Author: Tim Bajarin

I spoke last week with one of my friends who is in Vietnam about the current economic trend there that is helping prop up the Vietnamese economy.

Although not known as a tech manufacturing powerhouse yet, it has become one of the major countries around the world that could evolve to replace some of the Chinese Manufacturers that are caught in a tariff battle with the US today.

According to my friend in Viet Nam, this country sees a huge opportunity to steal away some tech manufacturing from China. Their government is working closely with ODM’s who have manufacturing facilities in China, to help them expand older tech factories that have set idle for years or build new ones.

At the moment, Vietnam has mostly been known as a manufacturer of apparel and shoes. But that looks like it will change. Already, some of the top PC makers have started to move some of their final assemblies of products to Viet Nam to get around any current or future tariffs.

In the chart below, it shows that U.S Imports from Vietnam have surged by 38% with a total of $20.7 billion products shipped to the US from its ports.

This chart also shows that in China, imported goods from their ports are down by 12-8%, although at this time it is more related to the tariffs than any mass exodus of manufacturers.

But for China, any serious move of manufacturing out of China will have serious ramifications long term for their economy. One of the reasons China has had such a good economy is that it propped up their manufacturing programs and used it to help get a younger generation of agricultural workers into new cities and get them better jobs.

This program started over 20 years ago. At the time, much of China was still very agricultural, and kids who were born in this environment were making about $10 a week and still living with their parents. China knew that this could lead to serious unrest and put in place a program to get them off the farms and into low to mid-level skilled labor jobs, especially in factories.

China also wanted to expand certain cities to make them manufacturing hubs and give them special trade designations so that manufacturing firms outside of China would be enticed to invest in China and create new factories, especially for tech products.

This program worked exceptionally well. These factories recruited millions of kids from the farms and in most cases, gave them a wage of about $100 a week, instead of $10. Most lived in company subsidized dorms, so they ended up with real buying power. The longer they stayed working in the factories, the better it has been for them to learn and advance. Through this process, they have increased their wages, and this, in part, has helped them drive a middle class in China that has dramatically driven their economy.

As you can imagine, losing even 10%-20% of manufacturing to places outside of China will have an impact on their economy. This is why China has a lot to lose in this tariff war and has started a major push for the Chinese to buy mostly Chinese made products to help bolster its manufacturing base.

I am hearing that the Chinese Government is threatening to penalize manufacturers from Taiwan, Korea and other Asian regions who have factories in China if they begin shifting a lot of their customers work from their Chinese factories. This is the early stages of discussion within the Chinese government, but one could imagine if their manufacturing base is genuinely threatened, a move like this would be highly plausible.

In an article in the New York Times, NYT reporter Keith Bradsher wrote a good piece entitled “A China-US Trade Truce Could Enshrine a Global Economic Shift” in which he argues:

“even a fragile truce could have lingering implications. The United States would keep in place broad tariffs on Chinese goods for months or perhaps years to come. Global companies would almost certainly respond by continuing to shift at least the final stages of their supply chains out of China. Uprooting an entire supply chain is a nightmare task,” said Jon Cowley, an attorney in the Hong Kong office of Baker McKenzie, a global law firm, who advises corporate clients on tariffs and supply chains. “It takes years, if not decades.”

President Trump warned this past week that he was concerned about the influx of goods from Vietnam. The surge could invite scrutiny from the Trump administration if it believes that companies are pretending to make products outside China but are simply clipping together Chinese-made parts.

Still, China has few options to stop those shifts. Trade between the two countries is so lopsided that China has many fewer American imports to tax. It could slam American companies that sell vast amounts of products in China, like Apple or General Motors, but pinching those companies could hurt the Chinese workers who make those products.

As this article points out, many US manufacturers see only instability with China and the US and now believe that regardless of these tariff pauses, the handwriting is on the wall and they need to seriously consider moving the manufacturing of a significant portion of their US-bound products out of China, starting now. It will happen slowly, but I sense that the Chinese manufacturing boat has turned around, and more and more manufacturers will begin looking for new places to make their products in the future.

Last week, President Trump enacted Level 3 tariffs on goods made in China, to the tune of $200 billion dollars. Here is the list of what will be charged in the new tariffs.

The list includes a huge amount of food items as well as tariffs on hundreds of materials like Zinc Oxide, Nickel Ore, Titanium ores, silver ores, some types of silicon and other materials that go into all types of toys and tech products.

