The Tom Dougherty Blog


Posts tagged “iphone”

Blackberry? Seriously?

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Research in Motion really wanted a name change. It’s just a shame it decided to go with Blackberry.

Once home to the coolest smartphone on the planet — the Blackberry — RIM has been annihilated by the competition in recent years. Blackberry phones have become technologically obsolete and the “Lucy” in the evolution of smartphones.

imagesThis out-of-date thinking has been reflected in the stock market too, where RIM shares have tanked. This doesn’t bode well for its attempt to play catch-up by introducing new, technologically savvy smartphones.

I get why RIM wanted a new identity. But changing its name to Blackberry is what it should have avoided most.

Blackberry is a name people associate with outdated technology. It doesn’t hold nostalgic value, but represents clunky in the era of the sleek iPhone and Android.

The Blackberry name is simply an albatross. If RIM (or, now, Blackberry) ever wants to be taken seriously again, the name Blackberry should be tossed to the curb.

iPhone more important than T-Mobile

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What’s so bizarre about the mobile phone industry is that manufacturers (Apple, Samsung) are playing offense in growing their market share, while the providers (AT&T, Verizon) are playing defense.

Case in point: T-Mobile announced yesterday it will finally carry the iPhone 5 and customers can pay a $99.99 down payment for the phone with monthly payments after that without signing a contract with T-Mobile.

You might think this is a great marketing strategy for T-Mobile. Maybe so, but think about this. You can’t leave T-Mobile until the phone is paid off. By paying off the iPhone, specifically designed for T-Mobile’s network, in monthly payments you actually have the contract of sorts with the phone, not the carrier.

T-Mobile is reduced to just being the supplier.

You can’t charge a premium price if you don’t have a premium brand

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Good news for all you Sony tablet oglers out there who just couldn’t bring yourself to make the purchase because its pricing was just too high: Sony just announced that it is dropping its price on its Android-based tablet base unit from $499 down to $399.

The misconception by many manufacturers releasing tablets priced at $499 is that consumers are willing to spend that $499 on a tablet since they purchase iPads so readily. This however is not true. Consumers are, in fact, willing to pay $499 for a tablet from Apple. Another tablet and an Apple tablet are not the same. With the latter, you have the ability to charge a premium because it matches a premium brand.

This pricing issue is not a first for Sony. The pricing teams still believe in the equity and clout its brand once carried, even though consumers don’t. From the P3S to the recently released Vita to its tablet to the upcoming release of its personal 3D viewer, Sony believes its brand justifies the premium pricing. It is not until sales figures begin rolling in and the over-forecasting of consumer interest becomes apparent that Sony’s prices find a more realistic level.

Big news from Sony at the 2011 E3 was a new “affordable” 3D television priced at $499. Now, a few months on the market, and it is regularly priced at retail stores for $399 and as low as $299 leading up to the holiday.

The point here is that only premium brands can justify premium prices. The power of a meaningful brand is that consumers will pay more for it and even inconvenience themselves for it. The fact that you are overpriced only becomes that much more apparent when the power of the brand doesn’t match it.

All hope for Sony is not lost. It just needs to get back in touch with the highest emotional intensities that exist in the market. Until then, expect more disappointing sales figures – and dropping prices.

Apple win against HTC is a bit hollow

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Let me start off by saying that I am a huge technology buff. If it has buttons, I want to press them. If it has a better screen, I want to see it. If it is new and costs a premium to be the first one to own it, I’ll sell some blood to cover the cost of being an early adaptor.

Because of this interest, I like the patent system. If everyone simply followed the same formula, competitive products would become rote. New ways to do things is what promotes innovation, and I believe patents help to stimulate that. But with most everything that is good, it must come in moderation. This is where my interest in electronics and positive outlook of patents begin to diverge.

Patents are for new creations, even game changers. Nowadays, however, companies file patents like crazy and buy up companies that are worth little to no value simply for their stockpile of patents. It all adds up to, in the longterm, create an industry that takes something that helps stimulate innovations but instead uses it to slow it.

Bringing me to Apple, which just won a patent lawsuit against HTC over a feature that converts incoming messages into highlighted, underlined links for phone numbers, names, etc. Sure, this does perform a task, but to what degree should we assign it genuine, distinguishable, game-changing value? Take for instance the ability to cut and paste within a document. Yes, it also “does” something, but what if only one interface allowed cutting and pasting, and all others were blocked from using it? There are things that companies should protect vigorously. But there are also others, especially within the tech industry, that should be considered contributions to help move the industry forward.

