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Consumer Electronics19 Jan 2006 04:24 pm

One of the hot tech stories this week is the Research in Motion (RIMM) patent infringement case which threatens to shut down the use of all Blackberries in the US.

What is the probability that will happen? Apparently, not very high – at least if we use investor and consumer behavior as a barometer. The stock price of RIMM is off its highs, but it hasn’t crashed yet, indicating investors don’t believe there will be a blackout. That’s probably because investors assume that both parties will act economically rationally if forced to negotiate a settlement.

More interesting is the fact that BlackBerry users are not rushing to eBay to immediately unload their devices in the face of this risk. This week, Blackberry’s top model, the 8700 series, which retails for $499, is selling briskly at an average and healthy price of $322. The secondary market holds hidden nuggets of powerful information that aren’t always obvious. In this case, eBay discloses the real-time level of consumer confidence that blackberries are here to stay.

Perhaps the strength of the stock influenced the solid prices on eBay this week. Is the tail waging the dog? Look for a future when the opposite occurs and real-time consumer behavior on sites like eBay lead the stock market.

Consumer Electronics and DVDs and Recreation03 Jan 2006 12:12 pm

Every January, I make a resolution to lose weight. The yearly recurrence of this resolution is a testament to my lack of success at acheiving my goal. I’m not terribly overweight - I just need to shed 10 or 15 pounds. But I hate dieting and get terribly bored working out! Along with the resolution, I concoct a new scheme each year to help make the process easier. The scheme usually involves buying something - an online subscription to Weight Watchers last year, a Polar heart monitor watch that downloads and tracks your workout stats to a computer the year before, my very own spin cycle the year before that. The Weight Watchers subscription expired with barely any use. I sold the spin cycle on eBay last year. I still use the Polar watch, though its novelty wore off and it doesn’t get me into the gym frequently enough.

This year, I used the same logic to buy a Sony TX690 computer - a subnotebook that easily rests on an elliptical machine or treadmill. It comes with a built-in DVD player, a wireless card, and access to Cingular’s EDGE network (a new technology that lets you connect at broadband speed from anywhere, including an unwired gym). My new computer should help numb my brain while I run so I don’t get bored.

So how will I use it? To surf the Internet and watch movies while I’m working out, of course!

At my brother’s recommendation, I just purchased the first season of a television show called ‘24‘. This show, which is now in its fifth year, uses an entire season (24 episodes) to track a single 24 hour period (hence the title). Because the episodes are tied in so closely together, the show is extremely addicting and makes for perfect workout material. I keep the DVD locked in the computer so that I can’t watch it unless I am working out. I’m on the seventh episode and it’s working. I can’t wait for my next session on the elliptical!

I have never purchased a television series on DVD before this. In fact, I never really understood why people buy DVDs in the first place, since most movies are only viewed once. And with the advent of the digital video recorder (DVR), extended cable channels and Video on Demand (VOD), it puzzled me even more.

Well, I now understand. The convenience of being able to watch what you want, where you want, when you want is extremely valuable - so much so, that people are willing to pay around $45 for the package when they could have otherwise watched it for free. Of course, “free” assumes that you don’t assign a cost to the time you lose watching commercials. Each one hour episode clocks in at around 40 minutes, which means that over the course of a season, you are spending 480 minutes or eight hours watching commercials. How much do you value your free time? At $20 per hour, it would have cost you $160 to watch the first season of ‘24′on TV, making the $45, or around $2 an episode, a bargain.

The bargain gets even better if you resell the DVD box-set when you have finished watching it. The first season of ‘24′ is trading online for around $27 used. After reselling the DVD, your net cost of watching the series is $18.

But since there are transaction costs in selling online, I recommend that you wait until you have accumulated all four seasons and sell them as a package.

Misc01 Jan 2006 09:37 pm

One of the more common New Year’s resolutions of 2006 will be to unclutter your life - this will especially be true once FutureShop goes on sale (January 23) and finds its ways into the hands of people that want to improve their lives. Getting rid of the things you no longer use will allow you to enjoy more fully the things you really love. Martha Stewart is pushing the same message as she advises her readers to “clear out the clutter” in this New Year’s Day article she wrote.

Prudent auction companies and dropshops will drum up business by echoing the same timely message to their communities.

Consumer Electronics and Misc31 Dec 2005 11:46 am

Yesterday, I replaced my electric toothbrush with an Oral-B Pulsar - a high quality electric toothbrush that is completely disposable. It is sleek, compact and could easily pass for a regular toothbrush. On the back of the box it clearly states: “Fully disposable - no need to change parts.” And if that isn’t clear enough, it goes on to reinforce its disposability: “Includes 1 non-replaceable Duracell battery. Product is not designed to be opened.” Oral B doesn’t want you to change the battery or the brush - they want you to use it like you do a regular toothbrush and throw it away when it’s time to replace it. I used it this morning and experienced the best brush of my life - no exaggeration - and all for $5.99.

I bring this up because auction culture will necessarily cause consumers to choose between buying something that has resale value and something that they will eventually just throw away. There will be a flight to quality on one end of the consumer spectrum and a flight to disposability on the other end. This phenomenon will cause two things to happen. It will squeeze manufacturers that produce lower quality, non-branded and non-disposable products. Additionally, as the quality of disposable versions get better, manufacturers of non-disposable versions will have to offer more in their products to stay in the game.

