This app looks beautiful. Can’t wait to mess around with it.
Upon re-reading Netflix CEO Reed Hastings’ blog post about splitting off their physical disc rental business into a separate company called Qwikster, I was struck by a sentence and how it applies to so many tech companies:
Most companies that are great at something –- like AOL dialup or Borders bookstores -– do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.
Two companies came to mind when reading this: Microsoft and RIM. The former is ironic given that Reed Hastings is on the board. The latter is the one I’m really interested in talking about given the company’s growing list of disappointing news and announcements over the past year.
At the heart of RIM’s problem is what Hastings is referring to in his post. It’s the concept of disruptive innovation. The idea that markets aren’t won or lost over slow iterations of existing products with the same value proposition. Apple, for instance, never could and likely won’t ever be able to win the PC business as it stands. But they recognized this and understood they don’t have to. The PC industry has been in accelerating decline for the past decade,1 and Apple smartly chose to position itself for dominance in the post-PC era.
They did this through a series of disruptive innovations that nobody has been able to match: iPod, iPhone, iPad. And they are no doubt already thinking about the next one, because the iPhone decade will eventually come to an end. As Horace Dediu pointed out on a recent episode of his outstanding podcast, The Critical Path, each of these products flowed from a new input mechanism (scroll wheel, touch) which in turn required a new ecosystem and market strategy.
This brings us back to RIM, the once-darling of Canadian tech innovation that I’m still hoping can return to its glory days. Looking back at the Blackberrys that existed in 2005, and comparing them with the Blackberrys of today, I find few substantial differences. Sure, the screens are better, they’re faster, have nicer graphics, and have a few new bells and whistles. But, fundamentally, these are the same enterprise-focused devices that once attracted IT pros to the platform.
Since then, the iPhone emerged and dramatically disrupted the market, and the modern Android platform was born in response to it. The BlackBerry has continued to chart a conservative path with the same platform and same fundamental assumptions about market access, the required ecosystem, and its consumers. In the process, RIM’s leadership seems to have been surprised to wake up one day and discover their devices were no longer inspiring the hearts and minds of those who once carried a BlackBerry on their hip.
That’s not to mention the iPad, and RIM’s subsequent distraction and failed attempt at responding to it. The PlayBook was dead in the water on launch and likely can’t be saved with slow iteration. They only sold 200,000 devices this quarter, and are already trying to bolster demand by slashing prices. This is a race to the bottom that will do nothing but continue to hurt the company.
Shortly before the PlayBook was released, I speculated in conversations with friends that RIM needed to bank the company on this device. I think they did just that, but never realized they were doing it. Unfortunately, the device wasn’t the right one to make such a gamble on.
Now it seems like QNX-powered BlackBerries may be their last ditch attempt. And it sounds like there will continue to be a concurrent lineup of existing BlackBerry OS devices and newer QNX-powered devices — no doubt creating confusion in the marketplace.
Just like Henry Ford didn’t try to sell his customers a faster horse, Apple didn’t become the most valuable company in the world by building faster Macs. They made minor gambles and released three key products over a decade that disrupted existing markets and paved the way for new ones they could own. RIM should take a lesson from Apple’s playbook2 and focus on new product offerings, with entirely new value propositions that play to their strengths.
The path of playing catch-up with Apple’s four-year-old innovations can only lead to failure. Reed Hastings is right. RIM is only just realizing the errors of its strategy, and can’t move fast enough to save itself.
This week, Apple will be hosting its Back to the Mac event, where they are rumoured to unveil Mac OS X 10.7, a new MacBook Air, iLife and iWork ‘11. As Apple concedes in the event’s media invitation, many people had begun to wonder if the Mac was being unfairly neglected in favour of the shinier and now more popular iOS-based devices (iPhones, iPads, iPods).
Yet we shouldn’t blame Apple for having shifted huge amounts of resources into this emerging platform over the past few years. The mobile space (including tablets) has exploded, and they’re clearly in it to win it. At WWDC last June, there weren’t even any Mac sessions — it was all about iOS. What’s a Mac developer to do?
Personal computers as we know them, including the Mac, will be relegated to a niche product within the next few years. Tablets are the future. There will no doubt continue to be a need among many of us for a high-performance, multitasking, windowed operating system, but that need won’t and shouldn’t extend to the average consumer.
Most people perform a few simple tasks on their computer: email, web browsing, consuming content (video, audio, photos, reading), and basic content creation (documents and spreadsheets). All of these things can be done today on a tablet — in some cases even better than with desktop computers. And it will only continue to improve as the form factor matures in the coming years.
The success of the iPad, with 7.5M units sold since its launch less than 6 months ago, seems to prove that Apple is on to something. The first million iPads were sold twice as fast as the original iPhone. And it’s not just techies who are buying these, but regular people as well. If you consider the iPad a PC, Apple is now the number one computer maker in the United States, with 25% marketshare.
Most people have had an antagonistic relationship with computers for years. They have mastered a few simple tasks that they need to accomplish on a daily basis, and yet the experience of using a computer is still incredibly frustrating for the average person. As a self-professed techie, I get questions on a daily basis from friends and family about their computer woes. How do I install this webcam? Why is it beeping? Where did my contacts go? Why won’t it print? How do I resize this photo? It’s enlightening to sit and watch an average person tackle problems on a PC. Their behaviours are rarely as we (the techies) expect them to be.
And yet, for many of these users who struggle with machines on a daily basis, the iPad immediately makes sense to them. I’ve watched as people use an iPad for the first time. It’s completely intuitive and satisfying to them, and they know that they need to own one. Even two-year-olds get it. Tablets are the future of computing.
I love Mac OS X as much as anyone but, for the average user, the added complexities of window management alone make it unnecessary for most tasks. With the tablet, our antagonistic relationship with computers may soon be over — and personal computers as we know them will become a niche product.