Away to the second greatest show on Earth

MSNBC.com calls CES the greatest show on Earth, but I have to take a bit of issue with that. Yes, it is the single largest US (!) technology and consumer show, but it is not the largest international one. Credit for that goes to CeBIT in Europe, which, although it is only held every two years, puts CES in its place. CES boasts only 140,000 visitors; CeBit nearly 500,000. Yikes.

Despite that, it is a great show, and I'll be headed there on Monday to see the latest and greatest flat panel displays, coolest wireless products, and the highest concentration of of high-tech marketing seen in the US. Expect blog entries and photos starting on Tuesday! And if other bloggers want to recognize me, I'm the bald guy with the SLR and the Apple Powerbook. Surprisingly, there aren't a ton of analysts that meet that description, so if you see me, introduce yourself and say hi.

Technorati Tags: CES, Consumer Electronics, Marketing, CeBIT

Intel's new brand takes aim at consumers

Today's New York Times comments on Intel's plans to shift to becoming a consumer brand after years selling only to business. This change in strategy, architected by Intel's new CMO Eric B. Kim, is part of the reason that the company is finally laying Intel inside to rest. Business Week also has an in-depth article on the transition.

Blackfriars things that this shift in focus simply amplifies a trend we identified a couple of years ago: that the epicenter of technology evolution is now the consumer, not business. And unlike the 1990s when companies only needed marketing messages compelling enough to get CIOs to buy, now technology companies need serious marketing -- not complex and incomprehensible specifications and features -- to succeed. The big question: what will Intel's big messages be to consumers, especially for consumer-oriented brands like Viiv. We'll undoubtedly hear more about this during the announcement next Tuesday and Paul Otellini's keynote at CES. Let's hope that the presentation goes better than Sean Malony's did last summer.

Technorati Tags: Viiv, Branding, Business, Intel, Marketing

Microsoft predicts Xbox 360 to become profitable by July 2006

Ars Technica notes that Microsoft predicts Xbox 360 will become profitable by Fiscal 2007, which starts in July 2006. Personally, I find that hard to believe except for one little detail I learned today: Halo 3 is scheduled to launch on the day that Playstation 3 is launched. Given that the many XBox 1 sales were made because of Halo 1, and that Halo 2 single-handedly made XBox 1 profitable for a quarter (and only that quarter), Microsoft might be betting the farm on having similarly great results with Halo 3.

Unfortunately, the data doesn't really support that theory. Sequels in the movie business tend to make about 1/2 of the revenue of the prior product, and the game business nowadays looks a lot like the movie business. So if Halo 2 made X dollars, the rational expectation is that Halo 3 will make X/2 dollars, not X or 2X just because it is new. Assuming that Microsoft is going to lose about $700 million on XBox 360s sold through June (6 million units times $126 loss per unit), Microsoft would have to sell about 19 million Halo 3s (at $40 profit per unit) to make up those losses. Given that Halo 2 sales were about 6 million units to date, that just doesn't seem possible.

XBox 360 was an interesting product launch, but at the end of the day, it ran very much along the lines Blackfriars predicted last summer. It sold fewer units that Microsoft originally projected (fewer than one million versus predictions of 1.6 to 2 million), and it was constrained by processor chip supplies. By July of next year, Microsoft will probably sell six million or so XBox 360 consoles. But by that point, Microsoft will be seeing real competition from Sony's Playstation 3 and probably from Nintendo's Revolution console, and that will be the end of the easy XBox 360 sale.

The result? The market for Halo 3 will be less than 10 million units by the end of 2006 -- and that's not enough to edge XBox 360 into the profitability. We expect Microsoft's XBox 360 business to lose money well into 2007 unless something drastically changes. The real question is how long Microsoft and its stockholders will subsidize this business in hopes of future profits.

Technorati Tags: Games, Gaming, Marketing, Microsoft, puppy, XBox 360

Things not to say when you are running a company

Wired Magazine has their 2005 Foot-In-Mouth awards up, and I have to say, they all made me say to myself, "What were those guys thinking?" But particularly notable is that there are eleven quotes in total, yet three were from only one company. No it wasn't Microsoft -- it was Intel. The only industry that came close was telecom, featuring quotes from Motorola, Worldcom, and SBC.

Technorati Tags: Business, Communication, Intel, Marketing, Microsoft, puppy, Telcos

The age of information overload -- CNN

CNN today has a nice thought piece on The age of information overload. The article uses this information overload as a justification for Google Print, arguing that time stresses are causing people to choose less reliable Internet sources over books, simply because Internet sources are more readily available and searchable.

The article closes with a great tyranny of too much comment about information overload.

If you fill every waking minute with more media, you never do any independent thinking," Nielsen said. "You may have all the specific pieces of information, but the higher level is knowledge and understanding. You don't have time for that reflection if it's being thrown at you at never-ending streams.

"All you can do is duck."

Couldn't have said it better ourselves.

Technorati Tags: Information overload, CNN, puppy, Tyranny Of Too Much

The end of "intel inside"

According to the Inquirer who cites the Economic Times, Intel is replacing the famous "intel inside" branding program with a new campaign beginning January 3, 2006. Intel inside, of course, was probably the most successful ingredient branding initiative in business history, so that will be a tough act to follow.

On the other hand, with many speculating that Intel's newest partner Apple has little interest in plastering logo stickers on its hip computer designs, Intel may have decided to try a more cool branding effort itself. After all, "intel inside" has been with us since 1991; maybe they decided to kill it before it got old enough to drive.

But fear not, lest you believe that all your favorite ingredient branding is gone. At least one set of leaked logos (who knows if there are the final ones) shows that the new Yonah processors speculated for use in forthcoming Apple laptops retain the "inside" moniker. The branding for those products would actually be "intel Core Solo inside" and "intel Core Duo inside". On the other hand, a system using the full Napa chip sets would get "intel Centrino" and "intel Centrino Duo" logos without the "inside". See what you think of these logos hosted by www.x86-secret.com.

And yes, virginia, there is no capital I in intel logos.

Technorati Tags: Apple, Brand, Intel, Intel inside, Marketing

And now there are three music labels being subpoenaed

We wrote yesterday about New York state's investigation into whether the music labels are fixing prices. Today, CNN notes that attorney general Eliot Spitzer has expanded that probe and subpoenaed three music labels to provide testimony and information in the investigation into price fixing. The article notes that Spitzer is investigating Vivendi as well as Warner and Sony BMG, whom we mentioned yesterday.