My biggest problem is that these lawsuits can be counter productive. Look at lawsuits against surgeons and the effect it has on medical costs. Lawsuits are a drain, and often result in a negative outcome even if a lawsuit is successful. I think about this Apple win and ask myself, what could Apple have created if it put the costs associated with litigation (direct dollars, man hours, brainpower) towards new innovations. There is a cost-benefit for everything, and the cost associated with continual patent lawsuits just seems a bit greater.

Winner or loser, patent lawsuits do little to help a brand. If you ask an Apple customer why he or she chose an Apple product, I promise you the amount of times someone replies, “They have great patents,” would be nil. It is the same reason why generics exist but are not the market leaders, even though they share the exact same ingredients as their brand name counterparts.

So, to Apple I say, don’t waste time and resources trying to force competitors out of the market with patents. Do what you do best, and put it all into continually making great, simple, intuitive products and consumers will push out the competition for you.

PlayStation Vita could prove to be an exercise in redundancy

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I have been following news about the upcoming PlayStation Vita handheld gaming system and, as its release date nears, I wonder more and more if its success will receive a similar lackluster release as the Nintendo 3DS.

The Vita is quite a technical powerhouse and looks like what the PSP should have been. And while it has an ample software lineup on release to avoid a lack of interest due of content, this new iteration is too little too late. The handheld gaming market has now expanded to include mobile phones in a very big way and the market that the Sony PSP and Nintendo DS once competed in has become vastly different.

The issues jeopardizing success are not due to a nonexistant market, but rather due to a nuanced market. In fact, the market for video games, is evident by the 24 hour, $400 million profit, Call of Duty: Modern Warfare 3 just raked in. The obstacle instead, is due to the advent of smartphones, causing the market for a standalone handheld gaming devices to become a bit redundant.

Adding to this hurdle is the young adult demographic the Vita caters to. It’s not that it doesn’t have titles for the younger audience, but with enhanced graphics, 3G connectivity, dual analog sticks, and multiple touchscreens it is certainly selling specs that an older market tends to care about. But this is a demographic that is already connected and invested in their smartphone. The key value of that last sentence being “connected.”

Take the recent success of Call of Duty. This was not a result of it having a profound story– in fact, the story is so fragmented and schizophrenic it’s sometimes hard to even get into. It did not sell so well because of groundbreaking graphics– it uses the same engine as the last Call of Duty and is certainly not the most visually stimulating game available in the market. No, Call of Duty sells because of its multiplayer. It is a game that breaks sales records and moves consoles because it offers a connected experience—an attribute that is very much an identifier of the mobile market.

Often, in both messaging and product development, companies miss the vital fact that no one switches for something they believe they already have. Sony might soon experience, as Nintendo’s 3DS has been experiencing, that the market might not have been pining for a new generation of handheld gaming systems, but instead might believe the phone that they own is the only handheld gaming device they need.

The uphill battles for Sprint

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The crux of positioning a messaging towards something like “unlimited data” is that the messaging must always maintain consistency or the messaging becomes meaningless. For some time now, Sprint has marketed itself as the last place in town where unlimited data was still safe. If only. It seems Sprint will now be doing away with its unlimited 4G data for devices with mobile hot spots.

When we work with brands and provide brand positioning, that positioning also includes ways to action that brand and fulfill its promises. Positioning without action is as meaningless as no position at all. As a general rule, don’t promise what you can’t deliver.

Sprint is in a difficult position and has been working down this road to correct the situation. It is behind the competition and pushing a message (unlimited data) that the market can no longer trust with complete confidence. It is also competing in a market where consumers are locked into contracts and have to pay extra costs to switch. In fact, Sprint couldn’t fulfill its “Now Network” brand until it recently paid heavily for the ability to carry iPhones. Therefore, for a time, Sprint couldn’t fulfill its brand promise until it carried the today’s most coveted phone.

Being the “Now Network” is also inherently a challenge as “now” is a bit nebulous. It might mean “fast” and “acting urgently,” but it can also mean “up to date” or even “status quo.” The problem is that Sprint has never defined what that meant, unless it was the unlimited data. Leaving any room for interpretation is never good, not to mention the much larger issues of how is it at all emotionally resonates to the market.

