Posts Tagged ‘RIM’

BlackBerry and JC Penney: Two Giants That Have Lost Their Way?

Monday, August 26th, 2013

What do BlackBerry and JC Penney have in common? Possibly more than you might realize.

1. Both missed the shift in their industry.

2. Both changed leadership.

3. Both implemented radical change.

4. Both achieved less than impressive results after this change.

5. Both implemented change following agitation from Wall Street – even though Main Street reacted neutrally or negatively to the change.

JC Penney even went as far as to hire the retail guru from Apple, Ron Johnson, as its new CEO to turn the company around but, in so doing, the needs of the customer were ignored. The introduction of tablets at point of sale, a relaxed dress code for the sales staff and the removal of coupons and store cash registers confused the target shopper – a very different shopper to the one found at the Apple store. The application of technology in this case was not the issue. The crucial question overlooked was whether the benefits of that technology outweighed the resistance to adopting it; in the case of JC Penney they did not. Not only was there resistance from the customer but Ron Johnson failed to gain the collaboration of staff and management, which proved to be a critical mistake.

Sales of the new BlackBerry 10 operating system based products – the Z10 and the Q10, and most recently the Q5 – are down as BlackBerry has lost significant market share to Apple, with its sleek and easy to use operating system and beautifully designed product. It was BlackBerry’s misconception that its superior new operating system and good design would enable it to reclaim its former position in the market. The reality was that BlackBerry started as a technology but developed into an experience. In the early 21st century the device became widely known as a “CrackBerry”, referring to the excessive and obsessive email-checking by its owners, for both business and personal use. The technology was convenient and secure and, most importantly, BlackBerry had become a trusted household name.

BlackBerry’s demise, however, was not just related to the fact that the operating system did not evolve; it put too much focus on the consumer and lost sight of its valued customer base, the corporate IT customer, whose growing desire was to access both their corporate digital networks and their social media networks on the same device, but this was ignored by BlackBerry. The infamous “BlackBerry outage” was the final straw and violated the trust that former loyal consumers had in the BlackBerry experience. RIM, as it was, was an engineering company that had no idea how to continue to design experiences and now, as “BlackBerry”, does not have the marketing knowledge or clout to rebuild consumer trust in the brand.

Both companies tried to emulate Apple in a classic “best practices” way but failed to understand that the Apple store and its devices were designs that embodied feelings and experiences, and created by a man with exceptional vision; someone who posed questions such as “how do we reinvent the store?” and “how do we do things differently on a phone?” Steve Jobs never just produced a “me too” product.

So, what’s the walk away? Wall Street hates failure but, more than that, it’s terrified of change. Both however are essential for innovation and creativity which are cornerstones of modern day business success. Wall Street’s demands for continuity of performance can ultimately result in giants being brought to their knees. What’s more dangerous is that when Wall Street sees these giants falling they demand a change of leadership. This new leadership is then faced with the challenges of innovating and risk taking to enhance performance when, in reality, all Wall Street wants is to preserve the status quo. JC Penny and RIM, as well as Motorola and Nokia, are prime examples of this. Apple looks as if it is unassailable at this point of time but calls by Wall Street activists to withdraw cash from the company will ultimately weaken its ability to take the risks that are necessary to sustain it going forward.

Steve Bell, President, KeySo Global

Apple and Huawei – Zen and the Art of the Long View

Monday, April 29th, 2013

Article first published as Apple and Huawei – Zen and the Art of the Long View on Technorati.

The telecoms and technology markets have always taken the long view with regard to product and business development. This week has seen two companies look to the future in different ways. Apple, the original Zen Master of strategy, coming to grips with an apparent hiccup in their recent string of successes and Huawei struggling in the aftermath of rejection by the U.S. government.

Apple has been in the press recently due to the substantial fall in its stock price and the increasing demands from shareholders to receive part of the $145 billion cash mountain that it has amassed. Apple CEO, Tim Cook, finally acquiesced and has just announced a capital buyback program that will increase the return to shareholders from $10 billion to $60 billion, as well as increasing its quarterly dividend by15%. This may quell the unrest of Wall Street investors in the short term but it exposes the company to a significant long term threat to their enterprise viability due to their increasing risk adversity and lack of innovative product introductions, particularly when compared to those of Samsung. It’s very easy to slip from grace and require cash to sustain operations if you miss market turning points – have a look at what happened to Motorola, Nokia and Rim! Steve Jobs, with his Zen Master ability, excelled at recognizing long-term future opportunities and betting the company in order to secure that future. He was protective of the cash, understanding that to “bet big” you need to cover the downside mistakes. Unfortunately, that doesn’t appear to be the case with Apple today.

Contrast this with Huawei that announced within the last 48 hours that it would abandon its pursuit of penetrating the North American telecoms network market after five years of battling the U.S. government. At the same time as this apparent retreat, however, Huawei has begun focusing on building its consumer product brand in the U.S. The company’s introduction of new products at this year’s CES gave it significant presence, and this month it announced a new marquee handset along with sponsorship for the Jonas Brothers tours, starting in Chicago. Huawei appears to be adopting a long term strategy to establish itself at the heart of the U.S. psyche as a “brand of trust”, potentially making it more difficult for them to be politically blocked in the next round of network purchases. Equally, since 4G networks have effectively been sold and rolled out in the U.S., the market opportunity is now elsewhere. The reality is that the market momentum of Huawei globally over the next five years will probably cause two of the five remaining network providers to be eliminated, meaning that Huawei will be the only real alternative to Ericsson when network operators look to upgrade their systems in 5 years time. The bet is that the U.S. government will have little choice but to reluctantly accept Huawei, even if it’s not with open arms.

The Zen Master, it seems, has actually moved back to China.

Steve Bell, President, KeySo Global

Which 3 Digital Technologies became Catalysts for Change?

Friday, August 31st, 2012

So what exactly have we recognized as being the three catalyst technologies or products that emerged in the year 2007? Below is an overview of each of these and highlighted are the main factors that we believe have influenced their evolution and subsequent relevance today.

WiMAX

WiMAX was an early 4G technology that started the move of the U.S. market to wireless broadband; it is often likened to “Wi-Fi on steroids”. The fact that Sprint and Clearwire, a startup that was supported by Google and Intel, could deliver blisteringly fast mobile Internet service forced AT&T and Verizon, the two largest U.S. carriers, to accelerate their deployment of 4G LTE. This development meant that standards needed to be agreed upon and formalized, and that network equipment manufacturers needed to accelerate production in order to provide for these large customers.

Having AT&T and Verizon focus on a single frequency (700 MHz) made it easier for device manufacturers to accelerate their development of 4G Internet products and deliver consumer-ready devices. The fact that some of these device manufacturers had been working on WiMAX devices in cooperation with semiconductor providers meant that they could accelerate products based on the WiMAX chipsets that almost 80% matched LTE.

Subsequently, both Sprint and T-Mobile have also either invested in or announced plans to build a 4G LTE network on top of their existing systems. What this means is that for the first time all four large U.S. carriers are offering mobile Internet services utilizing the same technology as the rest of the world, enabling global interoperability and roaming.

The iPhone

The second catalyst product was the iPhone which has received much acclaim for its elegant design and simple user interface. The real essence of the catalytic change that the iPhone initiated, however, was a shift in the consumer paradigm of a mobile device being used solely for communication to one that enabled interaction. The iPhone allows users to connect easily on-the-go and to share information, content, pictures and video simply and effortlessly. When it was first released, users found the interface to be so effortless that data volumes climbed exponentially and severely disrupted the AT&T network that had not been designed for large data capability! This forced AT&T, as well as other mobile operators, to rethink the entire concept of network architecture to include Wi-Fi as an offload mechanism. It also resulted in AT&T acquiring Wayport, and in the process becoming the single largest operator of Wi-F in the U.S.

Not only did the iPhone change the existing consumer paradigm and network architectures, it also broke the carrier stranglehold on its relationship with the subscriber. The iPhone was and still is provisioned via iTunes, which had previously been the domain of the mobile operator. This relationship with the subscriber, initiated at the time of purchase, was then solidified through the introduction of the app store and ultimately the iCloud. Apple effectively took the existing mobile business model, tore it up and replaced it with a hybrid that established a stronger bond with the consumer based on end-to-end user experience. The impact of the iPhone’s innovative design, end-to-end system, business model, user paradigm and elegant packaging of an everyday technology has had a tsunami-like impact on RIM, Motorola and Nokia, as well as on major mobile operators around the globe.