Our advice to the music labels: tell Spitzer your New Year's resolution is to make more money from The Long Tail of music than from fixed pricing.

Technorati Tags: Analysis, Marketing, Music, Price Fixing, Apple, Sony BMG, Vivendi

California finds fault with another brand of electronic voting machine

We wrote last week about Diebold's new legal problems from its untrustworthy voting machines. Well, on Christmas Eve, California decided that machines made by Diebold's competitor, ES&S, also need serious repairs before they can be certified, because the machines improperly reporting turnout figures and recording votes incorrectly. ES&S is the largest manufacturer of voting machines in the US, and it counts nearly 60% of all votes. Like the Diebold machines, ES&S machines do not create any paper audit trail, so there is no way to verify that its counts are correct, even though these machines are used in most US elections.

Given the many questionable facts associated with electronic voting machines, and the fact that many security experts consider these machines to be fundamentally flawed, this trend is only going to continue until someone in government (maybe Eliot Spitzer?) steps in and blows the whistle. Why is California out in front on this one? Perhaps because they have more high-tech workers and companies who know how easy it is to make computers do what they want -- and not necessarily what the user wants.

Technorati Tags: Voting Machines, e-Voting, ES&S, Security, Marketing, Diebold

Music companies investigated for anti-trust for ignoring the long tail

New York attorney general Eliot Spitzer is investigating whether four major recording companies are violating anti-trust laws with their demands for variable pricing of downloadable music.. Two of the labels -- Sony BMG and Warner -- have been particularly vocal in their criticism of Apple's fixed 99 cents per song, demanding that hit songs should sell for more and older tunes for less.

From a twenty-first century marketing point of view, this is really a bad pricing strategy. What these labels think they are doing is increasing overall revenue by charging more for hit music, which is the music they've worked hardest at to sign, promote, and distribute. They are assuming that these are going to be their high-value products. Too bad they aren't looking at the Internet demand data from folks like Amazon, Rhapsody, and Ecast.

Any self-respecting Internet blogger knows about The Long Tail (more in the long tail blog too), the fact that in a sufficiently large inventory-less market like the Internet, there is huge demand for niche products, be they obscure boy bands or blogs about garden gnomes. If you can sum up all the demand for these niche products, the demand far exceeds the demand for hits.

So what does this have to do with music pricing? Record labels are looking for high prices for hits and low prices for older music. But the demand for long-tail titles -- everything from old Sheena Easton titles to Tibetan monk chants -- vastly outnumbers that for hits. Worse, the record labels have already sunk their investments into those older titles, while new bands and songs require more marketing investments to keep them touring, recording, and appearing. The result: the labels are fighting to actually make less money in toto by fighting 99 cent universal price.

The funniest thing is that this isn't an obscure trend. It's been written up in everything from Business Week's Best of 2005 Ideas to The Economist. Yet the music labels keep fighting for their last century pricing preconceptions. Is it any wonder the music labels are going down the tubes?

Technorati Tags: Warner, Sony BMG, iTunes, Apple, The Long Tail, Business, Marketing

The gaming business catches rollout flu

Today's Wall Street Journal notes the negative impact that the XBox 360 rollout has had on major game makers like Electronic Arts and Activision. But this year's 18% drop is a far cry from the 1% decline after the Playstation 2 was introduced. Some executives are blaming the increasing reliance on franchise sequels such as James Bond and Tony Hawk games and less focus on great new gaming ideas:

But some executives say publishers may have become too reliant on sequels at the expense of making big bets on original games.

"Consumers are starting to recognize a lot of sameness in titles," says George Harrison, senior vice president of marketing at Nintendo's U.S. unit. "For big public publishers, the bigger you get, the more risk-averse you get."

Game sequels can still be huge money makers. Last Christmas, the two biggest-selling games were the smash hits Halo 2 from Microsoft and Grand Theft Auto: San Andreas from Take-Two Interactive Software Inc., both sequels. But the sequels jamming shelves this holiday season aren't captivating gamers.

"The lineup this year is arguably not as compelling," Electronic Arts Chief Executive Larry Probst told analysts this week.

Amen to that. But even more interesting is the comment that perhaps gaming is being muscled out of consumer wallets by other hot products:

Analysts point out that games also are competing in an increasingly crowded entertainment arena against such products as Apple Computer Inc.'s iPod. iPods, which range from $99 to $399, are flying off shelves this year.

With our projections of iPod sales sucking up anywhere from $1.6 to $2.4 billion in consumer revenues this holiday season, it should come as no surprise that new versions of old games perhaps aren't faring well. Sounds like it is time for game makers to take a step back and start getting creative again.

Technorati Tags: Analysis, Apple, Consumer Electronics, Games, Gaming, Marketing, Microsoft, puppy, XBox 360

Retail sales still tepid due to energy costs and tapped out consumers

The New York Times today notes that many retailers, fearing that today's last-minute buying spree will fail to make up for ho-hum sales growth this season, are looking past the holiday weekend and planning an aggressive Monday marketing blitz.. Blackfriars previously forecast weak holiday sales back in September because of the triple whammy of high energy costs, high pass-through product prices, and increased taxes. While retailers tried to spur buying by a variety of offers of free shipping, big discounts, and staying open late on Christmas Eve, consumers appear to be just too tapped out this holiday season to deliver any serious growth in holiday shopping. We predict that holiday sales will be up slightly from last year (our estimate is about 4%), but that will be a far cry from the 7% expected before the season started.

The good news? As noted in the Times article, retailers are planning more special marketing programs after Christmas this year to make up for the tepid holiday sales. But don't shop those sales looking for specials on the hottest products such as iPods and XBox 360s. Both of those lines of products are still so much in demand that few stores will have them available, and the few that do won't be discounting them.

Technorati Tags: Advertising, Apple, iPod, iPod nano, iPod Video, Marketing, Microsoft, Retail, XBox 360

Verizon goes nontraditional to market FiOS

Today's Boston Globe has an interesting article on how Verizon is marketing its new fiber services on dry cleaning bags, Chinese food boxes, and pizza boxes. The article cites one of my Forrester favorite consumer telecom analysts and close friend, Maribel Lopez, who experienced the marketing program first hand:

She was taken aback when she went to pick up her laundry from a dry cleaners near her Newton home, and had her clothes handed to her in a bag emblazoned with FiOS's aqua, orange, and white logo.

"I give them a dry cleaning slip and the plastic stuff my clothes were in had FiOS all over it," she said. She later ordered a pizza, which came in a box with the same insignia printed on it.

