Product, Pricing and Distribution with Ross Rubin – Reticle Research

19 June 2019

Ross Rubin is the principal analyst at Reticle Research and a frequent contributor to ZDNet and Fast Company. We discuss what devices he wants to make wireless, pricing and distribution for wireless power and a lot more.

This episode was recorded on June 5, 2019

Yuval Boger (CMO, Wi-Charge, @TheChargeGuy): Hello, Ross and thanks for joining me today.

Ross Rubin (Reticle Research, @rossrubin): Oh, my pleasure. Great to be here.

Yuval: So, who are you and what do you do?

Ross: My name is Ross Rubin and I am a technology research analyst. I’ve been looking at various tech ecosystems, hardware, software and content for a bit over 20 years. As a research analyst, my first firm tracked the rise of the consumer internet and then my second firm tracked sales of products such as digital TVs, iPads, some of the first smartphones. And since 2012, I have been the principal analyst at Reticle Research my firm. And we do a lot of research on the tech industry particularly partnering with media and event firms for different kinds of research, editorial research, and research for stories and to help their advertising. And I do a bit of writing for ZDNet, where I have a column and for Fast Company. And last year I started a podcast Techspansive, with a long-time industry colleague Shawn DuBravac.

Yuval: Perfect, so I gather your familiar a little bit with wireless power, wireless charging.

Ross: Absolutely. This has for so many years, looked like a holy grail and it seems very exciting that we’re really on the verge of being able to charge various devices without them having to be either plugged in or having to lay them down in a particular spot on a charging pad.

Yuval: Ever since I joined Wi-Charge. I sort of have a different outlook on life. I go into rooms and I look at stuff and say “Wi, Wi, Wi”. Here are all the things we could potentially power charge. But I wanted to ask you your opinion. If you think about a smart home, its got a lot of battery-operated devices. Which device would you want to be wirelessly powered so that you never have to replace batteries or that you would regain portability meaning being able to take it to one place or another?

Ross: Sure. Well, in a smart home. It’s interesting because there are a lot of factors that come into play such as for example, simple aesthetics. You don’t necessarily want to have a cable being visible for certain kinds of products. Ideally, you may want to place certain kinds of products in a location in a home where they just don’t have much access to an outlet. And yet you’d want to be able to have access to power virtually all times. So there is certainly a wave of new kinds of devices that really meet those criteria really well. I think a few examples are smart locks is a great example. We’ve seen vendors try to implement all kinds of workarounds in order to prolong the battery life in those products. Because it’s a hassle to replace them and of course you have to continuously have power to them because you don’t want to get locked out of the house.

Ross: I think a product that was even earlier to the digital home that suffered in part because there wasn’t a great wireless power solution was digital photo frames. The frames that we have today offer much better picture quality and the ones we had years ago they were smarter about turning off when there was no one in the room. However, people still wanted to do things like hanging them on the wall. Just like you would want to with a traditional photo. And today that means stringing an unsightly cord down a wall. I think that’s another good example. Another good example is security cameras. Again much like the smart locks, this is a very fast-growing category with a lot of demand, a lot of different vendors who are using all kinds of radio technologies and battery technologies to try to prolong the life of these products., whereas having access to uncouple wireless power would be a great asset for those kinds of products.

Yuval: I know you’re a technology analyst and not necessarily a copywriter but is that what you would call it uncoupled wireless power. How do you think we should explain it to the general public?

Ross: Yeah, I have no trademark on that one. I didn’t come up with that term. I don’t know if consumers would necessarily understand uncoupled, I think its more of an industry term. But maybe something like “contactless”, because today the term wireless power is associated with charging pads, maybe something like room-scale wireless power. Borrowing a term we’ve seen from virtual reality or maybe something like cordless or cord-free power because with the charging pads I think there’s still a strong association with the cords because they’re right there. So as you place more distance between the source of the power and the object being charged, there’s a stronger case for describing that as being cord-free.

