First to market or first to create an ecosystem?

February 24, 2011 by  
Filed under Articles, Blogs

It was always said, be first to market and you carry an advantage over your competitors. This is why we’d always see companies looking to innovate as the common belief was that if you were first, you had the greatest chance gain market share.

This is certainly a philosophy that companies like Intel follow, which is where Moore’s Law (which said you should double the number of transistors on a processor chip within every two years) originated. This obsession to be first to market at times has meant that someone has gained total market share overnight. However, it has also meant that we’ve some absolutely horrible products which have been released or that products were released that weren’t quite fully though through as there wasn’t much use for them yet.

Being in an integrated, connected world as we are in today, it has become more about the ecosystem that exists around the product than the actual product itself. The classic case is smartphones. The fact that RIM has built a closed ecosystem (which was only strengthened by having their killer App – BlackBerry Messenger), has meant that unless you’re able to penetrate RIM’s ecosystem, as a rival smartphone manufacturer, you aren’t able to grab market share.

The same goes with Apple. Apple weren’t the first to market a smartphone or a tablet. What Apple did do was be the first to create a fully integrated ecosystem that revolved around iTunes and its content distribution system. Once you’re a part of the ecosystem, there isn’t much room to move around. Ask an Apple iPhone user to move to an Android device and often times they stumble, just because they don’t want to exit the Apple ecosystem. This is also precisely why the hordes of tablets from unknown brands that are being marketed today have failed.

Sony also did the same in the television business when they re-emerged with LCD TV’s. Sony was in fact a late entrant into LCD TV’s and never really figured in the plasma TV business. Sony’s main business was still CRT and projection TV’s when most of the industry had already started investing in newer and better technologies. Sharp was the global leader in LCD TV’s, with Samsung, LG and Philips also in the race. With the launch of Sony’s Bravia, things changed over-night and Sony was well ahead. Bravia wasn’t just a brand name, but Bravia became a part of everything Sony did. Everything connected to or was linked with Bravia. Concepts such as high definition or HD capture and output became synonymous with Sony. The same is the case now with 3D, though the success of this hasn’t been quite what we expected just yet. By creating the Bravia ecosystem, Sony had essentially transformed a category of products and made it its own. The main downfall for Sony came from the fact that they had supply restrictions and the fact that the likes of Samsung had invested much more aggressively in manufacturing facilities meant they eventually lost their number one spot to Samsung. While Sony’s ecosystem helped it become number one, it wasn’t a unique ecosystem and very quickly Sony’s competitors learned they be a part of the ecosystem.

Another example where Sony got the ecosystem versus having the product first to market was when they launched the original Sony PlayStation. This was back in the mid 1990′s, when the gaming console market was largely dominated by Nintendo and Sega. Sega was in the midst of launching their Sega Saturn console in 1995, months before Sony could get their first PlayStation out for sale. Sega, being an incumbent, should’ve had the upper-hand but failed in that they launched at a higher price than Sony but apart from that, they didn’t have as many games ready at launch time, which immediately diluted the impact the Sega Saturn could have. Sony for their part launched the PlayStation with a plethora of games and ensured their ecosystem was robust, despite being a late entrant.

Today the gaming industry works on this ecosystem and this is why Sony, having realized they fell slightly behind the curve, is investing in Android gaming devices like the Sony Ericsson Xperia Play and is rumoured to be developing an Android-based tablet for gaming. Sony is not restricting this gaming experience to just tablets and smartphones, but the successor to the PlayStation Portable (PSP) for now called NGP, will also be running on Android.

Amazon’s Kindle is yet another example of how the ecosystem matters. Amazon weren’t the first ones to launch an e-book reader, but what they did do was integrate it with their content library better than anyone else did and just to ensure they’ve created enough stickiness for themselves, they’ve gone one step further and made sure that tablets like Apple’s iPad are also compatible with their ecosystem.

All too often though, brands get lost in specifications and lose sight of the bigger picture. There was a time when most manufacturers of DVD players and televisions were fighting to ensure they could guarantee the highest quality playback when little did they realize, most consumers weren’t watch such high quality content but were rather watching MPEG or AVI files that they downloaded from the Internet. Immediately, most manufacturers started bringing out TV’s or DVD players that could playback DivX files either of a CD, DVD or USB drive. This took a big mind shift for top manufacturers as the thinking was initially that if you make your products incompatible with pirated content, fewer consumers will buy pirated content. It ended up being the other way around, fewer people bought their televisions or DVD’s from the brands that were trying to stop pirated content from being viewed. Today, you’ll find nearly all the top brand names have products that can playback pirated content, else they risked further market share.

Having the best specs on a smartphone or tablet means little if you can’t download any Apps for it. Having the sound output from an MP3 player means little if you download your content onto it. Having the best quality 3D playback means little if there is no 3D content or broadcasting in your region.

The ecosystem needs to be there if a product is to do well. Nokia have learned this the hard way and are now changing themselves. This is also precisely why we see everyone looking to market the fact that their product can connect to YouTube, Facebook, Twitter or Flickr for example. Without this connectivity to these ecosystems, it becomes very difficult to sell your product, no matter how good your specs are so the next time you shop, think about ecosystem you want to be a part of and if your products allow you to be a part of this.

Blog: What do you actually use your tablet for?

January 9, 2011 by  
Filed under Articles, Blogs

It’s been an interesting few months since Apple introduced their revolutionary Apple iPad during 2010.  A product category that we as retailers thought existed for years but had a very limited potential in business-to-business applications suddenly morph itself into a different being.  What was a sleepy category suddenly became the category of 2010 for us.

So what did make Apple click and what was the difference from earlier generations of tablets?

Well, first and foremost was form factor. At Jacky’s, we’d been selling tablet computers from the likes of HP and LG for a number of years but basically what they were was notebook computers with a touch screen. They ran the same Microsoft Windows operating system that you found on your regular notebooks and largely ran the same applications as a regular notebook. We were told that the real potential for that generations of tablet PC’s (or rather tablet notebooks as they should’ve been called), was in segments like car-hire companies (where a person could come out with the tablet PC and inspect the car on the spot) or in the medical sector (where probably medical records, transcripts, X-rays, MRI’s, etc. could be kept and instead of moving around a patient file, a tablet PC with the person’s records would be used instead).

Honestly, it wasn’t a terribly exciting category for us as a retailer and as such always had a muted presence in our outlets.

Then came along Apple and shocked us, our customers and most other manufacturers. All of a sudden a tablet had become cool.

The user-interface that Apple’s been running on the iPad was largely developed for the iPhones and had the “touch” elements integrated as part of the development of the platform. This immediately stood out as even Microsoft will tell you that Windows is not designed for a touch interface per se.

Apple also had the advantage that they could further leverage on their huge pool of iPod / iPhone family experience. This included the fact that they now had an App store concept in place, they had experience with wireless radio technology (both GSM/3G and Wifi), a marketing buzz that generally was associated with their products and a huge install-base of loyal customers.

Apple has till now never actually focused too strongly on the business or enterprise capabilities of the iPad. It is a true consumer device, which then begs the question, what are we actually using tablets for and why do so many men & women in suits carry them around?

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