On April 22, 2010, the world celebrated the 40th edition of Earth Day.  According to earthday.org, it is the largest secular event in the world with over 1 billion people participating in over 190 countries.  This number was surprising to me because I barely remember reading anything about the event that allegedly included 1/7 of the population.  Other than the Google homepage spelling out Google in very “earthy” letters, Earth Day would have passed me by unnoticed.  By contrast, events like the Coachella Valley Music and Arts Festival (75,000 people), the Kentucky Derby (140,000 people), and even the NFL draft (held in Radio City Music Hall) had around the clock coverage, but were much smaller in scale.  Even a BP oil spill that happened off the Gulf Coast on April 20th was receiving around the clock coverage during Earth Day.  This made me believe that Earth Day would be more effective if people focused more on what they were trying to accomplish rather than how many people participated.  Thus, the question was raised: how many companies are serious about its environmental goals and how many are focused on convincing the public that they are serious?

I can not speak for every company nor can I provide a complete analysis on the positive and negative effects of any company’s environmental policy.  However, I can point out a few examples of environmental hypocrisy that will remind everyone that the only difference you can be sure of is the one you make yourself.

Let us begin with BP.  Oil companies already have a bad reputation regarding the environment and we have heard everyone blasting BP for spilling oil into the Gulf.  What people are not talking about is that BP has been recognized as one of the most environmentally conscience companies in the world.  Granted, operating an oil company generates a certain amount of pollution, but so do dozens of other industries.  So where is the hypocrisy?  It lies in the federal government.  Just listen to how they scold BP and its offshore drilling efforts.  Even though, on April 1st, President Obama lifted a decades-long moratorium on offshore drilling.  This effectively allows new drilling to take place in Alaska, the Gulf, and the entire Atlantic coast.  New drilling has been banned for the last 20 years.

During the government’s tongue lashing of BP, you will also not hear them mention that BP was one of three finalists for the US Department of Interior’s Pollution Prevention Award.  The winner was chosen before April 20th, but the ceremony has been postponed.  If BP was not the original winner, then why postpone the ceremony?  You also will not hear them mention BP as a finalist for the U.S. Government’s SAFETY Award For Excellence (SAFE) for High Outer Continental Shelf (OCS) Activity.  In other words, BP is a finalist for having the safest off-shore drilling operation.   The winner of this award was also chosen before April 20th, and the ceremony has been postponed.  I wonder who won.  It appears to me that BP is serious about the environment and the government is more concerned with making you think it cares.

Another great example is FedEx.  They announced on March 29th that they are launching the first electric delivery vehicle.  Awesome FedEx, we appreciate your efforts.  Here is the press release about the vehicle, which is not up and running yet.  Shocking.

The only problem with announcing that you are the first at something is that people might not believe you.  As it turns out, UPS has been operating 4 electric delivery trucks in New York since 2004, and dozens more in Europe.  The difference is that FedEx felt the need to run ads, commercials, and hold a press conference to tell the world about the one electric vehicle that they have and do not use.  UPS did the same thing without running around telling the world how wonderful they are.  They wanted to make a difference and did.  FedEx wants you to think that it is considering making a difference, but has not yet. 

The point is, before you allow a company’s environmental policies effect where you spend your money, remember that they will overstate the positives, understate the negatives, and say whatever you want to hear to get your business, fatten their wallets, and make you feel warm and fuzzy on the inside.  Like the old saying goes, “The loudest person in the room has the least to say.”  If a company was really making a difference it would not have to consistently tell you that it was.  You would notice, and if you really care about doing your part for the environment, remember, the only part that matters is the part you do yourself.  Don’t let a company fool you into thinking you are helping if you purchase its products.  The only difference it will truly make is on their balance sheet.

Here in the office printing analyst community, few forecast drum beats can be heard as loudly as claims of the imminent consolidation of copier vendors and the looming obsolescence of the A3 format.  These forecasts have gained increasing clout during the last year as the floundering economy expedited Oce’s path to acquisition and the emergence of new A4 MFPs, such as Sharp’s Frontier series, prompted analysts to proclaim that A3s were finally on their way out.  Although there is very justifiable evidence behind each of these forecasts, one of the most compelling arguments that both have come to fruition occurred in February when Panasonic announced that it was finally exiting the A3 MFP-Copier market to capitalize on the growth opportunities that lie in the A4 space.

From a 10,000-foot view it seemed pretty clear.  With one announcement, Panasonic encapsulated two of the most common theories surrounding the office printing space and became the first milestone in a pair of major transitions that are set to change the office printing market forever.  However, as with many apparently clear harbingers of change, the closer you look at Panasonic’s announced transition, the less straightforward the motivations behind it are.

Although Panasonic was never a copier market powerhouse, the manufacturer’s investment into the A3 space was clearly waning for the last five years before reaching its official nadir earlier this year.

On the product side, Panasonic’s actions did not reflect those of a company with intentions of growing within the copier market.  Panasonic launched just 12 new A3 MFPs between 2007 and 2010, all of which were closely based on their predecessors and provided no notable specification or feature improvements.  To put that into context, since December 2009 Xerox, Canon, and Ricoh have launched 13, 12, and 6 new A3 systems, respectively, and Ricoh is expected to launch another four MFPs in the coming months.  Additionally, Panasonic resisted expansion into departmental segments, sat as a spectator as vendors migrated to the light production arena, and never launched a true third party development platform.

Panasonic’s Old A3s

Panasonic appears to have invested even less into the marketing and distribution of its copiers and actually adopted almost the exact opposite channel strategy of the current market leaders.  In 2005, Panasonic bucked the growing trend of direct sales expansion by selling-off its 13 direct branches, in a cost cutting move that was positioned as an attempt to reduce competition with its channel partners.  During the following years, Panasonic’s limited emphasis behind its A3 business resulted in the manufacturer losing a large number of its authorized dealers, almost all mid-market and major enterprise clients, and its entire government sales presence beyond the municipal level.  Perhaps the most telling sign of Panasonic’s lack of commitment to the copier market came in February 2009 when the vendor announced that it would transition its 60 remaining authorized dealers to reseller status.

One year before making it official, Panasonic had essentially ended development of new A3 MFPs and was the only copier manufacturer without a direct sales or an authorized dealer presence.  To put it plainly, Panasonic’s exit two months ago came as no surprise to those that were paying attention.

One thing that may surprise folks in the A3 obsolescence crowed is that Panasonic is not shifting its focus to the type of A4s that will theoretically replace copiers.  Instead the vendor is planning to expand its current SOHO lineup, launching a variety of new desktop models that will sell through IT resellers, its Panafax channel, and will even reportedly include a substantial retail channel push (and they thought direct sales were expensive!).

Panasonic’s New A4s

Given the market share race and manufacturing scale pressures that face current A3 MFP manufacturers and the hardware cost advantages of A4 MFPs, it is almost certain that vendor consolidation and an engine format shift will continue.  However, Panasonic’s exit from the copier space and increased commitment to A4 printers should in no way be viewed as a move from a company that really had a choice.  Going forward there are certainly a handful of A3 vendors with low enough market shares and limited enough manufacturing scale that their future may be in doubt, but none are anywhere close to where Panasonic was in 2005 (nevermind 2010), so its safe to expect a substantial slowdown in vendor consolidation until the next recession.  Meanwhile, the expected transition to A4 MFPs is already occurring, but it will likely take the form of more balanced A3 and A4 product and fleet lineups as manufacturers look to provide the right hardware solutions for their clients’ needs.  It will not be in any way as abrupt as Panasonic’s recent transition – especially not until A4s can rival A3 systems’ usage costs, speeds, and high volume capabilities.

It’s no secret that the most successful retailers have the best knowledge of their products, their supply chain, and their customers.  The faster and more consistently a chain can process and respond to changes in these areas, the more competitive they are likely to be.  Conventional inventory management relies on line-of-sight tracking; an employee must visually identify a product in order to account for it.  It is both costly and time-consuming to have employees routinely do this, so this is where RFID technology can provide a solution.

RFID or radio frequency identification works by using radio waves to transmit information between a small label and a reader.  The technology is applied through a variety of mediums, including credit cards, passports, loyalty cards, and even the pass cards for buses running by Gap’s office in San Diego.  In retail, putting RFID tags on products and packaging can have huge benefits for the manufacturer down to the end-user.

