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telecrooks
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re: Cause of Telegent's spectacular fall: China dunnit
telecrooks   7/18/2011 10:40:42 PM
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AAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHH !!!

DMcCunney
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re: Cause of Telegent's spectacular fall: China dunnit
DMcCunney   7/18/2011 10:25:28 PM
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What I get from this is that Telegent had a bright initial idea: target a large potential market no one else was even looking at - but failed to think far enough ahead. Being first in the market and establishing a commanding share isn't enough. Once you're in first place, you have to stay there. And if the market you are in is big enough, you will get competition who will do just what you do, only cheaper. In semi-conductor electronics, the nature of any market is to become a commodity market very quickly, where the customers buy on price and the lowest cost producer wins. In addition, your market can change dramatically or even evaporate as technological shifts occur, like the shift from analog to digital TV. What do you do then? . If I'm a company like Telegent, my long-term strategy is likely to be "Identify an unserved market, develop a product to serve it, grow my business to take a commanding lead in that market, and position myself as an attractive acquisition target for a much bigger and better heeled company who sees buying me as the most efficient way of entering a new line of business that complements those they are already in. " . I'm *not* going to assume I can stay independant. I can establish a market, but I won't have the scale and resources to stay the lowest-cost producer when what I make becomes a commodity. I'll need to either be acquired or go belly up because I simply won't be able to compete. . The question for Telegent now is whether they can come up with another bright idea similar to their original one, and repeat what they did before in *creating* a market, then set themselves up to be bought by a big outfit that wants a piece of the market they created.

qerqwe
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re: Cause of Telegent's spectacular fall: China dunnit
qerqwe   7/18/2011 10:21:28 PM
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IP?? Since the competetion seems world wide, I assume that they could not protect their design.

junko.yoshida
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re: Cause of Telegent's spectacular fall: China dunnit
junko.yoshida   7/18/2011 5:31:47 PM
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Exactly. And that's probably the reason why Telegent wasn't even looking to move on to another market even two years ago!

old account Frank Eory
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re: Cause of Telegent's spectacular fall: China dunnit
old account Frank Eory   7/18/2011 5:04:38 PM
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A very interesting case study on competition. Considering that the competitor who drove the price to $0.80 is still making a profit, the margins had to have been staggering on Telegent's chip at $6.00.

junko.yoshida
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re: Cause of Telegent's spectacular fall: China dunnit
junko.yoshida   7/18/2011 3:54:23 PM
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Hi, resistion. Your points are well taken. But the truth is that China's mobile TV market was one of the biggest growth markets -- especially for analog mobile TV. We suspect that we will run into a situation similar to this, more often than ever before. In other words, there will be no time to test market your products elsewhere -- but you've got to plunge right into the Chinese market directly, because that's where the demand is.

GREATTerry
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re: Cause of Telegent's spectacular fall: China dunnit
GREATTerry   7/18/2011 3:39:41 PM
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Price went from $6.0 to $0.8 in months is bloody. Just wonder why this company didn't change their strategy and started something "new" 2 years ago. Maybe they have started but not succeeded or not yet mature.

resistion
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re: Cause of Telegent's spectacular fall: China dunnit
resistion   7/18/2011 2:43:18 PM
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Perhaps even more important, one-time innovation not enough, need sustained innovation to combat price effect of competition.

krisi
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re: Cause of Telegent's spectacular fall: China dunnit
krisi   7/18/2011 1:51:26 PM
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thank you Junko, spectacular story!

resistion
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re: Cause of Telegent's spectacular fall: China dunnit
resistion   7/18/2011 9:51:49 AM
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I think they should not have started with China market first, but get a feel in the US, Europe, Japan, or even discuss with Apple. Customers know/distinguish better in those countries.

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