Yuval: I long for the days of the phones where you had the corded, cordless, wireless designation…

Ross: Right. And then once things broke out it became cellular

Yuval: Exactly. One of the things that when new technology is introduced whether its Wi-Fi or cellular or anything else for that matter. One of the questions that come up, is it safe? Here I am, I’m about to introduce this new technology into my home, put it in my living room or where my kids are or someplace else. Obviously there is a regulatory side to this we were successful in obtaining UL approval and FDA approval and a couple of other approvals and all this alphabet soup will be on the back of our product but do you think that’s enough to communicate to everyone “Hey, this is a safe product because the government says it is” or do we need something else?

Ross: I think that’s a strong start certainly. It’s the job of those agencies to test for safety. I think that some of the organizations that we mention are strongly associated with power and electricity in the home. Things like UL, we’ve seen all kinds of products. Certified by them does that mean there wouldn’t be a benefit to other organizations and endorsing the safety of it. Now there may be a further benefit to that maybe if there was some kind of medical group, I don’t know if the AMA would be appropriate. But perhaps, in addition to those kinds of regulatory organizations that might be helpful because as you know, it is something new being introduced in the home. And I think some of it just comes with time. In the early days of cellular and the early days of WiFi there was a fair amount of concern over health impact. I would say that hasn’t completely disappeared, but it certainly has subsided very significantly over the years, and the more time that goes by and no effect the more comfortable people feel.

Yuval: So, you’re preaching patience just like Bill Gates that revolutions take more time than you think and then they’re larger than you think?

Ross: I’d say it’s a slope. There’s only so much you can do to provide assurance at the beginning and that’s probably not such a terrible constraint because early adopters are going to be more open-minded to those possibilities anyway.

Yuval: When I look at devices in my home and how I pay for services then let’s say I purchased a WiFi router. So I go to Best Buy or Amazon and pay 100 bucks and get a WiFi router and that’s the end of that. And then on the flip side, I have internet service at home or at the office and I pay a certain amount of money per month regardless of how much I consume. My cellular bill may be as unlimited or maybe as limited and then some over-usage charges. And then electricity or water just our classic utilities are really primarily paid by consumption if I consume more, I pay more. What do you think is the best approach for wireless power? is it “Here’s 50 bucks and here’s a wireless transmitter?” or “Here is a price per kilowatt of wireless power of electricity that we deliver?”.

Ross: I think some of that is going to come down to distribution. So certainly in retail, sometimes the services angle is a bit more difficult, at the point of sale. I think some of the early opportunities for wireless power is in bundles with some of the kinds of devices we talked about earlier, whether those are all from the same company which might be easier for me to see from a networking oriented company. Or perhaps some kind of smart home products oriented company. Then it may be coming from a different brand and then the retailer will just do a bundle. They is certainly going to be some segment of consumers that prefers that approach. Now that said we were talking about early adopters and many of those early adopters are going to be in the residential installer space in particular given some of the earlier points we were talking about in terms of preserving a home style and the focus on aesthetics. So in that respect there’s often an ongoing maintenance charge, there’s often a cost of a lot of products are wrapped up in an overall contract so perhaps in that instance, it would be presented as a service charge regardless of how it was sold to the installer.

Yuval: On the subject of price, one of the things we look at is sort of the history of WiFi. Both on the equipment side and also on the service side. It used to be that and I guess it still happens in some hotels and public places that you’re asked to pay for internet or maybe you get a certain amount free and then beyond that you have to pay. But when you go into Starbucks, its free and more and more people are just expecting WiFi to be free. Maybe it’s a way they choose with a coffee shop to go to. Do you see wireless charging following the same path?

Ross: So in addition to those residential installer market perhaps even a bigger market, a much bigger market is things like broadband companies, cable companies, wireless carriers. And your point about Starbucks is the reason they can provide that WiFi for free or why its transitioned to free overtime is because they have recognized the benefits to the business. The longer I’m in there working on my new screenplay, the more coffee I am likely to consume. So it becomes something of a competitive differentiator. Or in the hotels, what I see very common these days is hotels will offer you free WiFi but only if you have joined their rewards program. So there is a powerful incentive to do that.

