APS3000 technology to China?

General Discussion
1

I think I have a problem and need your input.

Some months ago a big chinese board manufacturer rang and asked me for a delivery date for a machine. I told him that august 2008 would eventually be possible if I have a deposit soon. The line went dead and I could breathe easy.

Personally I hate trade restrictions. My machine is made from parts from all over the world, Europe, Japan and the US. But if trade is not fair because of a non level playing field or crappy products (save the resources), restrictions make sense.

There was another phone call last week, here the content:

a customer is interested in an APS3000 for Oahu, where he wants to use her for design and development work with local shapers, all big and well established names. Great I think, just what I like. But then came part two, he wants other machines established in China so the boards can be produced there.

I got a lecture in the quality of chinese glassing and the quality of the materials used and could not say much really as it all sounded very plausible. After reading the Clark letter I got even more confused. Terms like “traditional industry”, “sophisticated buyer” and much more went through my little brain. I can afford to loose a few sales but will that be the end?

Your thoughts and input is most welcome.

2

yep its over yep way over…a science fiction attitude,a sense of an iminent future of complex dimension of broad spectrum implication, these ‘perfections’ quested and achieved in duplication are slowly appearing from well outside the periforal vision and are rearing up like a giant snake SHIR-KAHN and spreading the flutes of the head cowel to bite the the large and suculent dosing deriaire hanging out over the edge of the barrel that houses Yankee Ingenuity…the greatest asset we possess is our creative ingenuity,more than any other envied national trait …‘’ how can them damn americans think of such stuff’'…,and over time the claims that these things were invented in Russia amsterdamn austria canton canberra newcastle and marseilles must be addressed…the wombat 3400 will be shipped as a flawed copy of the program to Shoo Chew where foam will be made from old tennis shoes and the computer program run on ping pong gas and shoe string drive belts while The Schweitzers lawyers wring their hands anticipating a day in court 2007 to recoup lost revenue on snake bite remedy…for Cobra…ambrose…and me and john henry can still shape an Improv jazz riff 92 or 68 in the dark that will work …and the science fiction theatre 3000 has to take the responsibility for the chinese domination of the waves in the 21st century…

money changes everything … watch

3

what he said.

4

This is a tough one…

5

We will see after the first of the year if there is a tax slapped on each chinese made board :wink:

Quote:

6

yeaahhhhh…its sad but its true…i was talken to mccoy about it the other day…china…the big clothing co.s went up for cheap gear…and now the chinese are seasing the market with the same gear cheaper and better…the snakes coming back to bite this time…I feel sorry for all heart and soul guys as its vastly disappearing…chinese boards are now taking over…we heard …that the three or four big surf co.s are talking about getting together to combat it…there is no chance…to many chiefs not enough indians and the chinese have a lot more indians with guns…so the surf clothing and boards…sadly has been taken by the chinese…but they cant take our minds…YET…aloha

7

Do you think they will respect the patents on your machine in China? Is it worth the sale of a couple machines to have them in turn reverse engineer it and produce it cheaper, and turn around and sell it for less than it costs you to manufacture it? As a business decision, it’s a tough call. As a matter of ethics and stewardship of the sport, not so tough.

8

i will back lawless’s statement with an experience i had just recently …

tell me how ethical you think this story sounds …

i wont mention any names , but some in the know may figure a few things out …

over the last few years ive looked at options for increasing my production , but without the stress of having to employ people directly …

so i ended up having discussions and extensive dialog with various different asian production houses …

one of them wanted me to make a full production video and a complete instruction manual on how to build my boards , that was before they would even give me an answer whether they would build them or not , plus they refused to sign a confidentiality agreement …???

after a while it became obvious we wernt getting anywhere on the issue of intellectual property protection , that was the end of it …

