Ag Distribution

Very well-written article on RTK networks in precision ag (May issue)! Have you noticed or heard about a severe lack of experienced support staff at dealers? Precision ag is so new, and so many dealers are opening up, it seems like it either will become or already is a big problem. As an investor, I’m interested because this would be one factor motivating more consolidation in the sector. But GPS users would no doubt be interested also. Over and over, I hear about the importance of one’s dealer, whether they know what they’re doing or not. GPS units are starting to be sold more and more outside of North America. That begs the question, with sales so strong in the United States, how fast can new people be brought up to speed on these issues, and who is going to be selling for these companies in Australia, let alone the Ukraine?

— Daniel WahlHa Noi, Viet Nam

View from China

[Response to the June 6 OEM Insights column, Mass Market OEM newsletter.

I agree with your article on “The Next GPS Mass Market.” GPS/LBS product manufacturers in China face big challenges, especially for PNDs. The chips, micro-controller unit, and LCD panel are all imported from SiRF, Samsung, LG, TI, and so on. China only does the manufacturing job, the mass profit is about 3–5 percent, and many small factories do this work. That is why there is so much lower price but bad quality PNDs from China. And the remnibi/dollar rate rose 17 percent this year. Big earthquake, world economic slowdown . . .

— Leon LeeDesign by China, Dong Guan, China

Semi-Codeless Sunset

[Response to the June 6 Perspectives column, Survey & Construction newsletter.]

Interesting article. At first sight this would appear to be a manufacturer’s and salesman’s dream, as you say. But two negatives pop up straight away. The first is that creating uncertainty in the marketplace, no matter how far off, is generally bad for business. The second is that this would further encourage new entrants using multiple-frequency coded techniques, particularly as Galileo starts to solidify. If I were an established player with heavily patented codeless and semi-codeless techniques, I would not be happy. If I were planning to enter the market, or increase my market share, with the advent of Galileo I would probably be smiling.

— Rob LorimerPosition One Consulting; Chairman, Location AustraliaSurvey & Construction Editor Eric Gakstatter replies: The high-precision companies that enjoy a level of patent protection have known for some time that once L2C is broadcast from enough satellites, the competitive landscape may change. They’ve already adjusted for that in their long-term marketing/product strategy. Most have L2C-ready and some have L5-capable and Galileo-capable receivers.

Regarding new entrants, high-precision is not really a technology game any longer. It’s a distribution game, witnessed by the significant moves in the high-precision distribution channels this past 18 months. Even if New Co. from Taiwan designs a triple-frequency mousetrap for centimeter-level real-time positioning, it won’t make them a player in the high-precision game. I can think of two companies in particular that have very good high-precision technology, but little presence in the survey/engineering/construction space, mostly due to lack of distribution.

With L2C/L5 there will still be a technology play. Just like today where one L1 C/A receiver can significantly outperform another, the leaders have fine-tuned their high-precision products over many years. There are still some tricks to the trade that can be applied so there is a noticeable difference in performance.

I think they are all on the same page in this respect: they know they must support Galileo to stay competitive. They won’t chance getting burned like they did with GLONASS. Also, the investment to support Galileo is minimal compared to the investment to support GLONASS (FDMA).