Ross: So the question becomes what kind of service provider would benefit from subsidizing or installing these kinds of products. It could be, for example, one of these cable providers or security provider that is more likely to have more points of monitoring in the home or upselling a security agreement based on better coverage of those security cameras we talked about earlier. Just as with how the pricing works in terms of where the distribution is or what the customers’ payment expectation is, is going to depend on distribution. I think the good news is there’s a number of potential successful models and I think what we have seen from WiFi to your earlier point, is that in the earlier days there was a market for routers was almost exclusively retail. And over the past few years, increasingly WiFi router capabilities expected to come with my broadband. So we may see things evolve similarly for wireless power.

Yuval: And the last pricing question. Would you pay more for a phone if it had true wireless power capabilities meaning, wireless power at a distance without a charging pad or a cable?

Ross: I think that the ecosystem as we discussed a bit in the past, may take some time to evolve. It’s tough to carve out the premium for a single feature because phones don’t get features in those ways generally speaking. So for example, when the charging pad capabilities came to phones it wasn’t just an isolated thing where certainly one company didn’t say “Okay, here’s my model without wireless charging and here’s my model with wireless charging and here is the difference in price that you’ll pay for that”. They tended to be rolled in with a number of other features that roll out across different product lines. You’ll have your premium product line that was early to feature wireless pad charging. And then you’d have you mid-tier which over time would come to get it. And then you would have your perhaps lower tier which still does have it even though it been around for a while. And of course, different manufacturers will go at their own pace.

Ross: Could you carve it out as a specific feature for which consumers would say “I’m willing to pay X amount of dollars for just for that?”. I think that’d a difficult analyst to make, but I think in general the way smartphone manufacturers and other device manufacturers will think about, it will be to think about it as a bundle. Which of the following group of features might you expect in a premium product? And over time as the benefits of a true wireless charging, maybe we can use the phrase come to light. They will certainly be more value associated with that and its more likely to show up in the high end.

Yuval: And I think the phone companies or the phone manufacturers they actually deliver to the half of wireless charging, meaning the charging pad died because they say the phone is capable but if you want to unlock it you got to buy the charging pad from us. 30 bucks or 50 bucks and so on.

Ross: All retailers love accessories.

Yuval: Yes, now we’re coming off the $1000 monitor stand for the new Apple Monitor

Ross: That’s right.

Yuval: Our prices just went up. Right?

Ross: And that provides no wireless power right? So what good is it really?

Yuval: It does provide a holder for the wires, I think.

Ross: And it’s cantilevered so you have to figure out a way to work that in apparently.

Yuval: Good, so as we come to the end of our conversation. If you had the ability to control the developing plan of the Wi-Charge for the next 18 months what would you have us focus on?

Ross: So, certainly getting the first products out, it’s going to be huge, I think its very exciting to see the potential of it with demonstrations. But its really far more powerful when consumers can buy the product. I think that branding is going to be important so in addition to the Wi-Charge brand maybe that’s associated with some kind of certification. I don’t know if you’re going to have one and the same but if you are, then Wi-Charge needs to be that kind of seal of approval of compatibility with your system. Having products released by brands that consumers know and trust is going to be really important, And probably some of the first targets for that are some of the companies we talked about earlier, some smart home product companies that have developed brand names, and some of the networking company brand names. Not only do they have good resonance with consumers, but they have a strong retail presence and strong relationships with retailers that that can help drive successful promotion of them in that channel.

Yuval: Excellent, so Ross how could people get in touch with you to learn more about what you’re doing?

Ross: Sure, so I’m pretty active on Twitter. You can see me there @rossrubin, the website for my company is reticleresearch.com and if you’re interested in the podcast I co-host that called Techspansive its available on Apple Podcasts, Google Podcasts, Spotify, and we also recently started our own website for it at techspansive.com.

Yuval: Excellent, thank you so much, Ross, for joining me today.

Ross: My pleasure, Thank you so much for having me.

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