RFID tags can store information and can be read from up to a several feet away, without line-of-sight, so they are especially helpful for inventory management and security.  Manufacturers who put RFID tags on their products can add information about individual items, such as when it was made, how, and by whom.  Pallets of goods can be equipped with RFID tags to improve shipping accuracy and cut costs.  Once a product reaches a retailer’s shelf it can be accounted for faster and more effectively using the same RFID technology, reducing labor costs and inventory issues.  Retailers and manufacturers can even use RFID to track promotions more effectively.  RFID technology is already a proven solution for limiting retail shrinkage-it can reduce human error in the supply chain and double as a theft deterrent.  Additionally, tags programmed with a manufacturer’s identification can assure consumers that they have purchased a genuine product.

Standard size for retail, some are even smaller

Despite all the benefits of RFID, there are plenty of security and privacy concerns.  A retailer can track a shopper throughout a store utilizing loyalty cards that the person is carrying or an RFID tag implanted in clothing.  And who’s to say a person can’t steal your credit card information using an RFID reader a few yards away.  From a retailer’s perspective, there are risks associated with using RFID.  There have already been a few incidents where individuals have compromised RFID-enabled inventories using their own RFID reader.  These concerns have to be addressed before retailers or customers will feel totally comfortable with implementing RFID.

For now RFID tag costs are still pretty high, ranging between 5 and 50 cents depending on order volume, so you’ll probably only see them on higher-priced products right now.  However, as usage increases and costs continue to drop, RFID technology is expected to migrate toward lower cost products.  In-house RFID printers are becoming less expensive as well, making it possible for businesses to create their own RFID solutions.  I think there’s a huge opportunity for these little tags to improve identification and tracking for businesses, who in turn can use it to enhance the shopper experience and create value for customers.  Next time you’re opening a DVD case or tearing into your new electronic goody take a peek inside the package and look for an RFID label; they’re in more places than you may realize!

I am easily impressed.  Here I was, watching the NCAA tournament online, thinking, “This is brilliant, I can watch live basketball without having cable.”  All because of my magical broadband connection provided by Cox Communications.  Of course, the game looked like it was being played by pixilated Lego-men, but I didn’t care.  All I cared about was being able to watch my beloved Kentucky Wildcats without Greg Gumble and the CBS crew switching back and forth between games as if a squirrely 3 year-old was holding the remote.

However, when I recently received my bill for my broadband services I decided not to just blindly pay the balance.  I wanted to understand the brilliance for which I was paying.  Cox lists its fastest broadband service for $58.95 on its website.  That is about $9.75 more than the national average, according to the OECD (Organization for Economic Co-Operation and Development). This did not strike me as odd because I live in San Diego, where everything is three times more expensive. As I dug deeper, what I found frustrated me to no end, and after you read this you just might be as frustrated as I am!

First, Americans pay an average of $49.25 for broadband service.  This ranks 20th out of the 30 countries that are members of the OECD.  Greece has the cheapest broadband with an average monthly service costing the consumer $27.72, while Turkey is the most expensive with an average of $135.36.  Fifteen countries have averages of less than $40.00.  Relative to the developed world, broadband is expensive in America.

Don’t mistake cost for quality because the US ranks 23rd in advertised broadband speed. The average advertised download speed in the States is around 14618kbs/s.  That number is very misleading because the FCC estimates that households are lucky to get half of the advertised speed.  Half!  That means we are downloading at around 7000kbs/s.  That number ranks 29th, just ahead of Mexico (2514kbs/s) and just behind the Irish (6008kbs/s).  There are select places in this country that have broadband speeds of 51200kbs/s (50mbs/s), similar to those found in most countries.  However, that costs the consumer about $145 a month in the US.  That would make it the most expensive internet in the world!  This is when I started getting frustrated.

Is this even broadband anymore?  FCC regulations dictate that in order for something to be considered broadband it must have a download speed of 768kbs/s.  So as long as you are getting that, a company and call it broadband, and charge you accordingly.  Dial up internet speeds max out at 56kbs/s, but since the service can be bought for under $5.00 a month it is cheaper per kb of speed in a lot of places.

Americans have little choice in the matter.  Most cities have only two broadband providers, the phone company or the cable company, which creates a duopoly, and some homes are not even equipped with the infrastructure to offer both.  Yes, that is correct; America doesn’t have the infrastructure to offer competitive broadband prices.  Companies in other countries were willing to share the cost of building the required infrastructure while competing for customers.  But since the phone companies and cable companies seem to lack any sort of quality customer service I can see why they don’t want to compete.