High marks to Verizon for creativity in non-traditional (and multichannel) marketing. Blackfriars' research showed that non-traditional marketing programs reached yearly highs in Q3. Now if FiOS could just deliver the dry cleaning as well as advertise on it, we'd start to think those fiber investments were really worthwhile.

Technorati Tags: Advertising, Fiber, FiOS, Maribel, Maribel Lopez, Marketing, Nontraditional marketing, tag, Telcos, Verizon

Sony to introduce 82-inch LCD at CES 2006

The Register out of the UK notes that Sony plans to unveil an 82-inch LCD in Las Vegas in two weeks. This matches the one that Samsung introduced in March 2005, but knowing Sony, I expect it will be different. Here's hoping it matches the quality of the 40-inch Bravias that we've seen.


But the real question will be, "What's the price?" Given that we currently have 65-inch plasmas selling for about $9,100, an 82-inch using similar pricing would be around $12,000. But at these sizes, all bets are off. After all, Samsung's 102-inch monster plasma shown at CES 2005 was rumored to cost more than $100,000.

Technorati Tags: 1080i, 1080p, 720p, HDTV, LCD, Marketing, Plasma, TV

Apple's Macintel difference

Newsfactor published an article today strangely titled "Apple Moving Away from Macs?". But when you read the article, it largely just points out the obvious: that Apple is now emphasizing iPods and digital entertainment hubs as much as computers. For those of you following along at home, that's probably a "duh".

But one of my Forrester colleagues, Ted Schadler, then notes that the Mac is changing too.

"Apple has established a level of differentiation through its hardware and software," said Forrester analyst Ted Schadler. "It's not going to abandon that. In fact, it's probable that with the Intel switch, there will be more push toward performance, especially with laptops."

I'm going to both disagree and agree with Ted on this point.

1. I disagree because the hardware will be mostly the same. The days of the Gigahertz wars are over. Apple is going to market with exactly the same processor, support, and graphics chip sets as every Windows/Intel vendor. So any processor performance differences are going to be nil.
   



2. I agree because the software and peripherals will be quite different. What this hardware parity will do is to pit Apple's software and drivers against Microsoft's. We've never really seen a head-to-head competition between Windows and Mac OS X on identical hardware. But more than raw horsepower, we're going to see some real differences in design philosophy with the Macintel machines. Features that Mac users take for granted, like Spotlight search, fast wake from sleep, peripherals that just work out of the box, and great dual-processor performance will now become mainstream. You can bet that Apple's software applications like iChat AV, Front Row, Final Cut Pro, and Keynote will be tuned to take every advantage of the Intel hardware. And you can expect some new peripheral features too, like iSight cameras and ultra-wideband wireless USB devices down the road as well.
   

Now all this said, the article is right in terms of new, non-Mac devices coming. Blackfriars has already predicted an all-in-one flat panel TV system later in 2006 (think an iMac G5 with a 42-inch plasma panel for a display). We'll also undoubtedly see more iPods, video and otherwise. But the Macintel products are going to be the foundations of Apple's move into the digital living room. And they'll be different from others in the industry in perhaps the most important way: they'll just work. And that will be a much bigger difference to consumers than any benchmark results would ever be.

Technorati Tags: Apple, Business, Consumer Electronics, Forrester, Front Row, HDTV, Intel, Mac OS X, Macintel, Marketing, Plasma, TV

More product liability for Sony about root-kit-based digital rights management

Not only is Sony being sued by the Texas Attorney General under anti-spyware statutes, but the state has also added deceptive trade practices to the lawsuit as well. Why? Because the root kit installs itself on the PC, even if the user declines the end user license agreement. Hmmm. I wonder if the Mac software that is hidden on the disk might do that as well?

Again, this marketing disaster is a great example of a a company deploying a technology hoping to earn a few extra dollars, not because it solved any user problem or need. Maybe Sony needs to study Google's "Don't be evil" mantra. At this point, it couldn't do any more damage to their brand than this misguided marketing plan.

Technorati Tags: DRM, Music, Sony

Recap of Blackfriars 2005 technology predictions.

At the beginning of the year, we made some predictions about what we'd see in consumer technology at CES 2005. I thought it might be interesting to recap the predictions and talk about how well reality matched up with those predictions. So here we go.

1. Ever bigger flat screen TVs. The transition to flat panel displays has begun, and there is no indication it will stop any time soon. While some are predicting a $1,000 flat panel TV by 2006, I don't expect that to happen. Instead, we'll see more pixels and larger panels while leaving prices in the $2,000 to $10,000 range. I think this one was mostly right. We did see some $999 flat panels on Black Friday, mostly in the 37-inch and 42-inch EDTV areas, but most of the action was in the sub-$2,500 42-inch HDTVs and in the below $4,000 50-inch HDTVs.
   



2. Ever smarter digital music players. The iPod revolution is in full swing, and I expect a host of new music products to complement the iPod ecosystem and compete with it as well. But I also expect more smart playback systems that observe your music preferences and choose music that you like just as Bose's uMusic does. Also true. Apple introduced Party Shuffle to account for user preferences. Bose extended uMusic into more of their lines too. And Apple will probably sell more iPods this year than it sold in the three years leading up to it.
   



3. Tons of digital imaging products.The hottest products after iPods this Christmas were digital cameras and printers, and every company in that space will be showing next-generation models. While I got the call right, I have to say my writing didn'g follow through. Digital cameras remain hot, and after iPods are still the most searched for items on Froogle. Digital SLRs are now in the $500 range, and most major camera manufacturers have multiple lines of products for every need and price range. The big development that I missed was the rise of digital image kiosks for the likes of CVS and WalMart; that has turned into a multi-million dollar market by itself. But my biggest surprise this year: despite their popularilty, I didn't post a single blog entry just about digital cameras.
   



4. A format war for the next generation of DVDs. HD-DVD and Blu-Ray/DVD will fight it out for the hot Christmas products of 2006. Expect to see the two consortia supporting those formats to conduct a war of licensing for the next couple of years. This one has been huge. While I would claim that HD-DVD is on the ropes, the battle isn't over yet, and a lot will depend on which products gain traction next year. However, my call remains: Blu-Ray wins -- big time.
   



5. Lots of wireless audio products. Everyone hates wiring their house just to have music, but it takes a lot more than an 802.11b wireless ethernet link to make wireless audio plug and play. I expect to see a host of home theatre systems and media servers to sport wireless speaker links for both in-room and whole home audio. While this prediction came true (Panasonic, Sony, and Bose all have wireless speaker systems on the market now), again, I didn't write any posts about them. Bad me.
   