There has been much talk about how this round of tariffs would impact companies like Apple, Dell, HP, Lenovo and other major tech companies who create millions of smartphones, laptop, printers, etc.

While some of the components that are used in these tech products could impact their cost, I am told by ODMs that for the most part, this round of tariffs will have minimal impact on these products. One exception is servers. There are some things on this list that could add additional cost to servers created in China, but at the moment, it is still too hard to determine how much this new round of tariffs will truly impact server costs. As you can imagine, figuring out additional material costs due to tariffs is a painstaking process, and it may be a week or so before we get a real idea of how much these tariffs will add to the cost of some toys and tech products.

Sometime on Monday, May 13, 2019, the White House will release a list with what would be level 4 tariffs which would amount to another $325 billion dollars of products. Although it is not clear as of this writing what will be in these new tariffs, suppliers I talk to in Asia tell me that they have been warned that a level 4 round most likely will include some finished goods too, including laptops, tablets, smartphones, and printers.

As you can imagine, this has the tech vendors who create these types of products, watching very closely. Some economists point out that the 4th level of tariffs, including things like finished goods tech products, is more of a bargaining ploy by the US to try and get concessions from China. On the other hand, Chinese delegates left Washington last Friday night without a deal, and Trump and the team has given them another four weeks to resolve this tariff stalemate. Lobbyists for the tech vendors have been warning Trump and the White House that tariffs on tech products that have become fundamental to our daily lives would have a dramatic impact on the companies creating these products, as well as the economy.

A Bloomberg article posted after the Level 3 round of tariffs went live, stated the following:

“This week’s tariff move is likely to have significant short-term consequences for retailers and other U.S. businesses reliant on imports from China. But extending it to all trade would increase the economic and political stakes even further for Trump and American companies.

Such a step would see price increases on smartphones, laptops and other consumer goods — the kind that Trump’s advisers have been eager to avoid, out of concern for the fallout. It would likely provoke further retaliation, and some economists are predicting it could even tip the U.S. economy into recession just as Trump faces re-election in 2020.

This 4th round of tariffs is what Tim Cook, Micheal Dell, and other tech leaders have been deeply worried about and in Tim Cook’s case, he has personally lobbied against them. The one thing in favor of Apple, Dell, HP, and other local US companies is that Trump sees them as showcase companies and this is one of the reasons why they have avoided any real impacts from tariffs so far.

But Trump and the White House are running out of things to charge tariffs against, and it is most likely that should a China deal not go forward, even after level 3 tariffs have been levied, it may be impossible for the big tech giants to avoid being caught in this next round of tariffs.

Another thing that could impact Apple other tech companies is if China decides to retaliate by placing tariffs on US-based products coming into China. As the WSJ points out, Apple’s China business would come under this type of tariff retaliation, and it could impact their China business, that is already struggling.

Whether we go to a level 4 tariff round or not, the big tech companies already see the writing on the wall when it comes to China. As I stated in a recent Think.Tank column China has a 100-year plan in which they want to have more control of their destiny and that their own manufacturing facilities could be turned inward.

So, many of the big tech companies are now starting to look outside of China to countries like Viet Nam, Malaysia, Thailand, Cambodia, India, and Mexico to invest in new manufacturing facilities in these countries, to offset any potential issues with Chinese manufacturing capabilities in the future. Indeed, at least one major OEM will have moved a significant part of manufacturing or assembly of notebooks out of China by late this year.

Of course, there will be a lot of political jockeying in the next four weeks and these companies, along with most of America, are hoping for some resolution that keeps level 4 tariffs from ever seeing the light of the day.

But if the US and China cannot come to a resolution soon and level 4 tariffs do kick in yet this year, you can probably expect to pay significantly more for laptops, smartphones, and printers as early as Q4.

In 1997, while on one of my trips to Japan, I spent some time with local executives who were in the wireless business. During one of our dinners, we started talking about the culture in Japan and how their elders are revered. I asked one of them about the role technology played in the lives of the elderly, and they told me a fascinating story about how WIFI was used in parental eldercare.

It turns out that for most of the elderly in Japan, they still observe an age-old tradition of having tea around 4:00 PM each day. This tea ceremony is done like clockwork. At the same time, their children, who are now grown and may have their own families or are full-time salarymen and work long hours, wanted a way to check in on their parents daily to see if they are doing ok. Remember, this was in the days before smartphones and cellular was broadly available and accepted technology.

