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Spacetravelerx
Pooh-Bah


Reged: 12/23/12

Loc: New Mexico
Re: The plot thickens (Meade takeover) [Re: Starhawk]
      #5970851 - 07/14/13 05:49 PM Attachment (19 downloads)

Very good post Ed!

I also plotted your data (see attached).

Here are my VERY quick take aways (speculation of course):

* Meade was doing ok back in the day, likely a typical number for the biz.
* LX200 and ETX series took off making bigger money and profits.
* Dept store sales and ETX sales really kicked in - massive growth in the late 90s.
* Meade went public. Folks bought up their stock based on all the massive growth, revenue, and sales. Folks initially in the stock made a killing. Foolish people bought into the stock based on all that growth, ignoring ceilings and such.
* With Meade in full department store mode in the 2000's their net profit plummeted and even experienced losses.
* To trim expenses Meade moved to Mexico - reasonable since California is too expensive to do business in. They also trimmed on quality and materials in their products to improve profitability.
* To protect their IP they went on a lawsuit rampage. Further eating of costs.
* As the economy went in down turn, they suffered.
* There seems to also be a correlation with the growth of iDevices (iPod touches, iPads, and other related products) with downturn of telescope sales. Maybe a stretch. However with less and less discretionary money do you buy a telescope or an iPod touch for Christmas...

Meade is now going back to its roots. Is it too late?

Oh, weather systems and such? Bad move.

It seems that going public made a few folks rich, but that is it. BTW, being a public company has high overhead costs.

And like I said, and the data shows it, going in a big way on the dept store front did indeed hurt them.

BTW - you notice the downturn due to the recession in the early 2000's and 9/11?

Grrrrrrrr on all this...


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Starhawk
Space Ranger
*****

Reged: 09/16/08

Loc: Tucson, Arizona
Re: The plot thickens (Meade takeover) [Re: Spacetravelerx]
      #5970932 - 07/14/13 06:17 PM

Nothing like a graph...

Edd, Andrew, good work!

So, something I remember during 1998-1999-2000 is Meade rode the dotcom stock bubble precisely. There would appear to have been a time there where there was a boom, and the scopes looked cool to consumers who thought the original dotcom boom was cool.

But if you look otherwise, there never was a lot of money being made here. So, I'm starting to think this is an industry well suited to making salary as Jim pointed out earlier, and perhaps disastrously adapted to producing a regular profit growing year on year, as the modern investor requires.

-Rich

Quote:

Very good post Ed!

I also plotted your data (see attached).

Here are my VERY quick take aways (speculation of course):

* Meade was doing ok back in the day, likely a typical number for the biz.
* LX200 and ETX series took off making bigger money and profits.
* Dept store sales and ETX sales really kicked in - massive growth in the late 90s.
* Meade went public. Folks bought up their stock based on all the massive growth, revenue, and sales. Folks initially in the stock made a killing. Foolish people bought into the stock based on all that growth, ignoring ceilings and such.
* With Meade in full department store mode in the 2000's their net profit plummeted and even experienced losses.
* To trim expenses Meade moved to Mexico - reasonable since California is too expensive to do business in. They also trimmed on quality and materials in their products to improve profitability.
* To protect their IP they went on a lawsuit rampage. Further eating of costs.
* As the economy went in down turn, they suffered.
* There seems to also be a correlation with the growth of iDevices (iPod touches, iPads, and other related products) with downturn of telescope sales. Maybe a stretch. However with less and less discretionary money do you buy a telescope or an iPod touch for Christmas...

Meade is now going back to its roots. Is it too late?

Oh, weather systems and such? Bad move.

It seems that going public made a few folks rich, but that is it. BTW, being a public company has high overhead costs.

And like I said, and the data shows it, going in a big way on the dept store front did indeed hurt them.

BTW - you notice the downturn due to the recession in the early 2000's and 9/11?

Grrrrrrrr on all this...




Edited by Starhawk (07/14/13 07:28 PM)


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bremms
Carpal Tunnel
*****

Reged: 08/31/12

Loc: SC
Re: The plot thickens (Meade takeover) [Re: Starhawk]
      #5970987 - 07/14/13 06:48 PM

Telescopes a VERY durable luxury goods. Only so many need to be in circulation. The market got saturated. There are a LOT of used scopes.. Nearly endless supply on the internet. Some do want the latest computer driven Goto whirling egg beater.
I Agree this is better as more of a cottage style industry. An employer as it goes.


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OzAndrewJ
scholastic sledgehammer
*****

Reged: 11/30/10

Re: The plot thickens (Meade takeover) [Re: Spacetravelerx]
      #5970991 - 07/14/13 06:50 PM

Gday Andrew

Quote:

I agree on the ETX, a tad too much plastic. Adding some more "metal" too it wouldn't hurt.