BUT NO …

a few weeks later i get phone calls from some of my suppliers saying they had phone calls of interest from a producer in an asian country that they were looking for the materials and they specifically mentioned my boards and were asking technical questions pertaining to things particular to my contruction technique…none of my suppliers could answer any of there more detailed questions …

neither did any of my suppliers know i had previous discussions with this particular company in asia …

i can bet if i had a patent , they would be pawing over it right now … but because my techniques arent apparent in my finished product , the reverse engineers had to do a little more work in getting there questions answered …

i would say if what you build can be easily reverse engineered , then think twice…

even if you do have a patent , many asian manufacturers have no respect for patents or copyright, a look at where all the pirate stuff comes from will answer that …

i know there is the arguement , that if you dont sell em the know how someone else will , where as you could have made the money ,

but what good is a few extra bucks if the people around you feel like theyve been burnt ???

i have been facing the same ethical dilema on many occasions over the last few years …

theres 2 possible long term scenarios …

one is ,people will look back and say i was an idiot for not selling out quick enough and capitalising on my head start …

the other scenario is people will look back and say yea those were the guys who sold out and brought the house crashing down , yea blame them …

thats the way ive summed it up …

for crew outside the industry , they dont really have any idea about the consequences of there buying decisions …

but eventually every customer will come in contact with someone in the industry who will fill them in on whats really happening …

ive decided i dont want to be one of those names being quoted and held responsible for the undermining of our industry …

ill do what i feel i can live with …i enjoy a good nights sleep …and friendly faces in the line up …

regards

BERT

9

I have a question about the people factor. Many small businesses based on personal labor of the business owner get to a point where the guy simply can’t keep up with demand. In order to take advantage of these additional sales and profit out there for the taking, the owners are tempted to outsource the production to either an automated factory type setup or to a country where labor is cheaper. The other option is to simply take on apprentice employees and teach them the trade and have them continue. Yes, with the labor and insurance costs, the profit margin on items made by the employees will be less than those made by the owner, but…

So I ask, in the shaping business situation, are there simply a lack of individuals who wish to learn to shape/glass to take these jobs? If not, what makes machine shaping and outsourcing to asia a preferable option to taking on employees? Does it come down to a money issue? Surely even with employee costs, there would be a net increase in money into the owner shaper’s pocket vs. his previous one man shop days so…why the need to cash in even larger?

10

Sounds like the new line will be they are only for Oahu. That will seal the deal and the new owner/s will send them where ever they like all the while rubbing their hands together saying " that was so easy we just told them what they wanted to hear…"

11

OUCH… Is it OK if we only learn to takeoff and fly in this 747?

Miki, the fact that you have shared the program and asked this question shows your heart is in the right place, unfortunately there is no easy fix. While at some point the reverse engineers will have you, until then, is there any way to make control portions inaccessable…not only voiding the warranty but destroying proprietary parts and software. Think code with monthly password supplied by you preventing self destruction, trojan horse virus, machine leased instead of owned and you could pull the plug if you’re having trouble with the guy shaving in the mirror.

Best of luck....today again, I'm glad I'm me. Gil

Sometimes…I just close my eyes and go surfing in my mind…it’s always nice in there, warm too.

12

366 views and 10 replies? not many seem to care, I can sell and make a lot of money and only 7 Swaylockers are hurt. the future looks good…

13

If someone wishes to make boards in the east they will. Unfortuantely it boils down to cheap labour. Us westerners bitch and moan about it but are unwilling to give up our V8 SUV’s etc. It just the way thinks our going unfortunately we do it to ourselves.

What a few guys have mensioned above is reverse engineering and your system does stand the risk of been copie and then sold back to you. The East has a way of taking a western invension and improving on it. This might not happen now but as soon as the number of surfers grow on the east and there is more of a demand, it will happen.

Who knows maybe some good might come from it.

Sleep well :slight_smile:

14
Quote:

366 views and 10 replies? not many seem to care, I can sell and make a lot of money and only 7 Swaylockers are hurt. the future looks good…

Miki, this board is voiced primarily by neophytes and amatueurs. Most of the full time shapers are too busy to visit this board let alone post. I don’t think most would care less what you do. I have had the same situation as you, but for some reason I didnt’ think twice. Just couldn’t sell out.

