CellShok chiude i battenti?????
Cellshock and a quick analysis of the memory market
Finally I am writing something about hardware. Not what I wanted to write about, nonetheless, here we are.
I still keep in touch with the IT industry and it has been confirmed yesterday that there will be no more Cellshock memory made. The parent company MSC Vertriebs GmbH is still in business and probably going strong: http://www.msc-ge.com , however they decided to put an end to the whole cellshock enthusiast memory brand. It was to be expected to be honest; however it is still sad as they made some real good enthusiast memory.
Why am I writing this? Just to express my opinion why did Cellshock fail and maybe this will help some other overseas company better understand the UK market. While operating Vadim Computers I had the occasion to cross the paths with the Cellshock UK guys a few times and actually even sold these modules for a while. I will come back later on this, for now I will just share my thoughts on the current memory market.
When I started Vadim PCs, about 5 years ago, there were just 2 visible enthusiast memory brands in the UK – Corsair and OCZ. Both brands offered excellent memory supported by excellent RMA policy. Yes, you had to pay a good few hundred quid for a 1Gb kit, but it was worth it.
I don’t even remember having to return a Corsair DDR1 memory for being faulty on arrival (DOA); this is how good they were. So naturally we, as a System Integrator that cared about our system’s stability were very happy with Corsair and their lifetime warranty until the whole DDR2 crazy race started over a year ago. Each memory maker wanted to stand out from the rest of competition (Corsair, OCZ, Geil, Mushkin, G.Skill, Patriot, A-Data, Supertalent, Crucial just to name a few)
Speaking of Corsair and crazy DDR2 race, you may remember they had a DDR2-1111 (PC8888) part running at CL4. We were calling it Crazy 8’s. Even though that 2Gb kit was retailing for something in the region of £400, Corsair couldn’t manufacture enough of it as just a very unpredictably small percentage of its production was capable of running at those specs.
OCZ introduced heatpipe and watercooling-ready memory. Others were trying to be innovative too, however as the competition increased, the majority of memory makers started to recourse to the easiest strategy to stay in business - aggressive pricing. However, even though there were more than enough memory brands on the market, it didn’t stop MSC to launch their enthusiast memory brand – Cellshock around 2 years ago. They had great products, but unfortunately their management found it difficult to adapt to the ever changing market conditions. The memory market, like the rest of PC components is a very risky venture in a volatile market. Actually I would say it’s riskier than any other PC part business. We have seen prices falling and rising out of nowhere and it is just recently that it started to stabilise more or less as they achieved the bottom low that a memory can go down to.
Currently, you can get hold of a 2Gb DDR2-800Mhz CL4 branded memory for as little as £20 ex VAT. That is the retail pricing: OCZ 2GB DDR2 Memory - Cheap at Ebuyer!
Now, let’s see what goes in that memory?
- R&D
- Buying memory chips
- Assembling the modules
- TESTING & QC
- Marketing & PR
- RMA
- Retailer margins
I wrote the TESTING in capitals – yes, testing is the key there. I somehow find it difficult to believe that it could be profitable to sell a 2Gb kit to the end user for £20 and still hand-test each memory module before shipping. Yes, it was worthwhile doing so when a kit of memory was selling for hundreds of pounds, but certainly not today. Now, considering that the enthusiast memory has to run at higher than JEDEC standards and higher voltages, you can expect a high rate of failures of each manufactured module. So my guess is that some manufacturers simply cut on TESTING & QC as well as RMA expenses, so they can still make some margins. The end result with all drawbacks is passed to the end user. If they are lucky, they get a good part, if not they would get to return the memory, pay for the shipping if they didn’t buy it from a reputable e-tailer, wait for a new kit and generally waste the time.
So, lets talk about Cellshock now. Their philosophy was to make high-speed, stable memory, hoping for the end user to do the PR and Marketing for them via the word of mouth. When they started out, they didnt include much marketing activity in their budget. And we all know that marketing is like fuel for any business. With no marketing you get nowhere.
I remember requesting a sample for testing of their memory when they started. The answer was quite shocking – buy it. We weren’t a big System Integrator, but we were exactly who they needed to push their brand and they simply ignored it. Ok, I will be honest - one of the treats of being a Gaming PC maker was sampling the new hardware before being released and generally we had it on 30-60 days loan period, plus if we were killing it we didnt have to pay for it - we called this R&D. So I thought to myself – if you ignore us, I will ignore you. This spring however the situation changed and we got onto better terms. They realised that without SI’s, it’s difficult to establish their brand and we realised that their QC was stringent enough to suit our needs. It was too late unfortunately as their R&D budget has drained up and they didn’t produce any 4Gb DDR2 or DDR3 kit which was needed for our high performance PCs. So it all stopped there, later Vadim PCs closed and I didnt hear about Cellshock until yesterday, which made me write this.
So what’s the morale of the story? Yes, competition is a positive phenomenon, but having too much competition in this dynamic industry would kill companies when the prices fluctuate and margins dramatically change. I expect a few more companies to stop making enthusiast memory soon enough for us to witness and I see stay just the strongest who have managed to diversify and capitalise on their brand image. Well done to Corsair to branching out into the PSU market and congratulations for winning the ‘best PSU maker’ award from Custom PC readers second year in a row. I guess that once a few more players will drop, the memory pricing will go up slightly, however with that we would see better Q.C. and less returns. Please feel free to comment and share your memory buying experience.
Fonte Vadim Chobanu Cellshock and a quick analysis of the memory market
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