Knowing that these elders would have tea each day at 4:00 PM, they worked with some makers of teapots to add WIFI and motion sensors to them and created an algorithm so that every time the parent initially lifted the teapot, it would send a message to their grown children’s PC to alert them. That way they knew that the parents were having tea, which translated into them being relatively ok.

Today, wireless eldercare is already a big market. From using Find My Friends like apps to determine aging parents location, to giving them technology that can send instant alerts if they have fallen, need to contact a relative, or call 911. Or they could even call them to see how they are doing. So there are now many ways for grown children to keep in touch with parents as needed.

But one of the un-reported technologies being used by elders is the Apple Watch, and more specifically, grown children buying them for their parents to encourage them to use it to monitor their health. This is quietly becoming a significant market for Apple.
Although I cannot find any reports or numbers that tell us how grown children are buying many Apple Watches for their parents, I hear a lot of anecdotal feedback on this. And it makes sense.

Gen Xers and millennial’s are busy with their careers and family and have parents that are in their mid to late 60’s or early 70’s who are beginning to deal with health issues they did not have when younger. This younger generation has become more health conscious and is more in tune with using things like the Apple Watch, Fitbit, etc. to monitor their health and want their parents to do the same.

In my case, I wear the Dexcom continuous glucose monitor and can share my blood sugar readings with key family members 24X7. My biggest fear as a person with diabetes is low blood sugar that saps my energy and can be very dangerous if it gets too low. Sometimes I can’t feel my blood sugar going lower, but my Dexcom monitor knows and sends designated family members and me an alert. More than once my phone was in silent mode, and I could not feel the alarm, but one of my family saw the warning on their Apple Watch and called me to make sure I took something to bring my blood sugar up to safer level.

With the various health apps that monitor a person’s health and the ability to share real-time health data with family members, the Apple Watch is becoming much more valuable to the care of aging parents. I believe the majority of grown adults buying Apple Watches to help aging parents monitor their health and keep moving comes out of real concern. But in talking to some who have bought Apple Watches and health monitoring wearables for aging parents, they have admitted that part of the motivation for this is due to the guilt of not being near their parents so they can check up on them in person. Or are so busy that, even if close to them, are not proactive in connecting with them more often.

However, all those I have spoken with who have bought Apple Watches for their parents say that they have a real concern for their parent’s health and are glad to have a wearable technology that can monitor the health and summon immediate help if needed. They also like that it motivates them to move and exercise too.

There are a lot of wireless monitoring services for health care that use WIFI or Cellular for location tracking. One of the more interesting ones comes from GTX Corp, which manufactures the GPS SmartSole®. This sole can be slipped in a loved one’s shoes and can monitor their location 24/7.

Another innovative one comes from Trusense. TruSense integrates with technologies like the Echo Dot and includes a motion sensor, contact sensor, smart outlet, and hub that all work together to provide real-time data for caregivers.

But the Apple Watch, which can also be used for location tracking, has a dedicated focus on health monitoring and is increasingly becoming the kind of product that grown children are buying for their aging parents to not only track their health but to encourage them to move and be more active.

While it is difficult to get numbers on how many Apple Watches and Fitbit’s are bought buy grown children for their aging parents with an eye on helping their parents deal with health issues and stay closer in touch, you can see how this segment of the market for Apple and others is attractive. While none of these companies have created any ads for this market segment yet, it would be a good one for Apple and others to target as the aging population will be 47 million in 2020. https://www.urban.org/policy-centers/cross-center-initiatives/program-retirement-policy/projects/data-warehouse/what-future-holds/us-population-aging

My parents had health issues as they got older. I was traveling so much that I was highly negligent in keeping in touch with them and making sure they were doing well. If they were alive today, I would be the first to buy them an Apple Watch to help them monitor their health. Today’s technology has advanced so much that using Apple Watch and other fitness wearables as a tool to monitor aging parents health is more than possible and I believe that it will become a significant market segment for makers of health and location tracking wearables to target.

Early in my career, I found myself having to run interference between Silicon Valley and Hollywood. In those days, Hollywood was more afraid of Silicon Valley and how it could impact them. The MP3 music wars had just started, and they feared something similar could happen to TV and movie videos.

