Okay not on topic but have to get this out of my system....
Every time I see the title I see:
Would P&G sell TACOS
I'm going to go eat lunch now
AOS was a strategic investment. It's not even about revenue (though I have no idea how well the division is doing) but about controlling the high end of the shaving market, and more importantly, developing the way forward for the entire Gillette division.
They face a real challenge: they need to show earnings growth to Wall Street, but the old approach (adding more and more blades to cartridge razors) is at the point of diminishing returns. They can add 20-plus blades to a razor cartridge, but at some point the consumer's going to get wise. Right now most of their growth is coming from emerging markets like India, but they need to find a way to grow earnings in mature markets as well.
So the question is: how, going forward, are they going to get the consumer to pay even more than $44 for 12 cartridges? The only way is to somehow find a way to create a "high-end" brand mystique around shaving. Trust me, when they see people paying $100 for MdC their mouths are watering. They need to find a way to harness that energy. In that sense AOS represents a very cheap form of R&D for them. It also represents a way to make sure that when they let that genie out of the bottle, they're the ones in control.
My bet is they'll be sold within a year. If eShave buys 'em it would be a case of shaving Schadenfreude
Makes no sense to sell. With TAOS they control the high and the low end of mass consumer shaving.
Yes, I agree. At some point they're going to have to start promoting luxury razors and luxury soaps for revenue. I also don't see what innovation they can make that will be a real move beyond their Fusion. The battery gimmick already seems like desperation. I suppose they could start selling super high end $500 razors and super high end blades designed to last for a year but costing $100 while counting on people to lose, mangle, or just abuse their blades in the meantime so they'd have to buy more.