Economics

I don’t understand why the media make such a big fuss about computer companies like Apple, Dell, Gateway or now Cisco entering the consumer electronics business. Consumer electronics is a puny industry compared to IT. Just compare the market cap and revenues of Apple, HP or Cisco to that of Sony.

Diversifying into consumer electronics is a no-brainer because entertainment’s migration to digital makes many technologies dual-purpose, but consumer electronics will remain a marginal sideline to IT companies’ business, not a replacement growth engine.

A similar instance of the media industry’s myopia (and indeed narcissism) is how they make a big fuss of telecom and cable companies entering the market for music – the entire content industry’s revenues, music movies et al, does not amount to more than a couple weeks’ revenues for telcos.

I have been in Bombay for a week now. Traffic snarl-ups are a reality of life here, and enterprising hawkers flog magazines to passengers caught in traffic jams.

According to my wife, one of the publications they sell is “ee-keya” – Ikea catalogs. The thing is, Ikea does not (yet) have a presence in India. What people do is buy the catalog, then ask their carpenters to reproduce the furniture therein. It seems Ikea design is quite prestigious here…

In France, nuclear power plants follow a standardized design. The end result is that France gets more than 70% of its electricity from nuclear, reducing its dependence on oil or natural gas from the unsavory regimes in Russia or Algeria, and making it a leader in reducing greenhouse gas emissions. The lessons from security incidents are also immediately applied to all other plants, leading to higher overall safety. Technicians trained on one plant are qualified for all, leading to more flexibility in managing the workforce.

In the US, each nuclear plant is a one-off, with the results being much higher costs to construct and operate them.

The same situation applies to the by-laws of public companies. Each is hand-crafted. The only beneficiaries of this situation are lawyers and crooked executives who use their mastery of the arcana in by-laws to prevent shareholders from exercising their rights.

Public company rules should be defined by statute, not left to the discretion of executives and their tame boards.

The press recycles worn clichés when it reports on volatility in the markets. Last week’s 700-point drop was a “collapse” and today’s 5% drop is a “meltdown”.

I’m sorry, but 30% is a meltdown and 50% is a collapse. 5% or 7% do not rate such excessive terms.

A widespread financial meltdown almost invariably correlates with widespread fraud. Companies that specialize in data mining should focus on developing forensic accounting data mining tools instead, and partner with investigation agencies or law firms to sell audit and prosecution services to the government, on a bounty basis. It’s not as if the enterprise market is going anywhere but down.