Who’s Going to Blink First

TV Sales Becoming Litmus Test for U.S. Economy - NYTimes.com

The attached article talks about how many economists and electronics industry analysts are using sales of televisions as a litmus test for the American economy. Sales of high-definition and flat-screen TV’s were, until recently, been increasing rapidly as prices dropped, more HD channels became available, and people prepared for the national switchover to digital broadcasting occurring on February 17, 2009. These sales, however, have slowed significantly in the past few months. Retailers are not able to move the products as swiftly as expected, and as a result, have aggressively advertised sales, discounts, package savings, and extended price guarantees leading into Black Friday.

The early word is that TV sales have not been as high as the retailers had hoped. There currently looks to be a stand-off between the customers and the retailers. The manufacturers have claimed that the prices are “to the point of irresistible”, but the customers think that, “I’m sure the price is going to comedown.” The article asks the question, “Who will blink first?”

Not the consumers.

The consumers have no driving impetus forcing them to make these purchases. Sure there will always be people buying TV’s because they have too much money to spend or they need to replace a broken TV, but for the most part, purchasing a large flat-screen, plasma, or high-definition TV is a luxury. It’s a discretionary purchase. This is the reason the customers are not going to blink first. The discretionary budgets aren’t there like they were a short time ago.

The US is entrenched in the largest economic crisis its faced in decades, and it doesn’t look close to being over. In fact, now much of the rest of the world is slipping into a recession. House prices are dropping. People owe more on their mortgages than their houses are worth. Unemployment is rising quickly. I believe that people aren’t buying TVs now because (1) they don’t have the money (2) they are saving their money in anticipation of a difficult time, or (3) they are waiting for a really, really good price.

So who’s going to blink first? My money’s on either the manufacturers or the retailers. They need to make the sale worse than the customers need to buy the product. So TV sales do seem like a pretty good litmus test for the American economy, we just might not like what they tell us.

I Need My Shiny, New PC

The Shiny, New PC Syndrome - Forbes.com

This article talks about lean computing and calls into question whether companies are doing enough to make their employees computers more efficient rather than just newer. This seems like an issue I have to deal with on a daily basis, as I regularly need to run about 15 different applications on my computer at a given time to effectively do my job. I constantly deal with system issues, bog-downs, and processing shortages.

The company does constantly work on improving the systems and the computers I use at work. Extra, unused applications are removed and it is often rather difficult to actually get applications added to a machine even if it is required for your job. But I guess that's just corporate America. The article talks about improving the interaction between applications, and I would like to see that happen, but I don't know how effective that is with half of my applications built in-house and the other half purchased. Knowing how long it takes to get new systems created, or even just getting existing systems upgraded, I can't imagine how long it would take to do the analysis of everything my computer uses and how it could be improved. And then to have all the code changed, tested, and put into production? And then deal with the glitches and downtime while they fix the things they missed or forgot about?

Doesn't sound too much like a money saver to me.

For me, please give me the shiny, new PC. Keep upgrading my processor and bandwidth as they become available.

Oh yeah, anyone have a shiny, new PC to spare? We have a new system going live in a couple more weeks...

Google - The Green Machine?

Financial Aspect of Google’s Environmental Goals Grows - NYTimes.com

So this article that Professor Kane posted talks about Google’s foray into the world of the energy sector. The article talks about how Google has always spent millions in improving the efficiency of their data centers, but they have recently upped their involvement by investing in renewable and alternative energy sources.

At first this may look like a huge mistake for the company because energy research and production is so far away from their core business of information gathering and advertising. Google has no expertise in this field and over-extending their involvement in this sector could spell disastrous results for the company.

That being said, I think it’s an excellent idea for Google to be involved in the industry. Their core business is not in energy, but every company in the world has a responsibility to its shareholders and to itself to operate in the most efficient manner possible. This almost always means minimizing expenses. For Google, one of their largest expenses is its energy consumption, so it seems like good business practices to spend resources to find ways to minimize these costs. Suppose Google is successful in finding a way to produce renewable energy cheaper than current energy costs. Any company that could turn its largest expenses into a profit center would be well-advised to do it.

With all that in mind, Google must not jump too quickly or too far into the energy sector. It is a completely different business entirely and Google cannot stray from its core business too far. Over-extending outside of ones core competencies has been the demise of countless companies. If the energy research arm of the company begins growing and having success, Google would be best to spin this division off into its own company, separate from the search and advertising businesses, still owned under the master parent company. In this manner Google could benefit by lower energy costs without disrupting their primary businesses.