oldiebutgoodie
Apostle, Church of Vaporization
Just to clarify my earlier post a bit . . .
The Q closely meets the layman definition of a cash cow, and that's usually quite desirable for a company. The Q's main development cost was expensed long ago. There is an on-going fixed cost to support the product, but by now that too is mostly sunk cost. Arizer uses a variable-cost distribution model where most of its present costs are driven by and aligned with unit volume, this is largely a self-funding model. IMO Arizer has been shrewd in how it has kept the brand fresh: Make a very modest investment to upgrade the fan, tweak the remote, change the color, etc., and then let the channel in effect do its own "re-launch" of the brand ("Version 4.0", "2013 Version"). Consequently it's likely that the Q's unit margins are quite favorable even with deep channel discounts, and this strategy sustains demand for an on-going profit stream. As long as the market supports this - and the Q is really at an ideal functionality/price-point sweet spot - well, good for them.
Now, what Arizer does with its cash cow profits, I have no idea and no opinion. Being privately held, the owner(s) are entitled to spend it all basking on the Riviera if they so wish. However, it's at least likely that much of these profits funded development and launch of the Solo. How that has worked out for Arizer; again, I have no idea at all. And no opinion.
I intended no editorial. Just an observation that the Tower and the Q are fundamentally the same machine that they have been for years.
The Q closely meets the layman definition of a cash cow, and that's usually quite desirable for a company. The Q's main development cost was expensed long ago. There is an on-going fixed cost to support the product, but by now that too is mostly sunk cost. Arizer uses a variable-cost distribution model where most of its present costs are driven by and aligned with unit volume, this is largely a self-funding model. IMO Arizer has been shrewd in how it has kept the brand fresh: Make a very modest investment to upgrade the fan, tweak the remote, change the color, etc., and then let the channel in effect do its own "re-launch" of the brand ("Version 4.0", "2013 Version"). Consequently it's likely that the Q's unit margins are quite favorable even with deep channel discounts, and this strategy sustains demand for an on-going profit stream. As long as the market supports this - and the Q is really at an ideal functionality/price-point sweet spot - well, good for them.
Now, what Arizer does with its cash cow profits, I have no idea and no opinion. Being privately held, the owner(s) are entitled to spend it all basking on the Riviera if they so wish. However, it's at least likely that much of these profits funded development and launch of the Solo. How that has worked out for Arizer; again, I have no idea at all. And no opinion.
I intended no editorial. Just an observation that the Tower and the Q are fundamentally the same machine that they have been for years.
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