The New Good Enough

What comes after the $99 laptop revolution?

May 292012

When Cherrypal launched the first $99 laptop in December of 2009 it changed the world for millions of consumers in developing counties and low income groups in the industrialized world. Although the $99 Cherrypal “Africa” was advertised as “Small – Slow – Sufficient” it was exactly what many budget constrained consumers wanted: a “good enough” high-quality affordable laptop.

We live in a fast moving world. Consumer sentiment has shifted from laptops as the “can’t-live-without device” to mobile phones and tablet computers. What will be the next “gadget” revolution in order to make Internet access and mobile communication affordable to everyone? Is it the $99 smart phone (non-subsidized retail price), the $49 tablet computer (or tablet-phone) or a $9 feature phone?

What will drive mobile penetration to 100% on a global basis?

Made in Suburbia, Made in America 2.0, Made in Africa

Good Enough, Made in America 2 Responses »

May 112012

If you watch TV regularly, you might have noticed a dramatic change in the type of products advertised in the last few years. Compared to only five years ago, we are getting bombarded with TV advertisement for smartphones and other communication devices. This striking change is a definite indicator that mobile communication is a high growth industry – both on the hardware as well as on the software side.

Whether simple phones, smart phones, tablet computers, high-end industrial equipment or technologies protecting the environment, they all have one important attribute in common, they use electronic components which are all manufactured and assembled in Mainland China. Does this mean that manufacturing jobs in the US are gone for good?

We here at Cherrypal developed a blueprint in early 2010 for creating highly competitve assembly plants for mobile phones, tablet and laptop computers here in the US. In my presentation at the Commonwealth Club on September 16th, 2010, I outlined how small and highly optimized assembly plants in the US would be cost neutral compared to the huge assembly plants of Chinese contract manufacturers in Shenzhen. Foxconn, assembler for Apple, Dell, HP and other consumer electronic brands, employs more than 400,000 workers in Shenzhen, Mainland China, just about half an hour by train from Hong Kong.

We talked to several communities, from Detroit, Michigan to Sacramento and Oakland in California, how to go about creating jobs in neighborhoods with high unemployment. The idea was met with much excitement, however it was not followed by the necessary actions. The generated interest and excitement fell short when we asked for loans or loan guarantees in return for new jobs. As a privately non-Venture-Capital funded company we can only pull off projects of this magnitude through close collaboration with strong partners and the necessary financial backing. After all, that is how China was able to get its manufacturing and assembly industry started: what most people don’t know is that China’s main competitive advantage is not its cheap labor, but rather, government supplied loan guarantees in return for job creation.

Despite the lack of interest in the States we continued to develop the concept, it is now called “Made in Suburbia”. It provides the operating plan and financial models and analysis of how a MISAP (Made in Suburbia Assembly Plant) can be operated profitably and very beneficially to the local community.

Each MISAP has between 100 to 500 workers employed in sustainable, fairly paid and clean jobs in assembly, logistics and administration. Unlike traditional large scale Chinese assembly plants MISAPs will also act as a local support and logistics hubs, handle returns, replacements, repairs. MISAPs also maintain a community center, engage with local schools and provide insight into electrical and mechanical engineering, software development, and customer support. For every MISAP job created, an additional 7 jobs outside of the assembly plant will be created, adding another 700 to 3500 new jobs to the local economy.

MISAPs are a very compact, highly productive and low-overhead finished-goods-creation facilities, making them cost neutral compared to the low-labor cost and loan subsidized facilities in China. Corporate managers of other consumer electronics brands are aware of the benefits of local assembly, however, nobody has the guts to execute on it. Who would possibly want to explain to Wall Street that their company decided to manufacture consumer electronics in Michigan although labor cost in China is just a fraction? It would require a lot of explaining and the stock price would still go down.

Americans love to watch ABC’s “Good Morning America”, the Emmy award-winning morning news program. Another simple way to create jobs would be to produce a TV show called “Good bye America”, hosted by a “Simon Cowell”-like type judge. The show’s premise could be to let America select the most ignorant, “irrelevant”, “forgettable” and incompetent corporate manager or politician. It would be painful, highly entertaining, an American reality show at its best.

Seriously though, China and India are “in” – America has fallen out of fashion as a place to assemble goods – perception becomes reality. Is the perspective on stock valuation by Wall Street and corporate America still good enough?

In the 2008 presidential campaign politicians show-cased “Joe the Plumber”, a hard-working plumber who’s job cannot be outsourced to China. Isn’t it time to talk about “Bill the unemployed assembly plant worker” in 2012? Politicians know how to bail out banks, but when it comes to job creation for ordinary people they are clueless, or at least not very motivated.

