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Businesses China Hardware

Hardware Is Dead — At Least Most Expensive Hardware Is 342

First time accepted submitter ze_jua writes "In this article, Jay Goldberg, a financial analyst who travels to Shenzhen several times a year, analyses the potential consequences of the very low cost of hardware he found there on the consumer electronic industry worldwide. He wrote this piece of text after he found a very nice $45 Android 4 tablet. Are we so close to given-away tablets?"
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Hardware Is Dead — At Least Most Expensive Hardware Is

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  • by faragon ( 789704 ) on Monday September 17, 2012 @05:47PM (#41367893) Homepage
    Those pads have AllWinner A10/A13 SoC (ARM Cortex A8 @1.2GHz and GPU ARM Mali 400), 512MB of RAM, and 4GB of flash. I see no reason for not having mobile phones with similar technology (the AllWinner A10/A13 is a tiny SoC) for similar price (e.g. Broadcom or Qualcomm could add 3G easily and sell their own cost-killer SoC for smartphones). IMO, is going to change everything, as everyone will be able to have an smartphone.
  • Re:Nope (Score:5, Interesting)

    by rtaylor ( 70602 ) on Monday September 17, 2012 @05:51PM (#41367963) Homepage

    Yup. Recently spent nearly $50k for a new machine (512GB ram, 64 CPU, etc.). Seems many people are using low end hardware at the client end and expecting the cloud (which for some applications is not easily distributed) to do the real work.

  • Re:Absolutely. (Score:4, Interesting)

    by kamapuaa ( 555446 ) on Monday September 17, 2012 @05:57PM (#41368033) Homepage

    Or, maybe they are really expensive, but people still buy things that are expensive.

  • Re:No. (Score:5, Interesting)

    by Penguinisto ( 415985 ) on Monday September 17, 2012 @06:18PM (#41368329) Journal

    It's not retarded... well, not entirely.

    Hardware will always represent a non-zero cost. However, much of that cost can (eventually?) be absorbed or at least amortized by other budgets. Marketing stands out as a ferinstance (at least on a limited scale), since we already see VARs doing that with higher-priced items to IT managers and other decision-makers ("attend a sales pitch for 500Mbit fiber from Acme Telecom Business Services, and get a free iPad!" - Seriously, once we scored a free IBM ThinkPad for the department that way.)

    I bought the same $45 Android tablet for the missus' birthday off of AliExpress; it came with Android 4.0, and shipping cost $20 more. It has (almost) everything the original Kindle Fire had, but with better battery life, and minus the DRM or spamvertising.

    I wouldn't expect to get a free tablet for showing up at the local power company's booth at the county fair, but given the increasingly cheap prices? It's not too much of a stretch to see, in a couple of year, a fully functional (and decent!) tablet sitting in the toy section of the local stores, priced about the same as a Barbie Doll, model airplane, or suchlike.

  • by Trogre ( 513942 ) on Monday September 17, 2012 @06:24PM (#41368405) Homepage

    In principle I agree with you 100%. This is what China's manufacturing sector depends on - low wages and low environmental accountability, two area where he west cannot (and should not) compete. This is also one of the reasons I buy locally manufactured goods where possible.

    However in the case of tablets and smartphones the big name brands are manufactured in very similar, if not identical, conditions to the cheap ones,. In that light the appeal of expensive ones evaporates.

  • by jgotts ( 2785 ) <jgottsNO@SPAMgmail.com> on Monday September 17, 2012 @06:39PM (#41368583)

    Yes, hardware is super cheap. That's because we make it all in China. China has a huge labor base that has no say whatsoever in the political system. Labor and environmental laws, lax as they are, are not enforced.

    However, the Chinese economy is beginning to falter and labor unrest is on the rise. I used to think that Chinese pay would normalize with the West and that manufacturing would move to cheaper markets. Now I'm beginning to think differently. There will be major political unrest in China, supply chains will be severely disrupted, and hardware will move back to expensive labor markets, not cheap ones. Cheaper markets just don't have the infrastructure to match China and the West. Observe what happened in Thailand last year because they couldn't deal with a simple flood.

    So this period of super-cheap hardware fueled by the greed of CEO's will come to an end, factories will move back to the West, and things won't just be a bit more expensive, they will be considerably more expensive because of technical expertise lost to a Chinese state in chaos or decline.