We have been making the choice between permanent and disposable products in our everyday lives for years. Do you use a fancy, gold plated razor or a Gillette? A Bic Pen or a Montblanc? A Dunhill Lighter or a .99 cent special? Can you remember when disposable diapers didn’t exist? Twenty years ago you might not have believed that cameras would be available in a disposable version. And while the economics of an inexpensive cell phone makes it technically disposable, we haven’t officially embraced cell phones that way yet. What happens when the economics of buying something used makes an otherwise permanent acquisition technically disposable - will you treat the product that way?

The disposable electric toothbrush has officially arrived. The cell phone is just around the corner. The computer is close behind. What’s next?

And how will the permanent versions of these products evolve to compete?

Fashion and Cars29 Dec 2005 04:03 pm

In the car rental industry, companies regularly sell off their year-old fleets to make room for the newest model cars. It looks like Bag Borrow or Steal, a handbag rental company, is following their lead. They are having a sale to purge their inventory of “gingerly” used handbags. Click here for the details. And if you are interested in learning more about buying a used rental car, click here.

Misc27 Dec 2005 10:39 pm

Today I was quoted on the front page of the Financial Times in an article that discussed ‘regifting’, a term used to describe the behavior of giving someone a gift that one received as a gift from someone else. There were a flurry of similar articles in leading papers across the country. FutureShop was extensively excerpted in the FT article. I also appeared on CNBC to discuss the same topic this evening.

The general interest in the topic stems from the belief that people are starting to sell unwanted gifts on eBay rather than regifting them - a newsworthy topic for the week after Christmas.

Gifting is generally an economically inefficient behavior (unless you are giving cash, of course). Think about it for a moment. You are buying something for someone, yet you don’t really know the value that person will place on the item. In fact, it’s more than likely they will value the item at less than what you paid for it. Why? Because, if the recipient valued it as much, they would have likely bought it themselves (assuming they knew the item existed). And if they did buy it (and already own it) your duplicative gift is certainly worth a lot less to them than the first one they bought for themselves. (For example, how much would you pay for an identical shirt to the one you already own?) .

Fortunately, there are new and evolving practices that are helping make gift giving more efficient. The gift registry allows the recipient to tell its would-be gifters exactly what he or she wants. But gift registries are traditionally used for weddings (and more recently for baby showers). It is not yet culturally acceptable to register for birthdays, anniversaries, bar mitzvahs etc. Problem solved with the advent of the wish list, an Internet innovation that allows users of sites offering this feature to keep a running list online that lets the world know exactly what they want.

If you dont like to be told what to give - after all, a certain component of gifting is self serving…like getting the satisfaction of delivering a surprise to a friend or loved one, or deriving pleasure from making someone feel good - you can make the process more efficient by including a gift receipt with your gift. Gift receipts allow the recipient to exchange the gift hassle-free with something they prefer. Think back to the time when the only alternative would have been to include the actual receipt which revealed the cost - too tacky to ever have become mainstream. There is also the gift card, which like the gift receipt, allows you to control the venue of the purchase but not the actual item. There is an interesting secondary market for gift cards developing online as discussed in FutureShop as well as in this article.

If the gifts you received for the holidays this year didn’t come off your wish list or didn’t include a gift receipt, there are always the dropshops who are ready, willing and available to sell your unwanted gifts for you on eBay. They’ll even sell your gift cards if you don’t like the stores they came from!

Consumer Electronics24 Dec 2005 12:30 pm

This month I stumbled across an interesting service that complements auction culture. It’s called Cierge and the best way to understand it is to think of a concierge service for consumer electronics. Cierge is a division of Sony and provides its members with VIP access to their product line. Specifically, Cierge gets a special allocation of Sony products before they are released to the general public. As a member, you get the latest, greatest cameras, computers, game consoles and other goodies months before they are readily available in stores.

The price for access - a cool $1500 a year (you get free membership if you are an American Express Black Card cardholder). Given the cost, membership tends to be made up of people that are either tech junkies (like me) or tech-challenged (those that require special hand-holding when buying technology - Cierge will actually come to your home to install anything you buy if needed).

So why am I writing about this service? Simple. By being able to buy the newest gadgets in advance of broad public availability, you can enjoy owning these products for less. How? Because you get to own the newest gadgets depreciation free for several months. Typically, during the first few months of a new product’s life, it isn’t easy for people to get their hands on it. During that period, these products trade at a premium because people are willing to pay more to own the newest things (for example, the Xbox 360 is currently trading on eBay at almost 2X MSRP in its second month).

So by joining Cierge, you technically can amortize your cost for electronics over a much longer period than the average person. When it comes time to upgrading to the next best model, you can flip the old model to someone on eBay during a period when 1) it is still a current model and 2) you already got a lot of use out of it.

You can also use Cierge a different way - to try out the latest products for free! How? Buy the item, try it for a month or so, and if you are unhappy with the purchase, you can probably sell it online at cost (and sometimes at a profit) since there are always people willing to pay a premium for the newest hard-to-get models.

If you are interested in joining, call 877-295-7669 - They are so exclusive that they don’t have a website. But you can view Sony’s latest products at www.sonystyle.com.

For a list of the 50 greatest gadgets of all time, click here.

Misc22 Dec 2005 09:23 pm

So you’ve read FutureShop and want to keep up with the new auction culture revolution. Well then, you’ve come to the right place.

Check in frequently for real world updates on how people and businesses are embracing this new paradigm. And when you visit, look for tips, advice, strategies and other information that will help you understand and benefit from our rapidly changing world of buying and selling.

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