So the tally for 2005 was three right and two right, but unrecognized. We'll have to do better in 2006 and cover all our predictions throughout the year. Look for our 2006 predictions in the coming week.

Technorati Tags: Analysis, Apple, CES, Consumer Electronics, Digital home, Digital imaging, Gadgets, Marketing, Plasma, HD-DVD, Blu-Ray, puppy, Video iPod, Wireless audio

Hitachi's plans for world plasma domination

HDBeat notes that Hitachi has thrown down the gauntlet to dominate plasma displays in 2008. I am sure Samsung, LG, and Panasonic are going to have something to say about that. And despite this appearing to be a battle between the Japanese and Korean manufacturers, I've got to believe that we'll see China get into the act too.

This said, We saw about a 35% price drop of plasma displays this year. With these guys gearing up for global business warfare, we can probably expect the same for the next two years or so as well. But just as in 2005, I don't think we'll see overall prices drop that much; instead you'll see the different price points gain more resolution (1080p will become a standard premium feature), better scalers, and more cutting edge consumer design as differentiators.

Technorati Tags: 1080i, Samsung, HDTV, Consumer Electronics, Hitachi, Plasma, TV, LG, 720p, 1080p, Panasonic

Electronic Arts blames bad results on poor XBox 360 production

The Wall Street Journal notes that Electronic Arts has warned that it will miss two quarters of earnings, in part because of low XBox 360 sales.

This is the vendor version of the XBox 360 shortage backlash. As the video game business becomes increasingly hit-driven like the movie business, we can expect to see profits at gaming companies vary widely as well. According to NPD, game sales have dropped 18% this year because of fewer hits and consumer anticipation of new platforms. What's unsaid in the articles is that new XBox 360 games retail for $10 more than older games, which may be suppressing sales as well.

With the launch of both Playstation 3 and the Nintendo Revolution in 2006, we should see a pickup in game sales next year. But it looks like anything but a Merry Christmas for game makers this year.

Technorati Tags: Business, Consumer Electronics, Electronic Arts, Games, Gaming, Microsoft, Playstation 3, Revolution, Nintendo, Sony, XBox 360

Who you callin' a weenie network?

My old boss at Forrester, Paul Callahan, has just started his blog with a post on why little networks will have a bigger impact. These "weenie networks" as Paul calls them are much like the extended X Internet networks I wrote about in 2001 while I was at Forrester (you may have to register with Forrester to read the report). Clearly, companies like Wisair and Ember see the potential of these tiny networks. The open question is, "Which weenie will build the first billion dollar business out of them?"

Technorati Tags: Wisair, Marketing, Ember, Weenie networks, Wireless, Paul Callahan

Blackfriars marketing budget data in BtoB magazine

In its December 18th issue, BtoB Magazine highlights Blackfriars' data and analysis in an article on 2006 marketing budgets. The article, which ran in the print edition of the magazine, is also available online here.

Technorati Tags: Advertising, Analysis, Blackfriars, Business, Buzz Marketing, Communication, Marketing, Marketing measurement, Budgets

The two-tiered Internet tollbooth

Canadian law professor Michael Geist has an excellent commentary on the dangers of the two-tiered Internet that the telcos are lobbying for with the US FCC. Despite carrier claims that this would simply be an optional value-added service, Geist notes that some carriers have already abused net neutrality to keep Voice over IP services from competing with their existing phone service. Let's hope the FCC doesn't kill the net neutrality goose that created the Internet golden egg (or is that the Internet Egg McMuffin?)

Technorati Tags: Broadband, Business, Communication, Internet, Marketing, FCC, Telecom

The Internet: now one billion served

Jakob Nielsen notes that the Internet now has more than one billion users. Even more interesting are the new demographics:

According to Morgan Stanley estimates, 36% of Internet users are now in Asia and 24% are in Europe. Only 23% of users are in North America, where it all started in 1969 when two computers -- one in Los Angeles, the other in Palo Alto -- were networked together.

It took 36 years for the Internet to get its first billion users. The second billion will probably be added by 2015; most of these new users will be in Asia. The third billion will be harder, and might not be reached until 2040.

I hope this explains why so much of the spam you are getting is now in other languages.

But seriously, I think Jakob is onto the fact that this is a wakeup call to those of us who tend to market our Web sites, products, and services assuming a homogeneous audience. North American users are now less than one quarter of Internet users. It is time for marketers to remember that no matter what you are saying or selling, you are addressing a global audience that demands international usability.

Technorati Tags: Advertising, Business, Internet, Marketing, Usability, Web, Web advertising

Apple shipping 100,000 nanos a day, mulls 1GB iPod nano

Yikes. According to AppleInsider, Apple is currently shipping 100,000 iPod nanos a day. In addition, the article claims that Apple is considering building a 1 GByte iPod nano to sell for $149. There would then be some pricing pressure on the 1 GByte iPod Shuffle that currently sells for $129, but clearly Apple could adjust pricing as needed.

Nonetheless, if Apple is shipping 9 million iPod nanos this quarter alone, clearly my model of Apple selling 8 million iPods for Q4 is just way too low. Maybe those guys who are predicting a 11 million iPod Christmas -- or even 12 million -- have it right. I just can't figure out where they got the production capacity.

Technorati Tags: iPod nano, Retail, Consumer Electronics, Apple, iPod, iPod Video, Business, Analysis

XBox 360 demand in Sony's back yard? Not so much.

The New York Times noted that XBox 360 sales have been weak in Tokyo. Given Sony's dominance of the mature gaming market in Japan and Nintendo's continuing focus on the younger gamers, it's not a big surprise that Microsoft is struggling in this geography. Comments bore out the reason behind shopper's reticence:

Lined up on a rack near the display are the only nine games sold for Xbox 360. But behind it are some 3,000 games, spread across six store aisles, for Microsoft's biggest rival here, the Sony PlayStation 2.

"Xbox doesn't even have Gran Turismo," said Shun'ichi Moriizumi, naming a popular auto racing game. One of the few shoppers to stop in front of the Xbox display, Mr. Moriizumi, a 22-year-old university student, said he came to see the Xbox 360, which went on sale here Dec. 10, 18 days after its debut in the United States.