On the other hand, they deeply embraced the digital tools Silicon Valley was giving them to create special effects and content as well as provide the next generation of editing tools that helped advance their industries. I made many trips down to MPAA to meet with officials to discuss how Silicon Valley and the TV and Movie industry could work together and was even asked to address key members of the American Film Institute about the future of tech on their industry.

In one of my more unusual claims to fame, I was the first to suggest to one of the largest talent agencies that they needed to add a clause to all of their famous clients that made sure the stars they represented owned the digital rights to their performances. I remember the agent, who represented some of the top talents in the music industry, abruptly leaving the meeting we had and getting on the phone to his lawyers to get this clause in place fast.

But it took Hollywood another two decades to finally understand and embrace the fact that Silicon Valley could really help their industries thrive and now they are more in step with their digital future.

That does not mean they are not still afraid of Silicon Valley. The fact that Netflix, Amazon, and Apple are becoming TV and movie studios of their own, mean’s the competition is more significant for them. On the other hand, those studios and production companies who view Amazon, Apple, and Netflix as collaborators and work with them, gain serious partners whose distribution gives them millions of new customers for their programs.

However, the group in Hollywood that is benefitting the most from Silicon Valley today is the current and fledgling talented actors, actresses, writers and producers that have struggled to get their work and talent recognized by the giant movie and TV studios. Now they are getting a chance to have their work looked at by Netflix, Amazon, Apple, and others and get more opportunities to be seen and heard. This is especially true for indie film and documentary producers and the various talented people involved in these projects.

I once had the privilege of having lunch with the late Harry Anderson, the lovable judge on TV’s Night Court, who told me about his struggle as an actor to get discovered and that his choice to be cast as the judge came about from chance contacts and some real luck. He was a struggling actor that as he said “really got lucky” and this show propelled him to fame. Harry Anderson was also a talented writer and, even with his success, was still having some of his work and projects rejected for various reasons.

I have been speaking with friends in Hollywood who have told me that, thanks to Netflix, Apple Amazon and others in tech who are backing many new video projects that the creative juices in Hollywood have accelerated and more writers, producers, actors and actresses who are very talented are finding new projects being green-lighted.
In fact, my friends tell me there is an insatiable appetite from these big tech firms to find and back a plethora of video projects to meet the growing demand of their customers for on-demand streaming content.

I am especially pleased that these tech giants are backing all types of documentaries that, for decades, were hard sells in Hollywood. While movies and TV series that tell stories are in highest demand, documentaries can also tell stories and at the same time deliver educational content and even calls to action.

I have spent time with actors and actresses as well as some producers in Hollywood and watched their struggles to get their video projects brought to the big or small screens. While this may not be the golden age for Hollywood as it was in the early days, the advent of tech companies becoming movie and tv producers is important. Their need to get all types of content for their streaming services, is bringing a new kind of glory days to this creative community that has some of the most innovative and talented people on the planet.

Last May, I attended the SID conference in L.A. This is the premier display conference in the world. At this show, I saw the first foldable displays that could be used in a smartphone and unfolded to become a small tablet. I wrote about it and laid out how companies like BOE, Visionex, and Samsung showed prototypes of this foldable form factor and how it could drive a new type of design in smartphones in the future.

Since then, Samsung has introduced its first foldable smartphone known as the Galaxy fold, and they will start to take orders for this device this week.

When I saw the BOE prototype at last years SID conference, I got to hold it and play with its screen and fold it at least five times. The good news is that true to form, when folded out it becomes a small tablet. But in the folded mode it was not a great smartphone, and it did not fit in my pocket well.

While this form factor has become the standard view of how foldable are seen at the moment, I think the jury is still out whether a foldable phone that becomes a small tablet has a future. I would argue if there is even a solid business case for a dual-purpose smartphone.

I have seen a lot of speculation that this form factor could be successful but no serious research that even hints to whether a foldable smartphone that doubles as a small tablet is even what people want.
But the first reviews of the Samsung Fold are just coming out, and the initial response to it is relatively favorable.

Here are a few of the early review comments-

Geoffrey Fowler- Washington Post:

“It’s going to take more time to understand whether the Fold is the future or just a Frankenphone. A smartphone and tablet in one could be convenient … or do both jobs less well. I suspect it has more potential as a replacement for a tablet than as a phone. To find out, I would need to operate the Fold one-handed on my morning commute, try to burn through emails at a coffee shop, and catch up on my Netflix queue on a flight.