  • Re:Yep (Score:5, Interesting)

    by Miamicanes ( 730264 ) on Monday September 17, 2012 @06:53PM (#41368753)

    The REAL problem is that as cheap, corner-cut bottom-dollar hardware becomes the ubiquitous norm, the cost of getting something even SLIGHTLY better begins to go up exponentially because Joe Sixpack and ten million of his friends are no longer absorbing most of its fixed costs. You end up in a situation like we have today, where the worst and cheapest of cheap hardware enjoys 99.997% of the economy-of-scale benefit, and the hardware YOU want to buy ends up costing 4-16 times as much, and isn't 4-16 times better. So, we end up with things like optical-disc players that literally and physically break after just a few months. 45" or larger LCD TVs that cost $400, but randomly die after 9-30 months and can't be meaningfully repaired because TV repair shops aren't staffed by EEs with hot air rework tools, service manuals barely exist & are often reverse-engineered, and it usually ends up costing more to pay someone to TRY and fix it (with no assurance of success) than to throw it to the curb and buy a new one, even if the actual problem is a cold solder joint somewhere.

    Or, my pet peeve: the disappearance of proper deinterlacing chips, like Faroudja's DCDi that could somehow make ratty analog interlaced broadcast video look good, in favor of cheaper solutions that completely brutalize the quality of scaled 1080i60 video & anything that didn't start out as 24fps film.

    Not to mention my other pet peeve -- "720p class" TVs whose specs are basically fraudulent & work by treating 1080i60 like fake 540p60, and hacking both fake 540p60 and 720p60 down to 480p60. Hint: any TV smaller than 32 inches advertised as "720p class" is VERY unlikely to actually have 1280x720 physical resolution (or better), unless it's explicitly advertised as having a 1366x768 "computer" mode. It completely blows my mind that it's even legal to advertise a panel having a physical resolution of 850x480 (give or take) as "720p class" just because it's capable of converting 720p60 and 1080i60 into something it can display on the fly instead of freaking out and displaying an error message. Or "720p60/1080p30" camcorders whose actual video quality looks like a $20 USB webcam, because they're feeding source video that's NOWHERE close to 1280x720, let alone 1920x1080, into a media processor ASIC, encoding it as 4mbit/sec h.264, and calling it "720p60" or "1080p30" just because that's its nominal encoding resolution.

    IMHO, "spec inflation" is the biggest crime of all. If $80 camcorders were required by law to be advertised based on their image sensor resolution rather than their encoded output resolution & disclose their dynamic range at a given signal/noise ratio, and $99 19" TVs had to disclose their physically-addressable pixel resolutions & be advertised as 18.51" TVs, we wouldn't have nearly the problem we do now, because it would make their absence of quality more obvious. Unfortunately, manufacturers are now allowed to sell garbage disguised as real products, and simultaneously destroy the market for the real thing.

  • by Charliemopps ( 1157495 ) on Monday September 17, 2012 @07:16PM (#41368983)
    How much labor do you think is involved in making a tablet? Have you ever seen a printed circuit board get made? It's so god damned fast it'll blow your mind. The employees are only there to load the machine with reals of components and take away the trash. I doubt it will be too long before that's automated to.
  • Wow, are they nuts? (Score:5, Interesting)

    by Lumpy ( 12016 ) on Monday September 17, 2012 @07:46PM (#41369339) Homepage

    I work for people that will pay $23,000 for a TV set. They paid $19,000 for their 12 room whole house audio amp. I am guessing that the author of the article is some young kid that knows nothing at all about electronics in general and is far too young to realize there is a HUGE market for very high end anything. Look up the price for a Sub-Zero fridge or a Viking Range some time to find out what rich people are buying. One of my clients has a $6500 gas grill on his deck.

    a $900 64gig 3G iPad is nothing to them. The Crestron Remote I just sold them for their living room AV gear was $1100.00

  • by Taco Cowboy ( 5327 ) on Monday September 17, 2012 @08:41PM (#41369801) Journal

    TFA's warcry "Hardware Is Dead" is itself braindead.

    Just because the price-point of hardware falls does not mean the mechanics of dealings in hardware is dead.

    There are many more items in our daily lives carry price-point well below of $45.

    Are people dealing in porcelain cup dying of hunger?

    Are businesses dealing in cheap plastic toys closing up shop?

    No, of course not !

    As long as there is a demand, there will be a supply, and as long as there is a price-point difference between the supply side and the amount demand side is willing to pay, there is profit to be made.

    The author doesn't even know shit about doing business. He acts as if he's the re-incarnation of Chicken Little and keep yelling "The Sky Is Falling ! The Sky Is Falling !!"

If you suspect a man, don't employ him.