Back here at home, NPD has stated that its initial sales figures for XBox 360 sales and games were overinflated. NPD was going to re-release its revised data last week, but I haven't seen those results published yet. Meanwhile, the last likely resupply of XBox 360s at various retailers happened over the weekend. No word yet of what the actual volumes were, but it appears all were sold out very quickly. So despite the poor launch in Japan, Microsoft should have no trouble selling all they have made -- Blackfriars' projection was just shy of one million units as early as this summer -- before Christmas. The open question is how well demand will hold up in the retail doldrums of January and February.

Technorati Tags: Business, Consumer Electronics, Games, Gaming, Microsoft, Sony, XBox 360

Marketing trust in free and fair elections

You know a story is reaching critical mass when it shows up on the Op-Ed page of the New York Times. This weekend, the Gray Lady noted that serious questions are emerging about Diebold, the maker of roughly half of the electronic voting machines in the US. This follows the resignation of CEO Walden O'Dell earlier in the week, and the filing of a securities fraud suit against the company. But most concerning are the results of a Florida test showing that election officials and insiders can change the results of an election without anyone knowing. Noted in another article is the fact that another hacker was able to add 60,000 hidden votes to the central tabulation facility.

The central problem inherent in today's electronic voting machines is that there is no way for a trusted third party to validate that the results of an election reflect the votes cast in the election. Without paper ballots or similar audit systems that can be verified manually without the electronic black boxes being involved, we simply have to accept manufacturer assertions that the machines work as intended. Somehow, only in electronic voting is Ronald Reagan's admonition to "Trust, yet verify." ignored.

There will undoubtedly be many technical debates on the security issues here. But there is a larger marketing and communications job to be done too. Democracy works when people trust that elections are fair and their vote counts. If voters don't trust that the results reflect their wishes, the system falls apart, and faith in government erodes.

Both states and federal government agencies need to start building trust in the 2006 mid-term elections now, or face a complete lack of faith in the results. One step in that direction would be to establish a single set of standards for electronic voting, including creating an audit-able paper trail. Such was the recommendation of The Carter-Baker commission this year. But more importantly, the government has to start talking about its commitment to fair and verifiable voting, and not leave solutions to for-profit companies. After all, elections shouldn't go to the lowest or highest bidder -- they should be won by the people that get the most votes.

In today's technology-laden culture, sometimes simpler truly is better at convincing people that systems are fair. We put in place a system of paper ballots and purple ink for Iraqis to vote with. Why can't the US have a system that is equally as simple and easy to verify? Until electronic voting companies can answer that question with something other than "Trust us", this question won't die.

Technorati Tags: Diebold, e-Voting, Voting Machines, Communication, Voting, Communications, Marketing

iPods becoming unavailable for Christmas

AppleInsider notes that 1 Gigabyte iPod Shuffles are now listed as being unavailable until mid-January. At least one analyst is speculating that it will be replaced by a new even smaller Shuffle to be announced at MacWorld. It is interesting to note that the notation of it being available at the Apple Store is different than the one showing after-Christmas availability only for the 4 GByte iPod nano.

It sure sounds like new iPod Shuffles are likely in January. Heck, that $1.3 billion Apple spent on flash memory had to end up somewhere. But what this also means is that iPod demand for Christmas remains above supplies for the hottest products. And interestingly, note that the products that are running out are the more expensive ones in each of their lines, not the least expensive. This phenomenon demonstrates some of the behavioral economics I wrote about earlier today, and certainly proves the power of good marketing.

Technorati Tags: Apple, Business, Consumer Electronics, Influence, iPod, Marketing, Merchandising, Psychology, Video iPod

Irrational economics -- the ways we really buy

The Boston Globe science section today ran a very interesting article on a study being done at the Boston Federal Reserve Bank on the rise of behavioral economics. While some of the examples were rehashes of very old experiments (the example of excessive consumer choice was cited in Cialdini's 1992 book, "Influence: The Psychology of Persuasion"), the content was still thought-provoking, touching on such topics as why consumers pay $4 for a cup of coffee at Starbucks when they could buy one at the local coffee shop for $1.25.

One example I thought was particularly telling was the one about monkeys who optimized not for maximum gain, but to avoid losses:

Another economic principle holds that people always seek to maximize returns. But behavioral economics suggests avoiding loss is a more powerful motivator, and could, via evolution, be deeply ingrained in human nature.

At Yale University, Keith Chen, an economist, and Laurie Santos, a psychologist, taught Capuchin monkeys to buy food with metal chips. The monkeys were given a choice: They could buy one grape, with a 50-50 chance of winning a second grape, or get two grapes at the same price, but with a 50-50 chance of losing one.

In other words, the chances of ending up with just one grape were the same. Researchers expected the monkeys to simply buy the most food presented to them. But three out of four times, the monkeys chose to buy a single grape. The explanation: The monkeys didn't want to risk a loss.

I believe that the combination of overwhelming choice and the desire to avoid losses that dooms subscription music services, such as the URGE service Microsoft and MTV are launching next year. Few consumers want to spend all their time sifting through two million different song tracks, and those that do make the effort won't want to lose access to that work if they let their subscription lapse. It's a great example of a service offering being designed by marketers while ignoring basic consumer behavior.

Technorati Tags: Microsoft, MTV, URGE, Consumers, Psychology, Music, Cialdini, Behavioral Economics, Merchandising, Marketing

Google fends off Microsoft's attack on its revenue stream

The Wall Street Journal reports that Google will soon ink a deal with AOL to buy 5% of its stock for $1 billion and renew its advertising partnership. This apparently is a deal rejecting deal complexity as much as anything.

Google's late maneuvering also left Microsoft at the altar. Last week, it appeared close to sealing its own transaction with AOL. But people close to the talks said Time Warner executives grew uneasy over the complexity of a contemplated joint venture with Microsoft, as well as the fledgling nature of its search-engine and advertising technology. They also were won over by the chance to deepen ties to Google, the leader in search queries, which has the most online ad revenue among Internet companies.

More importantly for Google, this deal neutralizes a plan by Microsoft to cut off its "air supply" of revenue, to quote a prior Microsoft effort on Netscape. And given that Google derives much of its market power and ability to garner advertisers from being the largest search engine, it was a deal that it couldn't afford to lose -- yet.

Technorati Tags: Advertising, Google, Marketing, Microsoft

iPod mania outstrips cell phone desire this holiday (Morgan Stanley)

Morgan Stanley has updated their forecast of iPod sales this holiday season, noting that iPods are the #1 product consumers are buying this holiday, with more people buying iPods than cell phones. It also notes that consumers are shifting their demand toward the more expensive (and more capable, including video functions) iPods from simpler ones like the Shuffle. The firm also notes that US iPod penetration is only 8% (and Mac penetration 5%), leaving lots of room for growth.