Being deceived is frustrating, but what really bothers me is the fact that we are missing out on a number of opportunities simply because our internet is too slow.  There is a whole host of applications that we cannot use.  Remote surgery, video instant messaging, and streaming HDTV are just a few, and I am sure there are many more applications in education, energy management, health care, and public safety that I am not thinking about.

Google wants to know what can be achieved with faster internet. That’s why, in one lucky town, they are going to build an experimental fiber network that supports speeds up to 102400kbs/s, (100mbs/s) just to see what kind of applications can be developed when bandwidth is no longer a constraint.  There was no shortage of volunteers, either.  1100 towns applied, and over 200,000 individuals wrote letters to Google explaining why their town should be chosen.

When I read the 2020 estimate, which is in the most recent stimulus bill, I was beyond frustrated and decided to test my own internet connection.  My download speed clocked in at a pathetic 4985 kbs/s, and I realized America might have the worst internet in the world.  You can check yours here.

I apologize for sounding defeated, but our internet is slow and expensive and there is not a thing we can do about it.  The government estimates that by around 2020, 100 million homes will have broadband speeds of 100mbs/s.  That’s great; we have to wait a decade to catch up to the rest of the world, and how fast will their internet be by then?  My bitterness began to swell, and it got worse when my pixilated Wildcats lost a hard fought game to the West Virginia Mountaineers in the Elite Eight.  The video of that game could only be appreciated by the likes of Cubist painters Pablo Picasso or Georges Braque.  Ignorance is bliss, and I understand that now.  I should have just blindly paid the balance.

Apple last week launched its much hyped iPad tablet, selling approximately 300,000 units on the first day.  The company also announced that at least one book was downloaded within several hours of the purchase of each unit.  Several online blogs announced that the iPad would be the eReader market leader and called it the ‘Kindle Killer’.  The device may be cool (although I think it is a giant iPod Touch!) and should help people reduce the number of times they switch on their good ole’ PC or notebook for web browsing, the iPad is certainly not a ‘Kindle Killer’.  The technical reason for this is the iPad’s panel.  The iPad features a 9.7-inch IPS LED display versus the commonly used e-ink panel in most eReaders.  If you have not seen an eReader until now, an e-ink panel looks almost exactly the same as a printed page and has no backlight.  What this means is that the device does not produce any glare, allowing one to read even in bright sunlight and making the panel easy on their eyes.  However, unlike the backlit iPad, eReader users would still need to switch on their reading light if they were to read at night, which they would do anyway if they were reading an actual paper book.  The iPad also gains an upper-hand when it comes to reading color e-content.  e-ink panels currently lack support for color and only allow users to read in  black and white, thus not being the ideal choice for reading magazines.  The nascent e-ink technology also lacks the fast processing speed of the iPad.  However, companies are working towards developing much improved and faster e-ink panels and these disadvantages are expected to be minimalized by the end of the year.

Can you do this with the iPad?

Other than the lack of an e-ink panel, there are certain other attributes of the iPad that make it less comparable to eReaders.  The 24 ounce iPad weighs a good six ounces more than the 9.7-inch Kindle or twice as much as Sony’s Daily Edition.  This could lead to increased strain when reading for long hours, while holding the iPad with one hand.  At the time of the iPad’s launch, Steve Jobs announced that consumers could take a flight to Japan and use the iPad without recharging it, so an iPad’s battery would last approximately ten hours.  Now ten hours sounds great in comparison to a netbook or a laptop, but it is less impressive when compared to 2 weeks or 336 hours of battery life provided by most standard eReaders.

Most recent surveys also confirm that a majority of expected iPad owners are mainly going to use the device for mobile productivity purposes.  According to separate surveys from Comscore and ChangeWave Research, only 37 percent of people are going to read books on the iPad, while surveys from CNET and PriceGrabber.com put that number at an even lower 20 and 13 percent, respectively.  Although the 300,000 users who have already bought the device and others who are going to buy it will surely help drive e-content, the iPad is expected to be mainly used for web browsing, checking emails, and entertainment purposes.  With that said, the ‘cool factor’ associated with the Apple brand, the device’s multifunctional capabilities, and the company’s loyal core consumer base will continue to drive sales for the iPad, while taking some business away from dedicated eReaders.

