Posts Tagged ‘Apple’

iPhone 4 Static: Does “Fuzzy” Reception Kill the Golden Goose?

July 14, 2010

There has been a lot of media noise over the past week or so about the “antenna/reception issue” on the new iPhone 4.

This is exactly the kind of thing the precipitates the boundary between Early Adopter and Early Majority on the Product Adoption Lifecycle.

Early Adopters are willing to put up with a host of issues that may arise in order to get their hands on the new product as soon as possible. If there is a bug or two, which is often the case with a new version, so be it. Being one of the first to have such a device more than makes up for any inconvenience, which in many cases is expected.

Mainstream Early Majority buyers on the other hand, are a different breed. They don’t like experiments or issues. They want a “baked” product that works as expected.

As we have discussed in the past, they buy when their peers or friends buy, and they naturally gravitate to the category leader. They want the “one” and reward leadership by being willing to pay a premium for it. If there is an issue in the early phases… they do what comes naturally. They wait until everything is sorted out!

Consumer Reports Downgrades iPhone 4

Apple’s initial public position is the issue is a software issue, and a fix is on the way. Yesterday (July 13, 2010), as reported in the Wall Street Journal and other publications around the world, Consumer Reports reported that the problem is intrinsic to the design and amounts to a hardware issue that apparently can be fixed with a piece of duct tape in the right place. In response they downgraded their rating of this “hot” product to “not recommended.”

Is this Issue an iPhone Killer?

We doubt it. Remember the first iPhone launch? I had a client who waited in line (actually he had his assistant do it) for hours and hours to get his hands on one. And then for almost a week, he literally pranced around the office showing the device off. He was in heaven. And then, weeks later Apple dropped the price a couple of hundred bucks!

The joy quickly turned to fury and anger. He knew the price would inevitably drop but didn’t expect to blind-sided by such a move for many months. Suddenly his joy didn’t seem like such a good deal. He was right too. Ah the perils of Early Adopter-hood!

To it’s credit, Apple quickly got the message too, and quite smartly offered these early buyers $100 Apple Gift Cards, and the smile quickly returned to my boss’s face.  Just what he wanted, another trip to the Apple Store!

Bottom line. He expected such a move, but later. And Apple acted, after the problem blew up. In the end, sales kept taking off and we know the rest.

It Comes with the Territory

In many ways the situation is similar here. Early Adopters know this kind of thing happens .

We also fully expect Apple will fix the problem. It’s intrinsic to the brand. Other computer makers often force customers to put up with “known issues.” Unlike these more “commodity”-like companies, Apple is premium brand, and we fully expect the problem will be fixed to Consumer Reports’ satisfaction.

Once this happens, Consumer Reports, which in general was quite positive about the device overall, will recommend the product again. The brand connection with customers will be strengthened as consumers worldwide see that the Apple stands by it’s products as expected and the Early Majority will jump in once the dust settles.

Now if they would just open up the iPhone in the US to other carriers!!!!!

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Marketing Misfire. Nexus One… Looks Like a Great Phone to Me! The Real Battle Was Positioning and Google Missed It.

May 13, 2010

Summary:

1. The Situation

  • What’s at Stake
  • Product Features
  • Current Positioning

2. Analysis

  • What’s Right?
  • What’s Wrong

3. Recommendations

  • Connecting the Marketing Dots
  • A 5-Step Plan: What can Google do about it.

Introduction

Recently, before the (in)famous lost iPhone debacle, Apple indirectly made another announcement of perhaps greater import relative to this already proven game changing device, the iPhone. It appears that at long last, Apple is making the big move to create a version capable of running on other carriers, in this case industry-leading Verizon.

As earlier postings on marketing to win attest, Apple needed to make this move or else risk having the product marginalized to niche status if they stayed on ATT exclusively. The risk is magnified especially since Google’s robust mobile, open source  operating system Android in tandem with other devices, notably manufactured by NHT, opens up the market above and beyond any one carrier.

And to make matters worse, it appeared that Google along with manufacturer NHT would be the tools of this destruction with the much heralded launch of it’s Google-branded Nexus One smartphone. Nexus One was designed to be platform-agnostic and besides featuring Android, it exploded the existing sales channel model traditionally controlled by the carriers, and sold direct to customers online through Google itself.