15

“I can sell and make a lot of money…”

that pretty much sums it up.

Money ruined surfing.

16

In fact money ruined the world, just think about pollution, for example…

Miki this is a hard one, i know i won’t sell, so i’ll sleep in peace every single night, but the next week anyone will sell them what they’re looking for and i’ll be asking me why i’m always so stupid.

The thing is that you can be sure that they’ll find what they are looking for, and first they’ll be making more boards than now, then they’ll make their own shaping machine, maybe a copy of the one they bough, or maybe something new, but they’ll do it anyway.

The next thing is that boards made in USA and Europe will be an smaller percentage every day, the average pro shaper will desappear, the really good shapers will sell their boards far expensive (maybe). Then Rusty, All Merick, etc will open their factories in Asia…

Well you know how this works, it happened with a lot of different things and surfing industry isn’t different.

What’s in your hands is to make the process faster (and maybe you’ll have soon a reproduction of your machine at half the price) and earn some money (i don’t know if it’s too much money), or just let this thing pass to find that one of your competitors will sell them the machine.

For me, the bottom line is that you aren’t going to change a lot (only your personal situation) in the industry by selling them some of you machines, i think that we the consumers are the ones who can change the industry. That’s why i don’t buy in Ikea, that’s why i don’t buy Surftech (i had really good surftech deals), that’s why i don’t want to buy FCS, that’s why i don’t eat in Mc Donalds, and the list goes on…

It’s just a personal thing, but when i buy something, i like to think that the people who worked making this particular thing, have a “good life”, with enough food, with a place where to live, with a doctor when they need it, etc., and i feel good too if i know that what i buy isn’t made by a 6 year old child.

So Miki only has a little more impact than anyone of us on this industry, so if you think that you don’t like seeing Miki selling the machines to Asia, next time you’ll buy something think twice who and where was made.

Yesterday i read that at this rhythm, in 2050 we’ll need 4 more planets as this one to keep living as we do now, so who cares about shaping on 2050…?

Miki, take it easy, don’t think to much, and listen to your heart and family.

Coque.

17

Miki,

My livelihood doesn’t depend on shaping so I haven’t felt qualified to comment, but as you think responses are a bit sparse here’s my opinion.

The APS3000 is one of those technologies that has the potential to change the industry it’s being sold to, but you have to be careful that the industry changes in a way that suits your business and your own priorities ie you don’t want to shit in your own nest.

You’ve got to look at a couple of scenarios and see if/how they change the industry and impact on your customers and figure out what outcome is going to be best for you – and by best I don’t nessescarily mean profits – I’ve got a feeling you like working with some of the unique, talented (slightly mad) individuals who make surfboards. You may not like working with people who have different motivations.

How is the APS3000 going to affect the industry? For the first time shapers can confidently separate themselves from production and concentrate on design, testing and marketing. The output from the machine is so accurate it requires minimal hand finishing which means boards can be made anywhere and still have the quality the shapers need. So they can be made in China. The problem with China is that your Chinese customers have a serious competitive advantage over all your other customers – the argument most often raised is that the Yuan is pegged to the US dollar at an artificially low rate, meaning Chinese exports are way cheaper than they should be.

If you sell a couple of machines to Chinese producers and a fair number of big name shapers get boards made there. What would the impact on the market be and how will it affect your sales? Because boards can be made cheaper, the big labels can offer better margins to retailers. They can also do a wide range of models and offer more realiable supply in the peak demand times. If they have reliable supply of in-demand boards for a better margin retailers may drop lessor known shapers. Not all lessor known shapers will be screwed in this situation and some shops will still stock locally produced boards if they still sell. However increased offshore production is going to make things tougher for the less well known local guys which may mean the potential market for your machines is reduced.