Sprint’s financials showed a Q3 drop, but it also saw an increase in subscribers by 1.3 million. Tactically, Sprint is now moving in the right direction. It has the iPhone and is working to create a faster LTE-advanced network, but tactical moves are not enough by themselves. Now, with the category table stakes out of the way, Sprint needs to find something more meaningful than “unlimited data” to talk about if it wants to foster a strategy transition from “let’s keep up” towards “lets get ahead.”

And the winner for the most expensive table stake goes to…Sprint

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Looking at different markets, the bare minimum needed to compete varies. Sometimes, the minimum can be efficacy or FDA approval in the medical community, for example, or it might mean providing ample battery capacity for mobile electronics. They are all aspects that are not optional to compete but, if you are looking for a long-term presence, are required. Sadly for Sprint, the market of wireless providers has one of the most expensive table stakes– the iPhone.

Sprint just announced it will be purchasing 30.5 million iPhones over the next four years, a commitment to the tune of $20 billion. While Sprint’s stock has been taking a hit for this recent move, my response to those selling their Sprint stock is that, to compete, this was something Sprint needed to do.

Brand messaging is vital, even concerning table stakes. By the same token, while brand provides the reason “why” a company does everything, actions must reinforce that “why” and fulfill the brand promise or the brand becomes meaningless. What also muddies that “why” is when the brand fails to meet the bare minimum to compete in that market.

The iPhone only on AT&T was a differentiator. But once Verizon began to carry it, all the equity AT&T held was lost and it moved from a differentiator to a table stake.

Under these circumstances, I would say that Sprint has made a correct move by including the iPhone in its portfolio. The playing field is now level and Sprint is in a position to seize that opportunity using brand messaging that is meaningful and says why it has the iPhone.

Competing to increase market share through monthly minutes allowed or by data packages offered is short-term strategy. Now, while differentiators are for the most part flat in this market, is the time for Sprint to build preference by saying something emotionally resonate about the “why.”

iPhone making cell phone service providers irrelevant

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I am in awe of the brand power of Apple. If you have read this blog for any length of time, you know I am a self-confessed Apple loyalist.

As you may know by now, Verizon announced that it will start carrying the iPhone 4 next month.  Verizon finally gets arguably the world’s most popular phone and Apple gets access to “The Network.”

What I found so interesting about all of the news and opinions surrounding this news was that the discussion was primarily centered around the iPhone instead of Verizon. In recent memory, I do not think that Verizon has ever scheduled a press conference with the magnitude of the one it had yesterday.

And really if you think about it, this was a press conference about the iPhone not Verizon. Verizon is just the new host for the iPhone. The phone made the news “newsworthy” and Verizon’s role is simply to support it.

I believe there were three winners with this announcement: Apple and the customers of AT&T and Verizon. Clearly, Apple is the big winner as ultimately it has access to more customers. However, the customers of AT&T and Verizon also stand to win as each company is fighting a battle for users with the same device. That most likely means that consumers can look forward to service costs becoming more competitive.

The big loser is Android. There are a great many Verizon customers who “settled” for a Droid because their contracts prevented them from switching to AT&T for the coveted iPhone. I have a sneaking suspicion that Droid will soon become the defacto free phone when a customer signs a two-year contract.

What is so interesting about this from a brand perspective is that the brand that Verizon and AT&T sell (Apple’s iPhone) is what is spurring change. This is evidence that Apple’s brand power far eclipses that of either AT&T or Verizon. In fact, one might go so far to say that bringing the iPhone to Verizon has made cellular telephone service providers practically irrelevant.

Neither AT&T or Verizon evoke brand preference or loyalty and this is a problem for them. Without any reason to choose, the default becomes price – a position I’m sure neither AT&T or Verizon want to claim.

Unless they do something quickly to reinforce their brands in an effort to create preference, service providers will only be able to compete on price and promotion. The best chance they have as it stands now is the hope to be the exclusive provider of iPhone 5.

The Permission Issues of a Playstation phone

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Building a brand without the correct permissions is like a house of cards. Inevitably, it will fall. The importance of permissions is that they determine boundaries. What does the consumer give the brand permission to say about them? What permission do consumers grant the brand when making claims about a product? These are questions that messaging must address and, if they do not, then a brand has failed to create meaning nor created preference.

I again reference the rumored Playstation Phone. I am a technology buff and, in following gadgets on the up-and-coming, I have seen an occasional article about the rumored phone from Sony that combines the Ericsson phone line and the Playstation brand.

