Tuesday, June 15, 2010

Above: Foxconn's Terry Gou and Red's Jim Jannard.

It has all the drama of cinema's greatest movies. Our friends at 1001 Noisy Cameras report that Red has been hit by a double whammy leaving it without a manufacturer and with a major unsolved bug in the firmware of both Scarlet and Epic.

With competition from DSLRs putting pressure on Red to compete in the same market place as Canon and Panasonic, today Red's Jim Jannard seemingly added the very last nail to Scarlet's coffin by himself.

We have stumbled on an issue that has caused us considerable grief. It is unexpected and it has us baffled...
In a forum announcement, Jannard posted an incredibly frank and open statement.

The firmware of both cameras has a major unfixed bug backing up production schedules, but even more seriously Taiwanese company Foxconn are to close their Chinese factory, with the shock loss of 800,000 jobs, moving significant production back into Taiwan. Red has no electronics manufacturing partner at the time of writing.

I have started two companies... Oakley and RED... and have never seen anything like this in 35 years of business. We will get past these obstacles. No question about it. But we are going to need patience from our customers... We have been a "lucky" company up to this point... Trust me when I tell you that we have been humbled... So what does this mean? Obviously another delay... To compound matters, the company that was to make Scarlet has made an incredible announcement recently and has significant issues.
Foxconn has suffered well publicised issues at the Chinese factory, and is expected to move massive factory production to Taiwan, Vietnam and India. Wages with most likely be higher and most likely passed onto customers.

It is thought that when Red was informed of the Chinese factory closure, Jannard sought to have the camera manufactured in America but this plan fell through. Jannard did not say whether Foxconn dropped Red as a customer due to production capacity pressure from the move and in order to cater for larger companies such as Apple and Dell, or whether the deal fell apart due to Foxconn passing on increased costs to Red.

This exposes Red's major weakness against competitors like Canon and Panasonic. They have to subcontract out all their hardware manufacturing. Their plan to take over the world is now beginning to look too ambitious.

RED has pushed the envelop in every way. We have pushed ourselves and our competitors. We have laid out a roadmap for everyone what the future of image capture should be. I can only hope that counts for a bit of your consideration.
I think what counts for most people's consideration right now, is whether they will be able to buy a Scarlet or Epic in 2010 at all.

For every day that passes whilst Red suffer, their camera specifications and designs slip further and further into the clutches of competitors, who are already some distance ahead of volume and pricing. DSLRs are now everywhere. What I can't stand about Red though in comparison to the more conservative and failure-fearing Japanese corporations, is their sheer arrogance. It seems this at least, has now been fixed.

The past couple of years we have been on a roll. Humility has now set in. Until we solve this one... we are heads down and nose to the grindstone. Probably not a bad lesson for us to learn.
Separately, as someone familiar with the Taiwanese / Chinese situation I believe the political fall out of Foxconn moving 800,000 jobs out of China will probably lead to a deterioration in stability and peace too horrible to contemplate.

It would be a bit like being a REDUSER.net member under the rule of moderators
Source: eoshd.com
Further Sources: Here and here.

Posted by
Categories: Labels: