The Tom Dougherty Blog



Posts categorized “Computers”

We are officially in the post-PC world

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Bad news for PC makers, especially the ones that carry Windows 8. According to International Data Corporation, shipments of personal computers have fallen 14 percent from last year.

There are numerous reasons for this. Among them is the increased use of mobile phones and tablets over
laptops and desk computers.

“This is horrific news for PCs,” BGC financial analyst Colin Gillis told The Washington Post. “It’s all
about mobile computing now. We have definitely reached the tipping point.”

Technology companies must be nimble and innovative. Customers are constantly looking for something new.

It’s not just the newness of mobile computing that’s killing the PC market. The other culprit is Microsoft. Many experts say Windows 8 is a flop and sales have reflected that.

“The Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have
slowed the market,” said Bob O’Donnell of IDC.

It won’t be long before the overall computing prowess of tablets takes over and we move away from PCs. Ironically, some PC manufacturers are developing laptops with detachable keyboards, turning
the screen into a tablet of sorts.

It brings to mind what Steve Jobs said a little before his death. That we’re embarking on a “post-PC world.”

No doubt.




Cable TV’s time is running out

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Many  of us would love to get rid of our cable TV provider.  The cost is out-of-whack high and – with the availability of digital and mobile television – cable is fast becoming irrelevant.

A Belkin and Harris survey of many disgruntled cable customers predicts that those who view at least one television show per month over the Internet will grow sharply.  The Internet-as-TV users had been chugging along at 6.9 percent growth rate, but this firm forecasts that those rates will jump to  37 percent in four years. By next year, more than half of all Internet users will be watching on Internet-capable devices.

What to do if you’re Time Warner Cable or Comcast?

Get in the game.

Time Warner Cable, for example, offers an app to watch TV channels based on subscriptions, but it limits customers to home-use only.  Beyond that, it offers no on-demand option so customers may view live shows. Worse, the number channels is limited because many networks have their own apps.

Basically, the Hulus and Netflixes of the world are grabbing market share from cable because cable television clings to an outdated model.

If the established cabled providers don’t innovate, they will fail. The upside? We’ll finally be able to cut that cable television cord.




Surprising developments at Dell

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Michael Dell, the founder of Dell Computer, looked like a cinch to reclaim private ownership of the company as recently as last month.

Hold on. New bidders have arrived.

The Blackstone Group and Carl Ichan are making moves, which is very surprising. Dell has been hemorrhaging money for the last few years and, frankly, looked like it was on its way out.

Once the market leader, the company is third behind HP and Lenovo in the worldwide PC market. Its stock dropped 31 percent last year.

Dell is in need of repair. Incoming bids signal that there may be something worth fighting for in Dell.

The bids increased the offered price per share from Dells’ $13.65 to $14.25 by Blackstone and $15 by Ichan.

The fun will begin when the bidding is over and we see where the company is headed. Competitive bids turn the Dell buyout from a pity party into an opportunity to reclaim the company’s leadership.




Fujitsu’s attempt to attract women a little insulting

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Fujitsu has developed a laptop specifically for women, which smells like a strategic mistake to me.

The “Floral Kiss,” as its called, will debut in Japan on November 2. This is one concept that should have been crumpled and tossed to the drawing room floor.

Boasting a hokey array of “female friendly” features, the computer includes a flip hatch that can “even be used by the well-manicured” and “a power button adorned with a pearl-like accent.” It also boasts a caps-lock key embedded with diamond-cut gem “for a sophisticated look.”

Frankly, the Floral Kiss seems more like a kid-friendly tablet – you know, the ones with rubber bumpers, vibrant colors and a designated application set just for tots – than something women will want.

The Floral Kiss comes in “elegant white,” “feminine pink” and “luxury brown” and equipped with the built-in Digital Scrapbook, Diary and Horoscope applications. Insulting, isn’t it?

Fujitsu brandWhile the Floral Kiss itself is inane, the apparent branding miscues behind it are worse. Women are just as technologically savvy as men. Just like the guys, they effortlessly use iPads, stream Netflix and shop at Amazon.com.

Fujitsu ignores all that by lumping women into a bizarre stereotypical category of jewelry and arts-and-crafts lovers.

Interestingly enough, Jezebel’s Jenna Saunders agrees:

“Women are not some special subclass of humanity with totally unique needs in laptop computers (and a bizarre and unshakable preference for the color pink). Laptops are unisex, and the talents of the vague ‘team of female engineers’ who were tasked with designing this monstrosity would be put to better use improving the user experience of all Fujitsu’s existing female customers.”

I couldn’t have said it better myself.




Major changes are coming to the video game industry

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Over the past month, two pieces of news have caught my attention. The first was Sony’s purchase of Gaikai, a cloud-based video game site that allows big-named game titles to be played through an Internet browser. The second was that Ouya, an inexpensive game console that runs the Android operating system and Android-based games, is teaming up with OnLive to allow cloud gaming of some AAA content.

These moves have exciting and curious implications for the market. It’s exciting to see the industry rumbling towards digital, which will lead to the instant ability to play and be simple to use.

