Umm, this retail thing seems popular:
Archive for March, 2007
Late to the Apple TV party
March 31, 2007
Enough with Marissa Mayer
March 31, 2007Business 2.0 has it in for Ms. Mayer the same way Fortune had it for Kim Polese back in the days. Ms. Mayer is “Google’s vice president for search products and user experience.” Google’s overall user experience is not that great, so let’s drop the pretense that B2.0 picked her for more than her pretty face and her Google cachet.
Scot Finnie, Apple, and The Undercover Economist
March 30, 2007Must read! A honest, open, and straight-forward analysis.
Money paragraph:
The time for joking has passed. Microsoft hasn’t exactly failed with Vista. But it’s more like a double than a home run. Apple is innovating not just with the software and hardware it creates, but with the value proposition it is building in the marketplace. Apple hasn’t ever been particularly good about that before. Sure, it’s managed to appeal to people’s aesthetic sensibilities, but almost never to people’s wallets. While Macs still aren’t cheap, you get a lot more bang for the buck than you once did.
CE/IO’s who are not considering as a way to reduce TCO are ignoring their fiduciary responsibility.
Scot addresses a point similar to the one I made in an earlier post:
Nothing lasts forever. The bloom is coming off the rose on Microsoft. I would never put it past the software giant to come up with a way to remake itself in a better light. But the current course doesn’t appear to me to lead in that direction. As much as Apple is doing things right, Microsoft is doing things wrong. That’s a great combination for Apple, if it can keep walking the current tightrope.
Corporate culture matters! The world moved on, but Microsoft didn’t realize it.
What this is about is that Apple is reaching the right people with its product, winning new converts, Windows user by Windows user — and creating buzz.
Where did I see something similar? Ah, yes: Tim Harford’s wonderful book, The Undercover Economist. I am going to apply something from his book to Apple:
1. Is Apple making products the right way?
Check. Apple has successfully emulated Dell’s highly vaunted and efficient supply-chain. Apple has switched from proprietary technology to standards based systems and every product is being produced with the least waste and careful inventory management.
2. Is the company making the right products?
Check. The Undercover Economist (TUE) says “The price of the product equals the cost to make it. The price also reflects the terms of which customers can trade-off one priority against another”. As Scot observes above, the Apple price premium has vanished (even if the perception that Apple is more expensive remains, especially among “pundits”). But, people have voted with their pockets: Mac shipments are up and iPods are – well, you know the story. The Apple TV and iPhone are tbd.
3. Are the products being made in the right proportions.
Check. In the generic PC and MP3 player world world, products are not differentiated and hence there is a glut. That is one reason prices are so low and firms are constantly under-cutting each other’s prices to retain market-share. In Apple’s case, as TUE states it, “price equals cost equals value” keeps things efficient. There are numerous entry points for iPod consumers and just as many for Mac adoption (and remember, Apple is not playing for market-share).
4. Are the products going to the right people.
Check. In the case of the iPod, it’s going to everyone! A casual look at college papers would anecdotally suggest that Apple’s promotion is working. “Experienced” people may prefer to stick with Windows because it is a change. Young professionals, techies, gadget-ophiles, and students adapt much easier. That’s why Apple’s marketshare is, err, edgy (right, Steve?) Talk about targeted marketing.
How do you measure buzz? You don’t. It’s something that experienced people in this industry can just feel. And that’s the condition Microsoft should fear. Because buzz can turn into something much harder to combat than sheer numbers.
Thomas Fitzgerald’s Apple TV wish list
March 30, 2007Thomas Fitzgerald wishes for five things:
1. XVID/DIVX Support.
This is the equivalent of the OGG support people clamored for in the iPod. Not likely to happen.
2. iPod support.
Apple believes that iTunes is the superset of the iPod library, so anything in the iPod can be played through iTunes. Unlikely to get wish.
3. USB Hard Drive Support.
Apple wants you to use Airport Extreme connection as a way expanding storage. Low probability of getting this wish.
4. Add an “Apple Video” section.
Apple can add this as podcasts to iTunes Store for access. Scratch.
5. Add a way to “flag” content as you are watching or listening to it.
Great idea. Should happen in next rev!
Bumptop Desktop
March 30, 2007I am not sure if the real-life documents metaphor is completely apt, but the demo is cool (via Pogue):
So where’re the Apple TV ads?