One factoid I thought was particularly interesting was that Morgan believes that the US retail market could tolerate 300 to 400 Apple stores would be about right to maximize consumer penetration. Apple currently has 135 stores.

Morgan has projected 2006 earnings of $2.07 and a share price target of $90. Those numbers are remarkably close to mine, although my iPod sales projection is lower because of supply constraints.

Technorati Tags: Analysis, Apple, Consumer Electronics, iPod, iPod Video, iTunes, Retail

SED flat-panel TVs in spring 2006?

Reuters has a good end-of-year article on the promise of surface-conduction electron-emitter displays (SED) to shake up the flat panel market. The CEO of Canon is quoted as saying he would like to have his 55-inch SED flat-panel on the market by spring. But the article notes that the challenge is making money at the business, particularly against mature industries like plasma. One target was particularly notable:

Merrill Lynch analyst Ryohei Takahashi notes that South Korea's Samsung Electronics Co. (005930.KS: Quote, Profile, Research) is aiming to get the price of a plasma set down to $20 per inch by 2008. That would mean $1,000 for a 50-inch TV, one-fourth current prices and a mighty hurdle for a relatively new product like SED.

Hmmmm. Given current prices for 50-inch plasmas, that's about a 35% price decline each year, assuming Samsung hits that target mid-2008. And we've already seen some claiming that some new technologies could cut the price of LCD panels by half in that same time frame. But the analyst's point is well-taken; once a technology is well-established in the market, a new technology needs huge price-performance advantages to displace the existing players. The open question is, can SED deliver those, or other marketing features that will allow it to not compete just on price?

We should find out more at CES in January. We will be attending the show and will keep our eyes peeled in case Canon and Toshiba show up with any working panels. Canon has shown a 36-inch panel to a variety of VIPs in the last year or so, but I don't think they've shown them publicly.

Technorati Tags: 1080i, 1080p, 720p, Business, Consumer Electronics, HDTV, LCD, Manufacturing, Marketing, Plasma, puppy, Canon, SED

Apple more valuable than Microsoft in 2007?

Following up on last night's post about Apple versus HP, one hedge fund manager asserts that Apple's market cap could exceed Microsoft's in 2007. It took 2.5 years for Apple to grow from $6 billion to $60 billion in market cap. Microsoft's market cap is $286 billion. The numbers work. But while Apple's growth is impresssive, the stock market almost never goes in a straight line. Regardless, this sounds like a great topic for a future comparison piece like the one I did on Apple-HP.

The one thing that makes me feel like this prediction may be more accurate than we think is just Apple's marketing prowess. Name another tech company that has the same ability to convince consumers that they lust after their products. That kind of marketing is a huge differentiator and hard to acquire.

All that said, one of the rules I live by is that stock markets tend to over-react -- both to good and bad news. Apple was devalued as a company for a very long time. It is possible that it will be over-valued sometime in the next few years, maybe even in 2007. But all I can say is, call me when the P/E starts to exceed its annual earnings growth (currently in excess of 300%), and I'll sell.

Technorati Tags: Analysis, Apple, Business, Financial analysis, Marketing, Merchandising, Microsoft, Stocks

HDTV over WiFi: don't try this at home kids

HDBeat, one of our favorite blogs, has a rather interesting article about the challenges of running HDTV over wireless links using an XBox and a Windows Media Center. The bottom line: forget even trying with 802.11b. 802.11a and 802.11g are more likely to work, but only with no obstacles. And as many commenters point out, you may be better off just laying an Ethernet cable if you can.

So here's a question for HDTV manufacturers: why aren't there optical inputs on most sets? If I'm going to run a wire, it's just as easy to run a small fiber cable, and I can guarantee a lot better signals on that fiber around AC outlets and other interfering sources. Just a thought...

Technorati Tags: Consumer Electronics, Fiber, Flat-screen TV, HDTV, Wireless, Wi-Fi, XBox 360

The final flat-panel frontier: packaging

Wired magazine notes the Siemens is developing 'electronic paper' displays that can be used for product packaging. They argue these paper-thin electronic displays will be so cheap they could replace traditional cardboard labels on everything from milk cartons to Cheerios. They also say that the cereal aisle in your supermarket could start to look like the Las Vegas strip.

We're big fans of flat displays here, but we also agree with Wired's insight at the end of the article as well on tyranny of too much grounds:

"I think it is great for corporate advertising. I think it is great for advertising agencies. I think it is great for PR and marketing. But I don't think it is great for the mental health of the population," Lasn said. "We live in an age when we the people have lost control of our own culture that is being spoon-fed to us by marketers and advertising agencies -- and that is where all of the breakthroughs are happening."

So just like liquor, please use flat displays responsibly, and don't watch your groceries while driving home.

Technorati Tags: Siemens, Displays, Marketing, Retail, Flat-screen TV, Advertising, Awareness, Audiences

All I want for Christmas is .... Apple stock

I've been watching the articles being published about Hewlett Packard the last couple days as Mark Hurd put forth his vision in New York City on where the company was going. One of the big sound bites has been to look for the company to grow 4 to 6 percent in revenue in 2007. The company's stock price has been up more than 40% this year in anticipation of such growth projections. Meanwhile, Apple suffered two downgrades this week based upon stock valuation, despite having the hottest product in the hottest consumer electronics category this Christmas.

This got me to thinking about how the prospects for HP fare compared with Apple. So I put together the following table to compare the two companies:

	Hewlett Packard	Apple
Revenue	$86.7 billion	$13.9 billion
Trailing Price/Earnings	35	46
Profit margin	3%	10%
Operating margin	6%	12%
Quarterly revenue growth year-over-year	7%	57%
Quarterly earnings growth year-over-year	-62%	306%
Cash	$13.9 billion	$8.3 billion
52-week stock price change	+43%	+121%

After looking at that table, it looks to me like the analyst ratings of the two firms are backwards. Yes, Apple is a much smaller company. But Apple's pipeline of new products and services looks extremely strong. It has a billion-dollar software business that makes Microsoft-like margins, yet few people recognize. The company is about to compete with HP in computers, but with better style, a more secure operating system, and better software bundles. And the iPod is generating both excitement and revenues like there is no tomorrow. Heck, even The head of HBO wants to put his shows on Apple's iPods. And the Associated Press is now saying that Apple sets the pace in consumer electronics. It's only a matter of time before people realize the stock will continue to do the same.

