an extensive range, those would still look pretty lonely in all but the smallest shop.

But then consider how many well-informed geeks clamour to work in an Apple store (for peanuts) and you’d have to think it couldn’t be that tricky to get some bushy-tailed HTC afficionados extolling the virtues of smartphones from a High Street location.

Just a thought.


Skype Snoop

It’s been widely reported this week that men in suits can now tune in to your Skype video chats. Previously Skyping was secure and hidden away from prying government eyes. This is a good or bad thing depending on your point of view; it allowed naughty people to sort out doing naughty things in private but it also meant that certain forces for good could also get organised online to fight oppressive regimes – like in Syria, for example. Given the proliferation of Skyping – Microsoft (which owns Skype) announced that Skype users have logged 115 billion minutes of calls during the second quarter of 2012, up 50 per cent from the preceding quarter) it seems reasonable to assume that you’ll only be eavesdropped if you’re already a ‘person of interest’. So, somewhat ironically given the current social media mania, if you want to be good or bad keep a low profile.


And finally…

Microsoft posted a net loss of $492 million in its fiscal fourth quarter, marking the first time since going public that the software giant has not seen a profit.