As mentioned, the iPad offers far more capabilities than a standard eReader and certainly brings diversity to the eReader shelf, thus increasing competition in the still relatively uncompetitive market.  Although Amazon has yet to officially release sales figures for its Kindles, the e-commerce giant is estimated to hold a majority share of the eReader market, which is likely to go down in several months due to the imminent diversification of the market.  It is difficult to imagine that many consumers who own an iPad, including the 300,000 that purchased the device on Saturday, would also invest in a dedicated ebook reading device.  The iPad will likely appeal more to the tech savvy population, people looking to replace netbooks, and the magazine and news reading population, while the ‘Kindle’ will continue to be used by reading enthusiasts.  The iPad is the jack of all trades, being able to offer a little bit of everything to consumers, but the Kindles of the world are still the masters for ebook reading.  I can best relate this to the cricket world (for those not familiar with cricket, it is similar to American Baseball!).  Chris Cairns was the best all-rounder, but batting is still synonymous with Sachin Tendulkar.

Sachin 'Ton'dulkar

Last Friday, the Los Angeles Times featured a faux-cover with a HUGE picture of Johnny Depp as the Madhatter in promotion of the opening of Alice in Wonderland. If this isn’t advertising, I don’t know what is. To take out a full-color ad creating a cover wrap for the newspaper is big-doings for Disney, who must have some faith that the print media will reach audiences.

We can all admit that LA is a world of its own. What we think of as a normal size billboard is barely comparable to the city’s gargantuan displays that border its roads. With that in mind, this type of advertising would probably only happen in The City of Angels. Nevertheless, Disney is relying on the old school newspaper as one of its many advertising avenues for what proved to be an absolute hit. Alice in Wonderland became the best March release in history and biggest 3D movie ever, grossing $116.3 million during opening weekend! It’s doubtful that Disney’s advertisement in the LA Times alone made the movie move pass Avatar in its opening weekend, but it is also doubtful that Disney would spend somewhere in the range of $700,000 on something that didn’t specifically go toward its bottom line.

Yes, newspapers are suffering throughout the United States and around the world. But, the Alice in Wonderland advertisement shows that there is still a pulse for the newspaper industry. While the main objective of this ad was to entice people to go see the movie, it may have also helped sell newspapers, which ads rarely do. It would not be surprising if little Susie saw the front cover, begged her mother to buy it for her so she could hang it on her wall and cherish it (or have nightmares) for years to come. There are plenty of people that love the feel of newspaper, and yes, even that the ink gets all over your hands – although I can’t relate to that one!

The U.S. newspaper industry lost $7.5 billion in advertising revenues during 2008 according to the Newspaper Association of America. Historically, newspapers thrived on their advertising revenues. Without them, the papers can’t exist, at least not in the form they do today.

The Los Angeles Times took a concept developed on the web and moved it to print, something that is typically done in the opposite direction. The LA Times differentiated itself with this innovative ad and Disney debuted a new type of advertising while launching what will prove to be one of the biggest movies of the year.

While this is an amazing effort by the LA Times in offering innovative advertising options, the newspaper industry is expected to continue to decline. Even more reason to buy them while you can! Way to go LA Times and Disney – extending the life of the newspaper industry one movie advertisement at a time!

Disclaimer: Yes, I am the print media analyst at gap intelligence

One year ago last week, gap intelligence’s Market Intelligence reports included an industry news brief revealing that two thirds of all former Circuit City customers planned to go to Best Buy and Walmart for their future electronics purchases.  An understandable, but still immense, 55 percent of Circuit City shoppers planned to make future purchases at Best Buy, while a respectable 11 percent of shoppers expected to direct future CE purchases to Walmart locations.  Assuming that a similar portion of former CompUSA shoppers were already transitioning to Best Buy and Walmart, 2009 stood to be a banner year for the retail giants’ consumer electronics sales, regardless of the economy.

Although Best Buy and a number of other retailers certainly benefited from the recent channel consolidation, the redistribution of Circuit City and CompUSA’s sales has been far from one-to-one.  It turns out that much of Circuit City’s $11.7 billion 2008 revenue and CompUSA’s $4 billion-plus 2006 revenue was also consolidated – leaving surviving retailers and CE manufacturers searching for where at least $5 billion in annual electronics sales went.