There’s another dimension to the IP problem. If there are APS3000’s in China. You might find .brd files for various top shaper’s boards find their way there. You might see be walking around K-mart and see cheap surfboards with stickers that say “Grog Wabber Afterburner” or “Chonnel Islands flyer”. My imagination and sense of pessimism are both slightly over developed so this situation may never occur, but it is a possibility.

If you want to sell more machines – do what Benz and BMW have done - make a slower and cheaper machine and sell to the less well heeled.

18

Hey Miki, I just want to thank you again for coming here and being a swaylockian with a rest of us… among other things, you openly shared your program with us, while others are charging half a grand for similiar stuff… it’s obvious, you’re a stand up guy.

I’m just a ‘john henry’ backyard shaper, swinging my hammer in my free time, thinking about taking the plunge. Where I live, all my friends are pretty much G.I. nomads, including myself, nobody comes waayyyy out here with a full quiver but if anybody ever stops by the 2nd to last house on you way to breaks, then I’ve got a board you can borrow…

Back to my point, I’ve been asking around a lot lately… and evidently things are already up and running in the hinterlands, unbeknownst to us. Now, more than ever, is the time to push ahead with new ideas, regardless of your niche… you can’t reverse engineer something that’s always evolving.

best regards,

Brennan

PS DaCheetah; the swell is pumpin! I’m skipping work today.

19

miki, you can ask yourself a lot of questions, though.

  1. Is there anything remotely illegal in selling it?

NO. Nothing of that sort to worry about.

  1. How much is local industry going to be affected?

Well, where I live, a $400 surfboard is sold with an $80 shaper’s fee and $155 for the glassers, and about $100 for the materials (blank and fins and glassing materials), and is marked up $170. I broke the numbers up differently than normal to show YOUR potential impact from selling to China.

In China, the $235 in SKILLED LABOR fees might become $35. For the same retail margin, that board could be sold for $200. Plus shipping, so it sells around $250, or 62% of the local retail market. It sells close to wholesale for the local guys.

If such a system could be set up, tie in to the local shops, and deliver customs in 6 weeks, and make quality control comparable, local shapers would cease to exist.

There’s a lot of IFs there. Then you need to ask yourself if YOU are going to be a bottleneck in this process…right now Chinese glassing and quality control stinks. So the quality is not there. And they are already meeting the pricepoint I mentioned. Your machine would bring the quality on their shapes up, but that’s only a small part of their battle. Really, if they could glass well, they’d be most of the way there already, without the APS3000.

So, there is that additional concern. Are you, by selling them the APS3000, handing them the keys to the kingdom? I think the answer is no. They are already there, already making boards, and already underselling local markets. The holdups are getting into local retailers, and getting reasonable glass jobs. And you have NOTHING to do with that.

Certainly, some in the industry (in the US), would think less of you for doing it. But FCS and Futures don’t lose sleep over it. And you have to worry about an additional factor…

if the China boards take over, and you are not onboard, what happens to APS3000?

20

well. this a easy one…

you have no control on China… if they want your machine they will get some how.

It is really true that the customer have the choice but cant really blame them ether, people are poor and if you can save a buck here and there you will and this why walmart,costco, ikea is packed. They are cheaper and they have buying power.

i build board for living and i am scared of china invasion but where i live everybody (or almost) decide to ban the china boards because of the surf culture lost. going to your local board maker is part of the surf culture for 40 years and surfer are not ready to give it up.

there was a surfshop that try to bring cobra polyester board, it last one summer. everybody was talking about the shit chinese boards.

i looked at them and the quality wasnt bad but people didnt want to go there.

it clearly shows that surfer cares and we have a protection over china that way.

surfshop that doesnt sale chinese boards should have a sticker on their door that say NO CHINESE BOARD SOLD HERE

anyway, sell your machine i say.those chinese will buy another one anyway, surfcad or km???

cobra as allready 4 of the 3d motion.

government should put a tax on china board,

you should give me a good deal on the machine so i can fight them in my area…