In the interests of full disclosure, I am not a financial analyst, I do own some Apple stock, and your mileage may vary.

Technorati Tags: Analysis, Apple, Business, Financial analysis, HBO, Hewlett Packard, HP, iPod, Music, Steve Jobs, Stocks, TV, Video iPod

The digital home....NOT

New York Times technology writer David Pogue wrote of his skepticism regarding the digital home last week. According to his newsletter today, apparently responses have been running about 80-20 against the digital home concept.

This is no big surprise. Blackfriars noted this summer that Intel's Dr. Genevieve Bell has noted similar sentiments, saying:

Consumers don't want to build the digital home. They just want their home digital.

Someone once said that we'll have the paperless office sometime after we have the paperless bathroom. I suspect the same is true of the digital home. But to be fair, I don't think anyone has yet marketed great products that solve real consumer problems in digital homes yet either. I have high hopes that Apple may crack this code in 2006, just as it did with digital music over the past four years. We'll get some clues when Steve Jobs takes the stage in about four and a half weeks -- or not.

Technorati Tags: Apple, Consumer Electronics, Digital home, Gadgets, HDTV, Intel, TV, Video iPod

The great XBox 360 restock begins Sunday

Gizmodo has a lead on how many Xbox 360s are being resupplied to Best Buy this weekend. Overall opinion is that they will go on sale Sunday morning. My opinion is that Best Buy will probably advertise "Xbox 360 in stock!" in its Sunday circulars as a way to drive traffic to stores on this next-to-last holiday shopping weekend, even though by the time consumers read the pitch, it probably won't be true any more.

That said, here is the following shipping scorecard for XBox 360s so far:

US Launch: 300,000
Europe launch: 300,000
Japan launch: 159,000

Total: 759,000

That's very much in line with our projections from this fall. This resupply shipment is supposed to add another 300,000, bringing the total to 1,059,000. Blackfriars doesn't expect any further supply this year, so while Microsoft will have overdelivered on our estimates (less than 1,000,000 by Christmas), it will fall far short of the 1.6 to 1.8 million units originally estimated by analysts and implied by Microsoft. The interesting part will be to see what Microsoft will do to drive demand in January and February, when sales will undoubtedly be slower.

Technorati Tags: Advertising, Consumer Electronics, Games, Gaming, Marketing, Microsoft, XBox 360

Does telecom bandwidth foreshadow international economic growth?

Business 2.0 writer Om Malik asks an interesting question about Reliance Infocomm's new fiber link opening up between China and India: Can broadband predict economic shifts? He notes that currently the biggest pipes are between New York and London, and much of China's traffic to India has been routing through the US. But with the new FLAG-enabled fiber (does anyone remember the FLAG techno-journalism articles in Wired Magazine?), that traffic can now go direct. The question is, will economic value follow the bits?

Blackfriars answer: not really. While international communications is important to growing economic activity, what is even more important is in-country communication. While a direct fiber link between, say Hong Kong and New Delhi is useful, the economies of both countries actually need more bandwidth from their major cities to more modest concentrations of people than better international links. with only about 300 million fixed-line telephones and about the same number of cell phones in China, telecom penetration is still only about 25% of the population. India has a similar profile. This wiring (both fixed line and celluar) of these countries' populations will be a much larger effect than what route their international bits take.

Technorati Tags: Broadband, Business, Communication, Fiber, Internet, Marketing, Telecom

iPod mania going strong on eBay

We wrote yesterday about the appreciating prices of iPod minis on eBay. Today, eBay put out a press release on Business Wire noting that both iPod minis and iPod nanos are some of the top-selling items this holiday season (you will need free registration on Business Wire to read the press release). While the volumes are high, we should note that they really are a drop in the bucket compared to the 8 million iPods we've predicted Apple will sell this quarter, but it is a strong gauge of iPod demand.

Also, checking the Apple store, I note that the $249 4GB iPod nanos shipping times have now slipped past Christmas. $199 42GB iPod nanos and $299 iPod videos seem to still be available with one to two day availability, but my guess is that will start to stretch out as panic buying sets in closer to Christmas. So if you want one, don't wait.

Technorati Tags: Apple, Consumer Electronics, iPod, Marketing, Merchandizing, Video iPod

What? No Googlizer Bunny?

As MediaPost notes, Google has quietly started underwriting PBS's science program NOVA using home-developed 15-second ads. This seems to have flummoxed many in the Silicon Valley community; as was noted by Jupiter Analyst Gary Stein:

"The fact that there would be any sort of a commercial, even a short little spot, is not what they've done in the past," he said. "It's one of those things that's become a badge of honor among Web 2.0 companies--to not spend any money on advertising."

Guys that is so 1990s. Repeat after me: This is awareness advertising. It's a good thing. And it beats the hell out of the traditional 30-second spot.

Seriously, PBS sponsorships and underwriting carry a double benefit for marketers. First, they hit a high-income, high-education demographic, which is often very useful. Secondly, they do so in a fairly low-cost way, and carry an implicit third-party validation (i.e., PBS is implicitly vouching that they are a worthy underwriter, something you don't get on your run of the mill Fox Network spot) to their message that you can't buy any other way. The fact that Google figured this out all by themselves, put together a rather clever ad, and actually spent the money says that they have some people smart enough to think about the value of their brand. Who knows. Maybe Masterpiece Theatre is next.

Technorati Tags: Awareness, Underwriting, Retail, Google, Advertising, Audiences, PBS

The new hot investment vehicle: discontinued iPod minis

Blackfriars has noted that Christmas 2005 is a battle between the iPod and XBox 360 for the hot product of the season. Our current estimate is Apple will sell at least 8 million iPods for an average selling price of about $200 against about 1 million XBox 360s selling for an average price of $400 (we are part of that trend -- we've accounted for three iPod sales ourselves in our holiday shopping). But with iPod nano and Video iPod sales going gangbusters, it's a bit of a surprise that iPod mini -- the iPod that got discontinued at the iPod nano launch -- are now increasing in value.

This is a great example of people valuing scarce objects of desire more than those that are plentiful. Professor Robert Cialdini wrote about this phenomenon  with cookies more than thirteen years ago in his book, "Influence: The Psychology of Persuasion". Consumers taking a cookie from a jar with only three cookies in it found it more tasty, more desirable, and better looking than one from a jar full of cookies, even though the cookies were identical. The $1,000 XBox 360s on eBay this year are demonstrating this same "scarcity drives desirability" phenomenon. And because Apple isn't making iPod minis any more, that same scarcity has driven up iPod mini eBay prices by 32% since it was discontinued.