One could easily attribute 2009’s reduced electronics spending to the ongoing recession and they would be at least partially right.  However, I believe Systemax CEO Gilbert Fiorentino has tracked down this missing electronics demand, and interestingly enough, it appears that it never left – it’s just not being addressed at the same rate as before.  In a recent retailer roundtable discussion Mr. Fiorentino cracked open his Marketing 101 textbook and explained this phenomenon in the simplest terms.  With the exit of CompUSA and Circuit City went $800 million in annual advertising, roughly 25,000 relatively knowledgeable sales associates, and nearly 800 retail locations, all of which in their own way spurred demand.  To borrow Staples’s long-retired slogan “It’s that easy.”

The good news for CE manufacturers and retailers is that the potential electronics spending ceiling just increased significantly.  It’s just a matter of creating a need in the minds of consumers, providing inviting and convenient locations to shop, and staffing these locations with a knowledgeable and incentivized sales staff.  These are not new ideas and can certainly be done again.

So now the question is: Who is going to go out and make this happen?

Gilbert Fiorentino

Said this:

“You know how important advertising is – people think they need what they are told they think they need.  It wasn’t just pent-up demand in a world where a guy woke up in the morning and said, “I want to go buy a laptop” or “I want to go buy a TV.”

Don Draper

Said this:

“The most important idea in advertising is “new.” It creates an itch.  You simply put your product in there as a kind of calamine lotion.”

They are both right….

Smokey the Bear has the summer to worry about forest fires. Accountants are currently enduring their 7 day work week that runs through April 15^th. Gary has camera season. Camera season is a twice annual event when every single digital camera maker launches, unveils, bows, discloses, reveals, and make public their latest and greatest digital cameras. The year’s first camera season starts at the Consumer Electronics Trade Show and runs through the PMA Trade Show – usually January 1 through March 1. The first two months of the year is marked by chaos, turmoil, and very little blogging by this guy.

Think that interest in photography has diminished during this down economy? Through the first 8 weeks of 2010, I wrote about 285 new cameras. Yes, 285. I wrote A LOT. The cameras came in small shapes and big lenses. There are cameras that can be dunked underwater, that can be dropped in the snow, and can be thrown in the mud. There are green cameras and champagne cameras, there are pink ones, and another that comes with a backpacking strap. Pentax’ Optio W90 looks like it was designed by the guy who makes Coleman lanterns and General Imaging’s new camera line was crafted by fashion designer Jason Wu – who’s gowns have been worn by Michelle Obama (I researched this).

All of these cameras have kept me from blogging. So, much like Stephen King’s excluded cabin tucked away in the New Hampshire woods, I have taken to the sludge of Lake Arrowhead to catch up on some blogs. However, before I recap the 2009 Hirooka Awards, announce the new categories that we have launched, and show you the world’s first gap app, please humor me by reading through “Gary’s Camera Season Part 1 Award” winners. This is the first time I have hosted a Camera Award show, probably my last, and the awards themselves are coveted by absolutely no one.

In the spirit of Four H Ribbons handed out at the State Fair:

Third Place – Yellow Ribbon

Sony Cyber-shot TX5. Sony’s first waterproof camera, the $249 Cyber-shot TX5 can be dropped in the shallow end, can take movies of VERY slow moving fish, and can be kept frozen in a block of ice – in case your in an avalanche. More than what the camera can do on the outside, it’s more about what the Cyber-shot TX5 can do on the inside that matters. The camera ships with a back-lit CMOS sensor that gives it 10-fps shooting speed, adds Sony’s very cool sweep panorama shooting mode, can record high definition video, and is operated by a touch screen display.

Second Place – Red Ribbon

Olympus SP 800UZ. For those who, like me, prefer to do their stalking from a distance, Olympus’ SP 800UZ is the Zoom King. The model is headlined by its 30-times optical zoom lens that has few equals (FujiFilm FinePix HS10). Outside of capturing long range subjects, the SP 800UZ can record high def video, ships with Olympus’ very clever Art Filters (see movie), and includes 2GB of memory – enough storage for a full day of prowling. Best yet, while other cameras with weaker lenses and less features are offered for as much as $499, the SP 800UZ is quite the bargain at $349.

First Place – Blue Ribbon

General Imaging Jason Wu Series. Why does a simplistic camera from a small camera company win my Blue Ribbon? It’s not what the camera does, but how the camera was developed. General Imaging’s Jason Wu series is the first camera I can think of that has completely rethought the way a camera is packaged to the customer. Apple rethought packaging with its iPhone – giving the product such an elegant casing that it made customers feel like they just bought something very special. General Imaging’s Jas Wu series takes a page from Apple’s playbook and comes in an elegantly crafted box that would shine in the jewelry case at Nordstrom’s.