And if that wasn’t enough, customers were also offered both locked and unlocked versions of the device. If you wanted to purchase a subsidized version with a two-year contract, there was a T-Mobile version ready to rock for under $200, and a Verizon-ready model was going to roll this spring as well. Radical indeed.

Before we dive into what was wrong marketing-wise, remember there is much at stake for Google and perhaps NHT as well.

The smartphone is in fact a mobile computing platform and apps that run on these devices are, if I read the tea leaves correctly, potentially disruptive to Google’s online search-based ad model, especially as these platforms take off. I mean who needs search if in fact the app chosen already defines a clear area of interest as defined by the user?

This means that it is well worth Google’s time, talent, management attention and dollars to get in the game and win a real piece of the action, no matter what it takes. Otherwise others (re: Apple) will be in the driver’s seat. Android is one piece. An “iPhone killer” device, a Nexus One… another.

The Good: Feature by Feature… Nexus One Looked Like a Winner!

And what Google/NHT have done on the product level looks real good to me. The more you look at the features of Nexus One next to an iPhone, the better it looks.

It boasts a variety of powerful features including:

  • megapixel camera with a flash, versus the megapixel without flash on the iPhone 3GS,
  • the battery is removable and replaceable, iPhone’s is not,
  • there is a micro SD slot to add up to 32-gigabytes of memory, where with the iPhone, what you buy is what you get
  • apps run simultaneously on Nexus One which the iPhone is famously unable to do at this time
  • and we all know about iPhone’s inability to run applications developed on Adobe’s ubiquitous Flash platform, Nexus One of course runs Flash apps.

Plus Nexus One is the only smartphone to boast the Google nameplate, which is one of the world’s most recognized brands known for leadership in innovation. Add it all up on the product front, this is the good stuff!

The Bad: Positioning Is Where Google Falls Down

Alas, where this all is falling short is in the marketing and positioning arena, which is so essential for success in products of this class.

If there is one lesson we all need to remember and it seems we always forget, it is that product features do not a mainstream marketing strategy make!!!! We were taught this by Geoffrey Moore in his landmark book Crossing the Chasm.

Product features are great for early adopters but are not and don’t work as selling points to mainstream audiences who buy based on herd-like behavior criteria of peer adoption and market leadership.

When going mainstream, it is essential that customers get to feel that others just like them have and love the product, and then that they get to see and feel it for themselves, in order to win them over.

As far as I can tell, this is the whole deal right here on the Nexus One e-commerce and info page, the one that comes up when doing a Google or other search. Based on comments above, the positioning is off base, way off base.

From an e-commerce perspective alone, the presentation itself is simple and clean, just what we’d expect from Google.

From a positioning point of view however, what we see is a product message that by definition is focused on early adopters, not mainstream buyers. OOPS.

You can see it right away by Google tagging the device Web Meets Phone. Product features anyone? This tells us what it is, and if there was no iPhone, this may be necessary… but in an already established, hot product category, no way! Our response is so what?, isn’t that what a smartphone does? Nothing compelling there.

When we look at the rest of the Nexus One page we see the following sections, which also supports the product-focused positioning:

  • Demo
  • News
  • Already a Customer (Customer Service?)
  • Closer Look (including You Tube Channel)
  • And of course, a Buy Now button.

The question is why put the impediment of a Chasm crossing, first winning over early adopters and then mainstream buyers, in front of you when you don’t have to?

Getting the Right Message to the Right Audience

Google is a household name making a play to exploit Apple’s weaknesses and grab a piece of the mobile market. Since this is a competitive land grab type, early adopters are irrelevant here. This is a mainstream marketing move.

The criteria these consumers really care about here are leadership and referenceability. It has always been so. In other words, is the product a leader?, and do my peers have it, and love it?

Google as a brand is a leader, so customers can make the leap of faith to leadership on this level. The question is then, what do our peers think about it? Does it deliver? Is it (the product) “baked”?

Here is where the marketing for this product breaks down.

It is most likely that many potential customers don’t know anyone who has one, and what’s more, if they are interested, they can’t see it for themselves, let alone play with it and internalize the benefits of its many features. This appears to be a result of the Google-facing distribution channel. Because of this radical departure away from carriers, T-Mobile stores, the current existing carrier, don’t have them.

Re-Positioning: Connect the Dots and Take it to the Streets!