But how will the existing brands transition?

It will be interesting to see what, if any, integration Sony has planned between Gaikai and its next Playstation. Sony puts a lot of weight behind its high-priced hardware, using it to push new technologies. But streaming services, like Gaikai, don’t require much in the way of hardware. The Ouya is set to sell for $109 and that includes the processor chips, storage, etc.,needed to run Android-based games that would be downloaded to the unit. That $109 ticket price is quite a bit less then the $599 pricetag Sony slapped on the original 60GB PS3 in 2006.

Because of Ouya’s marriage with OnLive, Sony will have to think very strategically about how it utilizes Gaikai. If the company is too soft in its approach, Ouya has an opportunity to take market share. Sony needs to be aggressive, which means stepping out of its comfort zone and leaning more towards software than hardware.

There is a happy medium. Sony can achieve profits for its system and still retain preference for its brand, but if OnLive is successful at acquiring larger amounts of AAA content, Ouya’s existence will eat away at Sony’s margins.

Sony’s best bet is to champion the digital change rather than react to it.




Careful Microsoft, tablets are a risky venture

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To no one’s surprise, Microsoft will be releasing its own line of tablets, called Surface, and, while its tablet cover/keyboard is a pretty darn cool spin on things, I am not sure how the actual tablet will do. My issue with tablets is that Apple has, for all intents and purposes, done so well on its first go-around that the iPad has become synonymous with the category. The same can be said for the likes of Thermos or Kleenex, the brands so engrained in the markets their brand is often interchanged as the product itself.

So far, some manufacturers have tried their hand in the tablet market, but they seem to fight over the scraps and never make up ground against Apple. So far, there has been Sony, Samsung, Amazon, Dell and a few others. Some of them are better suited and have more brand permission releasing a tablet than Microsoft.

The tablet comes at a time when Microsoft is making some nice strides that can set it apart. It new Smart Glass is one of those things. It is fresh and, with additional “like” offerings, Microsoft is setting a foundation on which it can create a rebranded image for the company.

Tablets, however, are another story. This late in the game, you aren’t seen as being terribly innovative if you come out with only slight modifications (especially by one considered to be a software manufacturer that often makes things complex or, to be snarky, came out with Zune). You have to defend your product against an overwhelming category leader that has the best brand in the industry (in the world, really).

For Microsoft, there is some opportunity in the tablet market if it can find the highest emotional intensity and align itself with it it to give consumers the switching trigger they need to make the jump. Unfortunately, I think the market leader already has it.

There are a lot of things I see Microsoft doing that feel right, but tablets feel wrong. To regain some of the clout, it needs a game-changer.

Even though there are aspects if it that are cool, this ain’t it.




Best Buy is leaderless…So what is different?

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I hate to harp on Best Buy yet again, but boy, when it rains it pours. Best Buy CEO Brian Dunn unexpectedly resigned due to a personal conduct investigation underway and all I could think was what a lucky break it is for Best Buy.

Not lucky in the sense that he was bad at corporate management or that he was a bad person (I guess the personal conduct investigation will clarify that). No, the only way I can evaluate Mr. Dunn is through the perspective of brand. From that perspective, Dunn was failing.

When Stealing Share rebrands companies, as much effort is put into the internal corporate culture of the brand as into the customer facing portion. If they do not occur in tandem, the customer sees the brand as hollow and fake. Before a brand can become important it must first be believed.

As I’ve said in recent blogs, Best Buy confuses its awareness with brand equity. The detriment of this confusion is that brand provides clarity and, in the absence of it, Best Buy suffered. Dunn focused too heavily on best practices and, as such, the brand of Best Buy became only as valuable as the lowest common denominator. Importance flows like a river, high to low. What a CEO believes is important becomes important at the ground floor. Brand must be the driver for the new CEO or Best Buy will continue to hit the same obstacles it is currently trying to clear.

A new CEO focused on brand also ushers in a new corporate culture. A big problem with promoting best practices (beyond their lack of meaning with the customer) is that they are not emotional and are the table stakes in which you must have just to play. But they do not create preference. They also give employees little reason to care because they are difficult to take personal ownership of.  As a cooperate culture, it is much easier to live something like “Think Different” than it is to live “best price.”

Best Buy’s Board of Directors should look at this resignation as a fresh start. Wipe the slate clean and take a new approach. Recognize that what Best Buy is missing does not center on operations, but rather on brand. Best Buy is down, but with some meaning it will not be out.




Tough times for Best Buy, but mobile stores are not the answer

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Things are not looking very good for Best Buy. Its last quarter, which ended March 3, had it down by $1.7 billion, a figure even more disheartening when you consider that the loss included an additional week of sales to help soften it. Best Buy’s answer to the poor performance is a shift toward fewer big-box locations and an increased amount of mobile locations. There is one problem with the strategy however. Whatever issues it has with the big-box stores will be the same for mobile stores. Neither has a clearly stated reason for being nor a compelling enough message to establish brand loyalty.

