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Monday, September 30, 2002
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How many of you are happy with the current performance of your stereo, tv, watch, refrigerator, film camera or vacuum cleaner? All of these continue to enjoy technological advances but, for most consumers, the old units they own are sufficient for the task and the products are locked into a end of life replacement cycle.
For several years people have observed that PCs may be at that level. Despite Microsoft's best efforts to require the latest hardware to run a simple word processor, most people find their 500 MHz PC more than adequate for surfing the web, doing email, IMing, taxes and a bit of digital photography. A few people really need the latest processors and graphics chips, but they are a small minority.
What happens to an industry when a constant innovation cycle no longer offers the fantastic profitability enjoyed when consumers needed new hardware every 18 months?
http://www.nytimes.com/2002/09/30/technology/30SPEE.html
What happens when huge bets on the future may not match the shape of the future?
http://www.nytimes.com/2002/09/29/technology/circuits/29CHIP.html
9:47:31 AM 
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It was fascinating reading missives from last week's Fotokina photography trade.The APS camera format that was to change the industry a decade ago seems dead and new 35mm hardware is now rare as amateur interest has evaporated. Film based products were conspicuous by their absence and future appears very digital.
There is great innovation afoot when you get into cameras that cost $2,000 to $20,000. Large CMOS image sensors with 11 and 14 megapixels of resolution have made a dramatic appearance and, for many professionals and prosumers, mark the beginning of the end of 35mm film. Foveon's new image sensor is producing amazing images considering it is technically a three megapixel array. These advances will quickly move into the consumer range as customer hungry camera makers (and PC makers in the case of HP) try to sustain their sales.
At the consumer level there has been a factor of two improvement in effective resolution at price points between $300 and $1000 over the past year. If you don't have a digital camera, or if you have one that is a few years old, you will see a dramatic improvement with something new. For most people the current crop probably represents all they need in a camera
A few years down the road and we should have something that is cheap enough for everyone and sufficient to serve their needs. My guess is that it will take a 2 or 3 megapixel camera that goes for $100 - something that seems possible in two years. At that point things probably get bloody for the camera manufacturers as 35mm was during the eighties and early nineties.
9:47:15 AM
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What happens when people have almost enough music? Classical music has that problem now. Interest in "serious" music has been declining for a few decades and, after a flurry of activity when people converted their libraries from LPs to CDs, has settled into something like 0.8% of the total market. It is impossible to find classical CDs in many cities in the US and equally impossible to hear it on the radio.
There are problems for popular music too. The shrill noises that are emitted by the RIAA focus on theft, but it seems clear that the problem is deeper and we are witnessing a failed business model. By many accounts the current crop of new releases is uninspiring at best while the competition for time and money from other activities seems to be increasing.
At some level marketers need to understand that time and money are finite resources for most consumers. Markets that have expanded as the result of technology may flatten or even scale back. Sometimes there are great surprises. There is anecdotal evidence that teenagers in many parts of the UK are spending money on wireless phone service rather than cigarettes and CDs.
It is humorous to read Time Warner's job posting for a CTO. They really don't understand what is going on and would be much better served by people who understand sociology and anthropology as well as a technologist with a clue. Competent people who could make a positive impact on their business will howl with laughter at this.
http://www.hotjobs.com/cgi-bin/job-show?J__PINDEX=J985729OQ
9:46:59 AM
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