Assuming that this won’t or can’t be changed, what then? How can we get this product to the people?

How about testing then deploying some temporary pop-up stores and displays in key markets, key malls, key events, even key warehouse stores like Costco? Consumers can drop by and see, and ask the questions as well as buy… Plus such a temporary approach creates time sensitivity and urgency and also lends itself to deadline driven promotions to induce immediate buy decisions.

Segmentation

Also, so many students today use G-Mail and Google docs. What about more targeted programs, in this case engaging campus reps and offering sales incentives and scholarship-based promotions for sales results? Here is where you could play early adopter card… the rebel, be different card to build traction and gain market share.

Testimonials

One other avenue is to retool the YouTube Channel. Currently the Nexus One channel is all about product info and demos. Keep this content if you must, but also focus on customer testimonials instead. And this can be done strategically, and by that I mean seed it with some key persona or consumer types. Create some promotional incentives to drive submissions, then let it go.

There are plenty of consumer videos out there on the phone, but they are all over the place and you have to dive in to find them. They need to be connected back to the Nexus One page. And content kept on point as much as possible. This is where the incentives and promotions come in. These are necessary to create that peer support that is so essential.

Service?

Lastly, part of the fear factor that holds mainstream buyers back is service. They want and expect a tested service function. They don’t want or accept beta testing done on them. They want a fully baked whole product in place, operational and working. If not, they hold back and do what comes naturally.

They wait.

On the product/marketing side one big issue that can’t be , what happens if I am having issues? Who do I call? Where do I go? Since what is radical here is the “untethered” sales model, we have to know there is a clearly marked place we can go if we need help. Right now I have to figure it out and I don’t have a person to talk to or place to go.

Positioning is all about connecting ALL the dots and at no time is this more important than when mounting an incursion into mainstream markets with an entrenched and powerful leader.

Summary: A 5-Step Plan

To boil things down then, here is a 5-step plan to reposition the Nexus One into a viable competitor to the iPhone (note: there is still time!!!):

1. Re-position the product: Web Meets Phone positioning tag has to go. How about something like Nexus One by Google: The Smarter Phone or something like that.

  • Google. We need Google mentioned for leadership, making the phone not THE but A leading product,
  • “Smarter.” This way you create a qualitative showcase for the features to shine, but talk in the leader/market talk needed in mainstream communications

2. Narrow down to some tighter target segments,
3. Create incentives to drive and organize testimonials,
4. Take the product to the streets so customers can see, touch and buy the product from a person,
5. Re-communicate that Google is there for you relative service

Add it all up, now you have the marketing foundation to communicate a very competitive offering that can grab some market share. Now Google can add a link on the main search page for starters and they can realistically capture a portion of a % of that number to take Nexus One from failed iPhone Killer to a monster hit, with all the benefits of same!

Apple is safe. Or is it? NHT had fantastic earnings for its smartphone offerings through carriers on a global scale. NHT also has the ability to draw upon Google’s Android mobile operating system and Windows too, which will be releasing its new OS momentarily. So as Sherlock Holmes said, “Watson the game’s still afoot” but the battle for mobile superiority may be played out on another field.

Note: As I post this (May 13, 2010) Google/Android/Verizon announced sales in excess of iPhone for the first time. Stay tuned!

Message to Steve Jobs. Thanks for the iPad. Now the heavy lifting needs to begin.

February 9, 2010

As a marketer, it’s hard to stay away from Apple. The marketing has been at virtuoso levels consistently for the last decade, serving as a best practice and shining light for us all, at least until now.

The iPad was launched to great fanfare (hype perhaps?) last month Wednesday, January 27, 2010. The hype machine was in overdrive leading to what appeared to be an anti-climatic event that felt like a let down to the media frenzy that preceded it.

I had the chance to watch Steve’s keynote address recently with my Principles of Marketing class.

Here is how Apple boils it all down in their messaging and positioning for the product in their own words:

Our most advanced technology in a magical and revolutionary device at an unbelievable price…
The best way to experience the web, e-mail, photos, and video. Hands down.

For the first time in years after reading these value propositions, I asked myself, what are they are talking about? And why, oh why did they create unbelievable hype on a massive scale to deliver such a vague, “early adopter” message? I don’t get it.

