Ceton announces WP7 companion app.

[lithium630]

As the title says, Ceton is showing off their WP7 app.

http://cetoncorp.com/blog/companion-app ... me-screen/

This is news great for the 3 of you running WP7. Calm down, I'm kidding. What interests me is the last paragraph

We hope that you enjoyed a sneak peek at the new companion app home screen. Check back soon as we’ll be unveiling more and more of the companion apps including more on W8, WP7, Android and iOS!

Because speculating and fostering rumors is fun, I wonder if the Windows 8 app will have softsled type features. We already know that the InfiniTV can share tuners to another computer.

[richard1980]

I've said before that the only way we'd ever see Softsled is if a 3rd party developed it, because it's not cost effective for Microsoft to do it. Microsoft makes more money in the long run selling Xbox 360s than they would selling Softsled. I think the same thing applies to Ceton...they would make more money selling Echos than they would by selling Softsled.

[adam1991]

Unless, of course, the customer *really* wanted a Q in every room, recording six streams and viewing anything that's on any other Q (sort of a souped up modern day ReplayTV).

Let's imagine that the Echoes are as little as $150, and that the Q is as much as $700. I can see some people either on their own buying multiple Qs because they can afford it, or--more likely--a home theater installer selling him on the idea because he makes more money on that and the customer is already spending such huge amounts of money, it's easy to hide that extra $550 per box.

Were that the case, and were I Ceton, I would heavily investigate making such functionality available.

I see that Ceton is offering commercial solutions now as well:

In partnership with ATX Networks, Ceton has developed UCrypt™, a bulk QAM-to QAM digital cable solution for hotels, resorts, hospitals, multi-dwelling units and other commercial TV scenarios.

So it looks like they're AWFULLY busy, but it also looks like they're willing to stretch beyond what we in this forum do. It wouldn't at all surprise me to see them develop a second-tier, "available via dealer/installer only" home setup (think prosumer) that could include Softsled functionality.

(If they did offer such a thing, I'd quit my day job and become a full-time dealer/installer. Or a regional rep for Ceton for these products--maybe liase with both small dealer/installers for the high end stuff as well as the Micro Center/HH Gregg guys for the plain-Jane Q/Echo line. Hey, maybe I should give Ceton a call...)

[lithium630]

I've said before that the only way we'd ever see Softsled is if a 3rd party developed it, because it's not cost effective for Microsoft to do it. Microsoft makes more money in the long run selling Xbox 360s than they would selling Softsled. I think the same thing applies to Ceton...they would make more money selling Echos than they would by selling Softsled.

Microsoft historically has lost lot of money on every Xbox they sold. It's not really cost effective to sell Xbox's that are not going to be used for gaming. I imagine the echo is going to have a very slim profit margin since it needs to come in under the Xbox. It may be more profitable to sell the software to those who want to use their own hardware since the bulk of the development is done.

[richard1980]

For every Xbox they sell, Microsoft loses something like $100-150, but they make it up if other Xbox related products are purchased (games, peripherals, Xbox Live)...either directly by the person that bought the Xbox or by someone else. With a typical WMC user that purchases an Xbox just to be an extender Microsoft loses at most $150, but that person still might buy some Xbox Live membership time, some games, or some other hardware, all of which contribute to offsetting the $150 loss on the Xbox itself. Even in a worst case scenario where a person buys an Xbox by itself and does not ever spend any additional money on other Xbox related products, there are so many other people buying games, peripherals, and Xbox Live subscriptions that those people are the ones that offset the losses of people that don't buy anything extra. Overall, the Xbox 360 is a profitable device for Microsoft, which is apparent by looking at the Xbox division's financials.

On the other hand, Softsled works against the Xbox. If you buy Softsled instead of an Xbox, Microsoft loses the opportunity to sell you games and peripherals for the Xbox. So right off the bat, they are shooting themselves in the foot. Additionally, Softsled requires an up-front investment to develop, which means Microsoft immediately realizes a direct loss before they sell any copies of Softsled. They had the same thing with the Xbox, but they've already made up the R&D costs. In addition to the costs directly related to developing Softsled, there's also an opportunity cost of not having spent that time working on other projects. And to top it all off, Softsled only becomes profitable for Microsoft if they can actually manage to sell enough copies of it. WMC does not have a large enough installed base to make Softsled a viable investment option. From a business standpoint, Softsled is a bad idea for Microsoft. Only a fool would trade the unlimited upside potential and low risk of the Xbox 360 for the severely limited upside potential and high risk of Softsled. But that's the difference between businesses and consumers. We as consumers look at it and say "I want Softsled because it is better for me", and Microsoft says "We don't want Softsled because it is not better for us."

Ceton would be in a similar situation if they were to develop Softsled. There are a few differences though, which could actually make Softsled a viable option for Ceton. First, it remains to be seen if they will sell the Echo for a loss and use the Q and InfiniTV to make up the loss, but I doubt it. If I had to guess, I would say the Echo will likely be sold for a profit. Second, Ceton doesn't have any opportunity for continued revenue after the sale of an Echo (at least they haven't said anything about it). There's no Echo Live, or Echo games, or Echo peripherals. So Ceton doesn't have all that unlimited upside potential that Microsoft has with the Xbox. So really it comes down to R&D costs and profit margin between the Echo and Softsled. Overall, I think there's a better opportunity for profit in the extender market vs the Softsled market, specifically because the Echo only requires purchasing one PC/Q, but Softsled requires purchasing at least 2 PCs/Qs.