We are looking for MISAP partners globally, from the United States to Canada, Mexico, South America, Africa, Eastern Europe, Africa but also Asia. There is no logical reason why consumer electronics should only be assembled in China – other than lack of entrepreneurial imagination and ignorance. Every MISAP is the seed for a micro-Silicon-Valley-like ecosystem. MISAPs are going to be very successful in Africa – welcome “Made in Africa” for consumer electronic devices and applications.

Edwin’s “Tablastic Four” program

Good Enough, Tablastic Four No Responses »

Jan 082012

Yes, the word is out. The Education Wins (Edwin) Foundation is launching the “Tablastic Four” (“Tab4”) program this week.

Consumers will commit to only use ONE device for all their Internet and phone communication needs, temporarily retire their cell phone and laptop computer, and write/blog/youtube/facebook about their experiences. We will thoroughly analyze, form an opinion, learn, make adjustments, redefine expectations, keep trying, it will be a moving target.

I have been called crazy before, no big deal. The “Tab4” project though triggered some unexpected cynical remarks from industry insiders, predicting failure, claiming a tablet with an integrated phone doesn’t make any sense, tablets are not “designed” as “all-you-need” device.

Suppose success is defined by the criteria you apply. Our objectives, or rather success criteria, are not focused to replace the iPad or iPhone for those who can afford this kind of consumer electronics, rather, to find the “good enough-all-you-need” device for the vast majority of the world population, for those buying a phone and/or computer is a huge investment, and access to the Internet is a life changing event. Failure is the mother of success, let’s see where the journey goes.

Let me elaborate some more on the “Fab4” program.

The “Tablastic Four” program will be divided into small groups of 4 participants. The first group is called “Tab41”, the project will start on Thursday January 12, 2012 and last for 90 days. All four team members will receive the same “equipment” and also use the same cell phone carrier. It is important to us that we compare apples to apples. The participants commit to ONLY use the provided device for the next 90 days. If any of the project members give up or ask for a “time out” ( use a regular cell phone or laptop computer during the 90 days) we will all learn about it.

The plan is to launch the second group in early February, “Tab42”. We might make hard and software changes for future groups, change some “rules of engagement”, but all changes will apply to all four group members in the same way.

After the first groups are on their way we will launch a number of more geographically and user demographically focused groups, like “Detroit only”, “Kenya only”, “Brazil only” “college students only”, “executive users only”, “senior citizens only”, you get the idea.

We will continue to launch “Tab4” groups until all four project team members in at least 4 groups make it to the 90 days finish line and the “perceived user satisfaction” is at least 8 on a scale from 0 to 10.

Last but not least, let me remind you. Main objective of the “Tab4” program is to test an “all-in-one-all-you-need-good-enough” high-quality and inexpensive hardware/software solution in order to make Internet and phone communication available and affordable to everyone and everywhere.

Ready, Set, Go.

Sudden death of smart phones and laptop computers in 2012?

Good Enough, Tablastic Four No Responses »

Jan 052012

Desktop computer sales are declining, music CD sales are dropping dramatically, the fax machine is almost extinct, what’s next? The law of technology evolution is coldhearted, hype is followed by insignificance and death. What’s the destiny of smart phones and laptop computers?

Clever consumer brands trained us to spend thousands of dollars for over-hyped and overpriced gadgets. Whether you watch TV or browse the Internet, almost every day we get introduced to a cooler, thinner, faster smart phone in perfect gadget quality. For us consumers in the industrialized world this kind of waste might be acceptable (I doubt it though), however, for low-income groups and people in the developing world the Digital Divide appears to become more and more obvious every day.

Have we lost our minds for what actually makes sense, what we can afford, what we really need, what’s good enough for our everyday needs?

What if one device for less than 300 bucks could do it all? Wouldn’t that be fantastic, or may I say “tablastic”?

The Education Wins (Edwin) Foundation has started a project in cooperation with Epesitec, called “Tablastic Four”, or nicknamed “Tab4”. A small group of power users and gadget lovers have signed up and committed to only use the CherryPad Edwin tablet computer for the next 90 days, no cell phone, no laptop or desktop computer, no Windows, no iOS, just a fully loaded Android 2.3 tablet computer with full phone features, mini-keyboard and bluetooth earbuds. In other words, one device(some might refer to it as gadget) for everything, Internet browsing, emails, youtubing, facebooking, twittering, music, photos, phone calls, that’s it.

Our goal, from an Edwin (Education Wins Foundation) perspective, is to maximize Internet utilization and mobile communication worldwide. Will our project succeed? We don’t know yet, but one thing is for sure, we will learn a lot and share the findings with you. Stay tuned, subscribe to my blog and be surprised. Whenever the experts claim it can’t be done it will be done eventually, it’s just a matter of time. Our objective is to connect and unite the world via the Internet, provide unrestricted and affordable communication and meaningful content. Not just for a few, for everyone everywhere.

