|Day's Range||41.90 - 41.90|
(Bloomberg Opinion) -- How long should a manufacturer be responsible for maintaining support for legacy products? Consumer devices have increasingly become smart and connected, only to later be abandoned by the manufacturer. Smart suitcases have turned dumb, talking toys gone mute, and wireless security cameras bricked into paperweights. Most recently, Sonos got a lot of grief for announcing that older versions of their smart home speakers would soon lose access to services and functionality. Customers complained that they had spent thousands on their audio systems, with some products still on the market as recently as 2015.A hardware device is a one-time purchase, while software updates require continuous labor. As technology improves and devices last longer, the initial manufacturing cost may end up being a small proportion of the total lifetime cost of production. Many manufacturers have shifted to business models that treat the device sale as a loss leader for future revenue streams. Amazon can afford to underprice the Echo because it enables consumers to buy more stuff from Amazon, Google and Spotify teamed up to give away Google Home Minis, and even Apple recently lowered prices on its iPhones to grow a user base for its subscription services.At the more controversial end of the spectrum, companies like John Deere have used the Digital Millenium Copyright Act to legally prevent users from repairing their own equipment, forcing their customers to continue paying into a lucrative repair market.Sonos boxed itself into a corner early on by promising customers free software updates for life. As CEO Patrick Spence testified at a Congressional hearing earlier this month, “Our business model is simple — we sell products which people pay for once, and we make them better over time with software updates.”The company is in a particularly difficult position because Sonos began as a home audio company before the advent of smart home assistants. Its earliest speakers weren’t designed with the processing power and storage required to take advantage of today’s features. To minimize complexity, Sonos designed its audio system so that all devices in a home network would share the same software. Once one product is no longer eligible for updates, the whole setup would stop receiving updates. Sonos customers lodged public complaints and bullied the company into submission. Sonos promised to keep the updates coming.A better long-term solution for the company might be found by looking to a different coalition of rebellious customers: a group that has been quietly reverse-engineering their speakers to liberate them from the company’s software entirely. It’s not an easy task. A Sonos speaker integrates a speaker and a microprocessor running a proprietary operating system. In order to jailbreak the speaker, a user must gain access to the internal hardware and install their own software.It would no doubt please these customers were Sonos to make their legacy speakers open source. Sonos has already indicated that the company can remotely erase the software; it could similarly perform a remote reinstallation of an open-source operating system like Linux or Android. The company’s tech-savvy fans could then continue to improve the software — which could be downloaded by other users — while Sonos focuses on its core competency of manufacturing high-end speakers.In the future, device manufacturers may be less generous about promising a lifetime of free software support. After all, most technological improvements these days are done in software. When it comes to cars, the internal combustion engine hasn’t changed much since fuel injectors were introduced in the 1980s. The performance improvements seen in recent decades have come from better sensors and smarter software to interpret sensor data.Autonomous vehicles will have an even tougher sell, as it’s inevitable that self-driving technology will continue to improve after initial release. Will further updates be free, or will the vehicle manufacturer hold consumer safety for ransom?While it’s easy to insist that customers should have free access to software updates running on devices they rightfully own, it’s hard to reconcile a sustainable business model with a lifetime of free software. A device that requires a paid subscription or leaves software updates as an exercise for the customer is better than one that turns into a brick.To contact the author of this story: Elaine Ou at firstname.lastname@example.orgTo contact the editor responsible for this story: Sarah Green Carmichael at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elaine Ou is a Bloomberg Opinion columnist. She is a blockchain engineer at Global Financial Access in San Francisco. Previously she was a lecturer in the electrical and information engineering department at the University of Sydney.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Arcosa, Deere and Company, McDonald's, Darden Restaurants and Denny's highlighted as Zacks Bull and Bear of the Day
Tractor giant John Deere announced that four new companies have joined its latest startup program that’s designed to test new technologies with customers and dealers.
Deere & Company (NYSE:DE) had a relatively subdued couple of weeks in terms of changes in share price, which continued...
The company has a quarter-trillion dollar opportunity selling new technology and services to farmers, according to Melius Research analyst Rob Wertheimer.
Do US Farmers Trust President Trump? We will see. The “Phase One” trade deal between the United States and China will, once again supposedly, be signed today, the Ides of January. Despite previous reports that China has backed out of firm commitments to increase its purchases of US agricultural products, it now seems that somehow […]The post Market Morning: Trade Deal Signing, Bitcoin Fracas, Trump Rages at Apple, Jet Fuel Rain appeared first on Market Exclusive.
Deere & Co. on Wednesday said it will cut costs and ramp up investment in data-driven agriculture technology and its services business to make itself more profitable. In a pitch to investors, Chief Executive Officer John May said the measures are expected to boost operating profit margin to 15% by 2022 from 12.5% projected for this year. May, who took over Deere's reins in November, aims to shore up the company's fortunes which have taken a hit from Sino-U.S. trade tensions as well as poor weather in the American farm belt that has slowed equipment purchases by farmers.
Delta CEO Ed Bastian offered the CES keynote on Tuesday in Las Vegas. The airline has big plans for artificial intelligence, robots, and offsetting emissions.
The Zacks Analyst Blog Highlights: Pfizer, BP, Fidelity National Information Services, Deere & Company and Equity Residential
When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far...
Many investors, including Paul Tudor Jones or Stan Druckenmiller, have been saying before last year's Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the […]
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Deere & Company and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
Moody's Latin America Agente de Calificación de Riesgo S.A., ("Moody's") has assigned a Caa1 global scale and a Baa3.ar national scale foreign currency debt ratings to John Deere Credit Compañía Financiera S.A.(JDC)'s proposed Class I and Class II senior debt issuances for up to a combined amount of US dollars $50 million, which will be due in 12 months. The ratings on JDC, including the bond being rated today, are under review for downgrade in line with the review of the Caa2 Argentine government bond rating. JDC's debt ratings incorporate one notch of uplift from its standalone credit assessment of caa2 based on Moody's assessment of a high probability of support from its ultimate parent, Deere & Company (A2 stable), reflecting the strategic importance of the Argentine subsidiary as the captive finance company for agricultural machinery.
Yahoo Finance’s Seana Smith speaks with U.S.-China Business Council’s Anna Ashton about the latest developments in U.S.-China trade discussions on The Ticker.