But lest we forget, the iPod mini product has always had huge demand, often outstripping its supply. For months after its introduction, it was impossible to find this music player in stock, even at Apple stores, and it was one of the hottest products for Christmas 2004. It just shows the staying power of great products -- and great marketing.

Technorati Tags: Apple, Business, Consumer Electronics, iPod, Marketing, Music, Influence

Japan already discounting XBox 360s four days after launch

Kotaku notes that Japanese shops are now  discounting XBox 360 consoles to as low as 18.800 yen (about $157) to move out unsold units. Bloomberg is confirming the lack of interest, noting that only 28% of units shipped to Japanese stores have been sold. Blackfriars noted on Saturday that response to the XBox launch in Japan was muted. This response shows just how important it is to tailor products and marketing to markets outside the US and not to assume that what works here will work everywhere. We should also note that by the time of the Japanese launch, consumers had a chance to note the XBox 360 defect rate, and that may have kept Japanese consumers -- who are raised on very high rates of customer service and low defect rates -- away.

Technorati Tags: Games, Gaming, Marketing, Merchandizing, Microsoft, Retail, XBox 360

Low chip yields are causing Xbox 360 shortages

According to Next Generation Microsoft has attributed its XBox 360 production shortages to poor processor chip yields. Blackfriars had predicted this situation back in July based upon IBM's track record with Apple, and reiterated the chip production challenges in August. What was interesting in the article was that Microsoft had considered postponing the launch until chip yields were better; given the backlash that is currently occurring (especially given Microsoft's Live update slip-up last night, that might have been prudent.

Of course, Sony is subject to the same vagaries of IBM chip yields, and the cell processor is more complex than the XBox 360 one. But as is often the case, the issue here is not the technology problem, but how the business is marketing how it deals with problems. Microsoft has chosen to not talk about its chip yield problem until now, telling everyone that it was going to sell millions of XBox 360s in the first 90 days. Sony is taking a different tack. Sony has already been communicating challenging messages to consumers, such as the fact that its Playstation 3 will be "more expensive" (chip yield could be one of the factors that Sony is taking into account in this assessment). Given how much consumers value trust when buying expensive consumer electronics, I believe Sony's approach will garner it more customers and more customer loyalty than Microsoft's. The question is, how long will it take Microsoft to figure this out?

Technorati Tags: Communication, Communications, Games, Gaming, Marketing, Microsoft, Playstation 3, XBox 360

Sun's fight for the greener data center

Nicholas Carr, author of the book, "Does IT Matter?, critiques Sun Microsystems' marketing as represented by Jonathan Schwartz's blog, claiming that  "Sun has bounced between marketing pitches like Ricochet Rabbit on a meth jag". But then he latches onto Sun's latest initiative on power-efficient data centers and servers, and notes that that is a trend worth going after, given many of Google's and Intel's recently voiced concerns over the same topic.

I don't know. This sounds a bit to me like SUV drivers suddenly waking up and deciding if gas is going to be four dollars a gallon, hybrid technology is a good idea. After all, the fundamental trend behind "Does IT Matter" was the commoditization of information technology. The claim was always that since any company could buy racks of Dell servers, there was no competitive advantage in those servers. But those are the same servers that Sun customers are trying to displace. So which is it? Is IT commoditizing (and therefore Sun's power saving approach doesn't matter, since they are simply competing against a commodity), or has the business world finally recognized that Sun's approach of designing its own chips makes some sense after all, since it is those chips that provide better power consumption (and thereby, greener data centers)?

And by the way, much of the need for gazillions of servers in data centers has been from pragmatic approaches to getting Windows servers to run reliably. About 10 years ago, data center managers discovered that if you want an application to run predictably on a Windows server, you should run it as the ONLY application on that server. So when companies decide to run 300 business applications and databases, they end up with, you guessed it, 300 Wintel servers, each of which is mostly idling and burning power. Sun always claimed they had a better way -- buy a big 64-way Star Fire server, and run as many apps as you like, since Unix doesn't have the same reliability limitations as Windows. But businesses never liked the million dollar price tag of those servers. Instead, they bought 300 $10,000 Wintel servers -- and spent three times as much as they would have for the Sun box.

My view: power consumption is an important and often-overlooked metric. Just as businesses need to consider total cost of ownership (TCO) in their purchases of PCs, businesses also need to consider data center costs of floor space, air conditioning, power, and flexibility in their choices of server technology. Call it total costs of service or TCS. Smart companies will sell solutions with lower TCS, and that's exactly what Sun is doing with their new Star Fire servers. Companies that aren't so smart will tell you that it's all a commodity, and that you should buy their commodity because it has a lower price. Professor Carr is discovering that Sun's marketing and products are different -- but you have to look beyond the commodity IT market to appreciate its value. Let's hope more businesses figure this out.

Technorati Tags: Advertising, Communication, Marketing, Processors, Servers, Star Fire, Sun

Oops: XBox 360 Live update kills backwards compatibility

This is one of those results that proves rushing a patch to market is never good marketing. Russell Beattie notes that in an attempt to make more old XBox games compatible with XBox 360, The XBox 360's latest live update killed backwards compatibility entirely -- and worried him that it had fried the entire system. Word has it that Microsoft is working on a fix for the fix (and it may be on the system now), but yikes! Given the shortages of XBox 360s in consumer hands, this feels like a patch that could have waited until after the holidays. After all, it's not like there was any lack of demand for XBox 360s because they couldn't run Ghost Recon. And if Microsoft wants to win over the Japanese consumer, this type of marketing and support is not going to get it done.

Technorati Tags: Games, Gaming, Microsoft, Customer service, XBox 360

XBox 360 launch in Japan muted according to BBC/Reuters

Well, if you want an XBox 360, Japan is the place to go. The BBC reports that response to the Japanese launch on Saturday was subdued; one store noted that only 50 consoles were sold in the first two hours of availability. There's no big surprise here -- I think everyone knows that it's tough going launching a product on your competitor's home turf. But hey! Maybe someone in Tokyo will send one to Steve Ballmer; we hear he is looking to buy one and hasn't been been able to sign up for the employee purchase plan.

Technorati Tags: Consumer Electronics, Games, Gaming, Marketing, Microsoft, XBox 360