The later ETX-125s actually have a full metal frame under the plastic.
Really quite a solid little setup in its later incarnations.

That said

Quote:

Yes, yes, I hear the repair stories, but was was the failure/repair rate?




Depends on which one you got and who put it together.
I have always said the biggest problem in the ETX is the drive trains and the finnicky setup required to make em work.
If you want some fun reading, have a look at
http://www.weasner.com/etx/techtips/2010/Analysis_of_ETX125PE.html
This was what I found with a batch of 6 brand new units.
If people had attempted to use these for more than a few hrs, the gearboxes would have snapped in quick time.
I know of three people now who have fitted the roller thrust bearing and all reported a much more rigid base but still free to rotate, thus reducing drive train loads. Thats a $5 fix when done as a one off.
No one i know of has looked at replacing the gearbox with say a better worm carrier
with a gearhead motor with integrated encoder ( from say the LS/LX200 ) and a belt drive.
That would fix a lot of the problems.

When/if mine breaks i may just try that.

And just for another recent gotcha, the new way Meade open the hole in the side of the clutch bolt that goes through the base and carries the wiring is to use a side on slotter. This leaves a razor sharp edge inside the bolt where the DEC axis wires come through at the top.
Just saw one last week where the wires had cut through and were shorting out thus killing the DEC drive.
Lucky it was clock and ground that shorted, and not 12V to data/clock.
Its lack of attention to details like that, that cause people grief, just you dont know who will get hit and when.

Andrew Johansen Melbourne Australia


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Starman1
Vendor (EyepiecesEtc.com)
*****

Reged: 06/24/03

Loc: Los Angeles
Re: The plot thickens (Meade takeover) [Re: OzAndrewJ]
      #5971008 - 07/14/13 07:02 PM

And don't forget the little plastic pin protrusion on the altitude clutch plate.
At Scopy City we repaired hundreds of them (ETX80/90) until the 90 changed, though the ETX80 never did and all of them will eventually break.

I fondly remember the 80-90mm refractors on EQ mounts with slow-motion controls. When computers were added and metal parts changed to plastic: high defect rates.


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OzAndrewJ
scholastic sledgehammer
*****

Reged: 11/30/10

Re: The plot thickens (Meade takeover) [Re: Starman1]
      #5971027 - 07/14/13 07:12 PM

Gday Don

Quote:

And don't forget the little plastic pin protrusion on the altitude clutch plate.




Thankfully, ive never seen them ( ie the cheaper 90s )
All my work / investigation has been on the later ETX-125s.
The RA hardstop is the only pin that breaks / gets stuck with them.
The DEC hardstop is actually quite solid now and destroys the axle vs snap a pin.
( been there seen that on mine ).

Andrew Johansen Melbourne Australia


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Jon Isaacs
Postmaster
*****

Reged: 06/16/04

Loc: San Diego and Boulevard, CA
Re: The plot thickens (Meade takeover) [Re: Starhawk]
      #5971063 - 07/14/13 07:37 PM

Quote:

I'm not saying the ETX is perfect. However, I remember looking at them many a time and thinking It'd be a great little machine if it was just higher quality. And you could do so much without approaching the price of a Questar it really seemed someone should do that.

-Rich





Rich:

WHen I look at Meade and Celestron entry level scopes, I see the Nexstar GT/SLT series versus the DS series. Having seen both up close, there is no doubt in my mind that the Nexstar GT/SLT was a better mount with better optics and considerably less plastic.

The ETX Maks are decent scopes on decent mounts but priced above the entry level scopes.

Jon


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Starhawk
Space Ranger
*****

Reged: 09/16/08

Loc: Tucson, Arizona
Re: The plot thickens (Meade takeover) [Re: Jon Isaacs]
      #5971081 - 07/14/13 07:46 PM

Jon,

When you put it that way, it makes me feel like I'm just grasping at straws to figure out a way some part of Meade might go on.

But between you, OzAndrew (G'day!), Starman, and Rod, I'm reminded of all the times I got a good look at the internals and just shook my head. And since it was a friend's scope, I'd have to figure out a way to migrate them to something which avoids what Ed Ting called, "ETXs don't age well."

I know of two of those silly little NexStar GT mounts still running after 10 years. All metal and actual engineering does buy something.

So, this would end up being something more like inspired by the ETX. But I know that wouldn't be true- it'd be a clean sheet response to the Questar, but not as good and not as modular as the iOptron or Celestron mobile mounts.

-Rich

Quote:

Quote:

I'm not saying the ETX is perfect. However, I remember looking at them many a time and thinking It'd be a great little machine if it was just higher quality. And you could do so much without approaching the price of a Questar it really seemed someone should do that.

