SOPHISTRYBUSTER.WORDPRESS.COM

We have created a new spiffier Blog at Sophistrybuster.wordpress.com.

Blogspot was a great platform to begin, but it would appear that the folks at Google didn't really put any energy and dollars to allow this blog platform to compete with competitors such as Wordpress.

Come and visit to get the same type of sophistry busting insight.

Check out our new graphics too - I love that picture of Lipstick on a pig.

Dell entering Smartphone market. Ron Garriques Likley To Oversee another flop?

StreetInsider indicates that Dell will be entering the US smartphone market with AT&T.  Does the phrase “too little, too late mean anything”?

A friend pointed me to an article that was published on January 2, 2010 in the Austin American Statesman: “Whom to Watch in Business This Year”.  Lo and behold, there is Ron Garriques, listed as #2.

Here is the sentence that got my blood boiling: “Garriques made a name for himself at Motorola as the executive who drove creation of the Razr cell phone, which became a big hit”.

No he didn’t.

Ron was the guy who took the credit for the Razr.  He didn’t create the Razr, and he didn’t drive its success.  

This has been pieced together from various media reports.


Ron Garriques jumped ship from Motorola and joined Dell as soon as he saw the RAZR losing steam.

Let’s look at his record.

The RAZR was a big hit when it was introduced in 2004, but the guy who developed the RAZR was Geoffrey Frost, who was Executive Vice President and Chief Marketing Officer at Motorola, not Ron Garriques. Unfortunately for everyone in the executive team at MOTO, Frost died in 2005. Frost is credited with creating something cooler (and more expensive) than anything else out there. Everyone wanted it. Garriques competed with Ed Zander (CEO of Motorola, and former senior executive at Sun Microsystems) for the credit.  Zander won, and Garriques tried to manage the business.

In 2005, Motorola released the ill-fated ROKR phone.  It could download iTunes music. As the ROKR hit a flat note, Garriques suggested that it had a poor “message”, even though critics called the phone ugly and took a dim view of its puny 100-song limit. Garriques’ promised to make up for past mistakes with a black ROKR 2, and then a ROKR 3.  These phones struck some observers as resembling Sony's new Walkman with wireless music downloads to make phone companies happy.  They were to have a hefty 1,000-song capacity to appease users.

No one remembers that Motorola also released the Pebl and the Slvr (the candy bar version of the Razr) while Garriques was in charge in mid-2006. Both phones were huge flops. Garriques was quoted “I can envision Slvr being equal in 2006 to where Razr was in 2005."

In June 2006, Motorola introduced the Q phone. The reviews were simple: Nice phone, ugly software. Instead of developing software for the phone, Motorola (under Garriques’s leadership) reaped the dividends of Frost’s work as the company made billions in profit from overselling the RAZR for years.


In late November 2006, Garriques and Zander “engineered” the acquisition of Good Technology for $375mm. Motorola was trying to catch Research in Motion, and figured that the email software company would help them do it. Unfortunately for them, Kleiner Perkins (the VC backer of Good) and Dan Schader (the founder) had come to the conclusion that their efforts were not sufficient to catch RIM without a hardware platform. So they sold it to Motorola. Motorola mobile devices business president Ron Garriques said in a statement. "This acquisition will continue to strengthen Motorola as a leading provider of mobility devices and solutions both for enterprise customers and consumers."

Where was the management skill of Ron Garriques during all of this? His strategy was high volume and market share. In other words, ride the RAZR product down its cost curve. As a result, Motorola rode that one product way too long.

Then the buzz began to grow around Apple’s new phone – which we now know as the iPhone.

Around early November, 2006, Garriques was looking for new products to succeed the Razr line, and talked about an established goal of a 30% market share, slightly less than Nokia's 34% share.

In February 2007, Garriques resigned, effective immediately, and joined Dell. He did not want to get any of the blame for the sinking ship – even though the significant slide began and intensified on his watch.

Motorola announced first quarter results on April 20, 2007. The die was already cast. Motorola recorded a Q1 net loss of $181 million, compared with a profit of $686 million in the year-ago quarter. Handset sales slumped 15% on-year to $5.4 billion; the vendor shipped 45.4 million devices during the quarter, a slide of 2% on Q1 2006 and down 31% on Q4. Instead of cutting prices – and margins – as it did in achieving record volumes during Q4 2006, Motorola began sacrificing market share in order to defend prices and margins.

That's Ron's record.  Therefore, I'd be watching him in 2010 as well.  However, for different reasons than the Statesman would suggest.


Ron's recruiter/agent is the person I want to speak with and watch.  That guy works miracles.

Dell - ROTFLMAO!!

As Apple approaches $200 billion in market cap, I'm reminded of Micheal's famous, or infamous, comment about what he would do with Apple.

To paraphrase, he would close up the company, and return any excess cash to shareholders.

Today

Apple market capitalization is $194 billion, representing a multiple of 5.3x on trailing 12 month revenues.

Dell market capitalization is $29 billion, representing a multiple of 0.56x trailing 12 months revenues.

In other words, the market is valuing the entire company of Apple at 6.7x that of Dell.

However, adding insult to injury, the market is valuing a $1 of Apple revenue at almost 10x that of a $1 of Dell revenue.

ROTFLMAO!!!