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The reason hardware companies are failing


The consumer electronics market has quickly deteriorated into a case where it is Apple and everyone else.  Everyone else includes Sony, LG, Panasonic, Toshiba, Motorola, RIM, Logitech and Samsung.  Of these major companies, all except Samsung have seen decreased sales and loss of market share.  Why are these companies failing to get me lusting for their products?

Mostly because my gadget arsenal consists of an essential list including a Macbook Air, and iPhone, and Boombot speaker.  If you tap into my audio, I have some Sennheiser headphones and a Yamaha component system.  I could live without the Yamaha system, but I couldn’t even pull $200 on Craigslist for it… so it stays.  Having said that, the essentials include a smartphone, laptop, headphones, and portable speaker.  If you are hardware company not successfully manufacturing and marketing one of these four hardware items, your company is dying.

Sony seems to be one of the saddest stories of all.  Only a decade ago, the company was a beacon of electronic innovation.  With a portfolio including historically moving products like the Walkman, it is a wonder how the company has seem to lost its’ footing in the market.  The Vaio line used to be the computers warranted salivation in the PC world.  They were sleek, sexy, and expensive.  But now if you put one next to a Mac Air, the decision has been reduced to a rhetorical question of which to invest in.

Point and shoot camera lines are dying.  Smartphone cameras are getting better and better.  Throw on an Instagram filter and your smartphone shots suddenly look WAY better than your point and shoot piece of shit.  Oh….and you can upload directly to Facbook and Twitter with hashtags.  This is basically a huge market that is getting evaporated by the do-it-all smartphone.  Remember that Kodak moment?  I hope you do, because Kodak is now a mere stamp in time with a full fledged bankruptcy.  They probably roll over in their grave when they think about Instagram.

Samsung’s growth in the last year has largely been fueled by growth in the mobile telecom segment.  During Apple’s revival period, many attribute their success to the implementation of the iPod.  The commonality in the success is all about mobile.  Right now, Apple boasts one of the most successful smartphones of all time, while Samsung has invested significantly in redefining this fascinating bridge between tablet and phone with an insanely large screen.  Their whole, “BE note-WORTHY” campaign deserves a tip of the hat.  At CES, they had artists doing sketch portraits of people just to showcase the massive screen potential.

With the impending death of a number of large hardware companies, one might think that there is a window of opportunity for entrepreneurism.  Either a very dynamic CEO with the vision to pivot these large ships will have to step in, or new competitors will be formed.  With so much technology at our fingertips, the barriers to entry to hardware are not nearly as unattainable to your regular garage startup.  The question is what will the next revolutionary piece of hardware be?  And WHO is going to make it?

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