Tech Backwash |
The dot-com bankruptcies have created a glut of nearly new high-tech equipment. Companies likely to suffer:
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Before they turned out the lights at ZipLink in February, the
Massachusetts-based wholesaler of Internet hosting services held an auction of
its high-tech equipment. The booty, which included Internet servers and
computer-networking equipment from name-brand outfits such as Nortel Networks
and Cisco Systems, was worth more than $30 million when new. Some of it was less
than a year old and still in original shipping crates. But under the auctioneer’s
gavel, much of it sold for pennies on the dollar. For example, a Cisco 7500
series router that usually retails for $150,000 and resells refurbished for
$11,000 went for just $1,850.
Dirt cheap
Already struggling to reduce inventories and cope with evaporating customer
demand, some high-tech equipment makers and their distributors are under attack
from a third front. Thanks to the rising number of bankruptcies and
delinquencies among dot-coms, plenty of equipment, from used to nearly
untouched, for networking, computing, and telecommunications, is proliferating
at dirt-cheap prices. In fact, auctions of these products now account for about
a third of sales at auctioneer DoveBid, up from just 5% two years ago. That’s
a problem likely to cause big headaches for Sun Microsystems, Compaq Computer,
and Cisco. Although others like Nortel, Compaq, and Lucent Technologies have
also seen some of their gear show up on the auction blocks; the two tech
heavyweights earlier had much greater success selling to fast-growing Net
companies.
Trouble is, a domino effect in the industry is about to make the
used-equipment glut much bigger. Many dot-coms hosted their Web sites through
ASP’s, companies that basically rented them software over the Net. But with
the dot-coms now boarding up shop, the ASP market–which accounted for a
fast-growing portion of Cisco and Sun’s gear sales–is withering, too.
The problem is most severe in servers and routers, although tech equipment
such as PCS is also flooding the market. During the past six months, hundreds of
Sun servers have been sold at the auctions of failed dot-coms. When the ASPs
that served the dot-coms begin to fail in big numbers this year, they will flood
the market with equipment that routes Internet traffic or connects digital
subscriber line customers to their service providers. That’s especially
troubling because much of the equipment is new, or just one generation older
than what’s now available.
In response, Cisco is encouraging its largest distributors, such as Ingram
Micro and Tech Data, to help smaller Cisco resellers sell recovered gear. It can
then be sold as refurbished by those resellers, who account for more than 70% of
Cisco’s sales.
So far, Sun doesn’t see a problem. It has had an agreement with eBay since
December, 1999, that helps it unload excess and obsolete equipment.
Nevertheless, it recently hired DoveBid to host monthly auctions of material it
recovers from failed customers.
But all those efforts aren’t likely to make a big dent in the growing
used-gear market. Cisco underwrote less than 10% of customer purchases. That
means the rights of either to repossess equipment from bankrupt outfits is
severely limited. Instead, they’ll have to spend a growing amount of energy
trying to keep cheap, barely used equipment off the market.
By John Shinal in BusinessWeek. Copyright 2001 by The McGraw-Hill Companies, Inc
Recharging
Now
that the underpinnings for smart robots are falling into place, researchers in
dozens of corporate and academic labs are racing to develop working models that
within a few years may become our cohabitants and co-workers.
Personal robots won’t even approach their full potential in this decade,
but robot makers have already fielded many commercial previews. Although
sometimes clumsy and unpredictable, service robots are functioning as guards in
warehouses, delivering hospital food trays, and carrying documents from one
office to another. The Japan Robot Association (Jara) estimates that by 2002,
some 11,000 service robots will be deployed, 65% of them in hospitals and
nursing homes. By 2005, give or take a year, Jara projects that health-care
robots will be a $250 million market. As for personal bots, a panel of industry
and academic experts last year predicted they will be as common as PCs and cell
phones within 10 or 15 years.
One of the first robo sapiens on the market will be Honda’s Asimo, a
1.2-meter-tall android that resembles a child astronaut. It strides confidently,
climbs stairs, and negotiates corners. It can turn out the lights, and to show
off, walk a figure eight or compete with Sony’s SDR bots on the dance floor.
The hitch is that Asimo currently is blind, deaf, and dumb–and must be
remotely controlled. This fall, for an undisclosed fee, Honda will start renting
Asimo to companies and museums for use as a visitor’s guide.
Personable
Sony has already proved that mechanical companions are a promising market.