Samsung still has a lot to figure out on this. Perhaps that’s why it’s focusing on a high-end — and more-forgiving — market for its first folding phone.

Design critics have said the Fold suffers from the problem of combining desires that sound reasonable together but end up ruining each other — like the Homer Simpson Car on a beloved episode of “The Simpsons.”

To me, the Fold’s usefulness as a one-handed phone seemed to take a back seat to its capabilities as a two-handed tablet. The question is: How many people need an Android tablet with them at all times? Samsung was right years ago about the trend toward larger-screen phones, which not that long ago we used to jokingly call “phablets.” The Fold combats the distressing trend of people needing handles, like those stick-on circular PopSockets, just to firmly grip their phones. If it catches on, the Fold could be the beginning of an era where big phones really are just tablets.

Perhaps the lesson from the first folding phone will be about the value of making devices smaller. Instead of doing origami on a tablet, imagine folding in half the phone you already own. “I don’t just want bigger screens, and I want being smart with the screens you have,” Milanesi said. Welcome back, flip phones.”

Harry McCracken- Fast Company:

“If folding-screen smartphones do take off, the Galaxy Fold will have its place in history. But will it be remembered as the category’s iPhone—an epoch-defining device that everyone else chases for a decade or more? Or its Palm Treo—a much shorter-term phenomenon? Or could it be IBM and BellSouth’s Simon—the 1994 device that kicked off the smartphone era without succeeding or even influencing anything that followed? We might not know until years have passed and additional iterations of the Fold have come and gone.

For now, even Samsung can’t say where this device will lead it and the smartphone industry. The company seems to be OK with that. CEO Koh told me that he’s optimistic about the prospects for devices like the Galaxy Fold going mainstream. But first, he says, “I want to see the response from the market.” So does everybody else.”

Their price point of $1900 to $2900 at first will be a deterrent from this being a big hit. But even if a couple of thousand buy them and give feedback on their likes and dislikes, we could get a read on its short and long term potential.

But I can’t help thinking that a smartphone that folds in half from the top down may be the foldable smartphone that ultimately gains the greater public interest. Motorola is rumored to be working on a model that folds in half and easily fits in your pocket, but when unfolded, you get a large screen smartphone.

And recently, Sharp developed an OLED foldable screen optimized for smartphones that can be folded in half. In fact, they even created their own prototype foldable phone to show off their new screen.
https://www.oled-info.com/sharp-demonstrates-618-foldable-amoled-prototype

https://www.anandtech.com/show/14209/sharp-demonstrates-foldable-oled-displays-for-smartphones

I have no doubt that the next phase in smartphone innovation will be to integrate some type of folding screen into their designs. While we will get better cameras, more memory, sharpers screens, etc., the current form factor is due for some major changes in form and design.

Indeed, my colleague at Creative Strategies, Carolina Milanesi @caro_milanesi had an important take on the Samsung Galaxy Fold.

“Comparing the #GalaxyFold to a traditional smartphone would miss the point. This is not just a flagship product, and this is the first of a new category which is not for every buyer out there & not just because of price. Status, fashion & tech all come together in the target buyer.”

However, at this stage, I think that the Samsung Fold and others that want to be a smartphone and tablet may not be the form factor that drives the highest demand in folding smartphones. I do believe this design will have some serious interest from users and could do well over time, especially if prices can get under $1000. On the other hand, a smartphone that could deliver perhaps a full 7.3-inch screen when unfolded from the top down, maybe the design that gets the broader attention in a folded smartphone market of the future.

Now long after the original Segway was launched, I had the privilege of being able to test one. I had met its creator, Dean Kaman, at a dinner in San Jose a year before the Segway launch. Others who had actually been told about it like Steve Jobs and noted venture capitalist John Doerr, who went on record saying they felt this product by Mr. Kaman would be a game changer.

While the Segway did make a splash and did get interested as a short-range mode of transportation, it never took off. In fact, it was even banned in some cities for use on sidewalks as it was a nuisance to pedestrians and deemed unwelcome in many other cities who refused to let people use them on city streets.

But the one thing that the Segway did is to introduce what is called last-mile transportation link. And it has birthed the current “ last mile” mobile electric vehicle of the moment in the scooters that populate the streets and roads of many cities today.

The chart below shows the areas of the world where scooters are taking off.