Since on the surface, this just does not make sense, I thought it might be constructive to de-construct this a bit from the integrated marketing perspective and dive below the hype and superlatives to see if we can figure out what is going on here. Something is…

On the company and product side, clearly there is a lot happening. Disruptions abound, and they know it.

First, besides the overall product itself, is the A4 chip produced by Apple. I didn’t realize they had this capability, but if you look at it, should this tablet device take off and create a new category as hoped, a new chip architecture is in place… and its not Intel inside.

Apple is also we are told, undergoing a transformation. A couple of years ago, Steve Jobs eliminated “Computer” from Apple’s name to Apple, Inc. “We are now a software company,” he famously said.

This time around he took it another step further… “We are a mobile device company, the largest in the world.” Wow!

The tablet, which with its large touch screen interface, on the surface looks like an iPhone on steroids, with much of the same functionality built in. I originally dismissed the optimized iWorks part of the presentation but am now quite impressed that there is native to the iPad productivity (word processing, spreadsheet, and presentations) capability. This is no mere overgrown iPhone! The screen is large enough so we can actually see what we are doing. Will there be a touch-based Office app from Microsoft to come?

On the marketing side, it became clear that Apple understood that there was no direct competition for this ambitious, category creating product, and in response took one of those “going fishing” – everything for everybody, early adopter communication strategies that in the final analysis goes against the cardinal rule of positioning – which is to connect the dots of “what’s in it for me” for the customer versus setting it up so that he or she must figure it out for themselves.

You can see it in how they boiled down the core messaging:
Our most advanced technology in a magical and revolutionary device at an unbelievable price…
Compare this to the iPhone:

At launch:
Reinventing the phone

Today
The fastest, most powerful iPhone yet.

See the difference?

What does Magical* mean?, Revolutionary?, and what is this going to do for me, even with an “unbelievable” price?

* Note: Although it is not easy to figure out what this means on our own, lead designer Jony Ive does define “magical” quite well in one of the launch videos as “when something exceeds your ability to understand how it works, it sort of becomes magical. And that exactly what the iPad is!”

The Best way to experience the web, e-mail, photos, and video. Hands down.

Also each speaker in this very same video, especially marketing VP Phil Schiller kept on using the word “BEST”… best e-mail… best photos… best internet… best this… best that.

Hey Phil, I hate to ask what does “best” mean, and then if so, so what?

The key and unavoidable question that is the core of what positioning is all about still comes down to addressing what does this mean for me?, and at the moment I don’t know.

Nobody said this was easy…

There were kernels of marketing strength in the presentation, most especially in Jony Ive’s video presentation. As the lead designer, he is the person most intimate with the iPad and two things he said caught my attention. 1. “It just feels right to hold the internet in your hands.” 2. “I don’t change myself to fit the product, it fits me!”

These two ideas are interesting and compelling… and if, once the units are available, we physically “feel” this connection with the product, and I have no reason to suggest otherwise… well then, the iPad will be successful, perhaps very much so, in spite of this awkward positioning.

At the conclusion of the presentation Jobs argued that then when you add up the 125 million existing iTunes and App Store Customers along with the 75 million iPhone and iPod Touch install base who already know how to use the product, along with the new e-book bookstore with 5 of the major publishers on board, “we have breadth and scale required for success.”

Except this.

Even with this built in audience base in place, I will argue that there is a classic chasm to cross with this one. The product as it now stands is too big to pin down, there are too many disruptive elements, as Apple itself admits.

For example, is it an e-Book reader, and if so is it for the popular, business, educational markets?, is it a media device?, productivity tool?, something else?

Kept at this high level, wide “everything for everybody” positioning is inevitable which means we as the customers have to figure out what we want and need about this device on our own. This is dangerous and contrary to Apple’s own best practice of product launches past.

What’s more, for the past years Apple had the benefit of its latest devices having direct lineage to the iPod, which fueled adoption for new innovations.

For example, the iPod’s leadership as the dominant music player on the planet, allowed Apple to successfully launch the new at the time, arguably disruptive video iPod with just one studio on board (Disney) and a handful of titles available for sales at the iTunes store. This is nowhere near to the ecosystem the iPad now enjoys even before it is available,

Even so, the poorly endowed video-enabled iPod faced the chasm, while also living as the top of the line, world’s most popular music player at the same time. Today every studio is on board and billions of video downloads have been transacted. The chasm was “easy” to cross here.