Are products manufactured in China good enough?

Good Enough, Made in America No Responses »

Dec 212011

First the bad news. Everything is manufactured in China.

The entire consumer electronics industry silently closed all assembly plants in North America and Europe in the last 10 years. Today more than 95% of this products are manufactured in Mainland China, whether it’s Apple or Dell or HP or Cherrypal or Amazon or Epesitec, they all assemble in Shenzhen, about half an hour by train from Hong Kong.

Since all products (phones, tablets and laptop computers) are manufactured in China is there any difference in quality?

Overly simplified it very much depends who designed the products and who is watching the assembly/manufacturing process. Chinese manufacturers usually design their products for the local market, with very little consideration or understanding of the quality and usability expectations in North America and Europe. Believe it or not, the average Chinese consumer has very little appreciation for product quality. The only buying criteria is price. That’s also the reason for the incredible low prices for authentic Chinese consumer electronic products on eBay and other sites – low price – low quality – delivered as promised.

Well, differences in design are very obvious to the consumer. What’s not that obvious are guidelines how workers are treated and how environmentally friendly the assembly/manufacturing process is handled. Some Chinese contract manufacturers are famous for burning out their workers and polluting the environment at their discretion. Workers usually don’t speak up. There are hundreds of millions of Chinese farm workers waiting to get a better paid job in booming Shenzhen.

Companies like Apple and others are facing a lot of questions from the public. The true reason for the miserable working conditions is not related to cost pressure at all. The average factory worker makes about $100 a month and most factories actually employ too many workers due to generous government incentive programs. The root cause of the problem is poorly trained management and lack of interest to make the necessary changes.

http://www.pcworld.com/article/228384/foxconn_working_conditions_were_criticized_before_fire.html

Epesitec is an ODM (Origninal Design Manufacturer), headquartered in the States, with assembly facilities in China.

Like Apple, Dell, HP and the other major brands the products are designed here in the States and manufactured in Mainland China. Epesitec though is not a consumer facing brand, it designs and manufactures products that are branded by mobile phone carriers and others.

Here is what Epesitec considers “good enough” in order to assemble high quality and low cost products:

The more quality controls the lower the cost. Poor quality is not good enough and causes costly return and replacements.
Treat workers well and with respect, enforce breaks, provide incentives and benefits, no physical punishment.
Minimize exposure for the environment, use less energy, less waste, think now so you don’t have to pay later.

Now the good news, manufacturing locally, I call it “homemade tastes better”, is not just possible, it’s even desirable.

Epesitec started with assembly/manufacturing in Mainland China like everyone else, but there is ample proof that placing assembly as close as possible to the engineering and design process will increase product quality with very little impact on cost for finished goods.

Epesitec will start with “Made in America” assembly in 2012, improve product quality even further and keep cost low. Ironically most politicians are not very interested in manufacturing jobs locally, go figure.

Ever wondered why next to nothing is manufactured in North America anymore? If cheap labor is the only criteria why is nothing manufactured in Africa, for that matter. Will share more another time.

The New Good Enough Mindset

Good Enough No Responses »

Dec 202011

Triggered by the Wall Street implosion of September 2008 the economic environment is changing at a dramatic pace.Governments are out of money, employees are losing their jobs, environmentally friendly initiatives are out of fashion, education is of poor quality for most children in the world.

On the other hand products and services like mobile phones and tablet computers, social networking websites and reality TV broadcasts are in high demand. The way we consume information and form opinions is changing as well. The more we are exposed to the Internet the more our preferences are determined by “hype” rather than rational thinking. What do we really want and need, what is good for us, what is good enough?

Don’t get me wrong, I am a vivid proponent of the “Internet Access for Everyone” initiative, however, like with many other products and services the price should be affordable, quality high and easy to use. In other words, it should be “Good Enough”, but what is good enough really?

Money is tight, at least for 99% of the population here in the States and 99.99% worldwide. Don’t get me wrong, access to the Internet became an “I can’t live without product” within only a few years. There is ample proof that access to the internet increases employment opportunities and quality of education, if used wisely.

I have spent the last four years designing cost and quality optimized consumer electronic products and decided to share some of my experiences and observations with you. To be perfectly frank, I went from heaven to hell and up again. I have first hand experience when it comes to saving cost, optimizing value, operating on a shoestring, learning from mistakes and last but not least humility. Is “good enough” settling for less than that we really want?

The “New Good Enough Approach” (aka “New Humility”, “Good Enough 2.0”) raises many questions.

What products and services do we really need?
What’s a reasonable and fair price?
Do the “corporate values” of the vendor matter to us?
What are our spending priorities?
Is there such a thing as “New Humility”?
… and many more

I would like to offer some answers, thoughts, critical and hopefully entertaining perspectives. Stay tuned.