Posts Tagged RIM
Asymco author and analyst Horace Dediu, on the race to build a Blackberry killer, provides a great analogy demonstrating the importance of understanding your consumer:
RIM was like a barkeeper who enabled socializing on his premises by selling beer. The product he sold was not really beer but meeting services. A brewer looking enviously at the high margin beer being sold there might try to compete by launching “Pub-style beer” but the product won’t help people socialize any more if they drank it at home. Bar patrons were paying the high price of bar beer because it had an implicit rent attached for using the meeting site…
So no matter how much a brewer tried, unless they got into the business of managing taverns, they won’t ever put the barkeeper out of business.
This is because none of the products addressed the real question of what makes Blackberry live and thrive. They were just pub-style beer, not thinly disguised meeting places.
History repeats itself today as the Blackberry maker struggles to match the iPhone and iPad devices with its features, without understanding exactly why the products are so very loved, used and profitable.
Unfortunately, this happens all the time to marketers. Its critical that you develop the meaningful insights that drive your activities looking forward. We can sometimes be so blinded by the seemingly obvious that we immediately chase the tail of WHAT is beating us – and then try to meet or out-do their specifications. In doing so, we often miss WHY they are beating us. Reaching the underlying motivations driving consumer behavior is the most important thing for a good marketer.
My 3 year old is constantly asking, “why”? – it’s the core question that she uses to make sense of the world around her. Perhaps she is on to something?
Like most companies that focus on their “core customers,” RIM didn’t see the market shift coming. RIM kept talking to IT departments. Much like IBM did in the 1980s when it dropped PCs in favor of supporting mainframes and minicomputers because their “core” data center customers said the PC had no future. RIM was carefully listening to its customer – but missing an enormous market shift toward usability and apps. RIM expected its customers to tell them what would be needed in the future, but instead it was the competition that was showing the way. Many companies miss market shifts for this reason – they are listening to customers and not paying enough attention to the competition.
Just because IT departments buy the blackberry, doesn’t mean that they are the ‘customer’ you should be listening to. Apple made an end run on the enterprise by designing something the user would want more.
So many companies are too focused on what the customers and consumers are currently saying, and not enough on a broader understanding of consumer behavior or what the competition may be doing that actually is.
Here is something that I am fixated on these days: In one of the most competitive and fast moving industries in the world, where most products are built from rapidly evolving and readily available commodity components, Apple is winning big. Really, really BIG.
The iPod Touch, The iPhone 4, The iPad. There is nothing out there yet that can ‘touch’ them. Even if sometime soon there were products that match the base product specs and design quality of these devices, they would still need to overcome the perfectly married software and surrounding iOS, iTunes, App and MobileMe ecosystems. The lead Apple has created for itself here is truly incredible when you think about it.
The product here is king.
Say what you will about the Apple advertising, but this story is rooted in the actual product itself – a convergence of technology, software and design – that years on is yet to be matched. It’s so good in fact, that even the competition dropping its prices on their hardware has gained them very little against it.
Then consider that they are doing this while competing across the operating system, PC, smartphone, music player, tablets, gaming and lifestyle software segments (and dabbling in TV, advertising, clouds, e-retail, retail, books and social media). Companies whose entire business is built and focused on a single one cannot put out a device to rival. What is going on at RIM, Nokia, Palm, Microsoft? They are all focused on this single entity in the iPhone and are releasing products that fail to match even Apple’s old technology.
I am trying to think about when there will be equally good products, or possibly superior products to compete vs. the current product line. The Android platform is getting there, but that is perhaps the only thing easy to spot on the horizon, and it competes with only a small piece of the overall Apple product architecture (iOS). We could still be years away from seeing these iProducts exceeded.
In this context, product leadership of this kind is to be respected.
Update: See great Asymco recap explaining some of the ‘why’. Describes it as, ‘Apple sells a value chain – not a product’
Update: RIM takes a bath with a $480M write down on Playbook inventory.