Here in the US, they are also populating large cities, but in many, they have become controversial due to three key factors.

First, without any regulation, scooters, like the ones from Bird and Lime, started showing up in huge numbers in large cities and were more a nuisance than a welcomed vehicle for last mile journeys. Many cities banned them outright in order to develop rules and regulations guiding their use in these cities as well as make companies bid for the chance to place their scooters in these towns. Most cities now have solid regulation in place to control how many can be placed in a city, as well as having the proper insurances and guarantees that they are picked up at night to keep the sidewalks from being clogged and scooter’s under a semblance of control.

Second, is the fact that they can be dangerous. These scooters, while not speed demons, do travel at around 15 miles an hour and if you fall off at that speed, you could be injured. The chart below lays out the most common injuries.

CNET spoke to Trauma Centers in multiple cities to get feedback on the kind of scooter-related injuries they were seeing-

“CNET spoke to trauma centers in Denver, San Diego, San Francisco, and Austin. All reported an uptick in injuries from scooter accidents. It’s been just a few months since the vehicles were unleashed onto city streets, so emergency room doctors say they’re only beginning to collect data.

“We see some scary injuries,” said Dr. Chris Colwell, chief of emergency medicine for Zuckerberg San Francisco General Hospital and Trauma Center. “There’s still a lack of recognition of how serious this can be.”

Colwell said his emergency room is logging about 10 injuries a week. They range from extensive bruising to severe head trauma. Given the hills in San Francisco, he also sees a lot of road rash. “We saw a guy who fell over on his back this week,” Colwell said. “He ended up going through so many layers of skin, and we had to essentially put him to sleep to clean out the gravel embedded in his back.”

Bloomberg recently reviewed a study from the JAMA Network Open and found the following-

“The vast majority of the injured were riders as opposed to pedestrians. They averaged around 34 years of age and were 58 percent male. The study revealed a general lack of operator adherence to traffic laws or warnings by the scooter companies themselves, according to an article published Friday in JAMA Network Open. Though scooters can reach 15 mph, less than 5 percent of riders were reported to have been wearing helmets.
About 40 percent of patients had head injuries, and almost 32 percent suffered broken bones. The study said a significant subset of the injuries occurred in patients younger than 18.
The researchers don’t try to compare your chances of getting killed on (or by) a scooter versus a car, but rather the physical damage being wrought. And how did these 249 California riders get hurt, exactly? More than 80 percent just fell off, according to the study. Eleven percent hit something.”
https://www.bloomberg.com/news/articles/2019-01-25/electric-scooter-injuries-pile-up-but-lawsuits-are-hard-to-make?cmpid=BBD012519_BIZ&utm_medium=email&utm_source=newsletter&utm_term=190125&utm_campaign=bloombergdaily

This is a significant issue and one that will plague scooters for years unless riders do more to protect themselves, such as wear helmets and even knee and elbow pads when riding.

The third area is the business model. The Bird and Lime scooters cost around $550 each and have a life span if only around 1-2 months at best.

ExtremeTech talked with Quartz Report’s Ali Griswold, who did a study on one of the scooter programs in Louisville, KY-

“Quartz reporter Ali Griswold performed an analysis on revenue-per-scooter using open data sets provided by Louisville, KY. The question of how much revenue companies earn per scooter is an interesting one.

“Griswold’s analysis was made possible by the fact that the initial Louisville KY data sets included a unique identifier for each scooter, allowing her to track how long the vehicles persisted in the city. Later data dumps have removed this modifier, likely to prevent the kind of analysis she performed.

What she found is that the average scooter lived 28 days, with a median lifespan of 23 days. Focusing only on the oldest vehicles in the data set improved this slightly, to 32 and 28 days, respectively. Using the oldest vehicles for a baseline and excluding December data (her data set ran from August – December), the median vehicle took 70 trips over 85 miles.

When you run through the various costs and revenue, there’s just no way these companies are doing anything but losing huge amounts. The average revenue generated per scooter in Louisville, at least, comes out to between $65 – $75. Data available elsewhere online suggests each scooter costs Bird $551. The company wants to get that down to $360, but even so, it’s losing $285 – $295 per scooter deployed in the Louisville area.”

I have read other stories on the economics of the on-demand scooter business, and they all question the business models and if they can ever be profitable and sustainable.