Today, with an astounding 250 million sold to date, the iPod market appears to be saturated and sales are flat or declining. And we could argue this is not what the iPad product is at its core. It is a separate product. And positioning the iPad as a direct descendent of the iPhone, which has created a category on its own, is also not really accurate and in this case would limit its disruptive power as a category-creating product.

So the product is out there on its own, almost as a blank canvas… a remarkable product looking for relevance from the market as a whole. That is the issue.

This situation is not new for Apple. People weren’t banging down the doors for Apple to create the iPod at the outset. The market wasn’t seeking a device that could hold 1,000 songs. And if memory serves me well, It took a while to gain traction and truly took off when iTunes became Windows-compatible.

Assuming the above and we have a chasm in front of us, what now?

The market opportunities are numerous, so for the sake of brevity today, let’s look at a couple of examples to see how we could position the iPad in the e-Book space, to give us some ideas.

1. Blue Ocean: Completely Different and Compelling
Amazon’s Kindle is the original category creator and undisputed leader of the e-book market to date. The iPad with it’s color screen, robust distribution channel and access to content by the major publishers is mounting a direct assault to Amazon’s dominance and has a competitive offering no doubt. The black and white Kindle is a powerful one-shot pony and costs $250. iPad as an e-Book AND the “internet in your hand” offers so much more for $499. Does iPad demonstrate enough value to topple Amazon? Probably not… yet.

One of the drawbacks to the iPad, as with the iPhone is the inability to run multiple applications at the same time. What if… you could you could reframe the reading experience?, so that when you are reading your e-book on your iPad, you can, say, listen to music at the same time.

War and Peace, and Beethoven! With this simple added element, Apple could change the rules of the game and position iPad as the tool that transforms the reading experience:

Apple iPad… Reinvents Reading!

Such a move would force Amazon to find its way again in what could be a transformed market that by the new definition would play into iPad’s strengths, not Kindle’s, perhaps for the foreseeable future.

Now I am starting to see the potential “magic” that Jony Ive was talking about.

Bt the way, this move isn’t far off from the iPhone value proposition, which also was a category-changing device.

iPad has the extra load of category-creation, but the “reinvention” position isn’t far afield from the “different thinking” we expect from Apple.

And it making a product alternation is too much, we could go back to the keynote presentation and look at the say the games, or NY Times apps that were shown.

This positioning could then play out as:
Apple iPad… Reinvents the Newspaper
Reinvents the Video Game

2. Textbooks: Get Rid of the Heavy Load
There is another natural niche that plays into Apple’s DNA. Positioning iPad in the education space to fill a true, long held need to lighten the load of the infamous text book bag, which as I have been reminded in my professor life, can weigh many, many pounds. Good for upper body strength, perhaps, but cumbersome at best in reality.

We know that students today are online all the time and comfortable with being there. Making the switch to electronic books with these consumers, which surprisingly hasn’t really taken off to date, should and could be a non-traumatic and natural transition.

Plus, although it slipped in the 90’s when Apple all but surrendered the academic space to the Dell’s and HP’s of the world, Mac laptops today have gained significant traction on many campuses to be a leading computer device of choice by students.

We noted with interest as the rumor machine for the iPad was in full swing, that Apple was collaborating with academic institutions and textbook publishers to ensure that the product meets the needs of the academic community. Color is essential we are told. Also, students like to highlight text and take notes. Dropping in audio and video content, being able to link to current news sources, etc., could create a robust learning experience, while reducing the physical load, and we assume textbook cost.

Add it all up and iPad should have what it takes to fill a need and make a friendly conquest of a familiar beachhead market that will facilitate a quicker chasm crossing for the product overall.

Here is how it could sound, once again in “tag” talk:

Weighing only 1 ½ pounds, the Apple iPad puts Textbooks, the Internet, and More, Right in the Palm of Students’ Hands for Less than a Laptop.

To sum it all up:

1. Before we adopt the iPad, we need to touch, feel and play with this device… now! 60-days is too long a time to wait, and when it is finally available, early adopters will try it, and buy it.

2. If it indeed feels right… if we feel and get the “magic,” then iPad will be successful… over time. Keys to success will be segmenting the market and adopting a chasm/beach head focused marketing strategy with clear and compelling reasons to buy, which aren’t even close to being defined yet.

Have fun Steve!