March 30, 2007The silence is defeaning. Is Apple unconvinced that they can create awareness among the general populace for Apple TV or waiting for spillover effect from folks who are shopping for iPods? I am sure that the awareness level among iPod users is high, but, still, I would have expected a moderate promotional campaign.
Microsoft’s impending doom and how Apple & Microsoft differ on achieving success
March 29, 2007TMO has a post from a recent Smart Money interview with Steve Ballmer. Ballmer gets the inevitable Apple question. His answer:
it’s a romantic notion that Apple has the lead. People who build overpriced, underpowered equipment and then market it in an edgy way do not have a formula for broad success.
This fits in well with his earlier comments that Apple promotes rampant piracy with its products (probably enabled by that “edgy” marketing):
iPod users are thieves
Nevermind the inanities (Overpriced? No. Underpowered? Hmm – how so?), these quotes illustrate how Microsoft goes about competing, or rather, how Microsoft/Ballmer thinks firms should compete with them: not at all. According to Microsoft, the only way for Microsoft to win is if competition loses, or better yet, dies. This is the underlying philosophy. And this isn’t something new or restricted to Ballmer. This sense of anger and violence has been embedded in the organizational culture. Microsoft’s death-star treatment of Netscape, Corel, Borland, Lotus, Netscape, AOL, IBM, and numerous others are well-chronicled.
In the past, Microsoft was able to successfully get rid of the competition by exploiting it’s power relationships and monopoly. In a period where the power structure has shifted, it is readily apparent that Ballmer and Microsoft are annoyed by the sheer thought of having to compete with losers like Google, Novell, and Apple:
Bill Gates hinted the software giant will crush Google in the same way that it crushed Netscape — by integrating enterprise search deeply into Windows Vista, Office 2007, Outlook 2007 and SharePoint 2007 and with the rest of the Windows platform and also with emerging web services from Microsoft.
Ballmer vows to “kill” Google
“I’m going to f***ing bury that guy ed: referring to Eric Schmidt>, I have done it before, and I will do it again. I’m going to f***ing kill Google.”
Ballmer from earlier this year deriding Google’s efforts and revenue model (the not so subtle implication is that Google’s business model is unsustainable and unworthy of all the adulation):
“They are trying to double in a year,” Ballmer told a crowd of Stanford Graduate School of Business students on Thursday. “That’s insane in my opinion.”
Says Google is still in an early phase, in which it can milk its “one good idea.”
As in the past, he characterized Google as a one-trick pony, playing down the company’s efforts beyond search.
“They do a lot of cute things,” Ballmer said, to huge laughs from the business students.
The result of their one cute pony? Death within 5 years:
According to concept developed by Ballmer, the online search engines represent the key points of the future technology, and the leader in this domain, none other than Google, is destined to perish in less than five years
Ballmer quote from last year about Linux/Novell implying that Open Source = stolen code and that enterprises should be wary of using it:
We’ve had an issue, a problem that we’ve had to confront, which is because of the way the GPL (General Public License) works, and because open-source Linux does not come from a company — Linux comes from the community — the fact that that product uses our patented intellectual property is a problem for our shareholders. We spend $7 billion a year on R&D, our shareholders expect us to protect or license or get economic benefit from our patented innovations. So how do we somehow get the appropriate economic return for our patented innovation, and how do we do interoperability. The truth is, because of the complex licensing around the GPL, we actually didn’t want to do one without the other.
Of course, this is more civil than his earlier tone:
Linux is a cancer
Linux crowd is communist
Let’s recap:
Apple doesn’t compete on quality or innovation, but counts on edgy marketing, and marketing alone can’t make a company succeed. So Apple must die.
Google is an one-trick pony with an insane revenue goal that is not supported by it’s business model. So Google must perish within 5 years.
Novell & the entire Linux movement is promoted by communists who spread like a cancer and steal code from Microsoft. Communism and cancer are bad, so Linux must die.
This the only way Microsoft knows how to compete: denigration, destruction, mayhem, and death. In their ideal world, Microsoft would have no competitors and in the absence of any meaningful challengers, people will recognize the “wow” of their products.