[adam1991]

Overall, I think there's a better opportunity for profit in the extender market vs the Softsled market, specifically because the Echo only requires purchasing one PC/Q, but Softsled requires purchasing at least 2 PCs/Qs.

Think outside the box, though, and beyond what the average forum participant here would do.

As has been said many times, the Q/Echo is not aimed at us--therefore the business logic behind it may be way, way different than anything the average forum participant would imagine by himself.

I can't wait to see what's up Ceton's sleeve here.

The more I think about it and the more I see things like their hospitality/hotel solution, the more I think Ceton has a long term goal of being bought by a Scientific Atlanta or similar, much like Moxi is now part of Arris.

We are simply their (paying) field test team for some core technologies.

[lithium630]

I don't disagree with you from Microsoft's point of view. Since they made only a small effort to monetize Media Center, no improvements make financial sense. My point was that it could make sense for Ceton, although I really don't think it will happen. I can't argue the success of the Xbox, but generally speaking I hate the business model. I hate the idea of taking a huge loss on a product and hoping to make it up on the back end. It worked out well in this case, but eventually that model will fail big. Ask the US car companies.

[adam1991]

but generally speaking I hate the business model. I hate the idea of taking a huge loss on a product and hoping to make it up on the back end.

Back in the good old days, it worked for Vegas.

Now they charge a premium price up front, then demand that you show them you actually *did* gamble on their property, at which point they'll provide the discount ("comp").

If even Vegas shows that it's not sustainable...

[Motz]

Hey guys. so it really isn't an announcement at all. I showed the first version of the wp7 app back at CES. I am looking to make this a weekly series at a look at all the apps on all the devices. This week I am going to go in depth on the tv sections of the wp7 app and next week I will do an overview of the android app.

I will be looking at feedback of course, so as stuff comes out I will be interested into what you guys think.

[richard1980]

I don't disagree with you from Microsoft's point of view. Since they made only a small effort to monetize Media Center, no improvements make financial sense. My point was that it could make sense for Ceton, although I really don't think it will happen. I can't argue the success of the Xbox, but generally speaking I hate the business model. I hate the idea of taking a huge loss on a product and hoping to make it up on the back end. It worked out well in this case, but eventually that model will fail big. Ask the US car companies.

Overall, I dislike the model. Offering a product at a reduced price is a win for consumers and a loss for the business, and if the business can successfully make up the loss somewhere else, it's a win for the business, but a loss for the consumer. Microsoft is not the only company to successfully use this model. Nearly all retailers use this exact same model. Product 1 is sold for a loss while Product 2 is sold for a profit. The profit from Product 2 offsets the loss of Product 1. Or instead of just one Product 2, there might be 10 of them, with each one responsible for offsetting 1/10th of the loss from Product 1. It sounds great until you realize that every time you buy Product 2, you are paying more than you should. Instead, most people just see the opportunity to save money on Product 1.

Cell phones are an example of a variation of this model. Instead of hoping that consumers buy other products to offset the loss, the carriers have an insurance policy that all but guarantees the loss will be offset...the contract. The contract variation of this model offers lower risk and higher upside potential than the non-contract variation, but in return consumers generally have to pay more in the long run. Between the contract variation and the non-contract variation, the non-contract variation is better for consumers, so I applaud any business that opts for the non-contract variation, although, like I said, I still dislike the model.

And of course, there is the other model, the correct model. It costs $x to make a product, you have a y% profit margin, so the product sells for $x * (1+y%). No sales, no offsetting the price, no increased risk. It's a win for consumers, and a win for the business. The only problem is it's not as big a win for the business as the other method, and business in general are greedy. They'll generally pick the model that nets them the most profit, which is why you hardly ever see this model used in the retail market.

[kingwr]

Assuming that a consumer is going to purchase a Windows SKU in order to build a machine and use Softsled to access Media Center, Microsoft would make a lot more money from Softsled than on XBox or extenders.

[adam1991]

Shoot, with Windows 8 they could put it in the App Store.

[richard1980]

@kingwr There you go again with that misconception that Softsled would somehow boost Windows sales. It wouldn't. Sure, Microsoft could get $150-$250 for each copy of Windows+Softsled that is sold, and it would be profitable to Microsoft if enough people actually bought it (it's going to cost Microsoft some amount of money to develop and release Softsled, so Windows+Softsled is not profitable until enough copies are sold to offset all the development and release costs). But the problem is hardly anyone is going to buy Windows+Softsled. It's more cost effective for the consumer to buy an extender instead. Simply put, there is virtually no demand for Windows+Softsled. The demand is for Softsled as an add-on to copies of Windows that have already been purchased. In other words, Softsled would not contribute to increased Windows sales.