-Rich





Rich:

WHen I look at Meade and Celestron entry level scopes, I see the Nexstar GT/SLT series versus the DS series. Having seen both up close, there is no doubt in my mind that the Nexstar GT/SLT was a better mount with better optics and considerably less plastic.

The ETX Maks are decent scopes on decent mounts but priced above the entry level scopes.

Jon




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Starhawk
Space Ranger
*****

Reged: 09/16/08

Loc: Tucson, Arizona
Re: The plot thickens (Meade takeover) [Re: bremms]
      #5971100 - 07/14/13 07:52 PM

This is doubly true when you do a little research and find the slightly older ones are very easy to support. And the OTAs are all but immortal. You prettymuch have to break them to get them off the market.

-Rich

Quote:

Telescopes a VERY durable luxury goods. Only so many need to be in circulation. The market got saturated. There are a LOT of used scopes.. Nearly endless supply on the internet. Some do want the latest computer driven Goto whirling egg beater.
I Agree this is better as more of a cottage style industry. An employer as it goes.




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derangedhermit
Pooh-Bah


Reged: 10/07/09

Loc: USA
Re: The plot thickens (Meade takeover) [Re: bicparker]
      #5971135 - 07/14/13 08:14 PM

Quote:

We are really making way too big a deal about the LX800's, 850's, 200's, 80's, etc. etc. etc. [...]Honestly, it really didn't matter by that point. 96% of what Meade sold were not those advanced design telescopes (as per their 10K). Obviously, advanced telescopes was not their main market (and really hadn't been for over 14 years).

Meade's bread and butter is not and has not been their high end scopes. Their volume sales for that scope segment has always been between 2-4% of sales (as per historical 10K's). Even when they tried to move away from the high volume discount scopes, their addiction to the cash flow was too high and they moved back. Unfortunately, the margins on those products was not sufficient to offset their internal cost structure.

When over 95% of a company's sales is in one market segment, I tend to think that the remaining 4% is not a segment with which they hold a strong commitment. That 4% is also not why Meade failed. If it was, then Meade had far far greater problems that we could imagine.




The historical numbers do make it clear that any "advanced astronomy" product issues over the past year or two aren't significant.

I think you only show one of three main aspects of the situation, in using the 4%. That 4% is unit sales, and of course the Walmart $50 scopes will dominate number of units sold. But earlier in this thread I think it was you who mentioned that 4% of units generated about 30% of revenue, in one year at least. And 25-30% of revenue is probably a reasonable approximation over a number of years, once they went into the volume sales market. And the third aspect I'll call profit. We haven't discussed profit here, but it's a reasonable assumption that the "advanced" products were higher % margin than the mass-market stuff, or at least intended to be. So a very rough guess would be that since 30% of the business (by $) is higher margin, it could easily generate 50% of the profit.

Anyway, companies that measure themselves mainly by unit sales are one kind of company, with one set of skills and measures (and management), and companies that measure themselves by revenue without paying too much attention to unit sales are another. They are run completely differently, since their success is driven by different key factors. (Most companies that are dominantly profit-driven, the third type, tend to be small - shareholders look much more to revenues than profits for growth, and growth means higher stock prices.)

Anyway, it's very difficult to run a high volume (manufacturing especially, but also sourcing as Meade did) type operation *and* a high-margin product line in the same organization. And Meade is a small company. My guess is as David says, management couldn't run the low-margin business profitably.

C-level incentive compensation is usually tied mainly to revenue growth. The Meade execs probably went for what would substantially grow the company sales, and, coincidentally their own wealth. One or two years of losses you ignore, since that carrot is still out there, and you can almost always convince others, if not yourself, that things will turn around.

Frankly, thinking about it, losing 3 MUSD on 17 MUSD sales, in Meade's kind of business, should be hard to do. They are mainly a distributor of sourced products. They have a little R&D, but not enough to sink the ship. They have (or had) a good brand name in their market.

They may have made some commitments to suppliers based on higher sales figures that they could not escape from. But they have been losing money for several years, and the naive thinking is management can see it and fix it. But often the fix means a decrease in revenue, at least temporarily, and that may be seen as unforgiveable (i.e. the CEO is out of a job), so you don't take those steps.

But this is mostly speculation, due to lack of hard data.

Lee


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shadowpdiggity
member


Reged: 07/23/12

Loc: new haven, indiana
Re: The plot thickens (Meade takeover) [Re: derangedhermit]
      #5971214 - 07/14/13 09:27 PM

So does all this mean my lx80 won't ever be fixed?

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jimb1001
sage
*****

Reged: 11/14/09

Loc: Florida
Re: The plot thickens (Meade takeover) [Re: rmollise]
      #5971221 - 07/14/13 09:35 PM

Quote:

Quote:


The Meade business model required mass-market sales to be the bulk of their profits.




Mass market sales to places like Walmart never formed the 2bulk of their profits.