With its focused aimed squarely at Mom’s and gift givers, General Imaging designed the Jason Wu camera to be as simplistic as possible. The Jason Wu camera is fitted with just three buttons, on, shutter, and video, includes 4GB (no need for memory cards), and ships with a built-in USB plug that both transfers images and charges the camera. Flip turned the camcorder market on its ear by being the first to include a USB plug, expect the rest of the camera market to follow General Imaging’s lead. Trend setting packaging, fashion plate brand name, and truly innovative features – esteemed fashion designer Jason Wu gets my 4H Blue Ribbon. I am sure he is thrilled.

We’ve all been sold on the notion of globalization for the last decade, and for good reason.  Here at GAP we just recently launched our B.R.I.C. services to satisfy the global demand for information.  China is the world’s most populous country and fastest growing of all the G-20 economies.  Thus, operating in China is essential to any company that wants to operate globally, especially those based in America.  This is what I have been led to believe.  Yet, Google Inc., arguably America’s most respected company, is threatening to end its Chinese operations.  The search engine giant has apparently had enough of China’s extensive censorship and is claiming that the Chinese government hacked into Gmail accounts belonging to a number of human rights activist.

While Google is a great company and much admired here at GAP, the first question I had to ask myself was whether or not this was a tactical statement.  Could Google really leave China without a knee-jerk reaction by its stock-holders?  The answer appears to be, so far, yes.  China, even though it has the most internet users in the world, only accounts for 1% of Google’s revenue.  The day Google made the announcement, 1/12/09, its shares traded for only 2% lower at the end of the trading day.  Two days later, on 1/14/09 the company’s stock closed 5 points higher than what it opened for on 1/13/09.  Either stockholders do not think Google will bolt, or they do not think it will matter.  Only time will tell.

One reason Google wants to leave might be because it is losing the battle for market share in China.  China’s own state run search engine Baidu currently owns a 62% share of the market compared to Google’s 30%.  Controlling a third of the largest market in the world seems relatively successful, but not so much when you compare it to the 68% share it controls in the U.S.  I do not think Google considers itself second best at anything, and undoubtedly they believe that the censorship is the cause.  It only seems obvious that the Chinese people would prefer to use a Chinese search engine, particularly, one that is state run such as Baidu.  It is this fact that I believe to be the most influential to Google.

When Google launched its Chinese search engine, Google.cn, in 2006, they had no problem with China’s censorship policies and were willing to adhere to their view of propaganda discipline.  At the request of the Communist Party of China, Google even agreed to censor information about the 1989 Tiananmen Square protests along with information from countless human rights groups and dissenters.  Google agreed to all of China’s terms while operating under their motto of “Don’t Be Evil.”  For Google.cn, however, the motto seemed to be “Search No Evil.”

Free speech and human rights activist are heralding the news as a victory for their respective causes, and there is no doubt that Google is taking all the credit.  In fact, we should all applaud any champion of free speech, but Google.cn has been the exact opposite of that for several years now.  If we read between the lines, it becomes clear that Google is like many of the companies around the world.  They keep quiet and turn a blind eye to human rights violations as long as there is money to be made.  There has not been a lot of money in China for Google, and now they can no longer stand the tyranny of the Chinese government.  Coincidence?  I can’t say for certain.

Whatever Google’s motivation is for leaving China, one thing is for sure, it takes powerful organizations to tear down obstacles like the ones the Chinese people face.  I believe it is possible that Google can actually do more for the people of China by bolting than if they continued to conform.  Watching Google strive to become acceptable to the Chinese government, especially during the 2008 Olympics, was like watching an older sibling impose their will on their younger counter-part.  This is not meant to insult the company, but it is simply how Beijing works.  They do not take kindly to any highly publicized, theatrical throwing down of the gauntlet.  In fact, just like in Tiananmen Square, they tend to squash their foes before you even hear about them.  Facebook and Twitter are banned in China, and does anyone remember a public showdown between them and Beijing?  It is far more likely that Beijing will ban the company before Google pulls out.