There is another interesting economic model around scooters developing, and that is one in which a person buys a scooter and uses it as needed for last mile transportation.

Although I have used a Lime Scooter once or twice for short distance travel, last fall I tested the Element Folding Electric Scooter from Jetson.

This particular model costs $299, weighs 18.74 lbs and has a range of up to 10 miles. They have a higher end longer range and more durable model called the Quest, that sells for $539.00, Weights 28.4 lbs and has a max range of 18 miles.

If you were going to use this a lot, then the Quest would be the better purchase. But in my case, the Element meets my needs as I mostly use it to go to the local grocery store, and around the neighborhood, although I have packed it in my trunk and taken it with me to Downtown San Jose and used it there to travel short distances to meetings.

The lightweight of the Element makes it easy to put in my car’s trunk, or in the bottom of the grocery cart at the store. Portability is very important to me and having something like this in my car for last mile journeys has been quite useful.

Both Jetson Scooters get high ratings, and so far the Element has held up well over the six months I have been using it. Of course, many other companies, such as Segway, Xiaomi, Razor, Gotrax, Gilon and others see the market for personal scooter usage and are ramping up new models for our market.

I am pretty health conscience as well as balance challenged so I won’t use the scooter without a helmet and at least elbow pads. But so far I have had no major issue with the Jetson Element and continue to use it as needed.

While owning one’s own scooter is not for everyone and the on-demand model that Bird, Lime, and others are using has merit, especially in big cities where getting to a location fast and easily is called for, I have a sense that the ownership model has some serious legs and could become one of the more interesting way’s scooters are used in the future.

If you follow me on Facebook or Twitter, you may have discovered that I have restricted my Facebook posts to pictures of Golden Retrievers, my favorite dog breed, and once in a while I even post some family and friend related G-rated content. My Twitter usage is used mostly for posting my columns and industry commentary.

Over the last five years, Facebook’s “almost anything goes” feature has gotten out of hand, and its lack of policing itself and keeping so much offensive material and fake news on its site is starting to slow its growth. Twitter is even worse. People post things here that run the gamut of blasphemy to outright fake news and will probably be the biggest site to post deep fakes eventually.

Both companies and many others that allow so much uncontrolled content get away with it because they are not traditional media sites. They have no regulation to restrict them. This is a problem that has major ramifications for democracy and even decency and more has to be done to reign in these sites from being propaganda tools for rogue governments and perpetrators of fake news.

Adam Lashinsky, in his Fortune Data Sheet newsletter posted on March 22, 2019, has a recommendation on how to deal with the Wild West of social media and offers his solution in this following exert-

“The solution to this is so simple, by the way: Repeal the legislation that’s responsible for it all. I’m talking about Section 230 of the Communications Decency Act of 1996. It created the fiction that because terrorist-criminals live stream murderous rampages on Facebook, the “social media” company isn’t responsible, accountable, or liable for the content it publishes. You won’t find such garbage on the sites of any of the news organizations I cited above (including Apple News) or on a broadcast network or cable channel. That’s because those news organizations curate what goes on them—and can be sued if what they publish harms someone.

Repeal this misguided legislation, and Facebook (and Google’s YouTube) absolutely will find a way to prevent their publishing platforms from being used for ill. Would it hurt their business models? Of course. What’s more important, entrepreneurial glory and wealth generation or protecting the integrity of democracy and keeping foul content from hurting people?”

I have been making this argument for over five years. Not holding Facebook, Twitter and YouTube and others accountable has become a great threat to democracy and has split countries apart. Traditional media has to come under regulated guidelines in order to stay in business. The kind of derogatory material you see posted on Facebook, Twitter, etc. could never be published in the New York Times, WSJ, and traditional media sites.

Section 230 of the Communications Decency Act has outlived its usefulness. You can argue that we are in this place today because of this Act. It came about at a time when the Internet was young, and in that sense, it has helped it grow exponentially.
But it has been a two-edged sword in that it allowed social media sites to flourish without any controls and liability. As Adam suggests, it is time to repeal this act and make these sites admit what they are-Media sites.

Of course, the lobbyists from Facebook, YouTube, and other social media companies will fight this tooth and nail as they have in the past. But I sense this time is different. They have targets on their back and governments around the world are looking at ways to reign in things like fake news, hate speech, etc. And the way to do it makes the sites that distribute this material liable for what is written and spread on their websites, just like traditional media.