RIP: Tigger

Paul Winchell, the voice of Tigger, died today at 82. In addition to voice work, Winchell invented the artificial heart.

Blue Sky Disney said it, but I will say it too. TTFN, Paul. You will be missed.

Dell in retail. In other news, pigs are flying.

Since I have not posted in a while, I thought I would give you a double.

For those who haven't heard, Dell is now going into retail. First at Wal-Mart but they are also looking to expand to all other retailers. Expect to see them on shelves at Best Buy and Circuit City by the end of the year. Everyone is going to want to carry Dell. Its the most well known PC brand in America. No risk at all for the retailer.

You are probably saying, "But wait a minute? What happened here? I mean wasn't the direct model this game changing thing that was going to consume the entire PC business? I thought retail was a dinosaur, why is it now in vogue?"

I know this guy named Chuck May. He is the most respected guy in the retail PC business. They call him "Professor PC". Chuck is the head of product planning at Gateway and came on-board with the eMachines acquisition. Now I have taken a lot of slags at Gateway on this blog, but Chuck is a genius and man to be listened to. Chuck May (along with Bob Davidson and Wayne Inouye) is the guy that saved the retail PC business. And he is the one that made Dell go into retail. What Chuck innovated was a system for accurately forecasting with high precision what sales will be of a given PC SKU at retail and more than that how to move a consumer up from one product to another at the point of sale. eMachines never gave markdown money to the retail and it is said that if there were any left over PCs at the end of the lifecycle, Bob and Chuck had to buy them out of their pockets personally. That's how accurate their forecast is. And it revolutionized PC retail because until that time, retail PCs were uncompetitive with Dell and direct retailers. The other thing eMachines is famous for is the invention of the low cost PC. Before eMachines, PCs were over $1000 items. Today, most of the desktop business is conducted at below $500.

One time I asked Chuck how retail could really compete with direct. His answer was "when PCs get cheap enough, you no longer are going to want to buy them on the internet or over the phone. Why wait a week when you can have one today? If there is no cost difference, why would you pay for shipping and wait for your purchase? People don't generally buy DVD players and digital cameras online because it is so convenient to buy them down the street. PCs will become like buying milk and bread." Those words were prophetic because Chuck has won and killed the mighty beast of direct.

Don't believe me? Look at Dell's rationale for going into retail. Its to get consumers. But here's the rub, the biggest loser in this whole move may be Gateway. Retailers will keep carrying HP. They may cut back on HP because HP has pissed them off for so many years with their "only game in town" mentality. But no one is going to drop HP. Gateway is the lesser brand and the third banana. But they are better liked and seen as an efficient engine for the retailers.

If Gateway is smart, and I am not sure they are, they are on the phone right now selling the company to Dell. And if my old buddies Chuck and Bob are smart, they are on the phone right now trying to get jobs at Dell. Dell has zero retail experience. They don't know how it works and it is a very different animal than direct. They have zero relationships with retail. They are bound to fuck up. Gateway has no future. They will never get into enterprise and their schools initiative is small beer. They are driving down the same road to doom as Micron with the focus on small business and schools. It just doesn't work. The stock is down below $2 and the company has been for sale for a long time. The speculation is that they will be bought by Acer, but Acer has failed a thousands times in the US and I see no reason why this time should be different. Lenovo is bound to get into retail any day now. And Apple is kicking ass.

It is a time for giants again. Having once been the innovator. Gateway is once again a dinosaur. Chuck/Bob, if you are reading this, go to Dell. They need you.

iPhone

Its been over a month since I posted on the blog. Sorry.

Coob posted a comment and asked "This is off topic, but do you have any thoughts on the iPhone?"

Yes, I do. The iPhone is a hugely bold move for Apple. What may not be appreciated by some is that this is not just Apple offering a new product, but it is entering a new industry. And if Apple makes this work it could be worth billions to them. At $500 a pop their projected target of 10M units in the first year gets them to $5B already. To put that in perspective, Apple did $19B in fiscal '06. So not counting growth in Mac or iPod, that gives Apple 25% growth IN YEAR ONE. Its a huge bet. And it will work because the iPhone is an amazing product.

So amazing in fact that it has the rest of the mobile industry running scared. Everyone else is going to have some kind of touch screen/no keyboard phone this year. Many have already announced them. Everyone that is except Nokia who has said publicly that they not convinced by the touch screen. Apple is certainly taking a risk on the lack of a keyboard. It is the reason I am not getting one. For an e-mail junkie like me to drop my blackberry for a touch screen is just too big a leap. Walt Mossberg, the toughest tech critic in America and known Apple lover got his iPhone the other day and said he is really struggling with the screen. If Apple starts to get all kinds of mixed reviews because of the lack of a keyboard, it could really hurt them and put a kibosh on their mobile phone effort. Cottie will remember the time we saw Guy Kawasaki speak at a NeXT user group about Jobs and he said that Steve always has one blind spot in every product. I hope the screen interface ain't it.