One of the best early indicators of the American economy may be breast implants, tummy tucks and LASIK procedures. According to the December 8th Wall Street Journal, cosmetic surgery is a dead-on indicator of consumer confidence. Confidence is not a perfect match for consumer behavior, but uninsured cosmetic procedures are expensive, put off-able acts like car buying and condo shopping.
The Journal tells us that breast building is soft, and the fat has been sucked out of the liposuction racket for the moment, so we can expect the stock market to droop.
Cutera, the Brisbane, California laser maker, says that their earnings picture has darkened like liver spots, which may translate into weaker house remodeling sales and affect our world adversely.
Never underestimate the importance of Botox. It’s one more wrinkle in understanding the path of the machining world.
The $100 computer and the $2500 car are the hottest products on the planet today. Neither one is yet a reality, but the intense interest in developing these mass produced items for potentially a billion new customers in Asia, Africa, and South America is driving a mega battle in electronics and autos.
Video of $100 Computer
A few years ago, the personal computer push built the Microsoft and Intel fortunes. But in 2005, Nicholas Negroponte, of MIT, postulated that the $100 dollar computer was doable and set out to build the market and design the product. In the Nov. 24, 2007, issue of the Wall Street Journal, a front page article denotes the competitive struggle he has had as Intel attempts to co-opt his idea. The essential fact is that national governments will buy the production in the millions of units, and prices of Negro Ponte’s and Intel’s computers are now circa $200 and falling. Intel is scared of the product, which uses $3 software of Linux variety, but they are more scared that arch foe AMD will get the processor business, so they are pushing their low cost Classmate version all over the globe.
In cars, Tata Motors of India is rushing to develop a $2500 car for the new middle class of India in the hope that young people everywhere will covet one. Today we have over production in cars in the U.S. and Europe, but the potential market for cheap vehicles is absolutely enormous.
The big Japanese builders; Toyota, Nissan, and Honda, are ardently developing a $6000 car which could also reach a huge audience in Eastern Europe and China. For the suppliers of automotive, this offers a gigantic new market for brakes and tires and transmissions. It will be fascinating to see who will be able to serve this next great market.
On the computer front it seems likely that Silicon Valley will be the center of development of the $100 computer. It is less clear where the $2500 car will emerge. India and China have the cheap production capability, but I am skeptical about technical breakthroughs. Yet it is certain that the inexpensive, serviceable car will come soon because the demand will be insatiable, and it will be a lot more sophisticated than the Yugo.