The problem with Best Buy’s current big-box stores is that you can get everything they carry elsewhere. Its brand is not special nor are the products it sells, making it just a store rather than a destination.

Sure, it has a large selection that lets you get all your electronics/appliance shopping done. But how many people go out to buy a TV and a fridge on the same outing? Typically, you either go for one or the other. (Or you go to Costco.) If you are in the market for a fridge, Best Buy just joins a long list of stores whose value is also simply “a means to an end.”

On the other hand, if you want IKEA furniture, you go to IKEA. If you want a MacBook, you go to the Apple Store. There is value in IKEA and the Apple Store because of the experience, the focus and, most of all, having brands that offer something of greater value to the consumer than price. Best Buy is not a very pleasant shopping experience. Nothing it sells is particularly special, and it uses the rather emotionless value of price as its brand.

So are mobile stores going to be any different?

The problem with transitioning to more mobile stores is that too many mobile stores exist and Best Buy’s brand of price is not meaningful enough to increase usage beyond their stores’ proximity to consumers. AT&T, Verizon, RadioShack, the list goes on. Mobile stores already saturate the market.

Best Buy’s success does not rest in adjusting the size of its stores. It rest in adjusting its brand. Downsizing the stores is just addressing a symptom. It’s not addressing the cause.

Instead, Best Buy must decide who is it for and who is it not for. What does the brand promise? Best Buy is confusing its brand awareness as being meaningful when it is preference that signifies brand equity. The reason Best Buy is closing stores, laying off employees and switching to a mobile store model is because it hasn’t redefined its brand and used that to dictate structural changes.

Otherwise, it will soon become as irrelevant as RadioShack or, gulp, Circuit City.




Qwikster is dead, at last

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Well, that was certainty interesting. Netflix CEO Reed Hastings announced today that Qwikster, the proposed DVD-delivery offshoot of Netflix, is no longer.

In a statement emailed to subscribers, Hastings begins with: “It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.”

As a subscriber, I’m happy with this, which I hope is the final result. I like to do both (stream, rent) and I was confused over how the process would work once Qwikster was live.

There are a few lessons to be learned from this, however. For one thing, Hastings and Netflix have finally understood that simple is always best. The reason for the power of simplicity is because complexity adds barriers to use and adoption. It’s the reason why, for example, some of the most used websites, such as Facebook, are simple and easy to use – and why Facebook users got angry when Facebook overcomplicated matters.

The other lesson is that Netflix is struggling to maintain its market leadership because its brand has been based strictly on a process, rather than an emotional connection. So, when the process got confusing, the brand got rejected.

The market in which Netflix competes is becoming more and more competitive as competitors copy Netflix’s process. Blockbuster, once dead, will be resurrected by DirecTV in a model that copies Netflix. Rumors are also growing that this is an area in which Apple wants to gain a stronger foothold and may also copy Netflix’s process through Apple TV to do it.

Netflix triggered this Netflix/Qwikster model after customers complained of price hikes. Netflix failed to see that it could offer separate plans under one brand and one website until now. (Though, the brand guy in me was very interested in what Qwikster was going to look like.)

Give it up to Netflix for realizing its mistake and landing where it should. Now, it needs to take the next step in becoming emotionally important to customers so that, when mistakes are made, they are forgotten or forgiven, and any equity it has lost during this latest fiasco can be overcome.




Steve Jobs: A bulb that burns twice as bright burns half as long

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I was thinking about typing this note on my old Mac Plus, which I pulled from under the attic eves last night. I abandoned the idea, not because my old Mac no longer worked (it did), but because I realized I had no way to email or connect to what I wrote except with 3.5 floppy discs. I suddenly realized that my personal connection to Steve predates the Internet and goes all the way back to 1984.

I’m not going to write a blog that lauds all of Steve’s insanely great accomplishments and I need to say upfront that I never met him personally. But that is Steve’s magic after all, isn’t it? The products that Steve created are so intuitive, simple, personal, intimate, and magical, if you will, that I feel as if he is family. I took personal satisfaction in his success and now suffer a deep personal loss at his passing.

Do you remember the pop culture book that was popular a decade or so ago “All I Really Need To Know I Learned In Kindergarten”? Well, I can honestly say that everything I ever needed to learn about branding, simplicity and focus I learned from Steve.

So today I am deeply sad. Greatness passes as naturally as time, but Steve passed much too soon. I assumed it was soon to happen but found myself completely unprepared.

Will I ever again tune into another Apple Keynote with childlike anticipation? Will I stay up all night ever again trying to place my order for the newest and coolest product from the pied piper of elegance and simplicity? Will I still visit the Apple Store with the smile of a kid in a candy store? Will I still feel like somehow everything Apple creates in the future is somehow a personal win for me?

I do hope so. Steve showed me a path and I will settle for nothing less.

Sometimes, when I get full of myself, I remind my ego that Steve is one day older then me. Very humbling. He changed the world.

Fare thee well Steve Jobs and thank you for sharing. I know I will never see your like again.