Now, sales of entertainment robots, it believes, are primed to explode. These
include electronic critters like the $1,500 Aibo, which can learn tricks and
respond to voice commands. The latest model looks like a lion cub. Over the next
five years, an expanding menagerie of mechanical pets from Sony and others could
whet consumer demand. And then, around mid-decade, Sony’s acrobots should hit
the market–probably at prices comparable to a high-end PC. Come the 2010s,
predicts Toshi Doi, head of Sony’s Digital Creatures Lab, each of Japan’s 46
million households will have two or three robots, including a humanoid.
Researchers everywhere are equally fascinated by the potential of home robots
and cyber-companions. Ironically, some European and North American labs are
counting on biological approaches to help produce mechanical beings–a tack
called evolutionary robotics. The basic idea is to raise a machine like a child,
letting it learn from its own experiences and sensory impressions, rather than
feeding it canned software written by humans.
MIT’s Cog and Kismet are probably the most famous of the self-educated
bots. Cog is the brainchild of Rodney Brooks, head of MIT’s AI Lab. This
humanoid torso has been learning to interact with its surroundings and with
people since its "birth" in 1993. Cog has mentally progressed to the
crawling-infant stage–although its legs have yet to be attached. Cog’s face
is less expressive than Kismet’s, but even so, it can be engaging. Its camera
eyes track moving people, and it establishes eye contact with people facing it.
No matter how personable Cog may seem, fulfilling Brooks’s dream of a robot
with human-level intelligence remains on the distant horizon. Still, many
experts believe truly smart robots are inevitable, given the ever-growing power
of computer chips.
Frustration
There are a lots of BEAM proponents in Europe–and many researchers there
also share Japan’s view of the near-term need for personal robots. For
example, Germany’s Fraunhofer Institute has developed Care-O-Bot, to help
elderly and infirm people maintain independent lifestyles. It can guide and
support people who are unsteady on their feet, run errands around the house, and
operate home electronics.
In the US, though, getting the funds to turn robot research into a going
business has been a problem, laments Joseph Engelberger. Widely hailed as the
father of the industrial robot, Engelberger co-founded Unimation. 40 years ago
and created the factory-robot industry from scratch. After cashing out in 1983,
he founded HelpMate Robotics to build service robots. His flagship: wheeled
cabinets that scurry around hospitals, distributing medicines and patient
records. But Engelberger always had his eyes on domestic robots because the
market potential is clearly far bigger.
In 1997, HelpMate built a two-armed, wheeled prototype for NASA to evaluate
as a helpmate in space. Engelberger intended to adapt it for home use, since its
touch-sensitive hands and two arms could make beds and prepare meals for
seniors. But it was not to be. He couldn’t raise the $5 million he needed to
bring it to market, and financial problems forced him to sell the company in
1999. This lack of interest in robotics puzzles the Japanese. Many reckon it’s
because Hollywood often depicts robots as monsters, whereas the Japanese view
them as helpers.
As a result, Japan has amassed a formidable stockpile of robotics knowhow,
producing twice as many as the rest of the world combined.
Furthermore, Japan has an army of young, savvy robotics experts. Close to
half of its 4,500 registered robot engineers are focused on AI or related
disciplines aimed at enhancing robot intelligence.
Song and dance
Shoestring budgets at Waseda University and other academic labs nourished
Japan’s early robot dreams. Now, well-heeled Japanese corporations are
transforming research into commercial products. Backed by ample resources,
corporate engineers are now busily refining sensors and rewriting algorithms to
create more sophisticated machines.
As margins dwindle on consumer electronics and industrial equipment, Japan’s
manufacturers are desperately seeking new genres of products. Smart robots that
combine a virtuoso entertainer, flawless social secretary, compliant
maid-butler, patient listener, and multimedia communications system could be
just the ticket. Such companions could record the passing years and regale
people with intricately detailed multimedia stories of family triumphs and
personal exploits. Anything that owners forget, their cyber-companions would
remember.
The chief blemish on Japan’s bullish outlook is that buyers might expect
too much from the first crop of bots. Early androids may not have enough finesse
to poke around inside packed refrigerators, and people might be wise not to
trust them to iron shirts. "Just because robots can sing and dance doesn’t
mean they’ll soon do everything," cautions Shigeo Hirose, a robotics
professor at Tokyo Institute of Technology. Aibo the robo pet has proved they
don’t have to. Robots can ease their way into our lives, step by mechanical
step.
Irene M Kunii and Otis Port–BusinessWeek