The Amazon Kindle

The third catalyst product that has been an instrumental agent of change is the Amazon Kindle. This device did for a 500-year-old product concept, the book, what the Walkman or iPod did for music. Best sellers are now cheaper and easier to obtain via the Kindle which provides on-the-go access to the world’s largest library/bookstore. This simple to use, low cost device made the mobile Internet transparent to the user by incorporating the cost of access into the price of the book. Amazon achieved this by creating a blanket connection relationship with AT&T for global access. The fact that the Kindle e-Reader automatically creates a relationship with Amazon means that loyal subscribers are a natural evolution. Proof that this technological revolution is affecting the literary world is evidenced by the number of large bookstores, such as Borders in the U.S., that have closed, and Barnes & Noble swiftly producing their own e-Reader, the Nook.

The iPhone and the e-Reader together have evolved into an instant-on class of device – the tablet – that satisfies the mobile consumer’s need to instantly connect, be entertained and informed. While small enough to remain portable, smartphones and tablets facilitate sharing, learning, creating and interacting using wireless broadband connectivity (3G, 4G and WiMAX) and these in turn have become indispensable parts of our everyday digital lives.

Steve Bell, President, KeySo Global

www.keysoglobal.com

 

The Emotional Pull of Technology

Monday, July 9th, 2012

What could be easier than shopping for a cell phone, especially when you already know what you want? My wife had already decided that she wanted to upgrade her old Blackberry Bold so, being with T-Mobile, off we went to their store.

We wandered around, looked at and played with the two Blackberrys on display and asked a sales associate for advice. The youngster seemed technically competent but totally disengaged, probably having given the same spiel to customers a thousand times. It was obvious that, to him, our purchase was purely a transaction.

The Blackberry Bold was priced at $650 but as “loyal customers” we could purchase the phone for $360 with a $50 mail in rebate from T-Mobile. For this price my wife would have an upgraded phone with both touch screen and keypad, a faster camera, plus newer technology enabling the downloading and interaction with apps that hadn’t been possible on the older version. Ok, great – mission accomplished! I was getting ready to pay and leave.

My wife had other ideas. She was clearly not impressed with either the price or the salesperson. He had failed to connect with her and convince her that she was getting the phone she really wanted. She decided to “think about it”.

Our next port of call was the Target store. They hold wide range of phones – just no Blackberries. A very pleasant and competent salesperson explained that Target could no longer get hold of Blackberry devices. She empathized totally with my wife’s apprehension about transitioning to a large touch screen smartphone and explained that she herself had handled the switch over with remarkable ease. On her own phone, a Samsung Galaxy S11, she demonstrated with verve the swipe mechanism for texting, enthused about the high capability camera and beautiful images displayed on the large screen. She took time to answer questions and form a relationship with my wife, making the whole purchase exercise a fun and informative experience. Who would’ve thought that you’d find this degree of engagement at Target!

Ok, so what about the price? This was going to be the killer. As it turned out the Samsung Galaxy S11, after a trade-in refund for the RIM device and a loyalty discount for Target customers, retailed at … $137. That’s all it took to convince my wife – the offer and the phone were too good to resist!

So what are the “walk aways” from this experience?

  • Firstly, purchasing a cell phone is not just a technical sale; it’s an emotional one as well. Even when a customer’s requirements are clearly voiced, the engagement with this customer is crucial and can result in surfacing and satisfying unmet needs.
  • Secondly, RIM has a very hard job ahead if most retail stores do not have the product available to satisfy brand loyal purchases.
  • Finally, mobile operators had better start thinking about improving their retail business model and experiences to compete with Target-type competition; otherwise Vodafone’s proud boast in Barcelona at Mobile World Congress 2012 of being the 8th largest retailer in the world could very quickly transition a precious asset into an expensive embarrassment.

After much apprehension, my wife is now an avid fan of the larger, touch screen smartphone and after only two days of intense interaction, became a total convert. Who says technology doesn’t evoke emotions? Not me!

Steve Bell, President, KeySo Global

www.keysoglobal.com

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