Are some of the hottest gizmos in for a bumpy transition?
A recent Smart Money article on AOL examined five gadgets that it said consumers should refrain from buying right now. Normally, early adopters and consumer-electronics junkies would be the affected parties here, but the article's warnings carry significant investing implications, since all of the appliances it singled out have ties to popular, publicly traded companies.
Let's go over Smart Money's list.
That may not seem to be much of a problem right now, especially as iPhone demand runs brisk. Several metropolitan markets even report being out of stock. However, once a firm date arises for the release of the 3G model, it's a safe bet that consumers will wait for the upgraded model, especially if it means markdowns on the older, slower models.
I see this as no more than a near-term hiccup for Apple, since the company has a habit of announcing things just as they hit the market. There shouldn't be much of a lull, and for those sitting on the fence about upgrading to an iPhone, the 3G will be a dinner bell.
2. OLED TVs
The technology behind OLED -- organic light-emitting diodes -- has been building buzz over the years. The Rule Breakers newsletter service recommended industry pioneer Universal Display
As with all nascent home-theater technologies, the screens will grow and the prices will shrink over time. That's fine with Universal Display, which already has key partnerships in place, especially in smaller devices such as cell phones and media players, where the OLED will also become an economically reasonable option, given enough time.
Blu-ray finally slayed the HD-DVD format this year, so why is there no hooray for Sony's Blu-ray? The article suggests waiting until the 2008 holiday season for upgraded versions to arrive at more attractive price points. Once retailers clear out their inventory of HD-DVD players, Blu-ray manufacturers will be competing against themselves to drive prices lower later this year.
I still see Sony as a big winner here. Folks who don't want to wait for lower prices can still snap up Sony PlayStation 3 gaming systems, which offer easily upgradable Blu-ray functionality. The Blu-ray kick already helped the PS3 outsell the Xbox 360 through the first two months of this year.
4. Digital readers
Sony gets a third nod in the list for its Sony Reader, the e-book gadget that beat Amazon.com's
Amazon's Kindle has been unavailable for immediate delivery since shortly after its November rollout. Rather than get on Amazon's waiting list, early adopters have already piled on with requests for improvements, including touchscreens, greater Web-surfing capabilities, and increased storage capacity.
I see Amazon as a big winner down the road, especially with its recent purchase of Audible. Another bonus for Amazon is its symbiotic relationships with book publishers, a necessity in rolling out future e-store models that may include unlimited titles instead of pricey a la carte purchases.
5. Windows Vista
If you haven't heard of the buggy upgrades to Microsoft's
Consumers have been reluctant to pay for Vista as a stand-alone upgrade, since it's typically included in new PCs. Businesses have warmed to Vista, even though the proliferation of Web-stored enterprise software by companies such as Salesforce.com
Microsoft will have some serious challenges in the future. Getting folks to upgrade to Vista today will be a cakewalk compared to getting them to pay up for whatever comes next in an even more Web-wired world.
Early adopters, save yourselves
Add it all up, and you have a consumer-driven article that does more than point out some near-term potholes for several publicly traded companies. It's also revealing some of the long-term opportunities for these same tech and entertainment bellwethers.
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