If they didn't it's because they were funding all the R&D
And customer service for everything else from that line.

Where do you think they were getting that money?


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Starhawk
Space Ranger
*****

Reged: 09/16/08

Loc: Tucson, Arizona
Re: The plot thickens (Meade takeover) [Re: shadowpdiggity]
      #5971228 - 07/14/13 09:37 PM

Someone will have to spend at least $4.5 million, rationalize a product line and decide to keep the LX 80, then pay what it costs to fix the LX 80, then decide to pay for a recall. I'm not sure how you make a business case for any of those steps at the moment.

-Rich


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Joad
Wordsmith
*****

Reged: 03/22/05

Re: The plot thickens (Meade takeover) [Re: Starhawk]
      #5971279 - 07/14/13 10:06 PM

OK, what the heck. I'll put in my oar.

There is an interesting rendition of the history of the Meade corporation on the Company 7 web site. That history shows explosive growth for Meade through the 1990s into the early 2000s, then a swift and sweeping decline. I'll hazard to guess that a good part of that decline is attributable to forces beyond Meade's control: specifically, the entry of high end equipment priced at mid-range prices from Chinese manufacturers rebranded by American firms. Just consider the recent entry of affordable (not cheap but affordable) genuine RCs by Orion and Astronomics, not to mention ever larger apochromatic refractors that also are mid-range in cost.

This quondam mid-range dominance, I think was Meade's strength, especially in the LX90 and LX200 series. Both offered good quality AP platforms priced in a range between the low and the high end. That made them very popular and visible everywhere. Now there are so many choices in the mid-range price area that Meade has lost its niche dominance.

Some evidence for that lies in Meade's attempt to enter the high end market with such products as the LX850, not to mention the ill-fated RCX series (which, in the light of the entrance of mid-priced genuine RCs was a bit like Polaroid's coming up with a new Polaroid camera just as digital took over).


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Starhawk
Space Ranger
*****

Reged: 09/16/08

Loc: Tucson, Arizona
Re: The plot thickens (Meade takeover) [Re: Joad]
      #5971282 - 07/14/13 10:08 PM

Nothing to really argue with, there. For what it's worth, various dealers have been describing Meade as dying for going in three years.

-Rich


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derangedhermit
Pooh-Bah


Reged: 10/07/09

Loc: USA
Re: The plot thickens (Meade takeover) [Re: Joad]
      #5971296 - 07/14/13 10:16 PM

Quote:

[...]I'll hazard to guess that a good part of that decline is attributable to forces beyond Meade's control: specifically, the entry of high end equipment priced at mid-range prices from Chinese manufacturers rebranded by American firms. Just consider the recent entry of affordable (not cheap but affordable) genuine RCs by Orion and Astronomics, not to mention ever larger apochromatic refractors that also are mid-range in cost.

This quondam mid-range dominance, I think was Meade's strength, especially in the LX90 and LX200 series. Both offered good quality AP platforms priced in a range between the low and the high end. That made them very popular and visible everywhere. Now there are so many choices in the mid-range price area that Meade has lost its niche dominance.



I've never seen a "mid-range" R-C on an observing field. I'm curious if anyone else has. I'd also like to know about large apos that are "mid-range" (competitive with SCTs per inch aperture) in cost. I might buy one.

Lee


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Joad
Wordsmith
*****

Reged: 03/22/05

Re: The plot thickens (Meade takeover) [Re: derangedhermit]
      #5971330 - 07/14/13 10:30 PM

Mid-range genuine RC

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Joad
Wordsmith
*****

Reged: 03/22/05

Re: The plot thickens (Meade takeover) [Re: Joad]
      #5971348 - 07/14/13 10:39 PM

Mid-range large APO

Compare this to TEC and other high end 6 inch APO refractors.


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Jon Isaacs
Postmaster
*****

Reged: 06/16/04

Loc: San Diego and Boulevard, CA
Re: The plot thickens (Meade takeover) [Re: Joad]
      #5971350 - 07/14/13 10:40 PM

Quote:

Mid-range genuine RC




I think Lee was questioning the popularity of the GSO R-C's rather than the existence. In my mind, the LX-90s and LX-200s were an integrated system capable of both visual and A-P though in general, I believe that most scopes are used visually.

Jon


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Joad
Wordsmith
*****

Reged: 03/22/05

Re: The plot thickens (Meade takeover) [Re: Jon Isaacs]
      #5971377 - 07/14/13 10:55 PM

I used these as only two examples of a vast range of mid-range equipment. Any attempt to quantify what is actually on any given observing field is purely anecdotal. For example, I would guess that there aren't a lot of new large SCTs on observing fields either. There are a lot of refractors doing AP on Mt. Pinos, and a lot of very large Dobs for visual, however. I couldn't generalize on that basis, though.

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