American’s love Google and the Chinese people made it obvious that they support Google by going to the company’s Chinese headquarters last week and leaving flowers, lit candles, and signs of encouragement.  The impact of Google on this generation is incalculable, but do you believe Google is as heroic as the news is leading you to believe?  Or do you think they are simply avoiding the losses and hassles they would incur by staying?  They did not stand up courageously in the beginning when they thought there was money to be made.  Now, however, Google is willing to stand up for itself, and hopefully, the Chinese people will also have the courage to do the same.  As the old saying goes, “Better late than never,” but I can not help wondering if its courage on Google’s part or is it cowardice.

Regardless of their motivations or tardiness, one thing is certain, it feels good the have Google fighting for the good guys.  I have always considered Google to be one of the corporate good guys, especially in an environment consisting of Madoffs, Enrons, bailouts, and bonuses.  We will have to wait to see how everything plays out in the coming weeks or months, but rest assured readers, GAP is in China, GAP is staying in China, and GAP will continue to provide the most accurate, uncensored market intelligence from China.

During my store visits a couple of weeks ago, I came across a new highlighted product category that is available in most stores—yes, you guessed it right – eReaders.  eReaders are one of the hottest product categories this holiday season and promotional displays are currently seen at most consumer electronics and mass merchant stores.

One common theme across the channel is that Sony is heavily investing in eReaders as a future growth category.  The eReader display is the first thing that you notice when you are in Staples and the most prominent stand in Best Buy’s mobile device section.  Sony has placed so many eReader displays in retail that it is easier to count the chains that do not promote the technology.  Displays for Sony’s eBook reading devices feature informational videos and comparison charts highlighting the key differences between competing eReaders.

Following Amazon’s private label lead, Barnes & Noble also made a foray into the market with the ‘nook’.  The retailer has created a separate section in the middle of its stores managed by a dedicated in-store representative to educate people about the ‘nook’, provide a demo, answer any questions, and pre-order the device.  Yes, it is still only available for pre-order!!!  Let’s hope for Barnes & Noble’s sake that it gets the ‘nook’ out before President’s Day!

Sony and Amazon currently dominate the eReader market largely due to brand recognition as well as the availability of these products.  Out of the ten stores selling eReaders in gap intelligence’s retail panel, Sony is available at eight and enjoys a competition-free presence at seven of them.  Although the Kindle is limited to Amazon.com, given the ubiquitous reach of the internet and lack of holiday lines, customers would have no trouble ordering a Kindle.  Unfortunately for Barnes & Noble, pre-order sales of the ‘nook’ exceeded current production levels and the device has yet to be made available for an immediate purchase.  Barnes & Noble continues to change its shipping and in-store availability date (the last time I checked it was Feb 1st, phew!!).

Several companies are beginning to push their products including Astak’s jetbook, Bookeen’s Cybook Opus, and Foxit’s eSlick, with placements limited to Fry’s.  Amazon has already inked partnerships with major universities to test run the Kindle and also partnered with publishers to ensure text books are available in a compatible format.  Google on the other hand, is already working on building the ‘world’s largest’ ebook library and is unfortunately also quickly becoming a part of the ‘world’s largest’ and perhaps the biggest copyright battles.

According to estimates by Forrester Research, eReader sales are expected to double from 3 million units in 2009 to 6 million units by 2010, with almost one third of the sales taking place during the holiday season.  To capitalize on this expected growth, manufacturers must ensure that all production issues have been addressed sooner rather than later.

eReaders currently sell for over $150 and ebooks carry a $10 average price.  Due to lack of competition, pricing has been relatively stable in this small, but quickly expanding category.  Sony’s ‘Pocket’ and ‘Touch’ editions sell for $199 and $299, respectively, at all retailers except for Walmart where they are cheaper by a buck each, in line with Walmart’s lowest price guarantee.  eReaders are also finding more placements in retailers’ weekly circulars.  Although instant saving incentives are the most common promotion type ($40 average), the product sometimes also sells with a free leather case.

Vendors are positioning eReaders not only as a useful device for college students or business professionals, but also as ideal holiday gift items.  eReaders can prove to be exceptionally useful small devices to anyone who is an avid reader, has run out of space to store more books, or is tech savvy.

The eReader market is expected to go though a sea change in 2010 with a significant increase in the number of brands and product availability (both online and retail).  The category will also see aggressive price competition and possibly adaptations to its sales model and echo system.  Stay tuned for more on eReaders!