Contrast that with the way Apple under Steve Jobs is viewing competition: he doesn’t care (okay, obviously he cares about competition, but not to the point of getting in the way of executing on his vision). In his return keynote speech, the first thing Steve Jobs said was this:
We have to let go of the notion that Apple to win, Microsoft has to lose
And he’s pretty much acted that way. Since 1997, Jobs has focused primarily on making Apple innovative. His singular focus has been on re-energizing Apple into an innovative firm with nary a thought about Microsoft or their products (except for the usual “edgy” marketing jabs).
Maybe this is what is actually holding Microsoft back – the need to constantly peer ahead and see what Apple, Novell, and others are doing and how they need to react. If Microsoft was focused on it’s products, they could have been miles ahead. Instead, Microsoft and Ballmer are besot with death. If they are not careful, this could mean their own.
This is a leadership and culture issue and one that I am not sure can be fixed.
Culture is not something you manipulate easily. Attempts to grab it and twist it into a new shape never work because you can’t grab it. Culture changes only after you have successfully altered people’s actions, after the new behavior produces some group benefit for a period of time, and after people see the connection between the new actions and performance improvement.
Steve Jobs was able to re-capture Apple’s innovative culture by getting rid of dead wood and radically altering the power structure. Recall that he disbanded the vaunted academic research group, the cling-on executives, and stopped development on non-core projects. Once they were gone, he resold Apple on the innovation culture and design mantra.
Since I started writing this, MSFTExtremeMakeover has a very interesting article. Not much to quibble about there. I would add one more thing: losing respect.
It used to be that Microsoft genuinely had the attention of every industry. CE/IO’s used to draw up plans based on Microsoft product announcements and mere forward-looking statements. Look around today and see if Microsoft garners a tenth of the respect. Even it’s biggest fans are giving up. Ballmer has effectively killed it all thanks to his acerbic tone, over the top antics, and offensive language. It is going to be very hard for Microsoft to regain credibility, trust, and respect even after Ballmer is gone.
They are five years too late in recognizing the problem and fixing it. Someone at Microsoft should consult Dr. Ichak Adizes and his theory on corporate lifecycle:
Judging by Dr. Adizes theory, Microsoft is a stable company, but:
Stable is positioned at the top of the Lifecycle curve, but it is not the place to be. That position is Prime, where organizational vitality is at its maximum. Companies that are in the Stable phase have started to lose their vitality and are aging. When an organization first begins to age, the symptoms won’t show up on its financial reports. In fact, the opposite is true. Stable companies are often cash rich and have strong financial statements. Like medical tests, financial statements reveal a problem only when abnormal symptoms finally surface late in the Aristocracy stage. If you wait until the signs of aging appear in the numbers, the company will already be significantly aged. If you want to catch aging early, you must look elsewhere.
…
Slowly and subtly, the entrepreneurial spirit in the Stable organization dwindles. The momentum of aging increases and the organization slides down into Aristocracy, the next phase of its lifecycle. This transition is subtle. Unlike the transitions in growing companies that are dramatic and obvious, the slide into deeper aging is more of a continuous process of gradual decay.
We are witnessing the death throes of once unbeatable company.
Consumer Reports warns against Vista adoption
March 29, 2007Consumer Reports has been using a Microsoft tool to monitor Vista reliability (aptly named Vista Relaibility Monitor). According to CR:
It uses a scale from 1 (worst) to 10 (best). According to Microsoft, the Monitor’s score considers how well the system has handled time changes and software uninstalls. It also scores a full range of failures, including those by applications that stopped working and/or were terminated; the hard-disk or memory; and Vista itself.
The results are nicely captured in this image (courtesy of CR):
Based on their tests, CR concludes:
The score for our PC, shown in the screen shot (click for a larger view) above, is currently 3.07 and has gone lower than that–as low as a dismal 1.29. The low score reflects the unfortunate reality of new operating systems, as well as the (admirably) tough way the Monitor scores Vista performance.
…
Consumers of a new OS, then, are to some degree trapped in a corporate technology tussle. Microsoft may say it’s up to the third-party hardware and software makers to have all their applications, drivers and firmware updated for the new OS. The third parties may counter by saying the new OS should be able to run all the existing software and hardware with no updates necessary.What does our test (and the above reality) mean if you’re poised to go Vista? They add to the good reasons not to rush into using the new OS. If past OSs are a guide, the landscape will change for the better
Or not.