My recent thoughts on the phone began last night when I came across an article on a tech blog that highlighted new leaked photos. I realized how inconsequential the phone was by the fact that the simple mouse click to “see more” seemed a bit too much work for the payoff. I have seen random articles float around about the Playstation phone in the blogosphere. But only once or twice have I seen them make it all the way to a news source. Juxtapose that to the iPhone coming to Verizon, a rumor that has been ongoing for over a year now and which seems to have its very own permanent section on the tech page of all news organizations.

The difference between the a Playstation phone and the iPhone is that Apple’s iPhone is backed by a powerful brand and a well-versed knowledge of their brand permissions. That is not true for Sony.  To look deeper into Sony’s permission issues, just look at the name. Would any businessmen ever buy a phone called the “Playstation Phone”? Just think of the conversation at work…

“Hi Bill, did you get my email about the recent merger figures?” ask’s Bill’s boss.

Bill pulls out his new Playstation phone. Bill’s boss eyes Bill’s new phone

“What is that?” asks Bill’s boss

“Oh, its my PLAYSTATION phone” Bill replies.

Bill might as well have said he was using a phone he built with his tinker-toys.

For any business professional, other than one working in the gaming industry, Sony does not have permission to sell a phone under the Playstation brand. It only has connotations to gaming. It could be that Sony is only interested in the gaming market. But if that is the case, its scope might be a bigger problem than the name. It could be true that professionals enjoy gaming, but image matters and perception is reality. Sony needs to be sure that, pending their rumored phone buzz being true, it takes a good look at the permissions of its target consumer to be sure its message resonates with the consumer belief system.

The primary permission issue for Sony is that it has led with the sub-brand of Playstation when it is the parent brand of Sony that has permission to release a product that speaks to a tech savvy professional. While leading with the Playstation brand might make gamers rejoice, it does little to excite the larger consumer market.

The Playstation phone would not be the first attempt at a phone focused on gaming. Just look at Nokia’s attempt with the N-Gage. Sony will need to be cog nascent of what its consumers will accept or any future realization of a Playstation phone will see the current lack interest remain.

Thoughts on the Gecko, the Hyundai singer and Verizon

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The holiday season is over, we’re all back to our regular routines so let me reflect on a few thoughts on brand meaning rolling around in my head:

The Gecko: It’s time to retire the Gecko, and GEICO should have done it much earlier. Although the Gecko originally created a bit of a cultural stir, it has represented in my mind what has been the main problem with GEICO all along: Its characters, while interesting and sometimes funny, had no brand meaning. They just represent entertainment, not a reason to switch. Let alone steal market share.

And that’s the reason why the Gecko became tiresome and annoying. Because it never meant anything in the first place.

We often tell clients that they’ll get more tired of a campaign before audiences will – but that’s only the case if the campaign has meaning. Ronald McDonald has lasted so long as a character because he has meaning (fun for kids) that relates to the McDonalds brand.

The reason we are all tired of the Gecko is whatever appeal it had did little to support whatever brand meaning GEICO has. It might as well have been a caveman.

Hyundai’s singer: In case you were wondering (and I was), the girl singing in those Hyundai commercials is named Nataly Dawn of the folk-jazz group Pomplamoose. (I looked it up.) I found those spots damn appealing, with just the right tone, and they show what on-screen talent can do.

I doubt it sold more cars than usual, though I can imagine the spots raised awareness of the Hyundai brand just because they were different, memorable and appealing.

However, they do not increase preference because the tone/attitude/meaning of the spots do not relate to the Hyundai brand of “Assurance.” We’d get tired of Ms. Dawn just as quickly as the Gecko if those spots ran all year.

Verizon: As of 2 pm on Monday, Verizon’s stock was up while the Dow was down. Hmm, wonder why that is? Anticipation of Tuesday’s announcement of the iPhone coming to Verizon?

The conventional thinking is that, once the iPhone is at Verizon, AT&T customers will switch because of customer dissatisfaction and Verizon will have regained the market leadership it had before AT&T had the exclusive rights to the iPhone.

There will be some movement, sure, but I don’t think there’ll be some mass revolt. Switching is considered an ordeal, even if it really isn’t, and there’s little reason to switch when it’s Apple that’s carrying the brand, not AT&T or Verizon.

Once you have an iPhone, the most important move has already been made. The carrier doesn’t really matter.